Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Extend the Sunset Date of the Current Options Regulatory Fee (ORF) From December 31, 2025 to June 30, 2026

<NOTICE> SECURITIES AND EXCHANGE COMMISSION <DEPDOC>[Release No. 34-104416; File No. SR-CBOE-2025-085]</DEPDOC> <SUBJECT>Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Extend the Sunset Date of the Current Options Regulatory Fee (ORF) From December 31, 2025 to June 30, 2026</SUBJECT> <DATE>December 17, 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 December 12, 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, II, and III 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 relating to the Options Regulatory Fee. 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> ), 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 extend the sunset date of the current Options Regulatory Fee (“ORF”) from December 31, 2025 to June 30, 2026. Therefore, as proposed, ORF will continue to be $0.0023 per contract side, effective January 2, 2026. <HD SOURCE="HD3">Background</HD> Today, ORF is assessed by the Exchange to each Trading Permit Holder (“TPH”) for options transactions cleared by the TPH that are cleared by the Options Clearing Corporation (“OCC”) in the customer range, regardless of the exchange on which the transaction occurs. <SU>3</SU> <FTREF/> In other words, the Exchange imposes the ORF on all customer-range transactions cleared by a TPH, even if the transactions do not take place on the Exchange. The ORF is collected by OCC on behalf of the Exchange from the Clearing Trading Permit Holder (“CTPH”) or non-CTPH that ultimately clears the transaction. With respect to linkage transactions, the Exchange reimburses its routing broker providing Routing Services pursuant to the Exchange Rule 5.36 for options regulatory fees it incurs in connection with the Routing Services it provides. <FTNT> <SU>3</SU>  The Exchange notes ORF also applies to customer-range transactions executed during Global Trading Hours. </FTNT> Revenue generated from ORF, when combined with all of the Exchange's other regulatory fees and fines, is designed to recover a material portion of the regulatory costs to the Exchange of the supervision and regulation of TPH customer options business including performing routine surveillances, investigations, examinations, financial monitoring, and policy, rulemaking, interpretive, and enforcement activities. Regulatory costs include direct regulatory expenses and certain indirect expenses for work allocated in support of the regulatory function. The direct expenses include in-house and third-party service provider costs to support the day-to-day regulatory work such as surveillances, investigations and examinations. The indirect expenses include support from such areas as human resources, legal, compliance, information technology, facilities and accounting. These indirect expenses are estimated to be approximately 42% of the Exchange' total regulatory costs for 2026. Thus, direct expenses are estimated to be approximately 58% of total regulatory costs for 2026. In addition, based on the Exchange' analysis of its regulatory work associated with options regulation, and considering other regulatory revenue, it is the Exchange's practice that revenue generated from ORF not exceed more than 75% of total annual regulatory costs. These expectations are estimated, preliminary and may be subject to change. If the ORF rate were to revert back to $0.0017 per contract side as of January 2, 2026, the Exchange would collect significantly lower than the 75% threshold. Under that reverted rate, the Exchange forecasts for 2026 to collect closer to 54%. <SU>4</SU> <FTREF/> <FTNT> <SU>4</SU>  The Exchange is not looking to capture its traditional 75% threshold at this time, since it is contemporaneously submitting a separate rule filing to adopt a new ORF model, effective July 1, 2026 (subject to adoption of a similar model by all options exchanges). </FTNT> <HD SOURCE="HD3">Proposal for January 2, 2026</HD> The Exchange monitors its regulatory costs and revenues at a minimum on a semi-annual basis. If the Exchange determines regulatory revenues exceed or are insufficient to cover a material portion of its regulatory costs in a given year, the Exchange will adjust the ORF by submitting a fee change filing to the Securities and Exchange Commission (the “Commission”). Even with the temporary increase in 2025, the Exchange collected approximately 71% of its annual regulatory costs. The Exchange also notifies TPHs of adjustments to the ORF via an Exchange Notice, including for the change being proposed herein. <SU>5</SU> <FTREF/> Based on the Exchange's most recent semi-annual review, the Exchange is proposing to maintain the ORF rate of $0.0023 per contract side. <SU>6</SU> <FTREF/> The proposed extension is based on the Exchange's estimated projections for its regulatory costs, which projections have increased, coupled with a projected decrease in the Exchange's other non-ORF regulatory fees. Particularly, based on the Exchange's estimated projections for its regulatory costs, the revenue generated by ORF using the rate of $0.0017 per contract side (the rate to which ORF is set to revert after December 31, 2025), would result in projected revenue that is insufficient to cover a material portion of its regulatory costs ( <E T="03">i.e.,</E> less than 75% of total annual regulatory costs). Further, when combined with the Exchange's projected other non-ORF regulatory fees and fines, the revenue generated by ORF using the current rate is projected to result in combined revenue that is less than 100% of the Exchange's estimated regulatory costs for the year. As noted above, even with the extension of the sunset date for the temporarily increased rate, the amount collected by the Exchange will be lower than the 75% threshold. As the Exchange has done in the past, the Exchange will also provide the Commission confidential details regarding the Exchange's projected regulatory revenue, including projected revenue from ORF, along with a breakout of its projected regulatory expenses, including both direct and indirect allocations. <FTNT> <SU>5</SU>   <E T="03">See</E> Exchange Notice, C2025112601 “Cboe Options Exchange Regulatory Fee Update Effective January 2, 2026.” </FTNT> <FTNT> <SU>6</SU>  The Exchange proposes to have an automatic sunset of the proposed fee on June 30, 2026. </FTNT> The Exchange will continue to monitor the amount of revenue collected from the ORF to ensure that it, in combination with its other regulatory fees and fines, does not exceed the Exchange's total regulatory costs. <HD SOURCE="HD3">New ORF Model</HD> The Exchange appreciates the evolving changes in the markets and regulatory environment and has been evaluating its options while considering industry and regulatory feedback. In light of this, the Exchange has been reviewing its current methodologies and practices for the assessment and collection of ORF. As a result of this review, the Exchange is submitting contemporaneously with this filing another filing that proposes to adopt a modified ORF model that updates the Exchange's process of assessing and collecting ORF, in which model ORF would be assessed to only on-Exchange transactions that clear in the customer range at OCC. Under the proposed modified model, the Exchange expects to continue its current practice that revenue generated from ORF not exceed 75% of total annual regulatory costs. And as is the Exchange's practice today, revenue generated by ORF will not be used for nonregulatory purposes. To create real ORF reform, moving to a new ORF model that only assesses a fee to transactions that occur on one's own options exchange seems right. However, for a new, modified model to be truly meaningful and fair, a rate limited to transactions on one's own exchange should be adopted by all options exchanges to provide a consistent methodology in assessing and collecting ORF going forward. As set forth in its separate filing that proposes the new, modified ORF model, the Exchange is committed to switching to this new model as soon as a consistent framework has been established with the SEC, adopted by all the options exchanges and necessary regulatory ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 22k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━