January 24, 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-2024-03E 

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).

1 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 February 7, 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 which launched 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 Amendment makes the following updates to the Program: 

1 CDE also submitted rule certification CDE-2024-01E, which made minor and clarifying 

updates to the Program. 
• Under the current Program, CDE will select three DALPs that submit a written 

request to CDE to participate in the Program and meet specific criteria. The 

Amendment adds language to clarify that if there are less than three TPH applicants 

eligible to participate in the Program, the Exchange may select fewer DALPs;

• The Amendment clarifies that the Program Term end date is December 31, 2024 

and that the Exchange may determine to renew or extend the Program; and

• The Amendment makes it explicit that the Exchange will determine and apply a FIX 

session throttle limit, applicable to all DALPs, that allows DALPs to adequately 

meet the minimum Exchange quoting metrics under the Program. Pursuant to CDE 

Rule 540, the Exchange may set risk control mechanisms, which includes throttle 

limits, in a form and manner prescribed and provided by the Exchange.

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), 7 (Availability of General Information), 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. Further, The Exchange notes that the same throttle limits will apply to all DALPs and 

will function to protect the integrity of the CDE Trading System while allowing DALPs to 

adequately meet the minimum Exchange quoting metrics under the Program. Also, pursuant to 

CDE Rule 540, the Exchange will make available to TPHs risk control mechanisms, including 

applicable throttle limits, in a form and manner provided by the Exchange. Ultimately, 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/ Rebecca Tenuta

Rebecca Tenuta

Senior Counsel 

rtenuta@cboe.com 

(773) 485-7926