```

[Federal Register Volume 90, Number 21 (Monday, February 3, 2025)]
[Notices]
[Pages 8822-8829]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-02084]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-102297; File No. SR-CBOE-2024-047]

Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of 
Filing of Amendment No. 2 and Order Granting Accelerated Approval of a 
Proposed Rule Change, as Modified by Amendment No. 2, Regarding the 
Types of Complex Orders Available for Flexible Exchange Options 
(``FLEX'') Trading on the Exchange

January 28, 2025.
    On October 11, 2024, Cboe Exchange, Inc. (``Exchange'') 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 provide for the trading of complex flexible exchange options 
(``FLEX'') orders with both FLEX and non-FLEX components (``FLEX v. 
non-FLEX Orders''). The proposed rule change was published for comment 
in the Federal Register on October 30, 2024.\3\ On December 10, 2024, 
pursuant to Section 19(b)(2) of the Act,\4\ 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.\5\ The 
Commission received no comments regarding the proposal. On December 20, 
2024, the Exchange filed Amendment No. 1 to the proposal, which 
superseded and replaced the original proposal in its entirety. On 
January 23, 2024, the Exchange filed Amendment No. 2 to the proposal, 
which supersedes and replaces Amendment No. 1 in its entirety.\6\ The 
Commission is publishing this notice to solicit comments on Amendment 
No. 2 from interested persons and is approving the proposed rule 
change, as modified by Amendment No. 2, on an accelerated basis.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 101428 (Oct. 24, 
2024), 89 FR 86393.
    \4\ 15 U.S.C. 78s(b)(2).
    \5\ See Securities Exchange Act Release No. 101870 (Dec. 10, 
2024), 89 FR 101673 (Dec.16, 2024). The Commission designated 
January 28, 2025, as the date by which the Commission shall either 
approve or disapprove, or institute proceedings to determine whether 
to disapprove, the proposed rule change.
    \6\ Amendment No. 2 revises the proposal to: clarify and correct 
errors in the text of the proposed rules; provide an example of the 
application of the Exchange's obvious error rules to complex FLEX v. 
non-FLEX Orders; provide additional discussion of the potential uses 
of FLEX v. non-FLEX Orders; revise the description of the proposal 
to make clear that the Exchange's rules will continue to require 
that the component legs of FLEX complex orders, including FLEX v. 
Non-FLEX Orders, have the same underlying equity or index; and 
include additional information in the examples showing the pricing 
of FLEX v. non-FLEX Orders. Amendment No. 2 to the proposal is 
available at: https://www.sec.gov/comments/sr-cboe-2024-047/srcboe2024047.htm.
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I. Description of the Proposed Rule Change, as Modified by Amendment 
No. 2

    Cboe Exchange, Inc. (the ``Exchange'' or ``Cboe Options'') proposes 
to amend its Rules regarding the types of complex orders available for 
flexible exchange options (``FLEX'') trading at the Exchange. The 
Exchange initially submitted this rule filing SR-CBOE-2024-047 to the 
Commission on October 11, 2024 (the ``Initial Rule Filing''). The 
Exchange submitted Amendment No. 1 to the Initial Rule Filing on 
December 20, 2024 (``Amendment No. 1''), which superseded the Initial 
Rule Filing and replaced it in its entirety. This Amendment No. 2 to 
the initial Rule Filing supersedes Amendment No. 1 and replaces it in 
its entirety. The text of the proposed rule change is provided in 
Exhibit 5. The text of the proposed rule change is also available on 
the

[[Page 8823]]

Exchange's website at https://www.cboe.com/us/options/regulation/rule_filings/.

II. The Exchange's Statement of the Purpose of, and Statutory Basis 
for, the Proposed Rule Change

    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.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to adopt rules to govern a new type of 
complex FLEX Order. Specifically, the Exchange proposes to amend Rules 
4.21 (Series of FLEX Options), 5.70 (Availability of Orders), 5.72 
(FLEX Trading), and 6.5 (Nullification and Adjustment of Options 
Transactions Including Obvious Errors).
    FLEX Options are customized equity or index option contracts that 
allow investors to tailor contract terms for exchange-listed equity and 
index options. The Exchange may make simple FLEX Orders and complex 
FLEX Orders (see Rule 5.70(b)), including security future-option orders 
and stock-option orders, available for FLEX trading. Currently, the 
legs of a complex FLEX Order are limited to FLEX Option series only. An 
investor wishing to trade a complex strategy containing both FLEX 
Option series and non-FLEX Option series must execute such strategy 
using two or more separate orders. The Exchange now proposes to amend 
its rules to allow for the legs of a complex FLEX Order to include a 
combination of FLEX Option series and non-FLEX Option series (``FLEX v. 
Non-FLEX Order'').
    The Exchange notes that, with exception of the rules proposed in 
this rule filing, FLEX v. Non-FLEX Orders will be subject to the same 
trading rules and procedures that currently govern the trading of other 
complex FLEX Orders on the Exchange. To permit the trading of FLEX v. 
Non-FLEX Orders, the Exchange proposes to amend its rules as follows.
    First, the Exchange proposes to amend Rule 5.70 (Availability of 
Orders) to add FLEX v. Non-FLEX Orders to the types of complex orders 
available for FLEX trading.\7\ Specifically, the Exchange proposes to 
amend Rule 5.70(b) to state that the legs of a complex FLEX Order may 
be for FLEX Option series only or a combination of FLEX Option series 
and non-FLEX Option series (``FLEX v. Non-FLEX Order'').\8\ As noted 
above, FLEX v. Non-FLEX Orders will be considered complex FLEX 
instruments, which will be subject to the same trading rules and 
procedures that govern the trading of other FLEX Orders on the Exchange 
(unless otherwise noted herein). The Exchange also proposes to amend 
Rule 5.70(b) to remove the requirements set forth in subparagraphs (1) 
and (2).\9\ Rule 5.70(b)(1) provides that each leg(s) of a complex FLEX 
Order must be for a FLEX Option series authorized for FLEX trading with 
the same underlying equity security or index. The Exchange proposes to 
delete this requirement, as such requirement is already contained 
within the definition of complex order set forth in Rule 1.1. Rule 
5.70(b)92) [sic] provides that each leg(s) of a complex FLEX Order must 
have the same exercise style. The Exchange proposes to delete this 
requirement to allow for the trading of the proposed FLEX v. Non-FLEX 
Orders and will, in general, provide FLEX Traders with more flexibility 
and opportunities for customization via FLEX trading. Further, deletion 
of this requirement that each leg of a complex FLEX Order (whether 
comprised of all FLEX Option legs or FLEX and non-FLEX Option legs) 
must have the same exercise style will expand investors' choices and 
flexibility, and provide FLEX Traders with a mechanism by which to 
manage the positions and associated risk in their portfolios more 
precisely, based on exercise style.
---------------------------------------------------------------------------

    \7\ As part of the proposed rule change, the Exchange proposes 
to amend Rule 5.70(b) to add a cite to the definition of complex 
order in Rule 1.1; this is not a substantive change, but rather 
merely adds a cross-reference to the defined term for purposes of 
clarity. Per Rule 1.1, the term ``complex order'' means an order 
involving the concurrent execution of two or more different series 
in the same underlying security or index (the ``legs'' or 
``components'' of the complex order), for the same account, 
occurring at or near the same time and for the purpose of executing 
a particular investment strategy with no more than the applicable 
number of legs (which number the Exchange determines on a class-by-
class basis).
    \8\ Under the proposed rule change, complex FLEX Orders could 
include both listed instruments as well as FLEX instruments (if at 
least one leg is for a FLEX Option series), with an optional stock 
leg. Per the definition of complex order, the legs of all complex 
FLEX Orders (including FLEX v. Non-FLEX options) must have the same 
underlying security or index. See Rule 1.1 (definition of complex 
order).
    \9\ See supra note 1. [sic].
---------------------------------------------------------------------------

    The Exchange also proposes to add Rule 5.70(d), which states that, 
in classes determined by the Exchange, a nonconforming FLEX v. Non-FLEX 
Order is not eligible for electronic processing, in which case the 
nonconforming FLEX v. Non-FLEX Order may only be submitted for manual 
handling and open outcry trading. For reference, a ``nonconforming 
complex order'' is defined as a complex order with a ratio on the 
options legs less than one-to-three (.333) or greater than three-to-one 
(3.00).\10\ The proposed language is the same as language currently 
included in the definition of ``complex order'' in Rule 5.33(a), the 
intent of which is to permit the Exchange to determine in which classes 
nonconforming complex orders (including stock-option orders) may be 
submitted for electronic processing on the Exchange pursuant to Rule 
5.33.
---------------------------------------------------------------------------

    \10\ See Rule 1.1.
---------------------------------------------------------------------------

    The Exchange also proposes to add Rule 5.70(e), which states that 
the non-FLEX Option leg(s) of a FLEX v. Non-FLEX Order may not Leg into 
the Simple Book, to provide for more efficient execution and processing 
of FLEX v. Non-FLEX Orders. The series that would comprise a FLEX v. 
Non-FLEX Order are parts of different classes and thus are subject to 
different trading setting and parameters (e.g., allocation, 
entitlements) pursuant to the Rules. Non-FLEX classes also have 
separate market data inputs, as the System must read market data for 
each class in connection with potential executions in non-FLEX 
classes.\11\ If the System receives a FLEX v. Non-FLEX Order, it would 
need to trade the Non-FLEX leg against the appropriate leg in the book; 
however, there is no book with resting simple FLEX orders against which 
the FLEX leg could execute. If this were to occur, execution 
opportunities for FLEX v. Non-FLEX Orders may be prevented, as while 
the Non-FLEX leg(s) of the FLEX v. Non-FLEX Order would execute against 
interest in the book, there would be no execution opportunities for the 
FLEX leg(s) of the FLEX v. Non-FLEX Order. As discussed below, the Non-
FLEX legs of FLEX v. Non-FLEX Orders will protect Priority

[[Page 8824]]

Customer orders in the simple book for the Non-FLEX classes.
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    \11\ This proposed change is consistent with current Rules that 
do not permit legging of complex orders consisting of legs in 
different groups of series in a class, as the System handles groups 
of series as different classes. See Rule 5.33(g)(6). The proposed 
change is also consistent with the Exchange's handling of stock-
option orders. See Rule 5.33(g)(5).
---------------------------------------------------------------------------

    The Exchange proposes to amend Rule 5.72 (FLEX Trading) to 
distinguish criteria for a complex order with only FLEX Option legs and 
to add criteria for FLEX and non-FLEX Option legs of a FLEX v. Non-FLEX 
Order. First, the Exchange proposes to amend Rule 5.72(b)(2) to specify 
that each FLEX Option leg of the FLEX Option complex strategy must 
include all terms for a FLEX Option series set forth in Rule 4.21 
(including that a non-FLEX Option series with identical terms is not 
listed for trading), subject to the order entry requirements set forth 
in Rule 5.7.
    Additionally, the Exchange proposes changes to distinguish the 
criteria for a complex order with only FLEX Option leg(s) from that 
proposed for FLEX v. Non-FLEX Orders, noting that there are no changes 
to the criteria to those FLEX Orders containing only FLEX Option leg(s) 
as a result of the proposed rule change. The Exchange proposes to amend 
Rule 5.72(b)(2)(A) to specifically reference the pricing requirements 
for complex FLEX Orders with FLEX Option legs only. As proposed Rule 
5.72(b)(2)(A)(i) contains the requirements for a complex FLEX Order 
with only FLEX Option legs submitted into the System for an electronic 
FLEX Auction pursuant to Rule 5.72(c) or Rules 5.73 or 5.74, which must 
include a bid or offer price for each leg, which leg prices must add 
together to equal the net price. Proposed Rule 5.72(b)(2)(A)(ii) sets 
forth the requirements for a complex FLEX Order with only FLEX Option 
legs submitted into the System prior to representation in an open 
outcry FLEX Auction pursuant to Rule 5.72(d), namely that the order may 
include a bid or offer price on one or more of the legs (subject to a 
FLEX Trader's responsibilities pursuant to Rule 5.91 and Chapter 9). 
The execution leg prices must be entered or modified, as necessary, via 
PAR following execution of the order, which prices must add together to 
equal the net execution price.
    The Exchange proposes to add Rule 5.72(b)(2)(B) containing certain 
requirements for a FLEX v. Non-FLEX Order. Under the proposed rule, a 
FLEX v. Non-FLEX Order submitted in the System for an electronic FLEX 
Auction pursuant to Rule 5.72(c) must include a bid or offer price for 
each FLEX Option leg but no bid or offer price for each non-FLEX Option 
leg, and a net price. By allowing the System the ability to adjust the 
price of the legs, FLEX Traders may achieve their desired net price for 
the order, while ensuring the non-FLEX Option legs fit within pricing 
requirements of the non-FLEX markets. A FLEX v. Non-FLEX Order 
submitted into the System prior to representation in an open outcry 
FLEX Auction pursuant to Rule 5.72(d) below may include a bid or offer 
price for any FLEX Option leg but no bid or offer price for each non-
FLEX Option leg, and a net price. By allowing flexibility in open 
outcry trading, FLEX Traders may achieve their desired net price for 
the order.
    To achieve the desired net execution price for a FLEX v. Non-FLEX 
Order (1) the execution leg price of each non-FLEX Option leg may not 
be worse than the NBBO,\12\ worse than the BBO,\13\ or equal to the BBO 
if there is a Priority Customer order(s) on the Simple Book; and (2) 
the execution leg price of each FLEX Option leg(s) may be adjusted so 
that the prices of the FLEX Option legs combined with the prices of the 
non-FLEX Option legs add together to equal the net price. Thus, the 
non-FLEX Option legs of a FLEX v. Non-FLEX Order would be able to trade 
at the same price as non-Priority Customer interest at the BBO, which 
is consistent with complex orders comprised of solely non-FLEX 
Options.\14\ In addition, no non-FLEX component of a FLEX v. Non-FLEX 
Order would be able to trade at the same price as resting Priority 
Customer interest at the BBO.\15\ If a non-FLEX Option leg of a FLEX v. 
Non-FLEX Order cannot execute at a price permissible that meets the 
requirements set forth in proposed Rule 5.72(b)(2)(B)(i), the entire 
FLEX v. Non-FLEX Order will be cancelled.
---------------------------------------------------------------------------

    \12\ See Rule 1.1. The term ``NBBO'' means the national best bid 
or offer the Exchange calculates based on market information it 
receives from OPRA.
    \13\ See Rule 1.1. The term ``BBO'' means the best bid or offer 
disseminated on the Exchange.
    \14\ See Rule 5.33(f)(2)(A)(ii).
    \15\ See proposed Rule 5.72(b)(2)(B)(i). This is consistent with 
nonconforming complex orders comprised of solely non-FLEX Options. 
See Rule 5.33(f)(2)(A)(iv)(B).
---------------------------------------------------------------------------

    The below examples are designed to illustrate the pricing of a FLEX 
v. Non-FLEX Order. Assume for each example a FLEX Trader wishes to 
execute a complex FLEX Order with two legs (one FLEX Option leg and one 
non-FLEX Option leg).
    Example 1: Listed (i.e., non-FLEX) legs are adjusted to their NBBO 
first, FLEX Option leg is then adjusted residually to meet net 
execution price.

--------------------------------------------------------------------------------------------------------------------------------------------------------
          Instrument ID                  Legs              Symbol              Side           Ratio        Expiration          Strike           Type
--------------------------------------------------------------------------------------------------------------------------------------------------------
CI0001..........................  Leg 1.............  XYZ               Buy...............          1  December..........              10  Call.
                                  Leg 2.............  1XYZ              Sell..............          1  November..........           10.01  Call.
--------------------------------------------------------------------------------------------------------------------------------------------------------

Market for Non-FLEX Leg
Away BBO: 2.15 x 2.35
BBO: 2.20 x 2.30
NBBO: 2.20 x 2.30
FLEX Order Auction (``FOA''): Buy 10 CI0001 @ 1.25.
Leg 1 (Non-FLEX Option Leg) Price: N/A
Leg 1 Market: (Exchange Market-Maker) 2.20 x 2.30 (Exchange Market-
Maker)
Leg 2 (FLEX Option Leg) Price: 1.00
Response 1: Sell 5 CI0001 @ 1.19
Response 2: Sell 5 CI0001 @ 1.25
FOA trades 5 CI0001 with Response 1 at 1.19. The legs print at 2.20 and 
1.01.
FOA trades 5 CI0001 with Response 2 at 1.25. The legs print at 2.25 and 
1.00.

    Example 2: Listed (i.e., Non-FLEX) legs are adjusted up/down to 
their NBBO first, FLEX Option leg retains specified price, as no 
further adjustment is needed to meet net price.

--------------------------------------------------------------------------------------------------------------------------------------------------------
          Instrument ID                  Legs              Symbol              Side           Ratio        Expiration          Strike           Type
--------------------------------------------------------------------------------------------------------------------------------------------------------
CI0001..........................  Leg 1.............  XYZ               Buy...............          1  December..........              10  Call.
                                  Leg 2.............  1XYZ              Sell..............          1  November..........           10.01  Call.
--------------------------------------------------------------------------------------------------------------------------------------------------------

Market for Non-FLEX Leg
Away BBO: 2.10 x 2.35
BBO: 2.15 x 2.30

[[Page 8825]]

NBBO: 2.15 x 2.30
FOA: Buy 10 CI0001 @ 1.25.
Leg 1 (Non-FLEX Option Leg) Price: N/A
Leg 1 Market: (Exchange Market-Maker) 2.15 x 2.30 (Exchange Market-
Maker)
Leg 2 (FLEX Option Leg) Price: 1.00
Response 1: Sell 5 CI0001 @ 1.19
Response 2: Sell 5 CI0001 @ 1.25
FOA trades 5 CI0001 with Response 1 at 1.19. The legs print at 2.19 and 
1.00.
FOA trades 5 CI0001 with Response 2 at 1.25. The legs print at 2.25 and 
1.00.

    While the System followed the same process in both examples to 
price the non-FLEX legs first, because the leg market was wider in the 
second example, the System was able to execute the non-FLEX leg in that 
example at a price within that market without the need to adjust the 
entered price of the FLEX leg.
    The Exchange proposes to amend Rule 4.21 (Series of FLEX 
Options).\16\ The Exchange proposes to add Rule 4.21(a)(4) to state 
that the Exchange may halt trading in a FLEX complex strategy (whether 
comprised of all FLEX Option legs or FLEX and non-FLEX Option legs) if 
any leg of the strategy is halted. The System does not accept a FLEX 
complex order for a series while trading in the class is halted. A FLEX 
complex strategy may not execute until all legs are no longer halted.
---------------------------------------------------------------------------

    \16\ As part of the proposed changes, the Exchange proposes to 
add a ``FLEX Option series'' as a defined term in Rule 4.21(a). 
Further, to enhance comprehension, the Exchange proposes to amend 
Rule 4.21(a)(2) to add a missing word (``be''), as well as clarify 
that a FLEX Order for a new FLEX Option series may be submitted on 
any trading day prior to the expiration date. Such changes are non-
substantive, clarifying changes.
---------------------------------------------------------------------------

    Finally, the Exchange proposes to amend Rule 6.5 (Nullification and 
Adjustment of Option Transactions Including Obvious Errors), 
Interpretation and Policy .07. Specifically, the Exchange proposes to 
add Rule 6.5, Interpretation and Policy. 07(d), to state that if a non-
FLEX Option leg of a FLEX v. Non-FLEX Order qualifies as an Obvious 
Error under Rule 6.5(c)(1) or a Catastrophic Error under Rule 
6.5(d)(1), then the non-FLEX Option leg that is an Obvious or 
Catastrophic Error will be adjusted in accordance with Rules 
6.5(c)(4)(A) or (d)(3), respectively, regardless of whether one of the 
parties is a Customer. However, the non-FLEX Option leg of any Customer 
order subject to proposed Rule 6.5, Interpretation and Policy. 07(d) 
will be nullified if the adjustment would result in an execution price 
higher (for buy transactions) or lower (for sell transactions) than the 
Customer's net execution price for the non-FLEX Option leg. If any leg 
of a FLEX v. Non-FLEX Order is nullified, the entire transaction is 
nullified. This is consistent with the Exchange's handling of other 
complex orders, including stock-option orders, and ensures protections 
in the event of an Obvious or Catastrophic error. The below example is 
designed to illustrate how a FLEX v. Non-FLEX Order will be processed 
in the event of an Obvious Error. Assume for the example a FLEX Trader 
wishes to execute a complex FLEX Order with three legs (one FLEX Option 
leg and two non-FLEX Option leg).
    Example 3: Listed Leg 1 qualifies as Obvious Error.
Leg 1: Buy 1 Call 1.00 x 1.20
Leg 2: Buy 1 Call 2.00 x 2.25
Leg 3: Buy 1 FLEX Call (Note: the FLEX leg is not considered in 
determining obvious error adjustments)
SNBBO of listed legs: 3.00 x 3.45
Assume Leg 1 updates to 1.00 x 4.00; Listed Leg SNBBO updates to 3.00 x 
6.25
1 millisecond later
Complex Order trades at 5.45
    Leg 1 trades @ 2.25
    Leg 2 trades @ 2.20
    FLEX leg trades @ 1.00
    This order, specifically the execution on Leg 1, qualifies as 
Obvious Error, based on prices prior to Leg 1 market going wide.\17\
---------------------------------------------------------------------------

    \17\ See proposed Rule 6.5, Interpretation and Policy .07(d). 
See also Rule 6.5(c)(1).
---------------------------------------------------------------------------

Obvious error adjustment: Leg 1 is adjusted to trade at 1.60
    Theoretical price (``TP'') = 1.10
    Theoretical offer = 1.45
    Theoretical Offer + 0.15 adjustment \18\ = 1.60.
---------------------------------------------------------------------------

    \18\ See proposed Rule 6.5, Interpretation and Policy .07(d). 
See also Rule 6.5(c)(4)(A).
---------------------------------------------------------------------------

    The Exchanges notes that the counterparties to an execution of a 
FLEX v. Non-FLEX Order trade all of the component legs of the order.
    The Exchange believes that its existing surveillance and reporting 
safeguards in place are adequate to deter and detect possible 
manipulative behavior which might arise from trading FLEX v. Non-FLEX 
Orders and will support the protection of investors and the public 
interest. The Exchange also represents that it has the necessary system 
capacity to support the new complex FLEX Order type. Finally, the 
Exchange does not believe that any market disruptions will be 
encountered with the introduction of this complex FLEX Order type. The 
Exchange currently allows for trading of several types of complex 
orders, including stock-option orders, and has not experienced any 
market disruptions or issues with capacity. Rather, the Exchange 
believes the introduction of this complex FLEX Order type may promote 
more efficient trading, as investors wishing to trade a complex 
strategy containing both FLEX Option series and non-FLEX Option series 
would no longer be required to execute such strategy using two or more 
separate orders.
2. Statutory Basis
    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. Specifically, the Exchange 
believes the proposed rule change is consistent with the Section 
6(b)(5) 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) requirement that the rules of an exchange not be designed to 
permit unfair discrimination between customers, issuers, brokers, or 
dealers.
    Specifically, the Exchange believes the proposed rule change will 
benefit investors by expanding investors' choices and flexibility with 
respect to the trading of FLEX Options. The Exchange believes that 
introducing FLEX v. Non-FLEX Orders will increase order flow to the 
Exchange, increase the variety of options products available for 
trading, and provide a valuable tool for investors to manage risk.
    The Exchange believes that the proposed rule change would remove 
impediments to and perfect the mechanism of a free and open market as 
FLEX v. Non-FLEX Orders would enable market participants to execute a 
complex strategy including a combination of FLEX Option series and non-
FLEX Option series, which would, in turn, provide greater opportunities 
for market participants to manage risk through the use of a complex 
FLEX Order to the benefit of investors and the

[[Page 8826]]

public interest. The proposed rule change will benefit TPHs by 
providing a more efficient mechanism for TPHs to provide and seek 
liquidity for customized or complex FLEX strategies which include a 
non-FLEX Option leg(s).
    Further, trading FLEX Options, including FLEX v. Non-FLEX Orders, 
on an exchange is an alternative to trading customized options in OTC 
markets and carries with it the advantages of exchange markets such as 
transparency, parameters and procedures for clearance and settlement, 
and a centralized counterparty clearing agency. Therefore, the Exchange 
believes the proposed rule change will promote these same benefits for 
the market as a whole by providing an additional venue for market 
participants to seek liquidity for customized, large-sized, or complex 
FLEX option orders, including those with a non-FLEX Option leg(s). The 
Exchange believes that providing an additional venue for these FLEX 
orders, rather than potentially splitting the orders across OTC and 
exchange markets, will benefit investors by increasing competition for 
order flow and executions, and thereby potentially result in more 
competitive pricing related to FLEX Options.
    The Exchange believes that the proposed changes to Rule 5.70(b), to 
add FLEX v. Non-FLEX Orders to the list of complex orders available for 
FLEX trading, are consistent with the Act and remove impediments to and 
perfect the mechanism of a free and open market and a national market 
system because the changes will allow investors to trade in a more 
efficient manner, allowing investors to better customize their trading 
strategies and implement more precise trading strategies which are not 
available under current rules. Currently, a market participant is 
unable to trade a FLEX Option and a listed option as part of the same 
complex strategy; such user must submit an order containing the FLEX 
Option(s) and an order containing the listed option. This may introduce 
additional complexities such as price and legging risk, which would be 
eliminated under the proposed rule change. These complexities may 
unnecessarily limit market participants' ability to trade in an 
exchange environment that offers the added benefits of transparency, 
price discovery, liquidity, and financial stability. These investors 
may have improved capability under the proposed rule change to execute 
strategies to meet their specific investment objectives by using a 
single order with customized FLEX Option legs with non-FLEX Option 
legs.
    Similarly, the Exchange also believes the proposed changes to Rule 
5.70(b), to remove the requirement that each leg of a complex FLEX 
Order must have the same exercise style, will remove impediments to and 
perfect the mechanism of a free and open market and benefit investors, 
because it will provide TPHs with additional flexibility and precision 
in their investment strategies, by allowing TPHs to trade complex 
strategies that would otherwise be required to split into multiple, 
separate orders.
    The proposed changes to Rule 5.70(b) to add a cite to Rule 1.1 for 
the definition of complex orders and delete Rule 5.70(b)(1) provides 
further clarity within the Rules, to the benefit of investors.
    The Exchange believes the proposed changes to Rule 4.21(a), which 
address when the Exchange may halt trading in a FLEX complex strategy 
(whether comprised of all FLEX Option legs or FLEX and non-FLEX Option 
legs), are consistent with the Act and promotes the public interest and 
the protection of investors by clarifying the Exchange's authority with 
respect to FLEX complex strategies comprised of all FLEX Option legs 
and providing a consistent and transparent procedure with respect to 
FLEX complex strategies comprised of FLEX and non-FLEX Option legs, 
that would be applied by the Exchange, similar to trading halt 
authority under current rules. Further, the proposed change to add the 
defined term ``FLEX Option series'' provides further clarity within the 
Rules and eliminates potential confusion by providing a definition of 
``FLEX Option series'' to the benefit of investors.
    The Exchange believes the proposed changes to Rule 5.72(b)(2)(A), 
which provide clarity with respect to the criteria required for complex 
FLEX Orders with FLEX Option legs only, helps will help promote a fair 
and orderly national options market system. As such, the changes 
proposed under Rule 5.72(b)(2)(A), to separate out the requirements for 
complex FLEX Orders with FLEX Option legs only, provide clarity 
regarding the requirements for complex FLEX Orders with FLEX Option 
legs only, as compared to the proposed requirements for complex FLEX 
Orders with FLEX and non-FLEX Option legs.
    Additionally, the Exchange believes the proposed rule change to add 
Rule 5.70(d) will 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, because it will provide 
market participants with the same flexibility with respect to all their 
complex trading strategies. The proposed rule change eliminates 
confusion regarding what types of FLEX v. Non-FLEX Orders are 
permissible for electronic processing. As noted above, the proposed 
rule changes regarding execution of nonconforming FLEX v. Non-FLEX 
Orders are consistent with the Exchange's previously adopted rules 
regarding execution of other nonconforming complex orders.
    The Exchange believes the proposed pricing requirements for FLEX v. 
Non-FLEX Orders, set forth in proposed Rule 5.72(b)(2)(B), would remove 
impediments to and perfect the mechanism of a free and open market, as 
the proposed trading process for FLEX v. Non-FLEX Orders will provide 
the ability for investors to achieve the desired net package price for 
those orders while protecting customers with resting interest in the 
non-FLEX Simple Book. By requiring a FLEX v. Non-FLEX Order submitted 
into a FLEX Auction (whether electronically or in open outcry) to 
include a bid or offer price for each FLEX Option leg, but no bid or 
offer for each non-FLEX Option leg, and a net price, the requirements 
ensure that the non-FLEX Option leg will be subject to the same pricing 
requirements as they would if not part of a FLEX v. Non-FLEX Order. 
Specifically, the price of any non-FLEX Option leg that is part of a 
FLEX v. Non-FLEX Order may not be outside of the BBO or NBBO. The 
Exchange's proposal will continue to protect Priority Customer interest 
on the Exchange, as the non-FLEX Option legs of a FLEX v. Non-FLEX 
Order will always trade at a price better than BBO if there is a 
customer on a leg. Further, the price of a FLEX Option leg(s) that is 
part of a FLEX v. Non-FLEX Order must, following execution of the Non-
FLEX Option leg(s), serve to achieve the net execution price (which may 
not be worse than the desired net price included at order submission), 
which the Exchange believes will protect investors by ensuring the 
price of the FLEX Option leg(s) adhere to the agreed upon execution 
prices and the order's limit price.
    The Exchange believes this proposed trading process will ensure 
that a user who chooses to submit a listed (i.e., Non-FLEX) leg as part 
of a FLEX v. Non-FLEX Order is subject to the same pricing requirements 
as they would be if the listed leg was not submitted with FLEX Option 
legs for execution. Ultimately, FLEX v. Non-FLEX Orders will trade in 
the same manner as FLEX complex orders do today, and execution of the 
non-FLEX Option legs of these

[[Page 8827]]

orders will continue to comply with linkage requirements (by not 
permitting trade-throughs of the NBBO) and protect resting customer 
interest in the Simple Book. Further, the Exchange believes that the 
proposal to not permit the non-FLEX Option legs of a FLEX v. Non-FLEX 
Order to leg into the Simple Book is consistent with the Act and 
promotes the public interest and the protection of investors, because 
it will provide for more efficient execution and processing of FLEX v. 
Non-FLEX Orders, as legging would prevent execution opportunities for 
these orders (as discussed above).
    Finally, the Exchange believes that the proposed rule change is 
designed to not permit unfair discrimination among market participants 
as all TPHs may, but are not required to, trade FLEX v. Non-FLEX 
Orders.

B. Self-Regulatory Organization's Statement on Burden on Competition

    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, as all TPHs that are registered 
as FLEX Traders in accordance with the Exchange's Rules will be able to 
trade FLEX v. Non-FLEX Orders in the same manner.
    The Exchange does not believe that the proposed rule change will 
impose any burden on intermarket competition that is not necessary or 
appropriate in furtherance of the purposes of the Act, as the proposal 
is designed to increase competition for order flow on the Exchange in a 
manner that is beneficial to investors because it is designed to 
provide investors seeking to execute both a FLEX Option(s) and a listed 
option(s) with a more effective method of executing the trades, which 
may result in trade efficiencies (i.e., pricing or reporting (e.g., 
position limits) efficiencies) \19\ and reduced risk (i.e., pricing and 
legging risk). The Exchange believes the proposed rule change will 
encourage competition, as it may broaden the base of investors that use 
FLEX Options to manage their trading and investment risk, including 
investors that currently trade in the OTC market for customized 
options. The Exchange believes the proposed rule change may increase 
competition as it may lead to the migration of options currently 
trading in the OTC market to trading on the Exchange. Also, any 
migration to the Exchange from the OTC market would result in increased 
market transparency and thus increased price competition.
---------------------------------------------------------------------------

    \19\ See, e.g., Rule 8.35.
---------------------------------------------------------------------------

    The Exchange further notes that it operates in a highly competitive 
market in which market participants can readily direct order flow to 
competing venues who offer similar functionality. All TPHs may, but are 
not required to, trade FLEX v. Non-FLEX Orders at the Exchange. The 
Exchange does not believe the proposed rule change will impose any 
burden on intermarket competition that is not necessary or appropriate 
in furtherance of the purposes of the Act, as other exchanges could 
adopt this order type if so desired.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    The Exchange neither solicited nor received written comments on the 
proposed rule change.

III. Discussion and Commission Findings

    After careful consideration, the Commission finds that the proposed 
rule change, as modified by Amendment No. 2, is consistent with the 
requirements of the Act and the rules and regulations thereunder 
applicable to a national securities exchange,\20\ and, in particular, 
the requirements of Section 6 of the Act.\21\ Specifically, the 
Commission finds that the proposed rule change is consistent with 
Section 6(b)(5) of the Act,\22\ which requires that an exchange have 
rules designed to prevent fraudulent and manipulative acts and 
practices, to remove impediments to and perfect the mechanism of a free 
and open market, and to protect investors and the public interest.
---------------------------------------------------------------------------

    \20\ In approving this proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. See 15 U.S.C. 78c(f).
    \21\ 15 U.S.C. 78f.
    \22\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The proposal amends Exchange Rules 4.21, 5.70, 5.72, and 6.5 to 
provide for the trading of complex FLEX v. Non-FLEX Orders, which are 
comprised of a combination of FLEX Option series and non-FLEX option 
series.\23\ Currently, market participants are unable to trade a FLEX 
Option and a listed option as part of the same complex strategy and, 
instead, must submit separate orders for the FLEX Option(s) and the 
listed option components, which may introduce price and legging 
risk.\24\ The Exchange states that the proposal will eliminate these 
risks and allow market participants to execute strategies to meet their 
investment objectives by using a single order with customized FLEX 
Option legs and non-FLEX Option legs.\25\ The Commission finds that the 
proposal could help investors achieve their investment objectives more 
efficiently by allowing them to trade complex FLEX Orders with FLEX and 
non-FLEX components as part of a single complex FLEX v. Non-FLEX Order. 
As discussed below, the proposal also adopts rules governing the 
trading of complex FLEX v. Non-FLEX Orders that are consistent with the 
Exchange's existing rules.
---------------------------------------------------------------------------

    \23\ Complex FLEX Orders also may be comprised solely of FLEX 
Option series. See proposed Exchange Rule 5.70(b).
    \24\ See Amendment No. 2 at 15.
    \25\ See id.
---------------------------------------------------------------------------

    The proposal deletes Exchange Rule 5.70(b)(1), which provides that 
each leg(s) of a complex FLEX Order must be for a FLEX Option series 
authorized for FLEX trading with the same underlying equity security or 
index. However, complex FLEX v. Non-FLEX Orders are complex orders, as 
defined in Exchange Rule 1.1, and the definition of complex order 
requires, among other things, that the component legs of a complex 
order have the same underlying security or index.\26\ Accordingly, the 
deletion of Exchange Rule 5.70(b)(1) is a non-substantive change,\27\ 
and Exchange Rule 5.70(b), as amended, will continue to require that 
the component legs of a complex FLEX Order, including a complex FLEX v. 
Non-FLEX Order, have the same underlying security or index.\28\ The 
proposal also amends Exchange Rule 5.70(b) to allow the component legs 
of complex FLEX Orders to have different exercise styles. The Exchange 
states that removing the requirement that all component legs of a 
complex FLEX Order have the same exercise style will expand investors' 
choices and flexibility and provide them with a mechanism to more 
precisely manage

[[Page 8828]]

the positions and associated risk in their portfolios.\29\
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    \26\ See proposed Exchange Rule 5.70(b). Exchange Rule 1.1 
defines a complex order as ``an order involving the concurrent 
execution of two or more different series in the same underlying 
security or index (the ``legs'' or ``components'' of the complex 
order), for the same account, occurring at or near the same time and 
for the purpose of executing a particular investment strategy with 
no more than the applicable number of legs (which number the 
Exchange determines on a class-by-class basis). The Exchange 
determines in which classes complex orders are eligible for 
processing. The Exchange determines on a class-by-class basis 
whether non-conforming complex orders are eligible for electronic 
processing. Unless the context otherwise requires, the term complex 
order includes Index Combo orders, stock-option orders and security 
future-option orders.''
    \27\ See Amendment No. 2 at footnote 1.
    \28\ See id. at 5.
    \29\ See id. ``
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    The proposal adopts Exchange Rule 5.70(d) to provide that, in 
classes determined by the Exchange, a nonconforming FLEX v. Non-FLEX 
Order is not eligible for electronic processing.\30\ The Exchange 
states that this provision is consistent the flexibility provided in 
the definition of ``complex order'' in Exchange Rule 5.33(a), which 
provides, in part, that ``In classes determined by the Exchange, a 
nonconforming complex order is not eligible for electronic processing, 
including COA, COB, C-AIM, and C-SAM.'' Thus, Exchange Rule 5.33(a) 
allows the Exchange to determine in which classes nonconforming complex 
orders (including stock-option orders) may be submitted for electronic 
processing on the Exchange pursuant to Exchange Rule 5.33.\31\ The 
proposal also adopts new Exchange Rule 5.70(e), which provides that the 
non-FLEX Option leg(s) of a FLEX v. Non-FLEX Order may not leg into the 
Simple Book. The Exchange states that not allowing the non-FLEX Option 
leg(s) to leg into the Simple Book will provide for more efficient 
execution and processing of FLEX v. Non-FLEX Orders and is consistent 
with the Exchange's handling of stock-option orders, which also do not 
leg into the Simple Book.\32\ Accordingly, proposed Exchange Rules 
5.70(d) and (e) are consistent with existing Exchange rules applicable 
to the trading of complex orders.
---------------------------------------------------------------------------

    \30\ Exchange Rule 1.1 defines a non-conforming complex order as 
``s (a) a complex order with a ratio on the options legs less than 
one-to-three (.333) or greater than three-to-one (3.00) (except for 
Index Combo orders) and (b) a stock-option order with a ratio 
greater than eight-to-one (8.00), where the ratio represents the 
total number of units of the underlying stock or convertible 
security in the option leg(s) to the total number of units of the 
underlying stock or convertible security in the stock leg. For the 
purpose of applying these ratios to complex orders comprised of legs 
for both mini-options and standard options, ten mini-option 
contracts represent one standard option contract. For the purpose of 
applying these ratios to complex orders comprised of legs for both 
micro-options and standard options, 100 micro-option contracts 
represent one standard option contract.''
    \31\ See Amendment No. 2 at 6.
    \32\ See Amendment No. 2 at 6-7 and footnote 5. See also 
Exchange Rule 5.33(g)(5). The Exchange states that not legging 
complex FLEX v. Non-FLEX Orders will provide for more efficient 
execution and processing of FLEX v. Non-FLEX Orders. The Exchange 
states that if the System receives a FLEX v. Non-FLEX Order, it 
would need to trade the Non-FLEX leg against the appropriate leg in 
the book; however, there is no book with resting simple FLEX orders 
against which the FLEX leg could execute. The Exchange states that 
if this were to occur, execution opportunities for FLEX v. Non-FLEX 
Orders could be prevented, because although the non-FLEX leg(s) of 
the FLEX v. Non-FLEX Order would execute against interest in the 
book, there would be no execution opportunities for the FLEX leg(s) 
of the FLEX v. Non-FLEX Order. See Amendment No. 2 at 6-7.
---------------------------------------------------------------------------

    The proposal amends Exchange Rule 5.72(b) to establish pricing 
requirements for complex FLEX v. Non-FLEX Orders that are designed to 
protect interest on the Exchange's Simple Order Book and ensure that 
the non-FLEX components do not trade through the NBBO.\33\ Proposed 
Exchange Rule 5.72(b)(2)(B)(i) protects the priority of Priority 
Customer orders on the Simple Book by requiring each non-FLEX leg of a 
complex FLEX v. Non-FLEX Order to trade at a price that is better than 
the price of resting Priority Customer orders on the Simple Book. This 
requirement is consistent with the Exchange's pricing requirements for 
the component legs of nonconforming complex orders.\34\ The proposed 
rules also prohibit the non-FLEX component legs of a complex FLEX v. 
Non-FLEX Order from trading at a price that is worse than the BBO, 
which consistent with the Exchange's pricing requirements for the 
component legs of complex orders.\35\ In addition, proposed rules 
prohibit the non-FLEX component legs of a complex FLEX v. Non-FLEX 
Order from trading at a price that is worse than the NBBO, which is 
consistent with the pricing requirements for nonconforming complex 
orders.\36\
---------------------------------------------------------------------------

    \33\ See proposed Exchange Rule 5.72(b)(2)(B). The proposal 
makes no substantive changes to the pricing requirements for complex 
FLEX Orders with only FLEX Option legs.
    \34\ See Exchange Rule 5.33(f)(2)(A)(iv)(b). If a complex FLEX 
v. Non-FLEX Order cannot execute at a price that satisfies this 
requirement, the complex FLEX v. Non-FLEX Order is cancelled. See 
proposed Exchange Rule 5.72(b)(2)(B).
    \35\ See proposed Exchange Rule 5.72(b)(2)(B)(i) and Exchange 
Rule 5.33(f)(2)(A)(ii). The BBO is the best bid or offer 
disseminated on the Exchange. See Exchange Rule 1.1.
    \36\ See proposed Exchange Rule 5.72(b)(2)(B)(i). See also 
Exchange Rule 5.66(b)(7) (permitting the component legs of a Complex 
Trade, as defined in Exchange Rule 5.65(d), to trade through a 
Protected Bid or Protected Offer). The NBBO is the national best bid 
or offer the Exchange calculates based on market information it 
receives from the Options Price Reporting Authority. See Exchange 
Rule 1.1.
---------------------------------------------------------------------------

    Proposed Exchange Rule 6.5, Interpretation and Policy .07(d), which 
applies the Exchange's Obvious Error and Catastrophic Error provisions 
to the non-FLEX leg(s) of a complex FLEX v. Non-FLEX Order, is 
consistent with Exchange Rules 6.5, Interpretation and Policy .07(a) 
and (c), which apply the Exchange's Obvious Error and Catastrophic 
Error provisions to, respectively, complex orders that executes against 
leg market interest and stock-option orders. Proposed Exchange Rule 
4.21(a)(4) regarding the Exchange's authority to halt trading in a FLEX 
complex strategy, whether comprised solely of FLEX Options or FLEX and 
non-FLEX Options, when any leg of the strategy is halted, is similar to 
the Exchange's authority under Exchange Rule 4.21(a)(3) and will 
provide clarity with respect to the Exchange's handling of FLEX complex 
strategies when trading in any leg of the strategy is halted.\37\
---------------------------------------------------------------------------

    \37\ Exchange Rule 4.21(a)(3) provides that ``The Exchange may 
halt trading in a FLEX Option class pursuant to Rule 5.20, and 
always halts trading in a FLEX Option class when trading in a non-
FLEX Option class with the same underlying equity security or index 
is halted on the Exchange. The System does not accept a FLEX Order 
for a FLEX Option series while trading in a FLEX Option class is 
halted.''
---------------------------------------------------------------------------

IV. Solicitation of Comments on Amendment No. 1 to the Proposed Rule 
Change

    Interested persons are invited to submit written data, views, and 
arguments concerning whether Amendment No. 2 is consistent with the 
Act. 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 [email protected]. Please include 
file number SR-CBOE-2024-047 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-2024-04 7. 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

[[Page 8829]]

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-2024-047 and should be submitted on 
or before February 24, 2025.

V. Accelerated Approval of Amendment No. 2

    The Commission finds good cause, pursuant to Section 19(b)(2) of 
the Act, for approving Amendment No. 2 prior to the 30th day after the 
date of publication of notice of Amendment No. 1 in the Federal 
Register. Amendment No. 2 revises the proposal to: clarify and correct 
errors in the text of the proposed rules; provide an example of the 
application of the Exchange's obvious error rules to complex FLEX v. 
non-FLEX Orders; provide additional discussion of the potential uses of 
FLEX v. non-FLEX Orders; revise the description of the proposal to make 
clear that the Exchange's rules will continue to require that the 
component legs of FLEX complex orders, including FLEX v. Non-FLEX 
Orders, have the same underlying equity or index; and include 
additional information in the examples showing the pricing of FLEX v. 
non-FLEX Orders. The proposed changes to clarify and correct errors in 
the text of the proposed rules will help to ensure the accuracy of the 
Exchange's rules. The proposed change in the description of the 
proposal to make clear that the Exchange's rules will continue to 
require that the component legs of FLEX complex orders have the same 
underlying equity or index will help to ensure that the proposal 
accurately describes the rules being adopted. The example showing the 
application of the obvious error rules to complex FLEX v. Non-FLEX 
Order demonstrates the operation of these rules in the context of 
complex FLEX v. Non-FLEX orders, and the additions to the pricing 
examples help to clarify those examples. The changes in Amendment No. 2 
assist the Commission in evaluating the proposal and determining that 
the proposal is consistent with the Act and the rules and regulations 
thereunder applicable to a national securities exchange, as discussed 
above. Accordingly, the Commission finds good cause, pursuant to 
Section 19(b)(2) of the Act,\38\ to approve the proposed rule change, 
as modified by Amendment No. 2, on an accelerated basis.
---------------------------------------------------------------------------

    \38\ 15 U.S.C. 78s(b)(2).
---------------------------------------------------------------------------

VI. Conclusion

    For the reasons set forth above, the Commission finds that the 
proposed rule change, as modified by Amendment No. 2, is consistent 
with the requirements of the Act and the rules and regulations 
thereunder applicable to a national securities exchange and, in 
particular, the requirements of Section 6(b)(5) of the Act.\39\
---------------------------------------------------------------------------

    \39\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\40\ that the proposed rule change (SR-CBOE-2024-047), as modified 
by Amendment No. 2, is approved.
---------------------------------------------------------------------------

    \40\ 15 U.S.C. 78s(b)(2)

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\41\
---------------------------------------------------------------------------

    \41\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-02084 Filed 1-31-25; 8:45 am]
BILLING CODE 8011-01-P
```