Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fees Schedule To Adopt an Administrative Fee To Offset Its Costs in Administering the Marketing Fee Program

<NOTICE> SECURITIES AND EXCHANGE COMMISSION <DEPDOC>[Release No. 34-103961; File No. SR-CBOE-2025-063]</DEPDOC> <SUBJECT>Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fees Schedule To Adopt an Administrative Fee To Offset Its Costs in Administering the Marketing Fee Program</SUBJECT> <DATE>September 12, 2025.</DATE> Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”)  <SU>1</SU> <FTREF/> and Rule 19b-4 thereunder, <SU>2</SU> <FTREF/> notice is hereby given that on September 2, 2025, Cboe Exchange, Inc. (the “Exchange” or “Cboe Options”) filed with the Securities and Exchange Commission (the “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 Fees Schedule to adopt an administrative fee to offset its costs in administering the Marketing Fee program. 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 Fees Schedule, effective September 2, 2025. The Exchange first notes that it operates in a highly competitive market in which market participants can readily direct order flow to competing venues if they deem fee levels at a particular venue to be excessive or incentives to be insufficient. More specifically, the Exchange is only one of 18 options venues to which market participants may direct their order flow. Based on publicly available information, no single options exchange has more than 14% of the market share. <SU>3</SU> <FTREF/> Thus, in such a low-concentrated and highly competitive market, no single options exchange possesses significant pricing power in the execution of option order flow. The Exchange believes that the ever-shifting market share among the exchanges from month to month demonstrates that market participants can shift order flow or discontinue to reduce use of certain categories of products in response to fee changes. Accordingly, competitive forces constrain the Exchange's transaction fees, and market participants can readily trade on competing venues if they deem pricing levels at those other venues to be more favorable. In response to competitive pricing, the Exchange, like other options exchanges, offers rebates and assesses fees for certain order types executed on or routed through the Exchange. <FTNT> <SU>3</SU>   <E T="03">See</E> Cboe Global Markets U.S. Options Monthly Market Volume Summary (August 25, 2025), available at <E T="03">https://markets.cboe.com/us/options/market_statistics/.</E> </FTNT> By way of background, the Marketing Fee is assessed on transactions of Market-Makers, resulting from customer orders at the per contract rate provided in the Fees Schedule on all classes of equity options, options on ETFs, options on ETNs and index options. <SU>4</SU> <FTREF/> A Designated Primary Market-Maker (“DPM”), a “Preferred Market‐Maker (“PMM”), or a Lead Market-Maker (“LMM”) (collectively “Preferenced Market‐Maker”) are given access to the Marketing Fee funds generated from a Preferenced order. The funds collected via this Marketing Fee are then put into pools controlled by the Preferenced Market-Maker. The Preferenced Market-Maker controlling a certain pool of funds can then determine the order flow provider(s) to which the funds should be directed in order to encourage such order flow provider(s) to send orders to the Exchange. Each month, undisbursed Marketing Fees in excess of $250,000 will be reimbursed to the Market-Makers that contributed to the pool based upon a one month look back and their pro-rata portion of the entire amount of Marketing Fee collected during that month. <FTNT> <SU>4</SU>  A Marketing Fee of $0.25 per contract will be assessed to Market-Makers for transactions in Penny Program Classes and a Marketing Fee of $0.70 per contract will be assessed to Market-Makers for transactions in all other classes. The Marketing Fee does not apply to Sector Indexes, DJX, CBTX, MBTX, MRUT, MXEA, MXEF, MXACW, MXUSA, MXWLD, XSP, SPEQX, NANOS, FLEX Micros or Underlying Symbol List A. The fee also does not apply to: Market‐Maker‐to‐Market‐Maker transactions, including transactions resulting from orders from non‐Trading Permit Holder market‐makers; transactions resulting from penny cabinet trades and sub-penny cabinet trades; transactions in Flexible Exchange Options; transactions executed as a qualified contingent cross (“QCC”) under Rule 6.53(u); transactions executed in open outcry; and transactions in the Penny Program classes resulting from orders executed through the Step Up Mechanism under Rule 5.35. </FTNT> The Exchange now proposes to adopt an administrative fee to offset its costs in administering the Marketing Fee program. Specifically, the Exchange proposes to assess an administrative fee of 0.45% of the total amount of funds collected each month. The Exchange will closely monitor the amount of funds raised by this administrative fee and amend the fee in the future if necessary, so that the fee provides sufficient funds to adequately offset the Exchange's costs in administering the program. The Exchange is not making any other changes to its Marketing Fee program. The Exchange also notes that the proposed administrative fee is identical to the fee that at least one other options exchange assesses in connection with administering their respective marketing fee program. <SU>5</SU> <FTREF/> <FTNT> <SU>5</SU>   <E T="03">See</E> Nasdaq PHLX LLC Rules, Options 7 (Pricing Schedule), Section 4, Marketing Fees. </FTNT> <HD SOURCE="HD3">2. Statutory Basis</HD> The Exchange believes the proposed rule change is consistent with the Securities Exchange Act of 1934 (the “Act”) and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of Section 6(b) of the Act. <SU>6</SU> <FTREF/> Specifically, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5)  <SU>7</SU> <FTREF/> 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)  <SU>8</SU> <FTREF/> requirement that the rules of an exchange not be designed to permit unfair discrimination between customers, issuers, brokers, or dealers. The Exchange also believes the proposed rule change is consistent with Section 6(b)(4) of the Act, <SU>9</SU> <FTREF/> which requires that Exchange rules provide for the equitable allocation of reasonable dues, fees, and other charges among its Trading Permit Holders and other persons using its facilities. <FTNT> <SU>6</SU>  15 U.S.C. 78f(b). </FTNT> <FTNT> <SU>7</SU>  15 U.S.C. 78f(b)(5). </FTNT> <FTNT> <SU>8</SU>   <E T="03">Id.</E> </FTNT> <FTNT> <SU>9</SU>  15 U.S.C. 78f(b)(4). </FTNT> The Exchange believes that it is reasonable to assess the proposed administrative fee to offset its costs in administering the Marketing Fee program. As noted above, the Exchange will closely monitor the amount of funds raised by this administrative fee and amend the fee in the future if necessary, so that the fee provides sufficient funds to adequately offset the Exchange's costs in administering the Marketing Fee program. The Exchange believes that it is equitable and not unfairly discriminatory to assess the administrative fee because it would apply uniformly to all funds collected under the Marketing Fee program as a means to offset costs of collecting and administering such funds. Also, as described above, the proposed rule change is reasonable, equitable and not unfairly discriminatory as the proposed administrative fee is identical to the fee that at least one other options exchange assesses in connection with administering their respective marketing fee program. <SU>10</SU> <FTREF/> <FTNT> <SU>10</SU>   <E T="03">See</E> Nasdaq PHLX LLC Rules, Options 7 (Pricing Schedule), Section 4, Marketing Fees. </FTNT> <HD SOURCE="HD2">B. Self-Regulatory Organization's Statement ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 17k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━