400 South LaSalle Street › Chicago, IL 60605 › cboe.com

July 15, 2021

Christopher J. Kirkpatrick

Secretary

Commodity Futures Trading Commission

Three Lafayette Centre

1155 21st Street, N.W.

Washington, D.C. 20581

Re: Cboe Futures Exchange, LLC Rule Certification

Submission Number CFE-2021-016

Dear Mr. Kirkpatrick:

Pursuant to Section 5c(c)(1) of the Commodity Exchange Act, as amended (“Act”), and 

Regulation 40.6(a) of the regulations promulgated by the Commodity Futures Trading Commission 

(“Commission”) under the Act, Cboe Futures Exchange, LLC (“CFE” or “Exchange”) hereby 

submits a CFE rule amendment (“Amendment”) to amend the Lead Market Maker Program 

(“LMM Program”) for Cboe® iBoxx® iShares® $ High Yield Corporate Bond Index (“IBHY”) 

futures. The Amendment is set forth in a segregated confidential Appendix A to this submission. 

The Amendment will become effective on July 29, 2021.

Any CFE Trading Privilege Holder (“TPH”) organization may apply to the Exchange for 

appointment as a lead market maker (“LMM”) in the amended LMM Program for IBHY futures. 

There is no limit on the number of TPHs that the Exchange may approve as LMMs for IBHY

futures under the amended LMM Program. TPHs are selected by the Exchange as LMMs under 

the amended LMM Program based on the Exchange’s judgment as to which applicants are most 

qualified to perform the functions of an LMM for IBHY futures based on specified criteria.

The amended LMM Program provides for market performance benchmarks that LMMs

must satisfy in order to receive specified benefits. The market performance benchmarks include

parameters with respect to minimum two-sided quote size and maximum quote width. The market 

performance benchmarks are applicable during IBHY futures trading hours. Each LMM must 

designate in advance to the Exchange a single executing firm ID (“EFID”) through which the LMM 

will provide orders and/or quotes to satisfy the market performance benchmarks (“LMM Program 

EFID”). The benefits under the amended LMM Program are intended to attract and retain liquidity 

providers in IBHY futures. Exhibit 1 to this submission includes the description of the amended 

LMM Program which CFE will include in Policy and Procedure XV of the Policies and Procedures 

Section of the CFE Rulebook.1

 The Exchange believes that the market performance benchmarks 

and associated benefits under the amended LMM Program strike the appropriate balance to 

incentivize and retain liquidity providers in IBHY futures.

1 See Exhibit 2 for disclaimers and trademarks with respect to IBHY futures relating to and of Markit Indices 

Limited and BlackRock Fund Advisors.
2

The amended LMM Program expires on December 31, 2021, unless the amended LMM 

Program is extended by the Exchange. CFE may determine to extend the term of the amended

LMM Program and LMM appointments under the amended LMM Program, allow the amended

LMM Program and LMM appointments under the amended LMM Program to expire, terminate the 

amended LMM Program and all LMM appointments under the amended LMM Program at any 

time, or amend or replace the amended LMM Program with a different market maker program at 

any time. Any of these actions, other than allowing the amended LMM Program to expire, would 

be done through a subsequent rule amendment submission to the Commission.

CFE believes that the Amendment is consistent with the Designated Contract Market 

(“DCM”) Core Principles under Section 5 of the Act. In particular, CFE believes that the 

Amendment is consistent with DCM Core Principles 2 (Compliance with Rules), 4 (Prevention of 

Market Disruption), 9 (Execution of Transactions), and 12 (Protection of Markets and Market 

Participants). CFE notes in this regard that: Each LMM in the amended LMM Program is obligated 

by CFE Rule 308 (Consent to Exchange Jurisdiction) to comply with Exchange rules. Each LMM

is also required under the terms of the amended LMM Program to utilize Exchange match trade 

prevention functionality under CFE Rule 406B (Match Trade Prevention) with respect to trading 

in IBHY futures through its LMM Program EFID. Exchange rules include prohibitions against 

fraudulent, non-competitive, unfair, and abusive trading practices, and the Exchange will monitor 

trading in IBHY futures for violative activity such as wash trading, manipulative trading, and 

market abuse. The Exchange believes that the amended LMM Program will have a positive impact 

on the price discovery process by fostering improved liquidity, market width and size, and trading 

volume in IBHY futures traded on CFE’s centralized market and by incentivizing market 

participants to devote their efforts to enhancing market quality in IBHY futures. Enhanced market 

quality benefits all participants in the IBHY futures market. Accordingly, CFE believes that the 

impact of the Amendment will be beneficial to the public and market participants.

CFE is not aware of any substantive opposing views to the Amendment. CFE hereby 

certifies that the Amendment complies with the Act and the regulations thereunder. CFE further 

certifies that it has posted a notice of pending certification with the Commission and a copy of this 

submission on CFE’s Web site (http://markets.cboe.com/us/futures/regulation/rule_filings/cfe/) 

concurrent with the filing of this submission with the Commission.

Questions regarding this submission may be directed to Arthur Reinstein at (312) 786-7570

or Michael Margolis at (312) 786-7153. Please reference our submission number CFE-2021-016

in any related correspondence.

Cboe Futures Exchange, LLC

/s/ Michael Mollet

By: Michael Mollet

Managing Director
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EXHIBIT 1

(Additions are shown in underlined text and

deletions are shown in stricken text)

Cboe Futures Exchange, LLC

Policies and Procedures Section of Rulebook

* * * * *

XV. Cboe® iBoxx® iShares® $ High Yield Corporate Bond Index Futures Lead Market 

Maker Program

The Cboe® iBoxx® iShares® $ High Yield Corporate Bond Index (“IBHY”) Futures Lead 

Market Maker Program (“Program”) is applicable with respect to IBHY futures.

Trading Privilege Holder (“TPH”) organizations may apply to the Exchange for 

appointment as a lead market maker (“LMM”) in the Program. There is no limit on the number of 

TPHs that the Exchange may approve as LMMs under the Program. Any TPH that desires to apply 

for LMM status in the Program should submit an application in a form and manner prescribed by 

the Exchange. TPHs shall be selected by the Exchange based on the Exchange’s judgment as to 

which applicants are most qualified to perform the functions of an LMM under the Program. 

Factors to be considered in making this selection may include, but are not limited to, satisfaction 

of the qualifications listed below as well as any one or more of the factors listed in Rule 515(b), as 

applied to LMM applicants instead of with respect to DPM applicants.

The following describes the qualifications, requirements, market performance benchmarks, 

benefits, and appointment term under the Program unless otherwise specified.

Qualifications

• Ability to automatically and systematically provide two-sided markets during IBHY 

futures trading hours.

Requirements

• Each LMM shall designate in advance to the Exchange a single EFID through which the 

LMM will provide Orders to satisfy the market performance benchmarks under the 

Program (“LMM Program EFID”). The LMM Program EFID designated by an LMM must 

be an EFID assigned to the LMM and may not be an EFID of another TPH.

• Each LMM is required to utilize Exchange match trade prevention functionality under Rule 

406B with respect to trading in IBHY futures through its LMM Program EFID.

Market Performance Benchmarks

• Each LMM shall provide Orders in IBHY futures in conformity with specified criteria 

relating to minimum two-sided quote size and maximum quote width. These criteria apply 

during IBHY futures trading hours.

• The Exchange may terminate, place conditions upon or otherwise limit a TPH’s 
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appointment as an LMM under the Program if the TPH fails to satisfy the market 

performance benchmarks under the Program. However, failure of a TPH to satisfy the 

market performance benchmarks under the Program shall not be deemed a violation of 

Exchange rules.

Benefits

• An LMM is eligible to receive specified benefits in connection with acting as an LMM 

under the Program.

Term

• The Program and each LMM appointment under the Program will expire on December 31, 

2021. The Exchange may determine to extend the term of the Program and LMM 

appointments under the Program, allow the Program and LMM appointments under the 

Program to expire, terminate the Program and all LMM appointments under the Program 

at any time or amend or replace the Program with a different market maker program at any 

time.

* * * * *
5

EXHIBIT 2

The iBoxx® iShares® $ High Yield Corporate Bond Index and the iBoxx® iShares® $ Investment 

Grade Corporate Bond Index (the “Indexes”) referenced herein are the property of Markit Indices 

Limited (“Index Sponsor”) and have been licensed for use in connection with Cboe® iBoxx® iShares® 

$ High Yield Corporate Bond Index Futures and Cboe® iBoxx® iShares® $ Investment Grade

Corporate Bond Index Futures. Each party to a Cboe® iBoxx® iShares® $ High Yield Corporate 

Bond Index Futures or Cboe® iBoxx® iShares® $ Investment Grade Corporate Bond Index Futures 

transaction acknowledges and agrees that the transaction is not sponsored, endorsed or promoted by 

the Index Sponsor. The Index Sponsor makes no representation whatsoever, whether express or 

implied, and hereby expressly disclaims all warranties (including, without limitation, those of 

merchantability or fitness for a particular purpose or use), with respect to the Indexes or any data 

included therein or relating thereto, and in particular disclaims any warranty either as to the quality, 

accuracy and/or completeness of the Indexes or any data included therein, the results obtained from 

the use of the Indexes and/or the composition of the Indexes at any particular time on any particular 

date or otherwise and/or the creditworthiness of any entity, or the likelihood of the occurrence of a 

credit event or similar event (however defined) with respect to an obligation, in the Indexes at any 

particular time on any particular date or otherwise. The Index Sponsor shall not be liable (whether in 

negligence or otherwise) to the parties or any other person for any error in the Indexes, and the Index 

Sponsor is under no obligation to advise the parties or any person of any error therein.

The Index Sponsor makes no representation whatsoever, whether express or implied, as to the 

advisability of purchasing or selling Cboe® iBoxx® iShares® $ High Yield Corporate Bond Index 

Futures or Cboe® iBoxx® iShares® $ Investment Grade Corporate Bond Index Futures, the ability 

of the Indexes to track relevant markets’ performances, or otherwise relating to the Indexes or any 

transaction or product with respect thereto, or of assuming any risks in connection therewith. The 

Index Sponsor has no obligation to take the needs of any party into consideration in determining, 

composing or calculating the Indexes. No party purchasing or selling Cboe® iBoxx® iShares® $ High 

Yield Corporate Bond Index Futures or Cboe® iBoxx® iShares® $ Investment Grade

Corporate Bond Index Futures, nor the Index Sponsor, shall have any liability to any party for any 

act or failure to act by the Index Sponsor in connection with the determination, adjustment, calculation 

or maintenance of the Indexes.

iBoxx® is a service mark of IHS Markit Limited.

The iBoxx® iShares

® $ High Yield Corporate Bond Index and the iBoxx® iShares® $ Investment 

Grade Corporate Bond Index (the “Indexes”) and futures contracts on the Indexes (“Contracts”) are 

not sponsored by, or sold by BlackRock, Inc. or any of its affiliates (collectively, 

“BlackRock”). BlackRock makes no representation or warranty, express or implied to any person 

regarding the advisability of investing in securities, generally, or in the Contracts in particular. Nor 

does BlackRock make any representation or warranty as to the ability of the Indexes to track the 

performance of the fixed income securities market, generally, or the performance of HYG, LQD or 

any subset of fixed income securities.

BlackRock has not calculated, composed or determined the constituents or weightings of the fixed 

income securities that comprise the Indexes (“Underlying Data”). BlackRock is not responsible for 

and has not participated in the determination of the prices and amounts of the Contracts, or the timing 

of the issuance or sale of such Contracts or in the determination or calculation of the equation by 

which the Contracts are to be converted into cash (if applicable). BlackRock has no obligation or 

liability in connection with the administration or trading of the Contracts. BlackRock does not 
6

guarantee the accuracy or the completeness of the Underlying Data and any data included therein and 

BlackRock shall have no liability for any errors, omissions or interruptions related thereto.

BlackRock makes no warranty, express or implied, as to results to be obtained by Markit or its 

affiliates, the parties to the Contracts or any other person with respect to the use of the Underlying 

Data or any data included therein. BlackRock makes no express or implied warranties and expressly 

disclaims all warranties of merchantability or fitness for a particular purpose or use with respect to 

the Underlying Data or any data included therein. Without limiting any of the foregoing, in no event 

shall BlackRock have any liability for any special, punitive, direct, indirect or consequential damages 

(including lost profits) resulting from the use of the Underlying Data or any data included therein, 

even if notified of the possibility of such damages. 

iShares® is a registered trade mark of BlackRock Fund Advisors and its affiliates.