Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 7.10 Relating to Fingerprint-Based Background Checks

<NOTICE> SECURITIES AND EXCHANGE COMMISSION <DEPDOC>[Release No. 34-104012; File No. SR-CBOE-2025-065]</DEPDOC> <SUBJECT>Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 7.10 Relating to Fingerprint-Based Background Checks</SUBJECT> <DATE>September 22, 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 September 9, 2025, Cboe Exchange, Inc. (“Exchange”) filed with the Securities and Exchange Commission (“Commission” or “SEC”) 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 Rule. 7.10. The text of the proposed rule change is provided in Exhibit 5. The text of the proposed rule change is also available on the Commission's website ( <E T="03">https://www.sec.gov/rules/sro.shtml</E> ), the Exchange's website ( <E T="03">https://www.cboe.com/us/options/regulation/rule_filings/bzx/</E> [sic]) and at the principal office of the Exchange. <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 Rule 7.10 (Fingerprint-Based Background Checks of Exchange Directors, Officers, Employees and Others). <SU>3</SU> <FTREF/> Rule 7.10 describes the Exchange's current practice of conducting fingerprint-based criminal records checks of (i) directors, officers and employees of the Exchange, and (ii) temporary personnel, independent contractors, consultants, vendors and service providers (collectively, “Contractors”) who have or are anticipated to have access to facilities and records. The Exchange now proposes to amend Rule 7.10 to conform to the language in Section 17(f)(2) of the Securities Exchange Act of 1934 (“Act”). <SU>4</SU> <FTREF/> <FTNT> <SU>3</SU>  As part of the proposed rule change, the Exchange proposes to rename Rule 7.10 to “Fingerprint-Based Background Checks of Exchange Partners, Directors, Officers and Employees.” </FTNT> <FTNT> <SU>4</SU>  15 U.S.C. 78q(f)(2). </FTNT> By way of background, access to the Federal Bureau of Investigation's (“FBI”) database of fingerprint based criminal records is permitted only when authorized by law. Numerous federal and state laws authorize employers to conduct fingerprint-based background checks that make use of the FBI's database. Notably, Section 17(f)(2) of the Act and SEC Rule 17f-2  <SU>5</SU> <FTREF/> require partners, directors, officers and employees of members of national securities exchanges, brokers, dealers, transfer agents, and clearing agencies to be fingerprinted and authorize SROs to maintain facilities for processing and storing fingerprint cards and criminal record information received from the FBI database with respect to such cards. Section 17(f)(2) explicitly directs the Attorney General of the United States ( <E T="03">i.e.,</E> the FBI, which is the fingerprint processing arm of the Office of the Attorney General of the United States) to provide SROs designated by the Securities and Exchange Commission (the “Commission”) with access to criminal history record information. Section 17(f)(2) was amended by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank Act”) to also require partners, directors, officers and employees of registered securities information processors, national securities exchanges and national securities associations to be fingerprinted. <SU>6</SU> <FTREF/> Following this amendment, the Exchange and other securities markets adopted rules to obtain fingerprints from certain enumerated parties. <SU>7</SU> <FTREF/> <FTNT> <SU>5</SU>  17 CFR 240.17f-2(c). </FTNT> <FTNT> <SU>6</SU>   <E T="03">See</E> Section 929S of the Dodd-Frank Act. </FTNT> <FTNT> <SU>7</SU>   <E T="03">See</E> International Securities Exchange (“ISE”) Rulebook Options 6E, Section 8; New York Stock Exchange (“NYSE”) American Rule 3.11E; and Nasdaq Stock Market, Inc. (“Nasdaq”) Rulebook General 2, Section 13. </FTNT> The Exchange now proposes to amend Rule 7.10 in order to more closely align with the requirements for national securities exchanges as provided in Section 17(f)(2) of the Act. As noted above, Rule 7.10 currently applies to (i) directors, officers and employees of the Exchange, and (ii) Contractors. Section 17(f)(2) of the Act, however, does not specifically apply to independent contractors nor temporary employees, but instead references only “partners, directors, officers, and employees” of the Exchange. Thus, the Exchange proposes to amend Rule 7.10 to add reference to “partners” of the Exchange and to delete references to “temporary personnel, independent contractors, consultants, vendors and service providers who have or are anticipated to have access to its facilities and records (collectively, “Contractors”)” in order to conform to the requirements (and respective authority) of Section 17(f)(2) of the Act. In addition, in order to still safeguard the security of the facilities, systems, data, and information of the Exchange, the Exchange proposes to amend its rule to require all Contractors who have or are anticipated to have unescorted access to the facilities and records of the Exchange to have been subject to a background screening process by their associated employer. <SU>8</SU> <FTREF/> Finally, the Exchange proposes related technical changes to Rule 7.10(c) and (d). <FTNT> <SU>8</SU>  The Exchange currently includes in its professional services agreements a provision that requires third-party Contractors to represent and warrant that the Contractor has in place, and shall maintain, a suitable background screening policy and process consistent with applicable law which has been followed for each of its personnel prior to assigning, permissioning or permitting such personnel to have access to Exchange confidential information or performing services for the Exchange. The Exchange expects such background check to focus on, among other things, education verification, employment history verification, and criminal records. To the extent a Contractor would have “escorted” electronic access, such Contractor would be unable to view non-public systems, data, or information of the Exchange unless accompanied by an authorized Exchange employee who supervises and controls their access. </FTNT> <HD SOURCE="HD3">2. Statutory Basis</HD> 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. <SU>9</SU> <FTREF/> Specifically, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5)  <SU>10</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. <FTNT> <SU>9</SU>  15 U.S.C. 78f(b). </FTNT> <FTNT> <SU>10</SU>  15 U.S.C. 78f(b)(5). </FTNT> As noted above, Section 17(f)(2) of the Act, as amended by the Dodd-Frank Act, only references authority for Exchanges to submit fingerprints of its “partners, directors, officers and employees” for identification and processing and does not specifically apply to Contractors. Accordingly, the proposed rule change conforms Rule 7.10 to conform to the language in Section 17(f)(2) and more accurately reflects the Exchange's authority under Section 17(f)(2) of the Act, as amended by the Dodd-Frank Act, to require its partners, directors, officers, and employees to be fingerprinted and submit those fingerprints (or cause the fingerprints to be submitted) to the Attorney General for identification and appropriate processing. The Exchange believes the proposed changes to Rule 7.10, including the codification of the Exchange's background screening requirements related to Contractors are consistent with the foregoing requirements of Section 6(b)(5) in that it will allow the Exchange to remain compliant with applicable federal law, specifically Section 17(f)(2) of the Act, while helping the Exchange to identify and exclude persons (including persons with criminal records) that may pose a threat to the safety of Exchange personnel or the security of facilities and records, thereby enhancing business continuity, workplace safety and the security ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 17k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━