Federal Register / Vol. 90, No. 7 / Monday, January 13, 2025 / Notices 2759 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3 15 U.S.C. 78s(b)(3)(A). 

4 17 CFR 240.19b–4(f). At any time within 60 days 

of the filing of the proposed rule change, the 

Commission summarily may temporarily suspend 

such rule change if it appears to the Commission 

that such action is necessary or appropriate in the 

public interest, for the protection of investors, or 

otherwise in furtherance of the purposes of the Act. 

If the Commission takes such action, the 

Commission will institute proceedings to determine 

whether the proposed rule change should be 

approved or disapproved. 

5Copies of the submission, all subsequent 

amendments, all written statements with respect to 

the proposed rule change that are filed with the 

Commission, and all written communications 

relating to the proposed rule change between the 

Commission and any person, other than those that 

may be withheld from the public in accordance 

with the provisions of 5 U.S.C. 552, will be 

available for website viewing and printing in the 

Commission’s Public Reference Room, 100 F Street 

NE, Washington, DC 20549, on official business 

days between the hours of 10 a.m. and 3 p.m. 

Copies of the filing also will be available for 

inspection and copying at the principal office of the 

Exchange. 

6 17 CFR 200.30–3(a)(12). 

(‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on December 

23, 2024, Nasdaq BX, Inc. (‘‘Exchange’’) 

filed with the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change as described in 

Item I below, which Item has been 

substantially prepared by the Exchange. 

The Exchange has designated this 

proposal for immediate effectiveness 

pursuant to Section 19(b)(3)(A) of the 

Act 3 and Rule 19b–4(f) thereunder.4

The Commission is publishing this 

notice to solicit comments on the 

proposed rule change from interested 

persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend the 

fees of the following options market 

data products based on the rate of 

inflation: BX Top and BX Depth fees 

(internal and external distribution and 

Non-Display enterprise license) and BX 

Top and BX Depth per subscriber fees. 

Each fee will be adjusted for the 

inflation that has occurred since that 

specific fee was last changed. 

While these amendments are effective 

upon filing, the Exchange has 

designated the proposed amendments to 

be operative on January 1, 2025. 

The proposed rule change, including 

the Exchange’s statement of the purpose 

of, and statutory basis for, the proposed 

rule change, is available on the 

Exchange’s website at https://

listingcenter.nasdaq.com/rulebook/bx/ 

rules and on the Commission’s website 

at https://www.sec.gov/rulesregulations/self-regulatory-organizationrulemaking/national-securitesexchanges?file_number=SR-BX-2024- 

058. 

II. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act.5

Comments may be submitted 

electronically by using the 

Commission’s internet comment form 

(https://www.sec.gov/rules-regulations/ 

self-regulatory-organizationrulemaking/national-securitesexchanges?file_number=SR-BX-2024- 

058) or by sending an email to rulecomments@sec.gov. Please include file 

number SR–BX–2024–058 on the 

subject line. Alternatively, paper 

comments may be sent to Secretary, 

Securities and Exchange Commission, 

100 F Street NE, Washington, DC 

20549–1090. All submissions should 

refer to file number SR–BX–2024–058. 

To help the Commission process and 

review your comments more efficiently, 

please use only one method. The 

Commission will post all comments on 

the Commission’s internet website 

(https://www.sec.gov/rules-regulations/ 

self-regulatory-organizationrulemaking/national-securitesexchanges?file_number=SR-BX-2024- 

058). Do not include personal 

identifiable information in submissions; 

you should submit only information 

that you wish to make available 

publicly. We may redact in part or 

withhold entirely from publication 

submitted material that is obscene or 

subject to copyright protection. All 

submissions should refer to file number 

SR–BX–2024–058 and should be 

submitted on or before February 3, 2025. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.6

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2025–00409 Filed 1–10–25; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Sunshine Act Meetings 

TIME AND DATE: 2:00 p.m. on Thursday, 

January 16, 2025. 

PLACE: The meeting will be held via 

remote means and/or at the 

Commission’s headquarters, 100 F 

Street NE, Washington, DC 20549. 

STATUS: This meeting will be closed to 

the public. 

MATTERS TO BE CONSIDERED: 

Commissioners, Counsel to the 

Commissioners, the Secretary to the 

Commission, and recording secretaries 

will attend the closed meeting. Certain 

staff members who have an interest in 

the matters also may be present. 

In the event that the time, date, or 

location of this meeting changes, an 

announcement of the change, along with 

the new time, date, and/or place of the 

meeting will be posted on the 

Commission’s website at https://

www.sec.gov. 

The General Counsel of the 

Commission, or her designee, has 

certified that, in her opinion, one or 

more of the exemptions set forth in 5 

U.S.C. 552b(c)(3), (5), (6), (7), (8), 9(B) 

and (10) and 17 CFR 200.402(a)(3), 

(a)(5), (a)(6), (a)(7), (a)(8), (a)(9)(ii) and 

(a)(10), permit consideration of the 

scheduled matters at the closed meeting. 

The subject matter of the closed 

meeting will consist of the following 

topics: 

Institution and settlement of 

injunctive actions; 

Institution and settlement of 

administrative proceedings; 

Resolution of litigation claims; and 

Other matters relating to examinations 

and enforcement proceedings. 

At times, changes in Commission 

priorities require alterations in the 

scheduling of meeting agenda items that 

may consist of adjudicatory, 

examination, litigation, or regulatory 

matters. 

CONTACT PERSON FOR MORE INFORMATION: 

For further information, please contact 

Vanessa A. Countryman from the Office 

of the Secretary at (202) 551–5400. 

Authority: 5 U.S.C. 552b. 

Dated: January 8, 2025. 

Vanessa A. Countryman, 

Secretary. 

[FR Doc. 2025–00587 Filed 1–8–25; 4:15 pm] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–102126; File No. SR– 

CBOE–2024–042] 

Self-Regulatory Organizations; Cboe 

Exchange, Inc.; Order Instituting 

Proceedings To Determine Whether To 

Approve or Disapprove a Proposed 

Rule Change To Permit Orders 

Comprised of Options and Futures 

Legs (‘‘Future-Option Orders’’) 

January 6, 2025. 

I. Introduction 

On September 17, 2024, Cboe 

Exchange, Inc. (the ‘‘Exchange’’ or 


ddrumheller on DSK120RN23PROD with NOTICES1
2760 Federal Register / Vol. 90, No. 7 / Monday, January 13, 2025 / Notices 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3The proposal states that a future-option order 

‘‘which is deemed an inter-regulatory spread order 

for purposes of the Rules, is an order to buy or sell 

a stated number of units of an underlying or a 

related futures contract(s) coupled with the 

purchase or sale of an option contract(s) on the 

Exchange. The Exchange designates in which 

classes future-option orders are available.’’ See 

proposed Exchange Rule 1.1. 

4See Securities Exchange Act Release No. 101229 

(Oct. 1, 2024), 89 FR 81592 (‘‘Notice’’). 

5 15 U.S.C. 78s(b)(2). 

6See Securities Exchange Act Release No. 101646 

(Nov. 18, 2024), 89 FR 83723 (Nov. 22, 2024) 

(designating January 6, 2025, as the date by which 

the Commission shall either approve, disapprove, 

or institute proceedings to determine whether to 

disapprove the proposed rule change). 

7 15 U.S.C. 78s(b)(2)(B). 

8See supra note 4. 

9See Notice, 89 FR 81593. 

10See id. 

11See id. 

12See id. 

13See id. 

14See id. 

15The Exchange states that a ‘‘future-option 

order’’ is deemed an inter-regulatory spread order 

for purposes of the Exchange’s rules. The Exchange 

states that Exchange Rule 1.1 defines an interregulatory spread order as an order involving the 

simultaneous purchase and/or sale of at least one 

unit in contracts each of which is subject to 

different regulatory jurisdictions at stated limits, or 

at a stated differential, or at market prices on the 

floor of the Exchange. The Exchange states that the 

proposed rule change modernizes this definition to 

apply it to the Exchange in general, as opposed to 

the floor of the Exchange (the Exchange states that 

the definition of inter-regulatory spread order was 

adopted when all trading on the Exchange occurred 

in open outcry). See id. at footnote 3. 

16See Notice, 89 FR 81593. The Exchange states 

that the proposed definition of a future-option order 

is similar to the definition of a stock-option order, 

and that Exchange Rule 1.1 defines a ‘‘stock-option 

order’’ as an order to buy or sell a stated number 

of units of an underlying or a related security 

coupled with either (a) the purchase or sale of 

option contract(s) on the opposite side of the market 

representing either the same number of units of the 

underlying or related security or the number of 

units of the underlying security necessary to create 

a delta neutral position or (b) the purchase or sale 

of an equal number of put and call option contracts, 

each having the same exercise price and expiration 

date, and each representing the same number of 

units of stock as, and on the opposite side of the 

market from, the underlying or related security 

portion of the order. The Exchange states that the 

primary difference is the stock-option order 

definition requires the order to be delta neutral, 

while the proposed definition of a future-option 

order requires the order to have a risk offset within 

a specified range (as described below). See id. at 

footnote 4. 

17See Notice, 89 FR at footnote 5. 18See id. 19See Notice, 89 FR at 81593. 20See id. 21See id. The Exchange states that the user must 

include a delta value for each option leg of the 

order when submitting a future-option order. See 

Exchange Rule 1.1 (proposed paragraph (b)(2) of 

definition of future-option order). The Exchange 

states that although a user may use any 

methodology it chooses to calculate the delta value 

of option legs, the value must be reasonable and 

will be subject to surveillance by the Exchange’s 

regulatory division. The Exchange states that the 

System will use the user-submitted delta values to 

calculate the risk offset for the entire order. See id. 

at footnote 6. 

22See Notice, 89 FR 81593 and paragraph (a)(1) 

of the proposed definition of future-option order. 23See paragraphs (a)(1)(A) and (B) of the 

proposed definition of future-option order. 24See paragraph (a)(1)(C) of the proposed 

definition of future-option order. 

‘‘Cboe Options’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’), pursuant to Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Act’’ or ‘‘Exchange Act’’) 1 and 

Rule 19b–4 thereunder,2 a proposed rule 

change to permit future-option orders.3

The proposed rule change was 

published for comment in the Federal 

Register on October 8, 2024.4 The 

Commission has received no comments 

regarding the proposal. 

On November 18, 2024, pursuant to 

Section 19(b)(2) of the Exchange Act,5

the Commission designated a longer 

period within which to approve the 

proposed rule change, disapprove the 

proposed rule change, or institute 

proceedings to determine whether to 

disapprove the proposed rule change.6

This order institutes proceedings under 

Section 19(b)(2)(B) of the Act 7 to 

determine whether to approve or 

disapprove the proposed rule change. 

II. Description of the Proposed Rule 

Change 

As described more fully in the 

Notice,8 the Exchange proposes to 

amend its rules to permit future-option 

orders, which would be comprised of 

both options and futures legs.9 The 

Exchange states that it is common for 

investors to engage in hedging or other 

investment strategies that involve 

options and related futures products, 

and that, to execute these strategies, 

investors must submit the options order 

to the Exchange and separately submit 

the futures order to a designated 

contract market (‘‘DCM’’) on which the 

futures trade.10 The Exchange states, for 

example, that market participants may 

obtain positions in Cboe Volatility Index 

(‘‘VIX’’) options through transactions on 

the Exchange and hedge those positions 

entering into a separate transaction on 

Cboe Futures Exchange, LLC’s (‘‘CFE’’) 

centralized market in VIX futures (‘‘VX 

futures’’).11 The Exchange states that 

separate executions of this sort create 

additional risks, including the risk that 

one order will execute while the other 

does not and price risk resulting from 

the time it takes to complete both 

transactions.12 The Exchange states that 

due to these risks and the complexities 

of multi-part transactions, market 

participants may instead transact in the 

over-the-counter (‘‘OTC’’) market or not 

obtain a hedge at all.13 The Exchange 

states that the proposal would adopt a 

mechanism to facilitate the execution of 

these cross-product transactions in a 

simple, efficient manner that reduces 

these execution and price risks.14

The proposal amends Exchange Rule 

1.1 to define to define a ‘‘future-option 

order’’ as an order to buy or sell a stated 

number of units of an underlying or a 

related futures contract(s) coupled with 

the purchase or sale of an option 

contract(s) on the Exchange.15 The 

Exchange would designate in which 

classes future-option orders would be 

available.16 The Exchange states that it 

intends to initially permit future-option 

orders overlying VIX and that it may 

expand the availability of future-option 

orders to other underlying securities or 

indexes in the future. 17 The Exchange 

further states that, if required, the 

Exchange would submit rule filings in 

connection with any such expansion; 

the Exchange states, for example, that it 

may determine that a different risk 

offset requirement (as discussed below) 

is appropriate for another underlying 

based on the characteristics of the 

overlying options and futures.18

The proposed definition of a futureoption order includes a risk offset 

requirement and a User may submit a 

future-option order only if it satisfies 

the applicable risk offset requirement.19

The Exchange states that a risk offset 

requirement will provide market 

participants with sufficient flexibility to 

execute legitimate strategies comprised 

of options and futures while preventing 

a market participant from using the 

proposed execution mechanism to 

execute a futures trade outside of the 

normal trading process on the 

applicable DCM by combining the 

future leg(s), for example, with an 

inexpensive out-of-the-money option 

leg.20 Pursuant to paragraph (a) of the 

proposed definition of future-option 

order, the System will accept a futureoption order if the future leg(s) provides 

no less than 10% and no greater than 

125% risk offset to the option leg(s).21

A future-option order satisfies this risk 

offset requirement if the net delta value 

of the order is no greater than ¥0.10 

and no less than ¥1.25.22 The delta 

value of an option leg equals the 

expected change in the price of that 

options contract given a $1.00 change in 

the price of the underlying security or 

index, and the delta value of a future leg 

equals the amount set forth in the rules 

or contract specifications of the DCM on 

which the future contract trades.23 The 

delta value of each option and future leg 

is multiplied by the applicable 

multiplier.24 The sum of the future legs 

delta values divided by the sum of the 


ddrumheller on DSK120RN23PROD with NOTICES1
Federal Register / Vol. 90, No. 7 / Monday, January 13, 2025 / Notices 2761 

25See paragraph (a)(1)(D) of the proposed 

definition of future-option order. 

26See paragraph (a)(2) of the proposed definition 

of future-option order. 

27See id. 

28See id. An example of this calculation appears 

in the Notice at 89 FR 81593. 

29See paragraph (c) [sic] of the proposed 

definition of future-option order. 

30See Notice, 89 FR 81593–4. The Exchange 

states that it is for this reason a user may not 

designate a future-option order submitted for 

electronic processing as GTC or GTD, as provided 

in proposed Exchange Rule 1.1 (proposed paragraph 

(b)(1) of definition of future-option order). See id. 

at 81594, footnote 10. 

31See id. at 81594. 

32The Exchange states that, unlike stock, a future 

trades on one DCM, which would make such direct 

communication with the DCM possible. The 

Exchange states that this would only be available 

if the DCM and the Exchange established electronic 

communication between the two markets to permit 

this direct communication of the futures 

component. See id. at footnote 12. 

33The Exchange states that only authorized Users 

and associated persons of Users may establish 

connectivity to and access the Exchange to submit 

orders. See Exchange Rule 5.5(a). The Exchange 

states that a ‘‘User’’ is defined as a Trading Permit 

Holder (‘‘TPH’’) or Sponsored User who is 

authorized to obtain access to the System pursuant 

to Exchange Rule 5.5. See Exchange Rule 1.1 

(definition of User). The Exchange states that it 

currently has no Sponsored Users, so the term 

‘‘User’’ at present is synonymous with the term 

‘‘TPH.’’ The Exchange states that a User and any 

individuals associated with the User that submits 

a future-option order must have any required 

futures industry registrations and comply with 

applicable rules of the DCM on which the futures 

trades and the Commodity Futures Trading 

Commission (‘‘CFTC’’). See Notice, 89 FR at 

footnote 13. 

34The Exchange states that this requirement is 

substantially identical to that required for stockoption orders. See Notice, 89 FR at footnote 14. 

35The Exchange states that it intends to establish 

an arrangement with one or more FCMs/IBs that are 

members of the applicable DCM, pursuant to which 

arrangement those FCMs/IBs will have connectivity 

to the Exchange to receive the futures components 

of future-option orders and communicate those to 

the applicable DCM for execution of these futures 

components. See Notice, 89 FR at footnote 15. 

36See Notice, 89 FR 81594. 37See id. 38See id. at 81595. 39See id. at footnote 16. 40See Notice, 89 FR 81594. 41See proposed Exchange Rule 5.33(f)(1)(C). 42See Notice, 89 FR 81594. 43See id. 44See id. 

option legs delta values equals the net 

delta value for the order.25

For future-option orders overlying the 

Cboe Volatility Index (VIX), the System 

calculates the risk offset set forth in 

paragraph (a) using the net delta value 

for each ‘‘group’’ of option legs and 

future legs with the same expiration 

date.26 The net delta value of each group 

must be no greater than ¥0.10 and no 

less than ¥1.25.27 If any option contract 

leg or future contract leg cannot be 

grouped with any future leg(s) or option 

leg(s), respectively, the System rejects a 

VIX future-option order.28

If the System determines that a 

complex strategy comprised of future 

and option legs satisfies the risk offset 

requirement, it accepts all future-option 

orders for that complex strategy for the 

remainder of that trading day.29 The 

Exchange states that this will prevent a 

situation in which the Exchange accepts 

a future-option order for a specific 

complex strategy on a trading day but 

cannot execute against future-option 

orders for the same complex strategy 

submitted later that trading day but no 

longer satisfies the risk offset 

requirement because the delta values 

have changed since the initial order was 

submitted.30

The Exchange states that the proposal 

also amends the definition of ‘‘complex 

order’’ in Exchange Rule 1.1 to provide 

that unless the context otherwise 

requires, the term complex order will 

include future-option orders.31

The Exchange states that, under 

proposed Exchange Rule 5.33(o), when 

a User submits a future-option order to 

the Exchange: 

• if the User is also a member of the 

DCM on which the applicable future 

trades and the Exchange has established 

electronic communication with the 

DCM, the Exchange will electronically 

communicate the future component of 

the future-option order to the DCM on 

behalf of the User; 32 or 

• if the User is not also a member of 

the DCM on which the applicable future 

trades or opts out of the direct 

communication described above (or 

such direct communication is 

unavailable), the User must designate a 

specific futures commission merchant 

(‘‘FCM’’) or introducing broker (‘‘IB’’) 

with which it has entered into an 

agreement pursuant to proposed 

Exchange Rule 5.33, Interpretation and 

Policy .05 (the ‘‘designated FCM/IB’’) to 

which the Exchange will communicate 

the futures component of the futureoption order on behalf of the User.33

The Exchange states that proposed 

Interpretation and Policy .05 provides 

that if the User is not also a member of 

the DCM on which the applicable future 

trades or opts out of the direct 

communication (or such direct 

communication is unavailable), to 

submit a future-option order to the 

Exchange for execution, a User must 

enter into an agreement with one or 

more FCMs or IBs that are not affiliated 

with the Exchange, which FCM/IB(s) the 

Exchange has identified as having 

connectivity to electronically 

communicate the futures components of 

future-option orders to the DCM on 

which the futures trade.34 The Exchange 

states that this will provide Users with 

flexibility to pick which FCM/IB will 

communicate the futures components of 

their orders for execution (if an FCM/IB 

is necessary for communication of the 

futures component to the DCM).35

The Exchange states that the proposal 

adds future-option orders to the list of 

types of complex orders that may be 

accepted for electronic trading.36 The 

Exchange states that future-option 

orders submitted for electronic 

processing may execute pursuant to a 

complex order auction (‘‘COA’’) if 

eligible, as described in Exchange Rule 

5.33(d), or in the complex order book 

(‘‘COB’’) as described in Exchange Rule 

5.33(e) and will execute in the same 

manner as other complex orders, except 

as described herein.37 The Exchange 

states that future-option orders may also 

be submitted for execution (if eligible) 

in the complex automated improvement 

mechanism (‘‘C–AIM’’), as described in 

Exchange Rule 5.38, or the complex 

solicitation auction mechanism (‘‘C– 

SAM’’) as described in Exchange Rule 

5.40.38 The Exchange further states that 

the proposal amends Exchange Rule 

5.70(b) to provide that the Exchange 

may make future-option orders available 

for flexible (FLEX) options trading.39

The Exchange states that it proposes 

to adopt Exchange Rule 5.33(f)(1)(C) to 

provide that Users may express bids and 

offers for a future-option order in any 

decimal price the Exchange determines, 

which will allow the Exchange to 

accommodate the available pricing of 

futures.40 The minimum increment for 

the option leg(s) of a future-option order 

is $0.01 or greater, which the Exchange 

may determine on a class-by-class basis, 

regardless of the minimum increments 

otherwise applicable to the option 

leg(s), and the future leg(s) of a futureoption order may be executed in any 

decimal price permitted in the DCM on 

which the applicable futures trade.41

The Exchange states that smaller 

minimum increments are appropriate 

for future-option orders as the future 

component may be able to trade at finer 

decimal increments permitted by the 

DCM on which the futures trade.42 The 

Exchange states that even with the 

flexibility provided in the proposed 

rule, the individual options legs must 

trade at increments allowed by the 

Commission.43

As described more fully in the Notice, 

the Exchange states that the proposed 

electronic execution process of futureoption orders is substantially similar to 

that of stock-option orders.44 If a futureoption order can execute upon entry or 

following a COA, or if it can execute 

following evaluation while resting in 


ddrumheller on DSK120RN23PROD with NOTICES1
2762 Federal Register / Vol. 90, No. 7 / Monday, January 13, 2025 / Notices 

45See proposed Exchange Rule 5.33(o)(2)(A). 

46See proposed Exchange Rule 5.33(o)(2)(B). 

47See proposed Exchange Rule 5.33(o)(2)(B). The 

Exchange states that the execution of the futures 

component must satisfy requirements of the 

applicable DCM, including informational and 

reporting time requirements, risk controls, and 

price restrictions (such as needing to be within the 

daily quotation range). The Exchange states that, 

pursuant to Exchange Rule 5.33(k), trading in any 

complex strategy (including one that comprises a 

future-option order) is suspended if any component 

of a complex strategy (including a future leg) is 

halted. Therefore, if trading in a future is halted, it 

could not execute and would result in the futureoption order not being executed. See Notice, 89 FR 

at footnote 21. 

48See Notice, 89 FR 81595. 

49See proposed Exchange Rule 5.33(o)(2). 

50See Notice, 89 FR 81595 and proposed 

Exchange Rule 5.33(f)(2)(C)(ii). 

51See Notice, 89 FR 81595. The Exchange states 

that the proposal revises the definition of SBBO in 

Exchange Rule 5.33(a) to provide that the SBBO is 

the best net bid and best net offer on the Exchange 

for a complex strategy calculated using, for futureoption orders, the BBO for each component (or the 

national best bid or offer (‘‘NBBO’’) for a component 

if the BBO for that component is not available) and 

the daily quotation range for each future 

component. The Exchange states that the proposal 

revises the definition of synthetic national best bid 

or offer (‘‘SNBBO’’) in Exchange Rule 5.33(a) to 

provide that the SNBBO is the national best net bid 

and net offer for a complex strategy calculated 

using, for future-option orders, the NBBO for each 

option component and the daily quotation range for 

each future component. See Notice, 89 FR at 

footnote 22. 

52The Exchange states that the proposal amends 

the definition of ‘‘conforming complex order’’ in 

Exchange Rule 1.1 to provide that a future-option 

order is conforming (1) if the ratio on the options 

legs is greater than or equal to one-to-three (.333) 

or less than or equal to three-to-one (3.00) or (2) the 

options legs comprise an Index Combo order (as 

defined in Exchange Rule 5.33(b)). See Notice, 89 

FR at footnote 23. 

53The Exchange states that the proposal amends 

the definition of ‘‘nonconforming complex order’’ 

in Exchange Rule 1.1 to provide that a future-option 

order is nonconforming if the ratio of its options 

legs is less than one-to-three (.333) or greater than 

three-to-one (3.00) (unless the options legs comprise 

an Index Combo order). See Notice, 89 FR at 

footnote 24. 

54The Exchange states that all-or-none complex 

orders (including future-option orders) may only 

execute at prices better than the SBBO. See Notice, 

89 FR at footnote 25. 

55See Notice, 89 FR 81595. 56See id. 57See id. 58See id. The Exchange states that the proposal 

also updates Exchange Rule 5.85(g)(2) to provide 

that a trade representing execution of the options 

leg of a future-option order may be cancelled at the 

request of any TPH that is a party to that trade only 

if market conditions in any of the non-Exchange 

market(s) prevent the execution of the non-option 

leg(s) at the price(s) agreed upon. See id. at footnote 

26. 

the COB pursuant to Exchange Rule 

5.33(i), the System will execute the 

option component (which may consist 

of one or more option legs) of a futureoption order against the option 

component of other future-option orders 

resting in the COB or COA responses 

pursuant to the allocation algorithm 

applicable to the class, but will not 

immediately send the User a trade 

execution report, and then will 

automatically communicates the future 

component(s) to the DCM or the 

designated FCM/IB, as applicable, for 

execution at the DCM on which the 

futures trade.45 If the System receives an 

execution report for the future 

component from the DCM or the 

designated FCM/IB, as applicable, the 

Exchange will send the User the trade 

execution report for the future-option 

order, including execution information 

for the future and option components.46

If the System receives a report from the 

DCM or the designated FCM/IB, as 

applicable, that the future component(s) 

cannot execute, the Exchange will 

nullify the option component trade and 

notify the User of the reason for the 

nullification.47 The Exchange states that 

such nullification without a request 

from the User is consistent with the 

purpose of future-option orders, as 

contingent execution at or near the same 

time (and thus reduction in price and 

execution risk) is one of the primary 

goals of future-option orders.48 A futureoption order that is not marketable will 

rest in the COB (if eligible to rest) or 

route to PAR for manual handling, 

subject to a User’s instructions.49

Proposed Exchange Rule 5.33(f)(2)(C) 

states that for a future-option order with 

one option leg, the option leg may not 

trade at a price worse than the 

individual component price on the 

simple book or at the same price as a 

priority customer order on the simple 

book. The Exchange states that, for a 

future-option order with more than one 

option leg, the option legs must trade at 

price pursuant to Exchange Rule 

5.33(f)(2)(A), which is the permissible 

execution prices and priority for 

complex orders comprised of option 

legs.50 Therefore, the Exchange states 

that the System will not execute a 

future-option order at a net price: (1) 

that would cause any option component 

of the complex strategy to be executed 

at a price of zero; (2) that would cause 

any option component of the complex 

strategy to be executed at a price worse 

than the individual component prices 

on the simple book; (3) worse than the 

price that would be available if the 

complex order legged into the simple 

book; or (4) worse than the synthetic 

best bid or offer (‘‘SBBO’’) 51 or equal to 

the SBBO when there is a priority 

customer order on any leg comprising 

the SBBO and, if a conforming complex 

order,52 at least one option component 

of the complex order must execute at a 

price that improves the best bid or offer 

(‘‘BBO’’) for that component by at least 

one minimum increment or, if a 

nonconforming complex order,53 the 

option component(s) of the complex 

order for the leg(s) with a priority 

customer order at the BBO must execute 

at a price that improves the price of that 

priority customer order(s) on the simple 

book by at least one minimum 

increment.54 The Exchange states that, 

pursuant to the proposed changes, the 

option component(s) of a future-option 

order will ultimately trade in the same 

manner and in accordance with the 

same priority principles as they would 

if they had been submitted without a 

future leg.55

The Exchange states that the proposal 

also amends rules in Chapter 5, Section 

G of the Exchange’s rulebook to describe 

the execution of future-option orders in 

open outcry on the Exchange’s trading 

floor, which the Exchange states is 

substantially similar to the open outcry 

process for stock-option orders.56 The 

Exchange states that the proposal 

amends Exchange Rule 5.83(b) to 

provide that the Exchange may make 

future-option orders available for PAR 

routing for manual handling, and 

further amends this provision to provide 

that the Exchange may determine to 

make nonconforming future-option 

orders not eligible for electronic 

processing, in which case such orders 

would only be eligible for manual 

handling and open outcry trading.57 The 

Exchange states that the proposal 

amends Exchange Rule 5.85(g) to 

provide that a bid or offer that is 

identified to the trading crowd as part 

of a future-option order is made and 

accepted subject to the following 

conditions (which are the same 

conditions applicable to stock-option 

orders): (1) at the time the future-option 

order is announced, the Trading Permit 

Holder (‘‘TPH’’) initiating the order 

must disclose to the crowd all legs of 

the order and identify the specific 

market(s) on which and the price(s) at 

which the non-option leg(s) of the order 

is to be filled; and (2) concurrent with 

the execution of the options leg of the 

order, the initiating TPH and each TPH 

that agrees to be a contra-party on the 

non-option leg(s) of the order must take 

steps immediately to transmit the nonoption leg(s) to the identified market(s) 

for execution.58 The Exchange states 

that proposed Exchange Rule 5.85(b)(3) 

provides that (like the stock component 

of stock-option orders) a floor broker or 

PAR official may, subject to a User’s 

instructions, route the future component 

of a future-option order represented in 

open outcry to the DCM or an Exchangedesignated FCM/IB not affiliated with 

the Exchange for execution at a DCM on 


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59See Notice, 89 FR 81595–6. 

60See id. at 81596. 

61See id. 

62See id. 

63See id. 

64See id. 

65See id. 

66The Exchange states that if there is a priority 

customer order on every leg comprising the SBBO, 

at least one option leg of the future-option order 

must execute at a price that improves the price of 

the priority customer order on the simple book for 

that leg by at least one minimum increment. The 

Exchange states that this is the same priority that 

applies to a conforming complex order (comprised 

of all option legs) as set forth in Exchange Rule 

5.85(b)(1), and thus the options legs of a conforming 

future-option order will execute subject to the same 

priority as they would if they had been submitted 

without a future leg. See Notice, 89 at footnote 29. 

67See Notice, 89 FR 81596. The Exchange states 

that if there is a priority customer order on any 

leg(s) comprising the SBBO, the component(s) of 

the future-option order for the option leg(s) with a 

priority customer order at the BBO must execute at 

a price that improves the price of that priority 

customer order(s) on the simple book by at least one 

minimum increment. The Exchange states that this 

is the same priority that applies to a nonconforming 

complex order (comprised of all option legs) as set 

forth in Exchange Rule 5.85(b)(2), and thus the 

options legs of a nonconforming future-option order 

will execute subject to the same priority as they 

would if they had been submitted without a future 

leg. See id. at footnote 30. 

68See Notice, 89 FR 81596. 

69See id. 

70See id. 

71See id. 

72See id. 

73See id. 

74See id. 

75See id. 

76See id. at 81597. 

which the futures trade in accordance 

with proposed Exchange Rule 5.33, 

Interpretation and Policy .05.59 The 

Exchange also proposes to add 

subparagraph (5) to Exchange Rule 

5.85(g) (which the Exchange states is 

substantially similar to Exchange Rule 

5.85(g)(4) for stock-option orders) to 

provide that a TPH or PAR official may 

route the future component of an 

eligible future-option order represented 

in open outcry from PAR directly to a 

designated FCM/IB (as defined in 

Exchange Rule 5.33(o)) not affiliated 

with the Exchange for electronic 

execution at the DCM on which the 

futures trade (1) in accordance with the 

order’s terms, and (2) as a single order 

or as a paired matching order (including 

with orders transmitted from separate 

PAR workstations).60 The Exchange 

states that TPHs seeking to route the 

future component of a future-option 

order represented in open outcry 

through PAR to an Exchange-designated 

FCM/IB not affiliated with the Exchange 

for electronic execution at the DCM on 

which the futures trade must comply 

with proposed Exchange Rule 5.33(o).61

The Exchange proposes to amend 

Exchange Rule 5.91(g) to provide that, 

as they currently can for complex orders 

(including stock-option orders), floor 

brokers may leg future-option orders 

where one of the legs is executed on the 

Exchange.62

The Exchange states that the proposal 

amends Exchange Rule 5.85(b)(3) to 

describe the priority that will apply to 

future-option orders executed on the 

Exchange’s trading floor.63 The 

Exchange states that, under the 

proposal, future-option orders, like 

stock-option orders, will have priority 

over bids (offers) of in-crowd market 

participants on the trading floor but not 

over priority customer bids (offers) in 

the book.64 Further, the Exchange states 

that the options legs of conforming and 

nonconforming future-option orders 

may be executed at the same net debit 

and credit prices as the options legs of 

stock-option orders.65 Pursuant to 

proposed Exchange Rule 5.85(b)(4), a 

conforming future-option order may be 

executed at a net debit or credit price 

without giving priority to equivalent 

bids (offers) in the individual series legs 

that are represented in the trading 

crowd or in the book if the price of at 

least one option leg of the order 

improves the corresponding bid (offer) 

of a priority customer order(s) in the 

book by at least one minimum trading 

increment as set forth in Exchange Rule 

5.4(b).66 The Exchange states that, 

pursuant to proposed Exchange Rule 

5.85(b)(5), a nonconforming futureoption order may be executed at a net 

debit or credit price without giving 

priority to equivalent bids (offers) in the 

individual series legs that are 

represented in the trading crowd or in 

the book if each option leg of the order 

betters the corresponding bid (offer) of 

a priority customer order(s) in the book 

on each leg by at least one minimum 

trading increment as set forth in 

Exchange Rule 5.4(b).67

The Exchange states that the proposal 

amends Exchange Rule 6.5, 

Interpretation and Policy .07 to describe 

how a future-option order may qualify 

as an obvious error, that future-option 

orders will be handled in a similar 

manner to stock-option orders for 

purposes of Exchange Rule 6.5.68 The 

Exchange states that if the option leg of 

a future-option order qualifies as an 

obvious error under Exchange Rule 

6.5(c)(1) or catastrophic error under 

Exchange Rule 6.5(d)(1), then the option 

leg that is an obvious or catastrophic 

error will be adjusted in accordance 

with Exchange Rule 6.5(c)(4)(A) or 

(d)(3), respectively, regardless of 

whether one of the parties is a 

customer.69 The Exchange states that the 

option leg of any customer future-option 

order will be nullified if the adjustment 

would result in an execution price 

higher (lower) for buy (sell) transactions 

than the customer’s limit price on the 

future-option order, and the Exchange 

will attempt to nullify the future leg.70

The Exchange states that when a DCM 

nullifies the futures leg(s) of a futureoption order or when the future leg(s) 

cannot be executed, the Exchange will 

nullify the option leg upon request of 

one of the parties to the transaction or 

in accordance with Exchange Rule 

6.5(c)(3).71 The Exchange states that the 

proposal adds Interpretation and Policy 

.02 to Exchange Rule 6.6 to clarify that 

TPHs may update only the option 

component of a future-option order 

trade using Clearing Editor (and as 

permitted by Exchange Rule 6.6), and 

that any updates to the future 

component would need to be done in 

accordance with the Rules of the 

applicable DCM (if permissible).72

The Exchange states that execution of 

the options components of future-option 

orders will be subject to Commission 

jurisdiction, and execution of the 

futures components of future-option 

orders will be subject to Commodity 

Futures Trading Commission (‘‘CFTC’’) 

jurisdiction.73 The Exchange further 

states that each of the Exchange and the 

DCM on which the futures component 

of a future-option order trades will 

regulate conduct relating to futureoption orders and trades with respect to 

compliance with its rules, including 

bringing disciplinary actions for 

violations of its rules.74 The Exchange 

states that before authorizing a class of 

future-option orders to trade on the 

Exchange, the Exchange would enter 

into an information sharing agreement 

with the DCM on which the applicable 

future trades that encompasses 

information relating to future-option 

orders and trades, which would allow 

for the sharing of information between 

the Exchange and the DCM to permit the 

Exchange (and the DCM) to have access 

to all order, trade, regulatory, and other 

data relating to these orders and 

trades.75

The Exchange states that the proposal 

will provide investors with greater 

opportunities to manage risk and will 

provide investors with a more efficient 

mechanism to execute options and 

related future products, which investors 

regularly trade as part of hedging and 

other investment strategies.76 The 

Exchange states that the proposed 

execution mechanism for future-option 

orders will make the trading and 

hedging process for investment 


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77See id. 

78See id. 

79See id. 

80See id. 

81See id. 

82See id. 

83See id. 

84See id. 

85See id. 

86See id. 

87See id. 

88See id. 

89See id. 

90See id. 

91See id. 

92See id. 

93See id. at 81598. 

94See id. 

95See Notice, 89 FR at footnote 38. 

96 15 U.S.C. 78s(b)(2)(B). 

strategies comprised of option and 

future components more efficient, 

which will reduce execution, legging, 

and price drift risk that otherwise 

accompanies the current execution 

process for these strategies.77 The 

Exchange states that today, investors 

seeking to execute an investment 

strategy comprised of option and future 

components must do so through 

separate trades—one for the options and 

one for the futures, which creates risk 

that one trade occurs but the other does 

not, and which may leave an investor 

with an unhedged position.78 In 

addition, the Exchange states that 

separate transactions create risk because 

market conditions may change between 

the time it takes to execute both 

transactions, which may make the full 

package execute in an unfavorable 

manner for the investor.79 The Exchange 

states that although investors may 

continue to execute these strategies as 

separate transactions, the proposed 

execution process (both electronic and 

open outcry) will provide investors with 

an optional, alternative means to 

execute strategies comprised of future 

and options components that will 

reduce these risks, as it will permit the 

entire package to be priced together and 

will result in an execution only if both 

the options and futures components are 

able to trade.80 The Exchange states that 

the proposed single execution 

mechanism therefore expands the 

ability of market participants to engage 

in cross-product investment and 

hedging transactions, which the 

Exchange believes will contribute to 

reduced overall market risk and 

increased liquidity.81

The Exchange believes the proposed 

rule change is designed to prevent 

fraudulent and manipulative acts and 

practices and to promote just and 

equitable principles of trade.82 The 

Exchange states that the proposed risk 

offset requirement is designed to 

provide market participants with 

sufficient flexibility to execute 

legitimate options strategies comprised 

of options and futures while preventing 

misuse of this mechanism, such as a 

market participant using the proposed 

execution mechanism to execute a 

futures trade outside of the normal 

trading process on the applicable DCM 

by combining the future leg(s), for 

example, with an inexpensive out-ofthe-money option leg.83

The Exchange states that the 

Commission and the CFTC will 

maintain jurisdiction over execution of 

the options and futures components, 

respectively, of future-option orders.84

The Exchange states that each of the 

Exchange and the DCM on which the 

futures component of a future-option 

order trades will regulate conduct 

relating to future-option orders and 

trades with respect to compliance with 

its rules, including bringing disciplinary 

actions for violations of its rules.85 The 

Exchange states that it is a member of 

the Intermarket Surveillance Group 

(‘‘ISG’’). The Exchange states that ISG 

members work together to coordinate 

surveillance and investigative 

information sharing in the futures and 

options markets, and that the Exchange 

would therefore have access to 

information regarding relevant trading 

activity from other ISG members, 

including applicable DCMs (as CFE is) 

that are also members.86 The Exchange 

states that before authorizing a class of 

future-option orders to trade on the 

Exchange, if the applicable DCM was 

not a member of ISG, or if the applicable 

DCM was a member of ISG but the 

Exchange still deemed appropriate, the 

Exchange would enter into an 

information sharing agreement with the 

DCM on which the applicable future 

trades that encompasses information 

relating to future-option orders and 

trades.87 The Exchange states that this 

would allow for the sharing of 

information between the Exchange and 

the DCM to permit the Exchange (and 

the DCM) to have access to all order, 

trade, regulatory, and other data relating 

to these orders and trades, and thus 

facilitate the intermarket surveillance of 

future-option orders.88 The Exchange 

states that, as a self-regulatory 

organization, it recognizes the 

importance of surveillance, among other 

things, to detect and deter fraudulent 

and manipulative trading activity as 

well as other violations of Exchange 

rules and the federal securities laws.89

The Exchange states that its current 

rules prohibiting market manipulation 

and fraudulent, noncompetitive, and 

disruptive trading practices will apply 

to future-option orders, and that the 

Cboe Regulatory Division will 

incorporate information it receives from 

the DCM into its surveillance 

procedures to monitor trading of futureoption orders, including to detect any 

manipulative trading activity.90 The 

Exchange states that its surveillance, 

along with the proposed risk offset 

requirement, are reasonably designed to 

detect manipulative trading and enforce 

compliance with the proposed rules and 

other Exchange Rules.91 The Exchange 

states that it performs ongoing 

evaluations of its surveillance program 

to ensure its continued effectiveness 

and will continue to review its 

surveillance procedures on an ongoing 

basis and make any necessary 

enhancements and/or modifications that 

may be needed for future-option 

orders.92

The Exchange states that the proposal 

will provide investors with the ability to 

execute their investment strategies in a 

listed market environment as opposed 

to in the unregulated OTC market and 

may shift liquidity from the OTC market 

onto the Exchange (as well as shift 

swaps and OTC combos from the OTC 

market onto designated contract markets 

in the form of futures), which the 

Exchange believes would increase 

market transparency as well as enhance 

the process of price discovery 

conducted on the Exchange through 

increased order flow, to the benefit of all 

investors.93 The Exchange states that it 

may be a more attractive alternative to 

the OTC market, because of, among 

other things: (1) enhanced efficiency in 

initiating and closing out positions; (2) 

increased market transparency; and (3) 

heightened contra-party 

creditworthiness due to clearing 

requirements for listed options and 

futures.94 The Exchange states that the 

Commission previously approved an 

Exchange proposal that permitted the 

trading of inter-regulatory spreads 

comprised of S&P 500 Index options 

and CBOE 50 futures, and S&P 100 

Index options and S&P 250 futures.95

III. Proceedings To Determine Whether 

To Approve or Disapprove SR–CBOE– 

2024–042 and Grounds for Disapproval 

Under Consideration 

The Commission is instituting 

proceedings pursuant to Section 

19(b)(2)(B) of the Act 96 to determine 

whether the proposed rule change 

should be approved or disapproved. 

Institution of such proceedings is 


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97See id. 98 15 U.S.C. 78f(b)(5). 99 17 CFR 201.700(b)(3). 100See id. 101See id. 102See Notice, 89 FR at footnote 5. 103The proposed definition of future-option order 

in Exchange Rule 1.1 states: ‘‘A future-option order, 

which is deemed an inter-regulatory spread order 

for purposes of the Rules, is an order to buy or sell 

a stated number of units of an underlying or a 

related futures contract(s) coupled with the 

purchase or sale of an option contract(s) on the 

Exchange. The Exchange designates in which 

classes future-option orders are available.’’ 

104Paragraph (a)(1) of the proposed definition of 

future-option order states: ‘‘The System accepts a 

future-option order if the future leg(s) provides no 

less than 10% and no greater than 125% risk offset 

to the option leg(s). A future-option order satisfies 

this risk offset requirement if the net delta value of 

the order is no greater than ¥0.10 and no less than 

¥1.25.’’ Paragraph (a)(2) of the proposed definition 

of future-option order states: ‘‘For future-option 

orders overlying the Cboe Volatility Index (VIX), the 

System calculates the risk offset set forth in 

paragraph (a) [sic] above using the net delta value 

for each ‘‘group’’ of option legs and future legs with 

the same expiration date. The net delta value of 

each group must be no greater than ¥0.10 and no 

less than ¥1.25. If any option contract leg or future 

contract leg cannot be grouped with any future 

leg(s) or option leg(s), respectively, the System 

rejects a VIX future-option order.’’ 

105See Notice, 89 FR at footnote 5. 

106See Notice, 89 FR 81593. 

107See paragraph (b)(2) of the proposed definition 

of future-option order. 

108See Notice, 89 FR at footnote 6. 

109See Notice, 89 FR 81596. 

appropriate at this time in view of the 

legal and policy issues raised by the 

proposed rule change. Institution of 

proceedings does not indicate that the 

Commission has reached any 

conclusions with respect to any of the 

issues involved. Rather, as described 

below, the Commission seeks and 

encourages interested persons to 

provide comments on the proposed rule 

change. 

Pursuant to Section 19(b)(2)(B) of the 

Act,97 the Commission is providing 

notice of the grounds for disapproval 

under consideration. The Commission is 

instituting proceedings to allow for 

additional analysis of the proposed rule 

change’s consistency with Section 

6(b)(5) of the Act,98 which requires, 

among other things, that the rules of a 

national securities exchange be 

designed to prevent fraudulent and 

manipulative acts and practices, to 

promote just and equitable principles of 

trade, to remove impediments to and 

protect the mechanism of a free and 

open market and a national market 

system, and, in general, to protect 

investors and the public interest. 

Under the Commission’s Rules of 

Practice, the ‘‘burden to demonstrate 

that a proposed rule change is 

consistent with the Exchange Act and 

the rules and regulations issued 

thereunder . . . is on the self-regulatory 

organization that proposed the rule 

change.’’ 99 The description of a 

proposed rule change, its purpose and 

operation, its effect, and a legal analysis 

of its consistency with applicable 

requirements must all be sufficiently 

detailed and specific to support an 

affirmative Commission finding,100 and 

any failure of a self-regulatory 

organization to provide this information 

may result in the Commission not 

having a sufficient basis to make an 

affirmative finding that a proposed rule 

change is consistent with the Act and 

the applicable rules and regulations.101

As discussed above, the Exchange states 

that it initially proposes to make futureoption orders available for VIX, and that 

it may expand the availability of futureoption orders to other underlying 

securities or indexes in the future.102

However, the proposed rules do not 

specifically limit the availability of 

future-option orders to VIX, nor do they 

identify the permissible underliers for 

future-option orders.103 In addition, 

although all future-option orders would 

be subject to a risk offset requirement, 

the proposed rules establish a 

methodology for calculating the risk 

offset only for VIX.104 The Exchange 

states that it may determine that a 

different risk offset requirement is 

appropriate for another underlying 

based on the characteristics of the 

overlying options and futures.105

Instituting proceedings will allow for 

additional consideration and 

clarification of the intended scope of the 

proposal, including whether the 

proposal should be limited to futureoption orders on underliers for which 

the Exchange has established a 

methodology for calculating the risk 

offset requirement. 

The Exchange states that the proposed 

risk offset requirement will provide 

market participants with sufficient 

flexibility to execute legitimate 

strategies comprised of options and 

futures while preventing a market 

participant from using the proposed 

execution mechanism to execute a 

futures trade outside of the normal 

trading process on the applicable DCM 

by combining the future leg(s), for 

example, with an inexpensive out-ofthe-money option leg.106 The proposal 

provides no discussion or analysis 

describing how the Exchange developed 

the proposed risk offset requirement, 

including the permitted range of the risk 

offset, or why the Exchange believes 

that the proposed risk offset 

requirement—as opposed to another risk 

offset requirement or other metric— 

would be an effective means for 

permitting the execution of legitimate 

trading strategies while preventing 

misuse of the mechanism. Instituting 

proceedings will allow for additional 

analysis and consideration of issues 

related to the proposed risk offset 

requirement, including whether the 

Exchange has adequately described the 

operation of the proposed risk offset 

requirement, how the Exchange 

developed and selected the proposed 

risk offset requirement, how the 

proposed risk offset requirement will 

accomplish its stated purpose, and how 

the Exchange will determine when a 

different risk offset requirement would 

be appropriate. 

The proposal requires a User to 

include a reasonable delta value for 

each option leg and the risk offset 

percentage of the order.107 The 

Exchange states that ‘‘While a user may 

use any methodology it chooses to 

calculate the delta value of option legs, 

the value must be reasonable and will 

be subject to surveillance by the 

Exchange’s regulatory division.’’ 108 The 

proposal provides no discussion of how 

the Exchange will determine that Userassigned delta values are reasonable or 

how the Exchange will surveil for 

compliance with this requirement. 

Instituting proceedings will allow 

further discussion and consideration of 

how the Exchange will monitor 

compliance with the requirement that 

Users assign a reasonable delta value to 

each option leg of the order. 

In addition, as noted above, the 

Exchange states that execution of the 

options components of future-option 

orders will be subject to Commission 

jurisdiction, and execution of the 

futures components of future-option 

orders will be subject to CFTC 

jurisdiction.109 Instituting proceedings 

will allow for additional analysis and 

consideration of issues related to any 

jurisdictional issues. 

The Commission is instituting 

proceedings to allow for additional 

consideration and comment on the 

issues discussed above. In particular, 

the Commission asks commenters to 

address whether the proposal includes 

sufficient analysis with respect to the 

issues discussed above to support a 

conclusion that the proposal is 

consistent with the requirements of 

Section 6(b)(5) of the Act. 

IV. Procedure: Request for Written 

Comments 

The Commission requests that 

interested persons provide written 

submissions of their views, data, and 

arguments with respect to the issues 

identified above, as well as any other 


ddrumheller on DSK120RN23PROD with NOTICES1
2766 Federal Register / Vol. 90, No. 7 / Monday, January 13, 2025 / Notices 

110Section 19(b)(2) of the Act, as amended by the 

Securities Acts Amendments of 1975, Public Law 

94–29 (June 4, 1975), grants the Commission 

flexibility to determine what type of proceeding— 

either oral or notice and opportunity for written 

comments—is appropriate for consideration of a 

particular proposal by a self-regulatory 

organization. See Securities Acts Amendments of 

1975, Senate Comm. on Banking, Housing & Urban 

Affairs, S. Rep. No. 75, 94th Cong., 1st Sess. 30 

(1975). 

111 17 CFR 200.30–3(a)(57). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3 15 U.S.C. 78s(b)(3)(A). 

4 17 CFR 240.19b–4(f). At any time within 60 days 

of the filing of the proposed rule change, the 

Commission summarily may temporarily suspend 

such rule change if it appears to the Commission 

that such action is necessary or appropriate in the 

public interest, for the protection of investors, or 

otherwise in furtherance of the purposes of the Act. 

If the Commission takes such action, the 

Commission will institute proceedings to determine 

whether the proposed rule change should be 

approved or disapproved. 

5Copies of the submission, all subsequent 

amendments, all written statements with respect to 

the proposed rule change that are filed with the 

Commission, and all written communications 

relating to the proposed rule change between the 

Commission and any person, other than those that 

may be withheld from the public in accordance 

with the provisions of 5 U.S.C. 552, will be 

available for website viewing and printing in the 

Commission’s Public Reference Room, 100 F Street 

NE, Washington, DC 20549, on official business 

days between the hours of 10 a.m. and 3 p.m. 

Copies of the filing also will be available for 

inspection and copying at the principal office of the 

Exchange. 

concerns they may have with the 

proposal. In particular, the Commission 

invites the written views of interested 

persons concerning whether the 

proposal is consistent with Section 

6(b)(5) or any other provision of the Act, 

and the rules and regulations 

thereunder. Although there do not 

appear to be any issues relevant to 

approval or disapproval that would be 

facilitated by an oral presentation of 

views, data, and arguments, the 

Commission will consider, pursuant to 

Rule 19b–4, any request for an 

opportunity to make an oral 

presentation.110

Interested persons are invited to 

submit written data, views, and 

arguments regarding whether the 

proposed rule change should be 

approved or disapproved by February 3, 

2025. Any person who wishes to file a 

rebuttal to any other person’s 

submission must file that rebuttal by 

February 18, 2025. 

Comments may be submitted by any 

of the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (https://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

CBOE–2024–042 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to file 

number SR–CBOE–2024–042. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

internet website (https://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549, on official 

business days between the hours of 10 

a.m. and 3 p.m. Copies of the filing also 

will be available for inspection and 

copying at the principal office of the 

Exchange. Do not include personal 

identifiable information in submissions; 

you should submit only information 

that you wish to make available 

publicly. We may redact in part or 

withhold entirely from publication 

submitted material that is obscene or 

subject to copyright protection. All 

submissions should refer to file number 

SR–CBOE–2024–042 and should be 

submitted on or before February 3, 2025. 

Rebuttal comments should be submitted 

by February 18, 2025. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.111

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2025–00412 Filed 1–10–25; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–102125; File No. SR–Phlx– 

2024–73] 

Self-Regulatory Organizations; Nasdaq 

PHLX LLC; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Amend the NonDisplay Enterprise License and PHLX 

Depth Data Fees Based on the Rate of 

Inflation 

January 6, 2025. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on December 

26, 2024, Nasdaq PHLX LLC 

(‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Item I below, 

which Item has been substantially 

prepared by the Exchange. The 

Exchange has designated this proposal 

for immediate effectiveness pursuant to 

Section 19(b)(3)(A) of the Act 3 and Rule 

19b–4(f) thereunder.4 The Commission 

is publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend the 

fees of (i) the Non-Display Enterprise 

License and (ii) PHLX Depth Data 

(internal and external distribution and 

professional subscriber fee) based on the 

rate of inflation. Each fee will be 

adjusted for the inflation that has 

occurred since that specific fee was last 

changed. 

While these amendments are effective 

upon filing, the Exchange has 

designated the proposed amendments to 

be operative on January 1, 2025. 

The proposed rule change, including 

the Exchange’s statement of the purpose 

of, and statutory basis for, the proposed 

rule change, is available on the 

Exchange’s website at https://

listingcenter.nasdaq.com/rulebook/ 

phlx/rules and on the Commission’s 

website at https://www.sec.gov/rulesregulations/self-regulatory-organizationrulemaking/national-securitesexchanges?file_number=SR-Phlx-2024- 

73. 

II. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act.5

Comments may be submitted 

electronically by using the 

Commission’s internet comment form 

(https://www.sec.gov/rules-regulations/ 

self-regulatory-organizationrulemaking/national-securitesexchanges?file_number=SR-Phlx-2024- 

73) or by sending an email to rulecomments@sec.gov. Please include file 


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