Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Modify the Minimum Performance Standards Applicable to the Exchange's Lead Market Maker (“LMM”) Program in BZX-Listed Exchange-Traded Product (“ETP”) Securities as Provided in Footnote 14 of the Exchange's Fee Schedule and To Remove Closed-End Funds (“CEFs”) From the ETP LMM Program

<NOTICE> SECURITIES AND EXCHANGE COMMISSION <DEPDOC>[Release No. 34-104472; File No. SR-CboeBZX-2025-163]</DEPDOC> <SUBJECT>Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Modify the Minimum Performance Standards Applicable to the Exchange's Lead Market Maker (“LMM”) Program in BZX-Listed Exchange-Traded Product (“ETP”) Securities as Provided in Footnote 14 of the Exchange's Fee Schedule and To Remove Closed-End Funds (“CEFs”) From the ETP LMM Program</SUBJECT> <DATE>December 19, 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 December 12, 2025, Cboe BZX Exchange, Inc. (“Exchange” or “BZX”) 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 BZX Exchange, Inc. (“BZX” or the “Exchange”) is filing with the Securities and Exchange Commission (“Commission” or “SEC”) a proposed rule change to modify the Minimum Performance Standards applicable to the Exchange's Lead Market Maker (“LMM”) program in BZX-listed exchange-traded product (“ETP”) securities as provided in footnote 14 of the Exchange's fee schedule and to remove Closed-End Funds (“CEFs”) from the ETP LMM 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 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/equities/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 its Fee Schedule applicable to its equities trading platform (“BZX Equities”) to (1) modify the Minimum Performance Standards  <SU>3</SU> <FTREF/> applicable to the ETP LMM program  <SU>4</SU> <FTREF/> by changing the criteria needed to earn the Base Rates and Enhanced Rates provided in footnote 14(B) of the fee schedule; (2) memorialize those Minimum Performance Standards in the fee schedule; and (3) remove CEFs from the ETP LMM Program. The Exchange proposes to implement these changes effective December 1, 2025. <SU>5</SU> <FTREF/> <FTNT> <SU>3</SU>  As defined in Rule 11.8(e)(1)(E), the term “Minimum Performance Standards” means a set of standards applicable to an LMM that may be determined from time to time by the Exchange. Such standards will vary between LMM Securities depending on the price, liquidity, and volatility of the LMM Security in which the LMM is registered. The performance measurements will include: (A) percent of time at the NBBO; (B) percent of executions better than the NBBO; (C) average displayed size; and (D) average quoted spread. </FTNT> <FTNT> <SU>4</SU>  The ETP LMM Program was adopted in 2019 and was designed to encourage LMMs to maintain better market quality in BZX-listed securities, and, in particular, in lower volume securities where transaction-based compensation ( <E T="03">i.e.,</E> rebates) may not be sufficient. <E T="03">See</E> Securities Exchange Act No. 91151 (February 10, 2021) 86 FR 11372 (February 24, 2021) (SR-CboeBZX-2021-016) (the “Original Filing”). </FTNT> <FTNT> <SU>5</SU>  The Exchange initially filed the proposed fee changes on November 21, 2025 (SR-CboeBZX-2025-150), withdrew that filing on December 4, 2025, and submitted a replacement filing (SR-CboeBZX-2025-160). The Exchange withdrew SR-CboeBZX-2025-160 on December 12, 2025, and submitted this filing. </FTNT> The Exchange first notes that its listings business operates in a highly-competitive market in which market participants, which includes issuers of securities, LMMs, and other liquidity providers, can readily transfer their listings, opt not to participate, or direct order flow to competing venues if they deem fee levels, liquidity provision incentive programs, or any other factor at a particular venue to be insufficient or excessive. The proposed rule changes reflect a competitive pricing structure designed to incentivize market participants to participate as LMMs in the Exchange's LMM Program, which the Exchange believes will enhance market quality in all securities listed on the Exchange and encourage issuers to list new products and transfer existing products to the Exchange. The Exchange currently offers daily incentives for LMMs in ETPs and CEFs and listed on the Exchange for which the LMM meets certain “Base” or “Enhanced” Minimum Performance Standards. <SU>6</SU> <FTREF/> Such daily incentives are determined based on the number of BZX-listed ETPs/CEFs for which the LMM meets such Minimum Performance Standards and the average auction volume across such securities. Generally speaking, the more LMM Securities  <SU>7</SU> <FTREF/> for which the LMM meets the Minimum Performance Standards and the higher the auction volume across those ETPs/CEFs, the greater the total daily incentive to the LMM. <FTNT> <SU>6</SU>  Minimum Performance Standards generally refers to a set of standards applicable to an LMM that may be determined from time to time by the Exchange. <E T="03">See e.g.,</E> Exchange Rule 11.8(e)(1)(E). </FTNT> <FTNT> <SU>7</SU>  The term “LMM Security” means BZX-listed securities for which a Member is an LMM. </FTNT> The Exchange first proposes to eliminate CEFs from the ETP LMM Program provided under footnote 14(B) of the fee schedule. To effect this change, the Exchange proposes to remove CEFs from the definition of “Qualified ETP LMM” and adopt a new term “Qualified CEF LMM” in the fee schedule. The Exchange proposes to define “Qualified CEF LMM” to mean an LMM in a BZX-listed CEF security that meets the LMM performance standards set forth in Rule 11.8(e)(1)(E)(ii). The Exchange proposes to modify the existing definition of “Qualified ETP LMM” to mean an LMM in a BZX-listed ETP that is registered as a market maker in good standing on the Exchange that meets the Base or Enhanced Minimum Performance Standards set forth in footnote 14(B). The Exchange also proposes to eliminate all references to CEFs in footnote 14(B) of the fee schedule. The Exchange proposes to adopt a new definition for the term “ETP Minimum Performance Standards” which would mean the “Base” or “Enhanced” standards set forth in footnote 14(B) of the fee schedule. The Exchange also proposes to modify references to Standard Rates in footnote 14(B) to Base Rates. The Exchange also proposes to amend both the Base and Enhanced Minimum Performance Standards under which an ETP LMM would qualify for the daily incentive. The Exchange proposes no changes to the amount of the daily incentives currently provided in the fee schedule. The Original Filing provided that the Exchange expects the Minimum Performance Standards to include the below, and before diverging significantly from those ranges, the Exchange would submit a rule filing to the Commission describing such proposed changes. Specifically, the Minimum Performance Standards included in Original Filing required: (i) registration as a market maker in good standing with the Exchange; (ii) time at the inside requirements (generally between 3% and 15% of Regular Trading Hours for Base Minimum Performance Standards and between 5% to 50% for Enhanced Minimum Performance Standards, depending on the average daily volume of the applicable LMM Security); (iii) auction participation requirements (generally requiring that the auction price is between 3% and 5% of the last Reference Price, as defined in Rule 11.23(a)(19), for Base Minimum Performance Standards and 1%-3% for Enhanced Minimum Performance Standards); (iv) market-wide NBB and NBO spread and size requirements (generally requiring between 200 and 750 shares at both the NBB and NBO for both Base and Enhanced Minimum Performance Standards with an NBBO spread between 1% and 10% for Base Minimum Performance Standards and .25% to 4% for Enhanced Minimum Performance Standards, depending on price of the ETP and underlying asset class); and (v) depth of book requirements (generally requiring between $25,000 and $250,000 of displayed posted liquidity for both Base and Enhanced Minimum Performance Standards within 1% to 10% of both the NBB and NBO for Base Minimum Performance Standards and 0.25% and 5% for Enhanced Minimum Performance Standards, depending on price of the ETP and underlying asset class). Now, the Exchange proposes to modify the Base and Enhanced Minimum Performance Standards and memorialize those Minimum Performance Standards in the fee schedule. First, the Exchange proposes to provide under footnote 14(B) introductory language related to a Qualifie ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 34k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━