Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Rules Related to the Submission of Bids and Offers for Certain Complex Strategies for Execution Using Bulk Message Functionality

<NOTICE> SECURITIES AND EXCHANGE COMMISSION <DEPDOC>[Release No. 34-103701; File No. SR-CBOE-2025-059]</DEPDOC> <SUBJECT>Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Rules Related to the Submission of Bids and Offers for Certain Complex Strategies for Execution Using Bulk Message Functionality</SUBJECT> <DATE>August 13, 2025.</DATE> Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”), <SU>1</SU> <FTREF/> and Rule 19b-4 thereunder, <SU>2</SU> <FTREF/> notice is hereby given that on August 12, 2025, Cboe Exchange, Inc. (the “Exchange” or “Cboe Options”) 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. <FTNT> <SU>1</SU>  15 U.S.C. 78s(b)(1). </FTNT> <FTNT> <SU>2</SU>  17 CFR 240.19b-4. </FTNT> <HD SOURCE="HD1">I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change</HD> Cboe Exchange, Inc. (the “Exchange” or “Cboe Options”) proposes to amend its Rules related to the submission of bids and offers for certain complex strategies for execution using bulk message functionality. The text of the proposed rule change is provided in Exhibit 5. The text of the proposed rule change is also available on the Exchange's website ( <E T="03">http://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx</E> ) and at the Exchange's Office of the Secretary. <HD SOURCE="HD1">II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change</HD> 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. <HD SOURCE="HD2">A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change</HD> <HD SOURCE="HD3">1. Purpose</HD> The Exchange proposes to amend its Rules regarding the submission of bids and offers for certain complex strategies using bulk message functionality. The primary purpose of bulk message functionality is to encourage market-maker quoting on the Exchange. <SU>3</SU> <FTREF/> The Exchange's bulk message functionality permits Market-Makers to submit a single electronic message to the Exchange, in which message the Market-Maker may enter, modify, or cancel up to an Exchange-specified number of bids and offers. <SU>4</SU> <FTREF/> Bulk messages are submitted through bulk ports, as set forth in Rule 5.5(c)(3). The System handles a bid or offer submitted in a bulk message in the same manner as it handles a bid or offer submitted in an order message, unless the Rules otherwise specify. While the definition in the rules for bulk messages ( <E T="03">i.e.,</E> quotes) applies to both simple and complex bids and offers, the Exchange currently offers bulk message functionality only for simple bids and offers. However, the Exchange plans to expand the use of this functionality to complex bids and offers for Exchange-designated strategies, <SU>5</SU> <FTREF/> and this filing amends certain rules in connection with this planned expansion of functionality. <FTNT> <SU>3</SU>   <E T="03">See</E> Securities Exchange Act Release No. 86374 (July 15, 2019), 84 FR 34963 (July 19, 2019) (SR-CBOE-2019-033). The Exchange notes that a “bulk message” is often referred to as a “quote” or “quote message,” while an “order” and “order message” refer to an order (even if submitted by a Market-Maker, which would be classified as a quote pursuant to the definition of quote in Rule 1.1). This is relevant for purposes of the reporting exemption for options market-maker quote in the CAT NMS Plan (“CAT”). <E T="03">See CAT Section 6.4(d)(iii); see also</E> CAT FAQ K10 (which provides that each options exchange determines which messages submitted by options market-makers are subject to the exemption) and Cboe Options Regulatory Circular 20-044 (July 7, 2020) (which requires Market-Maker bulk message quotes include quote sent time in accordance with the exemption and notes that other messages, such as order and auction response messages, sent by Market-Makers are not subject to the exemption). </FTNT> <FTNT> <SU>4</SU>   <E T="03">See</E> Rule 1.1 (definition of bulk message). The proposed rule change amends the definition of bulk message in Rule 1.1 to correct a cross-reference. The proposed rule change amends Rule 5.5(c)(3)(A) to clarify that bulk messages may be submitted by Market-Makers only, which is consistent with the definition of bulk message that states a bulk message must have an M Capacity (which, per the definition of Capacity in Rule 1.1, is the code corresponding to the account of a Market-Maker). </FTNT> <FTNT> <SU>5</SU>  Pursuant to Rule 5.33(b)(2)(A), the Exchange may designate complex strategies in which a complex order with Capacity M or N may enter the COB. These designated complex strategies (which the Exchange announces pursuant to Rule 1.5) are the complex strategies in which Market-Makers may submit complex bulk messages. </FTNT> In 2024, the Exchange amended its Rules to encourage increased, consolidated liquidity in complex strategies on the complex order book (“COB”). <SU>6</SU> <FTREF/> Specifically, Rule 5.33(a) permits the Exchange to create new complex strategies to allow for the consolidation of liquidity within a single complex strategy that may otherwise be spread across multiple customer-created complex strategies expressing similar exposure profiles. Additionally Rule 5.33(b)(2)(A) permits complex orders with a Market-Maker capacity (M or N) to enter complex orders to rest in the COB in Exchange-designated complex strategies to support this consolidation of liquidity. The proposed rule change enhances current functionality to further support the consolidation of liquidity within certain complex strategies rather than have liquidity spread across complex strategies with the same or similar exposure risk profiles. Specifically, it will permit Market-Makers to use the same bulk message functionality they generally use to provide liquidity in simple markets to do so in complex markets (rather than only be able to use order message functionality) in the complex strategies designated by the Exchange pursuant to Rule 5.33(b)(2)(A). As noted above, bulk message functionality will permit Market-Makers to submit new or updated bids and offers for multiple complex strategies in a single message. This functionality is consistent with Market-Makers' quoting systems that update quotes in response to market conditions and will permit Market-Makers to update quotes in more complex strategies on a regular basis. Currently, Market-Makers need to submit an individual order for each complex strategy in which they want to submit a bid or offer. The Exchange believes providing Market-Makers with this functionality for Exchange-designated strategies will encourage Market-Makers to add more liquidity into these strategies. <SU>7</SU> <FTREF/> <FTNT> <SU>6</SU>   <E T="03">See</E> Securities Exchange Act Release No. 100081 (May 8, 2024), 89 FR 42007 (May 14, 2024) (SR-CBOE-2024-015). The proposed rule change adds to the definition of complex strategy in Rule 5.33(a) that Exchange-designated complex strategies are available for trading during RTH only, as the Exchange does not publicize which strategies will be available until prior to the RTH trading session. If a User wanted to trade in that complex strategy during other trading sessions, it may continue to do so by submitting that complex instrument creation request as it would for any other complex strategy during those trading sessions. </FTNT> <FTNT> <SU>7</SU>  Proposed Rule 5.5(c)(3)(A)(ii) states that complex quotes may be submitted on in Exchange-designated complex strategies. </FTNT> The proposed rule change first adopts Rule 5.5(c)(3)(A)(ii) to impose similar requirements on bulk messages comprised of complex bids and offers to the requirements imposed on quote messages comprised of simple bids and offers. <SU>8</SU> <FTREF/> Specifically, proposed Rule 5.5(c)(3)(A)(ii) provides that bulk messages comprised of complex bids and offers must have a Time-in-Force of Day. <SU>9</SU> <FTREF/> This is consistent with the purpose of bulk ports, including for Exchange-designated strategies, which are intended to be used for liquidity provision on the Exchange (particularly Market-Makers). <SU>10</SU> <FTREF/> In turn, the Exchange believes it is unnecessary to allow orders entered via bulk ports to be able to last beyond the trading day on which they were entered. This is consistent with why bulk messages were initially limited to a Time-in-Force of Day when Cboe migrated its prior quoting functionality to its new technology in 2019. As noted when the Exchange adopted quote functionality, the Exchange understands it to be common practice in the industry for Market-Makers to enter new quotes at the beginning of a trading day based on then-current market conditions. <SU>11</SU> <FTREF/> <FTNT> <SU>8</SU>  The proposed rule change makes a nonsubstantive change to add Rule 5.5(c)(3)(A)(i) to contain the current provisions related to simple quotes (including adding introductory language to make clear that provision applies to bulk messages comprised of simple bids and offers changing current subparagraphs (i), (ii), ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 50k characters. 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