Self-Regulatory Organizations; Cboe BYX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Rule 14.1 Regarding Information Circular Requirements

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<title>Federal Register, Volume 91 Issue 199 (Friday, October 16, 2026)</title>
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[Federal Register Volume 91, Number 199 (Friday, October 16, 2026)]
[Notices]
[Pages 65814-65816]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-21126]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-106646; File No. SR-CboeBYX-2026-038]


Self-Regulatory Organizations; Cboe BYX Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend 
Rule 14.1 Regarding Information Circular Requirements

October 13, 2026.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on September 30, 2026, Cboe BYX Exchange, Inc. (``Exchange'') filed 
with the Securities and Exchange Commission (``Commission'') the 
proposed rule change as described in Items I and II below, which Items 
have been prepared by the Exchange. The Commission is publishing this 
notice to solicit comments on the proposed rule change from interested 
persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Cboe BYX Exchange, Inc. (``BYX'' or the ``Exchange'') is filing 
with the Securities and Exchange Commission (``Commission'' or ``SEC'') 
a proposed rule change to: (1) amend Rule 14.1(a) to add express cross-
references to Rules 3.7 and 3.21; (2) delete current Rule 14.1(c)(1) in 
its entirety, thereby removing the requirement that the Exchange 
distribute an information circular to Members prior to the commencement 
of trading in each UTP Derivative Security \3\ that generally includes 
the same information as contained in the information circular approved 
by the listing exchange; (3) amend current Rule 14.1(c)(2)(B) to 
require that the written description referenced therein be provided in 
a form approved by the listing exchange or prepared by the open-ended 
management company issuing such securities; (4) renumber current Rules 
14.1(c)(2) through (5) as Rules 14.1(c)(1) through (4), respectively; 
and (5) make a conforming amendment to Interpretations and Policies .01 
to update the cross-reference from Rule 14.1(c)(3) to Rule 14.1(c)(2). 
The text of the proposed rule change is provided in Exhibit 5.
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    \3\ See Exchange Rule 1.5(ee).
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    The text of the proposed rule change is also available on the 
Commission's website (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>), the 
Exchange's website (<a href="https://www.cboe.com/us/equities/regulation/rule_filings/byx/">https://www.cboe.com/us/equities/regulation/rule_filings/byx/</a>), and at the principal office of the Exchange.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
sections A, B, and C below, of the most significant aspects of such 
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to: (1) amend Rule 14.1(a) to add express 
cross-references to Rules 3.7 and 3.21; (2) eliminate the requirement 
that the Exchange distribute an information circular to Members prior 
to the commencement of trading in each UTP Derivative Security that 
generally includes the same information as contained in the information 
circular provided by the listing exchange as provided in current Rule 
14.1(c)(1) by deleting Rule 14.1(c)(1) in its entirety; (3) amend 
current Rule 14.1(c)(2)(B) to require that the written description 
referenced therein be provided in a form approved by the listing 
exchange or prepared by the open-ended management company issuing such 
securities; \4\ (4) renumber current Rules 14.1(c)(2) through (5) as 
Rules 14.1(c)(1) through (4), respectively; and (5) make a conforming 
amendment to Interpretations and Policies .01 to update the cross-
reference from Rule 14.1(c)(3) to Rule 14.1(c)(2). The proposal is 
based on Cboe BZX Exchange, Inc. (``BZX'') Rule 14.11(j).\5\
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    \4\ As further described below, the Exchange will notify Members 
of the written description requirement under Rule 14.1(c)(2)(B) by 
means of an information circular. Such written description will only 
be required when required by the listing exchange.
    \5\ See Securities Exchange Act Release No. 105715 (June 17, 
2026) 91 FR 37477 (June 23, 2026) (SR-CboeBZX-2026-054).
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    Rule 14.1(c) governs the trading of UTP Derivative Securities on 
the Exchange--securities listed on another national securities exchange 
that trade on the Exchange pursuant to unlisted trading privileges 
(``UTP''). Under current Rule 14.1(c)(1), the Exchange must distribute 
an information circular prior to the commencement of trading in each 
UTP Derivative Security that generally mirrors the information circular 
issued by the primary listing exchange, including: (a) the special 
risks of trading the Derivative Security; (b) the Exchange Rules that 
will apply to the Derivative Security, including Rule 3.7; (c) 
information about the dissemination of the value of the underlying 
assets or indexes; and (d) the risk of trading during the Early Trading 
Session (7:00 a.m.-8:00 a.m. Eastern Time), Pre-Opening Session (8:00 
a.m.-9:30 a.m. Eastern Time) and the After Hours Trading Session (4:00 
p.m.-8:00 p.m. Eastern Time) due to the lack of calculation or 
dissemination of the intra-day indicative value or a similar value. The 
Exchange proposes to delete Rule 14.1(c)(1) in its entirety.
    The information circular requirement is unnecessary because the 
primary listing exchange's information circular already provides 
Members with the same disclosures the Exchange would otherwise be 
required to produce. Members have access to the primary listing 
exchange's information circular prior to the commencement of UTP 
trading and may rely upon it for the same purposes.\6\ The Exchange's 
issuance of a separate, duplicative circular therefore serves no 
independent investor protection function. The existing Member-level 
suitability and customer disclosure obligations under Rules 3.7 and 
3.21 continue to apply independently of the information circular 
requirement.
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    \6\ Such information circulars are generally available on the 
primary listing market's website.
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    The Exchange also proposes to amend Rule 14.1(a) to add express 
cross-references to Rule 3.7 (Recommendations to Customers) and Rule 
3.21 (Customer Disclosures). The Exchange is adding express cross-
references to those rules in Rule 14.1(a) to enhance their visibility 
in the context of UTP Derivative Securities. These rules already apply 
to Members by operation of the Exchange's rulebook. The cross-
references are intended to make the applicable framework explicit

[[Page 65815]]

in the context of UTP Derivative Securities. Rule 3.7 independently 
requires Members to ensure that any recommendation of a UTP Derivative 
Security is suitable for the customer based on the customer's 
investment profile, a standing obligation that applies regardless of 
whether the Exchange has issued a product-specific information 
circular. Similarly, Rule 3.21 independently requires Members to 
provide customers with a written disclosure of the risks of trading 
outside of Regular Trading Hours before accepting any order for 
execution during such sessions, a standing obligation not contingent on 
the Exchange's issuance of a product-specific information circular.
    Because current Rule 14.1(c)(1) has historically served as the 
mechanism through which the Exchange satisfies the notification 
obligation under current Rule 14.1(c)(2)(B), deletion of Rule 
14.1(c)(1) necessitates a conforming amendment to current Rule 
14.1(c)(2)(B). The Exchange proposes to amend current Rule 
14.1(c)(2)(B) to require that the written description referenced 
therein be provided in a form approved by the listing exchange or 
prepared by the open-ended management company issuing such securities. 
The Exchange will notify Members by information circular that such 
written description will only be required when mandated by the listing 
exchange. This amendment is consistent with the broader purpose of the 
proposed rule change: where the listing exchange's information circular 
already provides Members with the information necessary to assess a UTP 
Derivative Security, a duplicative written description obligation 
serves no independent investor protection function. Members may rely on 
the listing exchange's information circular in the same manner and to 
the same effect.
    Finally, the Exchange proposes to renumber current Rules 14.1(c)(2) 
through (5) as Rules 14.1(c)(1) through (4), respectively, and to make 
a conforming amendment to Interpretations and Policies .01 to update 
the cross-reference from Rule 14.1(c)(3) to Rule 14.1(c)(2).
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the Act and the rules and regulations thereunder applicable to the 
Exchange and, in particular, the requirements of Section 6(b) of the 
Act.\7\ Specifically, the Exchange believes the proposed rule change is 
consistent with the Section 6(b)(5) \8\ requirements that the rules of 
an exchange be designed to prevent fraudulent and manipulative acts and 
practices, to promote just and equitable principles of trade, to foster 
cooperation and coordination with persons engaged in regulating, 
clearing, settling, processing information with respect to, and 
facilitating transactions in securities, to remove impediments to and 
perfect the mechanism of a free and open market and a national market 
system, and, in general, to protect investors and the public interest. 
Additionally, the Exchange believes the proposed rule change is 
consistent with the Section 6(b)(5) \9\ requirement that the rules of 
an exchange not be designed to permit unfair discrimination between 
customers, issuers, brokers, or dealers.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(5).
    \9\ Id.
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    The Exchange believes the proposed deletion of current Rule 
14.1(c)(1) is consistent with the Act because the primary listing 
exchange's information circular already provides Members with the same 
disclosures that the Exchange's information circular would contain. The 
investor protection functions historically served by the information 
circular requirement are independently addressed through the primary 
listing exchange's information circular and the Member-level 
obligations imposed by Rules 3.7 and 3.21, to which the Exchange 
proposes to add express cross-references in Rule 14.1(a). The proposed 
amendment to current Rule 14.1(c)(2)(B) ensures that where a written 
description is required, it is provided in a form approved by the 
listing exchange or prepared by the open-ended management company 
issuing such securities, thereby aligning the Exchange's requirements 
with those of the primary listing market. The Exchange will further 
notify Members by information circular that such written description 
will only be required when mandated by the listing exchange, ensuring 
that no duplicative obligation is imposed where the listing exchange 
has not determined one to be warranted. The renumbering of current 
Rules 14.1(c)(2) through (5) as Rules 14.1(c)(1) through (4), and the 
conforming amendment to Interpretations and Policies .01 updating the 
cross-reference from Rule 14.1(c)(3) to Rule 14.1(c)(2), are 
ministerial. Additionally, as discussed above, the proposal does not 
raise any novel issues not previously considered by the Commission. For 
these reasons, the Exchange believes the proposed rule change is 
consistent with the Act.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. The proposed rule change: 
(1) adds express cross-references to Rules 3.7 and 3.21 in Rule 
14.1(a), which does not impose any new obligations on Members; (2) 
eliminates duplicative procedural obligations applicable to the 
Exchange in its capacity as a UTP trading venue by deleting current 
Rule 14.1(c)(1); (3) aligns the written description obligation under 
current Rule 14.1(c)(2)(B) with the primary listing market's 
requirements; (4) renumbers current Rules 14.1(c)(2) through (5) as 
Rules 14.1(c)(1) through (4); and (5) makes a conforming amendment to 
Interpretations and Policies .01 to update the cross-reference from 
Rule 14.1(c)(3) to Rule 14.1(c)(2), which is ministerial. The proposed 
rule change does not alter the terms or conditions under which UTP 
Derivative Securities may be traded on the Exchange, impose any new 
requirements on Members, or affect the ability of any market 
participant to access the Exchange's markets. Members will continue to 
have access to the primary listing exchange's information circular 
prior to the commencement of UTP trading and may rely upon it for the 
same purposes as the Exchange's information circular. The proposed 
amendment to current Rule 14.1(c)(2)(B) aligns the written description 
obligation with the primary listing market's requirements and does not 
impose any burden on Members beyond what the primary listing market 
itself requires. Accordingly, the Exchange does not believe the 
proposed rule change imposes any burden on competition not necessary or 
appropriate in furtherance of the purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    The Exchange neither solicited nor received comments on the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A) of the Act \10\ and Rule 19b-

[[Page 65816]]

4(f)(6) \11\ thereunder. Because the foregoing proposed rule change 
does not: (i) significantly affect the protection of investors or the 
public interest; (ii) impose any significant burden on competition; or 
(iii) become operative for 30 days from the date on which it was filed, 
or such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \12\ and Rule 19b-
4(f)(6) \13\ thereunder.
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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(6).
    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires the Exchange to give the Commission written notice of its 
intent to file the proposed rule change, along with a brief 
description and text of the proposed rule change, at least five 
business days prior to the date of filing of the proposed rule 
change, or such shorter time as designated by the Commission. The 
Exchange has satisfied this requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) \14\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\15\ the Commission 
may designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has asked 
the Commission to waive the 30-day operative delay so that the proposed 
rule change may become operative immediately upon filing. The Exchange 
states that the proposed rule change eliminates duplicative procedural 
obligations applicable to the Exchange in its capacity as a UTP trading 
venue because the primary listing exchange's information circular 
already provides Members with the same disclosures the Exchange would 
otherwise be required to produce.\16\ The Exchange also notes that the 
proposed rule change does not alter the terms or conditions under which 
UTP Derivative Securities may be traded on the Exchange. For these 
reasons, the Commission finds that waiver of the 30-day operative delay 
is consistent with the protection of investors and the public interest. 
Therefore, the Commission hereby waives the 30-day operative delay and 
designates the proposed rule change to be operative upon filing.\17\
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    \14\ 17 CFR 240.19b-4(f)(6).
    \15\ 17 CFR 240.19b-4(f)(6)(iii).
    \16\ The Exchange represents that such information circulars are 
generally available on the primary listing market's website. See 
supra note 6.
    \17\ For purposes only of waiving the 30-day operative delay, 
the Commission has also considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

    <bullet> Use the Commission's internet comment form (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>); or
    <bullet> Send an email to <a href="/cdn-cgi/l/email-protection#b0c2c5dcd59dd3dfddddd5dec4c3f0c3d5d39ed7dfc6"><span class="__cf_email__" data-cfemail="1260677e773f717d7f7f777c6661526177713c757d64">[email&#160;protected]</span></a>. Please include 
file number SR-CboeBYX-2026-038 on the subject line.

Paper Comments

    <bullet> Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to file number SR-CboeBYX-2026-038. This 
file number should be included on the subject line if email is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's internet website (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>). Copies of the filing will be available for inspection and 
copying at the principal office of the Exchange. Do not include 
personal identifiable information in submissions; you should submit 
only information that you wish to make available publicly. We may 
redact in part or withhold entirely from publication submitted material 
that is obscene or subject to copyright protection. All submissions 
should refer to file number SR-CboeBYX-2026-038 and should be submitted 
on or before November 6, 2026.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\18\
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    \18\ 17 CFR 200.30-3(a)(12) and (59).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-21126 Filed 10-15-26; 8:45 am]
BILLING CODE 8011-01-P


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