Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend a Wide Market Protection Mechanism Designed To Reduce the Risk of Orders Executing at Extreme or Adverse Prices When the National Best Bid and Offer is Determined To Be Wide

<NOTICE> SECURITIES AND EXCHANGE COMMISSION <DEPDOC>[Release No. 34-104435; File No. SR-CBOE-2025-091]</DEPDOC> <SUBJECT>Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend a Wide Market Protection Mechanism Designed To Reduce the Risk of Orders Executing at Extreme or Adverse Prices When the National Best Bid and Offer is Determined To Be Wide</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 15, 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 Rule 5.34 to adopt a wide market protection mechanism designed to reduce the risk of orders executing at extreme or adverse prices when the national best bid and offer (“NBBO”) is determined to be wide. 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 purpose of this rule filing is to amend Rule 5.34(a), Order and Quote Price Protection Mechanisms and Risk Controls (Simple Orders). Specifically, the Exchange proposes changes the wide market protection mechanism set forth in Rule 5.34(a)(5). By way of background, the wide market protection mechanism is designed to reduce the risk of orders executing at extreme or adverse prices when the NBBO is determined to be wide. The wide market protection mechanism leverages the Exchange's iterative drill-through protection mechanism for certain orders when the NBBO is wide and initiates a drill-through pause on applicable inbound market or limit orders or elected Stop (Stop-Loss)  orders which would either execute or post to the Book  <SU>5</SU> <FTREF/> at potentially extreme prices. <FTNT> <SU>3</SU>  A “Stop (Stop-Loss)” order is an order to buy (sell) that becomes a market order when the consolidated last sale price (excluding prices from complex order trades if outside of the NBBO) or NBB (NBO) for a particular option contract is equal to or above (below) the stop price specified by the User. Users may not designate a Stop Order as All Sessions. Users may not designate bulk messages as Stop Orders. A User may not designate a Stop order as Direct to PAR. <E T="03">See</E> Rule 5.6(c) (definition of “Stop (Stop-Loss)” order). </FTNT> <FTNT> <SU>4</SU>  A “Stop-Limit” order is an order to buy (sell) that becomes a limit order when the consolidated last sale price (excluding prices from complex order trades if outside the NBBO) or NBB (NBO) for a particular option contract is equal to or above (below) the stop price specified by the User. A User may not designate a Stop-Limit Order as All Sessions or RTH and Curb. Users may not designate bulk messages as Stop-Limit Orders. A User may not designate a Stop-Limit order as Direct to PAR. <E T="03">See</E> Rule 5.6(c) (definition of “Stop-Limit” order). </FTNT> <FTNT> <SU>5</SU>  “Book” means the electronic book of simple orders and quotes maintained by the System, which single book is used during both the regular trading hours and global trading hours trading sessions. <E T="03">See</E> Rule 1.1 (definition of, “Book”). </FTNT> Currently, pursuant to Rule 5.34(a)(5)(D), bulk messages, Intermarket Sweep Orders (“ISOs”), Immediate-or-Cancel orders (“IOCs”), and M and N capacity  <SU>6</SU> <FTREF/> orders with a Time-in-Force of Day  <SU>7</SU> <FTREF/> are excluded from the wide market protection mechanism. The Exchange proposes to amend Rule 5.34(a)(4)(D) to exclude all M and N capacity orders from the wide market protection mechanism (regardless of Time-in-Force). <FTNT> <SU>6</SU>   <E T="03">See</E> Rule 1.1 (definition of “Capacity”). </FTNT> <FTNT> <SU>7</SU>  A “Time-in-Force” means the period of time the System holds an order or quote. Time-in-Force may include Day, Fill-or-Kill, Good-til-Cancelled, Good-til-Date, Immediate-or-Cancel, Limit-on-Close, Market-on-Close, and At the Open. <E T="03">See</E> Rule 5.6(d). The Exchange notes that all Immediate-or-Cancel (“IOC”) orders are excluded from wide market protection. <E T="03">See</E> Rule 5.34(a)(4)(D). </FTNT> As noted, the current rules already exclude M and N capacity orders with a Time-in-Force of Day, which encompasses the majority of Market-Maker orders. In general, Market-Makers are positioned to observe and subsequently address wide market scenarios, by tightening the NBBO with an order or quote. The proposed change merely extends the current rules to include any other potential type of Market-Maker order, thereby ensuring consistency across all potential types of Market-Maker orders. <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>8</SU> <FTREF/> Specifically, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5)  <SU>9</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>10</SU> <FTREF/> requirement that the rules of an exchange not be designed to permit unfair discrimination between customers, issuers, brokers, or dealers. <FTNT> <SU>8</SU>  15 U.S.C. 78f(b). </FTNT> <FTNT> <SU>9</SU>  15 U.S.C. 78f(b)(5). </FTNT> <FTNT> <SU>10</SU>   <E T="03">Id.</E> </FTNT> In particular, the Exchange believes the proposed rule change to exclude all M and N capacity orders from the wide market protection mechanism (regardless of Time-in-Force) will remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, protect investors. In its initial proposal, the Exchange proposed to exclude only M and N capacity orders with Time-in-Force of Day, as the majority of Market-Maker orders are submitted with a Time-in-Force of Day. The proposed change to exclude all M and N capacity orders, regardless of Time-in-Force, is designed to ensure consistency across all potential types of Market-Maker orders. The Exchange believes the proposed change is reasonable, as Market-Makers are positioned to observe and subsequently address wide market scenarios, by tightening the NBBO with an order or quote. The Exchange believes the proposed change will support the operational efficiency of the wide market protection mechanism and alleviate potential confusion, by removing an unnecessary operational distinction between types of Market-Maker orders, to the benefit of investors. Finally, the Exchange believes the proposed change to exclude all M and N capacity orders is not unfairly discriminatory, as the proposed change will apply to all M and N capacity orders. The current rules already exclude M and N capacity orders with a Time-in-Force of Day, which encompasses the majority of Market-Maker orders. The proposed change merely extends the current rules to include any other potential type of Market-Maker order. As noted above, Market-Makers are best positioned to observe and address wide market scenarios. <HD SOURCE="HD2">B. Self-Regulatory Organization's Statement on Burden on Competition</HD> 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 Exchange does not believe that the proposed rule change will impose any burden on intramarket competition that is not necessary or appropriate in furtherance of the purposes of the Act because the proposed change will apply to all M and N capacity orders uniformly ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 16k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━