December 15, 2023 

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-2023-16E 

Dear Mr. Kirkpatrick:

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

amendment (“Amendment”) to make certain clean-up changes to certain CDE Rules to provide additional 

clarity and accuracy within the CDE Rules. Exhibit A to this submission sets forth the rule changes included 

in the Amendment. The Amendment will become effective on January 2, 2024. 

The Amendment updates the definition of Contract in CDE Rule 101 (Definitions) to clarify that a 

single leg Futures expiration and each single leg Options series1 is a separate Contract, and to better align 

the definition with that of the definition of Contract in the rulebook of its affiliated designated contract 

market (“DCM”), Cboe Futures Exchange, LLC (“CFE”). 

The Amendment removes subparagraph (a)(14) from CDE Rule 401 (Duties and Responsibilities 

of Trading Privilege Holders) because this provision is duplicative. The requirements in subparagraph 

(a)(14) are already governed by CDE Rules 403(b) and 409. The Exchange notes that pursuant to CDE Rule 

401(a)(4), all Trading Privilege Holders (“TPHs”) are required to comply with all CDE Rules, which 

includes CDE Rules 401 and 409. 

The Amendment updates paragraphs (b), (c) and (d) of Rule 524 (Recordkeeping Requirements for 

Entering Orders into the Cboe Digital Trading System) to remove the requirement that Orders, Cancel 

Orders, and Cancel Replace/Modify Orders must contain a manual Order indicator. The current Financial 

Information Exchange (“FIX”) protocol for interfacing with the CDE Trading System does not include a 

manual Order indicator. CDE prior submitted a rule certification (CDE-2023-03E, which became effective 

on October 16, 2023) to align and harmonize certain CDE Rules with CFE Rules, including CDE Rule 524. 

Upon harmonizing CDE Rule 524 with corresponding CFE Rule 403 (Order Entry and Maintenance of 

Front-End Audit Trail Information), CDE inadvertently added manual Order indicator to the requirements 

under Rule 524. As such, the Amendment corrects CDE Rule 524 to more accurately reflect the current 

FIX framework by removing manual Order indicator as a required field.

The Amendment updates subparagraph (a)(1) of Rule 532 (Reports of Large Positions and 

Ownership and Control Reporting) to clarify that any Person subject to large trader reporting pursuant to 

1 The Exchange notes that it is approved for trading options on futures but currently does not list any options 

products.
CFTC regulations, not only TPHs and Clearing Members that are subject to such CFTC requirements, must 

submit large trader reports to CDE. The Amendment clarifies in CDE Rule 532(a)(1) that the Reportable 

Futures Level applies on a per Contract basis, and that an account, rather than a person, may be in reportable 

status for a Contract. The Amendment adds that the Exchange will prescribe the form and manner for which 

reports should be submitted pursuant to subparagraph (a)(1) and (b)(1), as well as a time element to the 

reporting requirements in subparagraphs (a)(1) and (b)(1) by including the word “concurrently”. These 

updates provide additional clarity as to how and when copies of reportable positions that are submitted to 

the CFTC should be submitted to the Exchange, and are also intended to make CDE Rule 532 more

consistent with CFR Rule 412B (Ownership and Control Reports and Reportable Positions), which reflects 

the same “form and manner” and “concurrently” language in connection with submission of the same 

reports. The Amendment removes subparagraph (b)(2), as the requirement therein that a TPH submit reports 

of special accounts is already required by subparagraph (b)(1)—special accounts are reported in CFTC 

Form 10A. The Amendment also makes other minor, non-substantive clean up changes throughout Rule 

532. 

The Amendment revises CDE Rule 540 (Risk Controls) for accuracy and clarity. It removes the 

reference to FIRM code in CDE Rule 540(b) and replaces it with Customer Account Reference (“CAR’), 

as risk controls may be set by CAR rather than FIRM code. A TPH’s CAR is linked to its Clearing Member. 

The Amendment also clarifies and makes explicit that risk controls may be set by product. The Amendment 

also removes match capacity allocation as a risk control setting parameter. This parameter was inadvertently 

copied from corresponding CFE Rule 513A (Risk Controls) in the prior rule certification referenced herein

(CDE-2023-03E); however, such risk control setting is not currently available to CDE Clearing Members. 

The Amendment also adds language to make it clear in Rule CDE 540(b) that: Clearing Members are 

required to obtain access to and utilize the risk control mechanisms that the Exchange makes available for 

use by Clearing Members; and risk control mechanisms that enable TPHs to set risk control parameters 

within the parameters set by their Clearing Member may be made available to TPHs. 

Finally, the Amendment specifies in subparagraph (d)(2) of CDE Rule 603 (Timing and Reporting 

Requirements for Privately Negotiated Trades) that a notification to the Exchange of an EDRP transaction

must contain the identity, quantity and price or premium of the Related Position. In the prior rule 

certification referenced herein (CDE-2023-03E), CDE adopted the same reporting requirements for EDRPs 

on the Exchange as for ECRPs on CFE pursuant to CFE Rule 414. The rule change to CDE Rule 603(d)(2) 

made in the prior rule certification inadvertently omitted the requirement currently in CFE Rule 414(g) that 

a notification contain information related to the Related Position. 

Core Principle Compliance

CDE believes that the Amendment is consistent with the DCM Core Principles under Section 5 of 

the Act. In particular, CDE believes that the Amendment is consistent with the following DCM Core 

Principles:

• DCM Core Principle 2 (Compliance with Rules) because the Amendment updates the CDE Rules 

for additional clarity and accuracy, facilitating market participants’ understanding of and 

compliance with CDE Rules; 

• DCM Core Principle 4 (Prevention of Market Disruption) in that by updating the CDE rules related 

to risk controls and risk control mechanisms available to participants to provide for additional 

clarity and accuracy, the Amendment contributes to the prevention of manipulation, price 

distortion, and disruption of settlement process; 

• DCM Core Principle 7 (Availability of General Information) in that the Amendment further 

clarifies the applicability of CDE Rules, and enhances CDE Rules in a manner that provides 
additional clarity and specificity throughout to facilitate increased understanding of CDE Rules by 

market participants; 

• DCM Core Principle 9 (Execution of Transactions) in that the Amendment makes clear the 

reporting requirements for EDRPs, thus improving CDE’s market by enhancing the transaction 

requirements and reporting process for privately negotiated transactions, and increasing 

transparency of such requirements in the Rules; 

• DCM Core Principle 10 (Trade Information) in that by updating the audit trail requirement to more 

accurately reflect the current FIX framework for interfacing with the CDE Trading System, the 

Amendment will facilitate market participant compliance with audit trail requirements and help 

CDE to administer an efficient and effective audit trail program to prevent and detect customer and 

market abuse; and 

• DCM Core Principle 18 (Recordkeeping) in that the Amendment updates CDE Rules related to 

books and records and recordkeeping requirements to remove redundancies, providing additional 

clarity in the rules regarding the Exchange’s maintenance of records of activities related its 

business. 

Certification

CDE believes that the impact of the Amendment will be beneficial to the public and market 

participants. CDE is not aware of any substantive opposing views to the Amendment. CDE hereby certifies 

that the Amendment complies with the Act and the regulations thereunder. CDE further certifies that it has 

posted a notice of pending certification with the Commission and a copy of this submission on the Cboe 

Digital website (https://www.cboedigital.com/regulation/exchange-notices/) concurrent with the filing of 

this submission with the Commission.

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 
www.cboedigital.com © All Rights Reserved

Exhibit A

Amendments to the Cboe Digital Exchange Rulebook

(All deletions are struck-through and all additions are underlined)

* * * * *

RULE 101. Definitions 

When used in this Rulebook the following terms shall have the respective meanings as follows: 

* * * * *

“Contract” means any Future, Option, Swap or Digital Asset contract, agreement, or transaction approved 

for trading on the Exchange or through the Cboe Digital Trading System, and pursuant to the Rules. Each 

single leg Futures expiration and each single leg Options series is a separate Contract.

* * * * *

RULE 401. Duties and Responsibilities of Trading Privilege Holders 

(a) Each Trading Privilege Holder shall (and shall cause all of its Authorized Traders and Related Parties):

(1) use the Cboe Digital Trading System in a responsible manner and not for any improper purpose;

(2) use the Cboe Digital Trading System only to conduct Exchange Activity;

(3) conduct all Exchange Activity in a manner consistent with the Cboe Digital Exchange Rules and

Obligations, and Applicable Law;

(4) comply with all Cboe Digital Exchange Rules and Obligations and act in a manner consistent with

the Cboe Digital Exchange Rules and Obligations;

(5) comply with all Clearing House Rules, to the extent applicable to it, and act in a manner consistent

with the Clearing House Rules, to the extent applicable;
www.cboedigital.com © All Rights Reserved

(6) comply with all NFA Rules, to the extent applicable to it, and act in a manner consistent with the

NFA Rules, to the extent applicable;

(7) observe high standards of integrity, market conduct, commercial honor, fair dealing, and just and

equitable principles of trade while conducting or attempting to conduct any Exchange Activity, or any

aspect of any business connected with or concerning the Exchange;

(8) not knowingly mislead or conceal any material fact or matter in any dealings or filings with the

Exchange or in response to any Exchange Proceeding;

(9) keep any User IDs, account numbers and passwords related to the Cboe Digital Trading System

confidential;

(10) be fully liable for: all trading losses, all Orders, all transactions in Contracts effected by Trading

Privilege Holder, all transactions effected on Cboe Digital Exchange and for any use of the Cboe

Digital Trading System made by Trading Privilege Holder or Trading Privilege Holder’s Authorized

Traders, and all trades even if the Orders received via the Cboe Digital Trading System: (1) were

entered as a result of a failure in the security controls and/or credit controls, other than due to the

gross negligence of Cboe Digital Exchange, or (2) were entered by an unknown or unauthorized

user;

(11) use the Exchange’s pre-trade controls that enable the Clearing Member to implement

appropriate risk limits for Trading Privilege Holders ;

(12) employ practices to monitor and enforce compliance with risk limits;

(13) be responsible for promptly informing the Exchange of any material changes to the information

provided to the Exchange by the Trading Privilege Holder pursuant to Rule 301; and,

(14) keep, or cause to be kept, complete and accurate books and records, including, without

limitation, trading records in underlying commodity and derivatives markets related to the Cboe 

Digital Contract, records and documents related to data submitted by the Trading Privilege Holder or 

Affiliate to an instrument or index to which an Exchange contract settles, all books and records 

required to be maintained pursuant to the CEA, the CFTC Regulations or the Cboe Digital Exchange 

Rules, and Applicable Law, for at least five (5) years, and make such books and records readily 

accessible for inspection by a representative of the Exchange, the CFTC or the United States 

Department of Justice during the first two (2) years of such five-year period; and
www.cboedigital.com © All Rights Reserved

(145) prevent, detect, and mitigate market disruptions or system anomalies associated with the

Trading Privilege Holder’s electronic trading on the Exchange.

* * * * *

RULE 524. Recordkeeping Requirements for Entering Orders into the Cboe Digital

Trading System

* * * * *

(b) Each single Order other than a Cancel Order or Cancel Replace/Modify Order must contain the following

information: (i) whether such Order is a buy or sell Order; (ii) Order type; (iii) price or premium (if the Order

is not a Market Order); (iv) quantity; (v) in the case of Orders for Futures, Contract identifier or product and

contract expiration(s); (vi) in the case of Orders for Options, either Contract identifier or each of strike

price(s), type(s) of option(s) (put or call), expiration(s) and underlying Futures Contract(s); (vii) Client Order

ID; (viii) FIRM code (i.e., Clearing FIRM code and Trading Privilege Holder FIRM code); (ix) Order Entry

Operator ID; (x) Clearing House origin code (C for Customer or F for Firm); (xi) Customer Type Indicator

code; (xii) manual Order indicator; (xiii) account designation (which shall be the account number of the

account of the party for which the Order was placed, except that a different account designation may be

included in the case of a bunched Order processed in accordance with Rule 524(h) and 511 or in the case

of an Order for which there will be a post-trade allocation of the resulting trade(s) to a different clearing

member); and (xiiiv) such additional information as may be prescribed from time to time by the Exchange.

(c) Each Cancel Order must contain the following information: (i) Client Order ID of Order to be canceled;

(ii) FIRM code (i.e., Clearing FIRM code and Trading Privilege Holder FIRM code); (iii) Order Entry Operator

ID; (iv) manual Order indicator; and (iv) such additional information as may be prescribed from time to time

by the Exchange.

(d) Each Cancel Replace/Modify Order must contain the following information: (i) Client Order ID; (ii) Client

Order ID of Order to be canceled; (iii) FIRM code (i.e., Clearing FIRM code and Trading Privilege Holder

FIRM code); (iv) Order Entry Operator ID; (v) manual Order indicator; (vi) Order type; (vii) price or premium;

(viii) quantity; and (viiix) such additional information as may be prescribed from time to time by the Exchange.

* * * * *

RULE 532. Reports of Large Positions and Ownership and Control Reporting
www.cboedigital.com © All Rights Reserved

(a) Large Trader Reporting

(1) Each Trading Privilege Holder, including Clearing Members, and any other Person, that is subject to

large trader reporting pursuant to CFTC regulations relating to Exchange Contracts, shall, in a form and

manner prescribed by the Exchange, concurrently submit to the Exchange a copy daily report of all

reportable positions at or above the Reportable Futures Level as set forth in the Table in Rule 533 (“Large

Trader Report”) that such Trading Privilege Holder or Person is required to report to the Commission

pursuant to CFTC regulations. Positions at or above the Reportable Futures Level in a Contract in a

discrete Commodity Code (pursuant to the Table in Rule 533) trigger reportable status. For an person

account in reportable status in a Contract in a discrete Commodity Code, all Contract positions,

regardless of size, in the same discrete Commodity Code must be reported.

(2) All Large Trader Reports shall be submitted in a manner and form acceptable to the Exchange. The

Exchange may require that more than one Large Trader Report be submitted daily. The Regulatory

Oversight Committee or the Exchange may require reports from any Trading Privilege Holder, including

any Clearing Member, on a lesser number of positions than reflected in the Table in Rule 533.

(b) Ownership and Control Reporting

(1) Each Trading Privilege Holder, including Clearing Members, and any Trading Privilege Holder and

any other Person, that is required pursuant to CFTC regulations to submit to the CFTC Form 102

(including CFTC Form 102A and CFTC Form 102B) relating to Exchange Contracts, must, in a form and

manner prescribed by the Exchange, concurrently provide submit to the Exchange with a copy of the

required Form 102 (including CFTC Form 102A and CFTC Form 102B) identifying the owner, any

controlling parties and any additional required information for each reportable account.

(2) Each Trading Privilege Holder that is not a Clearing Member must report to the Exchange the same

information regarding the identification and reporting of special accounts relating to Exchange Contracts 

that each a Clearing Member is required to report to the CFTC pursuant to CFTC regulations for 

reportable accounts.

(23) A reportable account for the purposes of Rule 532(b)(1) and (b)(2) is an account at or above the

Reportable Futures Level and/or the Volume Threshold Reportable Level as identified in the Table in

Rule 533.

(32) The applicable Large Trader Report, Form 102A and Form 102B must be submitted to the Exchange

no later than 9:00 am Eastern -Central Time on the Business Day following the date on which the account

becomes reportable. Additionally, Trading Privilege Holders must submit a revised form Form 102A and
www.cboedigital.com © All Rights Reserved

Form 102B reflecting any material changes to the information previously provided to the Exchange within 

three Business Days of such changes becoming effective. In the absence of any material changes, the 

Exchange may require electronic submission of a new Form 102A or Form 102B on an annual basis for 

the maintenance of accurate records. 

* * * * *

RULE 540. Risk Controls

* * * * *

(b) Risk control mechanisms may be set by FIRM codeCustomer Account Reference (CAR), product,

and/or Contract and/or match capacity allocation depending upon the applicable risk control. Risk control

settings applicable to a Contract product apply to all expirations or series, as applicable.

(c) The Exchange will make available to Clearing Members risk control mechanisms made available to

Clearing Members shall that enable a Clearing Member to set risk control parameters for Trading Privilege

Holders in relation to Orders submitted to the Cboe Digital Trading System with FIRM codes that are linked

to a clearing number for that Clearing Member. . Clearing Members are required to obtain access to and

utilize the risk control mechanisms that the Exchange makes available for use by Clearing Members. The

Exchange may make available to Trading Privilege Holders risk control mechanisms that enable the

Trading Privilege Holder to set risk control parameters within the parameters that may be set by the

Trading Privilege Holder’s Clearing Member.

* * * * *

RULE 603. Timing and Reporting Requirements for Privately Negotiated Trades

* * * * *

(d) Reporting.

* * * * *

(2) The notification to the Exchange of a Privately Negotiated Trade shall include (i) whether the Block Trade

or the component of the EDRP transaction in a Contract is a single leg transaction or a transaction in a multileg transaction; (ii) the Contract identifier (or product and contract expiration for a future or product,

expiration, strike price and type of option (put or call) in the case of an option), price (or premium for an

option) and quantity of the Block Trade or the Contract leg of an EDRP, as applicable, and whether the Block

Trade or the Contract leg of an EDRP, as applicable, is buy or sell; (iii) the time of execution (i.e., the time

at which the parties agreed to the transaction); (iv) the arrangement time, if any (i.e., the time at which the
www.cboedigital.com © All Rights Reserved

parties agreed to enter into the transaction at a later time); (v) Order Entry Operator ID; (vi) FIRM code (i.e., 

Clearing FIRM code and Trading Privilege Holder FIRM code); (vii) account; (viii) Customer Type Indicator 

code; (ix) the identity, quantity and price or premium of the Related Position (including the expiration, strike 

price, type of option (put or call) and delta in the case of an option), applicable only to EDRP transactions; 

and (ix) any other information required by the Exchange.