January 2, 2024

Christopher J. Kirkpatrick

Secretary

Commodity Futures Trading Commission

Three Lafayette Centre

1155 21st Street, N.W.

Washington, D.C. 20581

Re: Cboe Digital Exchange, LLC Rule Certification

Submission Number CDE-2024-01E

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 

(“CFTC” or “Commission”) under the Act, Cboe Digital Exchange, LLC (“CDE” or “Exchange”) 

hereby submits updates to its Default Auction Liquidity Provider (“DALP”) Incentive Program (the 

“Program”), previously self-certified with the Commission pursuant to Regulation 40.6(a) (CDE2023-09E). The Program is set forth in a segregated confidential Exhibit A-1 and Exhibit A-2

(marked changes) to this submission. The updates to the Program (the “Amendment”) will become 

effective January 17, 2024.

Program Description

The current Program is designed to encourage CDE Trading Privilege Holders (“TPHs) to 

become DALPs, thereby attracting additional interest and liquidity on the Exchange and further 

growing participation, particularly in light of CDE’s new financially-settled margined futures 

offering slated to launch on January 11, 2024. Specifically, a DALP is a TPH of the Exchange who 

desires to participate in one or more default management auctions conducted by the Exchange’s 

affiliated derivatives clearing organization, Cboe Clear Digital, LLC (“Clearinghouse”) in the event 

a clearing member of the Clearinghouse is in default (“Auction”). Pursuant to a written DALP 

Agreement between the Clearinghouse and a DALP, among other requirements, a TPH that is a 

DALP is required to meet certain minimum participation thresholds in an Auction (“Minimum 

Participation Requirements”) and minimum quoting metrics on the Exchange during regular 

trading hours measured on a monthly basis (“Minimum Quoting Metrics”). In order to encourage 

TPHs to become DALPs and fulfill these requirements, under the Program CDE will select three 

DALPs will receive a monthly monetary incentive in support of providing liquidity in futures 

contracts listed on the Exchange. 

Amendment Description 

The start date of the Program Term of the current Program has elapsed; therefore, the 

Amendment makes the following updates to the Program in connection with restarting the Program 

Term, as well as an additional update for clarity regarding the Exchange’s ability to review the 

Program. The Amendment:
• updates the Program Term to begin on January 17, 2024;

• clarifies that the Program Incentive Payment will be prorated for the month of January 

2024 given the mid-month start date, as well as for any Program Participant that may 

become eligible after the first trading day of a calendar month; and 

• makes clear that the Exchange will review the Program at least annually and that the 

Exchange may review the Program and re-open the selection process at additional points 

in time during a calendar year.

The Amendment does not make any substantive changes to the Participation Criteria or the 

total Program Incentive Payment under the Program or the general purpose or function of the 

Program.

Core Principle Compliance

CDE believes that the Program is consistent with the Designated Contract Market 

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

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). 

Specifically, TPHs eligible to participate in the Program, as DALPs, are obligated to follow the 

Exchange Rules, which include prohibitions against fraudulent, non-competitive, unfair, and 

abusive trading practices. The Program will not give any DALP a specific trading advantage as it 

treats all participants eligible for the Program equally and does not impact order execution priority 

or otherwise give any Participant an execution advantage. The Program will provide TPHs with a 

meaningful incentive to engage on CDE’s futures markets and will facilitate and accelerate the 

growth of such markets. The Exchange believes that the Program is beneficial to its futures markets 

by incentivizing the provision sufficient liquidity in the futures products offered by the Exchange, 

while also encouraging TPHs to participate in Auctions, thus providing liquidity and transparent 

pricing in the event of a clearing member default. Accordingly, CDE believes that the impact of 

the Programs will be beneficial to the public and market participants.

Public Information

We have concurrently posted a notice and copy of this submission on the Exchange’s 

website at https://www.cboedigital.com/regulation/exchange-notices/ under “CFTC Submissions.”

Opposing Views

We are not aware of any opposing views to this self-certification.

Certification

Cboe Digital Exchange, LLC hereby certifies to the Commodity Futures Trading 

Commission, pursuant to the procedures set forth in Commission regulation §40.6, that this 

submission complies with the Commodity Exchange Act, as amended, and the regulations 

promulgated thereunder.

If you have any questions regarding this submission, please contact the undersigned at the 

information below.

Sincerely, 
/s/ Katherine Kirkpatrick

Katherine Kirkpatrick

Chief Legal Officer

kkirkpatrick@cboe.com

(312) 786-7431