Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing of a Proposed Rule Change To Proposes To Amend Rules 5.37, 5.39, 5.73, and 5.74 To Permit Orders for the Accounts of Market-Makers With an Appointment in the Applicable Class on the Exchange, in all Classes, To Be Solicited for the Initiating Order Submitted for Execution Against an Agency Order Into a Simple AIM, Simple SAM, FLEX AIM or FLEX SAM Auction

<NOTICE> SECURITIES AND EXCHANGE COMMISSION <DEPDOC>[Release No. 34-104437; File No. SR-CBOE-2025-090]</DEPDOC> <SUBJECT>Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing of a Proposed Rule Change To Proposes To Amend Rules 5.37, 5.39, 5.73, and 5.74 To Permit Orders for the Accounts of Market-Makers With an Appointment in the Applicable Class on the Exchange, in all Classes, To Be Solicited for the Initiating Order Submitted for Execution Against an Agency Order Into a Simple AIM, Simple SAM, FLEX AIM or FLEX SAM Auction</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 9, 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 Rules 5.37, 5.39, 5.73, and 5.74 to permit orders for the accounts of Market-Makers with an appointment in the applicable class on the Exchange, in all classes, to be solicited for the Initiating Order submitted for execution against an Agency Order into a simple AIM, simple SAM, FLEX AIM or FLEX SAM Auction. 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 amend Rules 5.37 (Automated Price Improvement Mechanism (“AIM” or “AIM Auction”)), 5.39 (“Solicitation Auction Mechanisms (“SAM” or “SAM Auction”)), 5.73 (FLEX Automated Improvement Mechanism (“FLEX AIM” or “FLEX AIM Auction”)), and 5.74 (FLEX Solicitation Auction Mechanism (“FLEX SAM” or “FLEX SAM Auction”)), to permit orders for the accounts of Market-Makers with an appointment in the applicable class on the Exchange, in all classes, to be solicited for the Initiating Order  <SU>3</SU> <FTREF/> submitted for execution against an Agency Order into a simple AIM Auction pursuant to Rule 5.37, a simple SAM Auction pursuant to Rule 5.39, a FLEX AIM Auction pursuant to Rule 5.73, or a FLEX SAM Auction pursuant to Rule 5.74. <FTNT> <SU>3</SU>  The “Initiating Order” is the order comprised of principal interest or a solicited order(s) submitted to trade against the order the submitting Trading Permit Holder (the “Initiating TPH” or “Initiating FLEX Trader,” as applicable) represents as agent (the “Agency Order”). </FTNT> By way of background, Rule 5.37 contains the requirements applicable to the execution of certain customer orders (“Agency Orders”) using AIM. An AIM Auction is an electronic auction intended to provide an Agency Order with the opportunity to receive price improvement (over the National Best Bid or Offer (“NBBO”)). Rule 5.39 contains the requirements applicable to the execution of Agency Orders using SAM. Similarly, a SAM Auction is an electronic auction intended to provide a larger-sized Agency Order with the opportunity to receive price improvement over the NBBO. Upon submitting an Agency Order into an AIM or SAM Auction, the initiating Trading Permit Holder (“Initiating TPH”) must also submit a contra-side second order (“Initiating Order”) for the same size as the Agency Order. The Initiating Order guarantees that the Agency Order will receive an execution at no worse than the auction price. Upon commencement of an auction, market participants may submit responses to trade against the Agency Order. <SU>4</SU> <FTREF/> At the conclusion of an AIM Auction, depending on the contra-side interest (including auction responses) available, the Initiating Order may be allocated a certain percentage (or more) of the Agency Order. <SU>5</SU> <FTREF/> At the conclusion of a SAM Auction, depending on the contra-side interest (including auction responses) available, the Initiating Order may be allocated the entire Agency Order or none of the Agency Order. <SU>6</SU> <FTREF/> Rules 5.73 and 5.74 contain the requirements for AIM and SAM Auctions for flexible exchange options (“FLEX Options”) (“FLEX AIM” and “FLEX SAM,” respectively). <FTNT> <SU>4</SU>   <E T="03">See</E> Rules 5.37(c)(5) and 5.39(c)(5). </FTNT> <FTNT> <SU>5</SU>   <E T="03">See</E> Rule 5.37(e). </FTNT> <FTNT> <SU>6</SU>   <E T="03">See</E> Rule 5.39(e). </FTNT> Currently, the introductory paragraphs of Rules 5.37 and 5.73 prohibit orders for the accounts of Market-Makers with an appointment in the applicable class on the Exchange in all classes except S&P 500 Index options (“SPX”) to be solicited to execute against the Agency Order in a simple AIM or FLEX AIM Auction, respectively. The introductory paragraphs of Rules 5.39 and 5.73 prohibit orders for the accounts of Market-Makers with an appointment in the applicable class on the Exchange to be solicited to execute against the Agency Order in a simple SAM or FLEX SAM Auction, respectively. While market participants other than appointed Market-Makers may contribute liquidity to these crossing auctions as either contra orders or responses, appointed Market-Makers, who are the primary source of liquidity on the Exchange in their appointed classes, are limited in the manner in which they may provide liquidity to these auctions. Given that contra orders that comprise Initiating Orders may be allocated a percentage of the Agency Order at the conclusion of the auctions, the limited ability of appointed Market-Makers to participate in simple AIM, simple SAM, FLEX AIM, and FLEX SAM Auctions may reduce the execution opportunities for these liquidity providers, which execution opportunities are available to other market participants who may be solicited or submit responses. The Exchange believes that eliminating the prohibition against appointed Market-Makers acting as contra in single-leg AIM orders would enhance price improvement opportunities, particularly for retail and smaller Customer orders. This is especially relevant in proprietary products like VIX options, for which many AIM orders are large-sized transactions with banks or institutional participants as contras, while retail orders often route directly to the Book without the opportunity for potential price improvement via AIM auctions. Allowing local appointed Market-Makers to be solicited as contras may result in exposure of more small customer orders to potential price improvement via auction processes. The Exchange notes that appointed Market-Makers may be solicited as contras for complex AIM and SAM Auctions, which function in a substantially similar manner as AIM and SAM for simple orders. <SU>7</SU> <FTREF/> The Exchange further notes that Rule 8.10 prohibits TPHs from misusing material, nonpublic information (for example, advanced knowledge of auctioned orders), so protections will remain in place under the proposed rule change to address any potential information leakage concerns. <FTNT> <SU>7</SU>   <E T="03">See</E> Rules 5.38 and 5.39. </FTNT> Additionally, the restriction has become operationally outdated in current market structure. As noted above, it is common practice that AIM orders already involve the same Market-Maker firm acting as both contra (via an away Market-Maker) and auction respondent (via an appointed Market-Maker). Eliminating this restriction would reduce an arbitrary and unnecessary burden allow Market-Maker firms to structure more efficient auction processes, which may ultimately promote greater competition among Market-Makers and provide Customers with enhanced opportunities for price improvement. To demonstrate the importance of the liquidity provided by Market-Makers, for the time period from January to June 2025, the percentage of smaller Customer orders (20 or fewer) that executed in open outcry against a Market-Maker in multi-list classes as contra was approximately 57%, and the percentage of smaller customer orders (20 or fewer) that executed electronically against a Market-Maker in multi-list classes as contra was approximately 93%. Further, for the same time period, the percentage of smaller Customer orders (20 or fewer) that executed in open outcry against a VIX Market-Maker as contra was approximately 71%, and the percentage of smaller customer orders (20 or fewer) that executed electronically against a Market-Maker in multi-list classes as contra was approximately 87%. Currently, there are 24 distinct TPHs with appointments across multi-list classes and 18 TPHs with VIX appointm ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 23k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━