# Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing of Amendment No. 1 and Order Granting Accelerated Approval of a Proposed Rule Change, as Modified by Amendment No. 1, To Add P.M.-Settled Options on the Cboe Magnificent 10 Index With Third Friday Expirations, Nonstandard Expirations, and Quarterly Index Expirations
**I. Introduction**
On September 10, 2025, Cboe Exchange, Inc. (“Cboe” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) [^1] and Rule 19b-4 thereunder, [^2] a proposed rule change to add p.m.-settled options on the Cboe Magnificent 10 Index (“MGTN”) with third Friday expirations, nonstandard expirations, and quarterly index expirations. The proposed rule change was published for comment in the *Federal Register* on September 26, 2025. [^3] On November 3, 2025, the Commission designated a longer period within which to take action on the proposed rule change. [^4] On December 8, 2025, the Exchange filed Amendment No. 1 to the proposed rule change as described in Item II below, which Item has been prepared by the Exchange. Amendment No. 1 superseded the original proposed rule change in its entirety. [^5] The Commission is publishing this notice to solicit comments on Amendment No. 1 from interested persons, and is approving the proposed rule change, as modified by Amendment No. 1, on an accelerated basis.
[^1] 15 U.S.C. 78s(b)(1).
[^2] 17 CFR 240.19b-4.
[^3]*See* Securities Exchange Act Release No. 104019 (Sept. 23, 2025), 90 FR 46424 (Sept. 26, 2025). The Commission did not receive any comments on the proposal.
[^4]*See* Securities Exchange Act Release No. 104173 (Nov. 3, 2025), 90 FR 51424 (Nov. 17, 2025).
[^5] Amendment No. 1 revises the proposed rule change to reflect changes to the rule text made by a separate filing that had proposed several of the same changes but was approved subsequent to the filing of this proposed rule change. *See* Securities Exchange Act Release No. 103997 (Sept. 17, 2025), 90 FR 45431 (Sept. 22, 2025) (adopting p.m.-settled options on the Cboe Bitcoin U.S. ETF Index (“CBTX”) and the Mini-Cboe Bitcoin U.S. ETF Index (“MBTX”) with third Friday expirations, nonstandard expirations, and quarterly index expirations) (“P.M.-Settled CBTX and MBTX Options Approval Order”). Amendment No. 1 also adds references to CBTX and MBTX options to the proposed rule change as well as details about the market capitalization and trading volume of the current MGTN index components. Amendment No. 1 is available at: *https://www.sec.gov/comments/sr-cboe-2025-068/srcboe2025068-683087-2110994.pdf.*
**II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change, as Modified by Amendment No. 1**
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 amend Rules 4.13 and 5.1. First, the Exchange proposes to amend Rule 4.13(e), which governs its Nonstandard Expirations Program (“Program”), to permit P.M.-settled options on the Cboe Magnificent 10 Index (“MGTN options”) that expire any Monday, Tuesday, Wednesday, Thursday, or Friday (other than the third Friday-of-the-month (“Expiration Friday”) or days that coincide with an end-of-month expiration) (“Weekly Expirations”) and that expire on the last trading day of the month (“EOMs”). Currently, under this Program, the Exchange is permitted to list P.M.-settled options on any broad-based index eligible for standard trading and the Cboe Bitcoin U.S. ETF Index (“CBTX”) and the Mini-Cboe Bitcoin U.S. ETF Index (“MBTX”) (which are narrow-based indexes) that expire on: (1) any Monday, Tuesday, Wednesday, Thursday, or Friday (other than the third Friday-of-the-month or days that coincide with an EOM expiration) and (2) the last trading day of the month. [^6] The proposal expands the availability of Weekly and EOM expirations to MGTN options, which are narrow-based index options eligible for standard options trading. [^7]
[^6]*See* Rule 4.13(e).
[^7] The Exchange notes MGTN options are eligible for the Monthly Options Series program pursuant to Rule 4.13(a)(2)(C), which permits p.m.-settled options that expire on the last trading day of the month (as do options with EOM expirations). The Exchange proposes to make these options eligible for the EOM expirations pursuant to the Nonstandard Expiration for consistency since the Exchange is proposing to make these options eligible for the Weekly Expirations, which are part of the Nonstandard Expiration Program.
The Nonstandard Expiration Program will apply to MGTN options in the same manner as it currently applies to other index options. Weekly and EOM Expirations are subject to all provisions of Rule 4.13 and treated the same as options on the same underlying index that expire on the third Friday of the expiration month; provided, however, that Weekly and EOM Expirations are P.M.-settled, and new series in Weekly and EOM Expirations may be added up to and including on the expiration date for an expiring Weekly or EOM Expiration.
The maximum number of expirations that may be listed for each Weekly Expiration ( *i.e.,* a Monday expiration, Tuesday expiration, Wednesday expiration, Thursday expiration, or Friday expiration, as applicable) and each EOM expiration in a given class is the same as the maximum number of expirations permitted in Rule 4.13(a)(2) for standard options on the same index (which is currently six for MGTN options). Weekly Expirations need not be for consecutive Monday, Tuesday, Wednesday, Thursday, or Friday expirations as applicable; however, the expiration date of a nonconsecutive expiration may not be beyond what would be considered the last expiration date if the maximum number of expirations were listed consecutively. Weekly Expirations that are first listed in a given class may expire up to four weeks from the actual listing date. Similarly, EOM expirations need not be for consecutive end of month expirations; however, the expiration date of a nonconsecutive expiration may not be beyond what would be considered the last expiration date if the maximum number of expirations were listed consecutively. EOM Expirations that are first listed in a given class may expire up to four weeks from the actual listing date. If the Exchange lists EOMs and Weekly Expirations in a given class, the Exchange will list an EOM instead of a Weekly Expiration that expires on the same day in the given class. Other expirations in the same class are not counted as part of the maximum number of Weekly or EOM Expirations for an applicable index class.
If the Exchange is not open for business on a respective Monday, the normally Monday expiring Weekly Expirations will expire on the following business day. If the Exchange is not open for business on a respective Tuesday, Wednesday, Thursday, or Friday, the normally Tuesday, Wednesday, Thursday, or Friday expiring Weekly Expirations will expire on the previous business day. If two different Weekly Expirations on an index would expire on the same day because the Exchange is not open for business on a certain weekday, the Exchange will list only one of such Weekly Expirations. In addition, pursuant to Rule 4.13(e)(3), transactions in expiring index options with Weekly and EOM Expirations may be effected on the Exchange between the hours of 9:30 a.m. and 4:00 p.m. on their last trading day (Eastern Time).
Second, the Exchange proposes to amend Rule 4.13(c), which governs quarterly index expirations (“QIXs”), to add MGTN options to the list of options in Rule 4.13(c) that are eligible for quarterly index expirations (“QIXs”), which are currently available for options on the S&P 100 Index (“OEX options”), S&P 500 Index (“SPX options”), Mini-S&P 500 Index (“XSP options”), S&P 500 Equal Weight Index (full-value) (“SPEQ options”), S&P 500 Equal Weight Index (1/10th reduced-value) (“SPEQX options”), Russell 2000 Index (“RUT options”), Mini-Russell 2000 Index (“MRUT options”), CBTX options, and MBTX options. [^8] Pursuant to Rule 4.13(c), there may be up to eight near-term quarterly expirations open for trading in a class, and these options will be P.M.-settled. The QIX program will apply to MGTN options in the same manner as it currently applies to the other options currently eligible for those expirations. QIXs are subject to all provisions of Rule 4.13 and treated the same as options on the same underlying index that expire on the third Friday of the expiration month, except that QIXs, are P.M.-settled.
[^8] The Exchange notes MGTN options are currently eligible for the Quarterly Options Series program pursuant to Rule 4.13(a)(2)(B), which permits P.M.-settled options that expire on the last trading day of the quarter (as do QIXs). The Exchange proposes to make these options eligible for QIXs for consistency, since QIXs are currently available for certain index options available for trading on the Exchange (which options are also eligible for the Nonstandard Expirations Program).
Third, the Exchange proposes to amend Rule 4.13, Interpretation and Policy .13, to permit the listing of P.M.-settled MGTN options that expire on Expiration Fridays. Currently, pursuant to Rule 4.13, Interpretation and Policy .13, the Exchange is permitted to list P.M.-settled SPX options, XSP options, SPEQ options, SPEQX options, RUT options, MRUT options, CBTX options, and MBTX options that expire on Expiration Fridays. Combined with the proposed rule change above to permit the Exchange to list P.M.-settled MGTN options with Weekly Expirations, the Exchange would be permitted to list P.M.-settled MGTN options with expirations on all Fridays (in addition to all other days of the week). MGTN options that are P.M.-settled and expire on Expiration Fridays are subject to all provisions of Rule 4.13 and treated the same as A.M.-settled MGTN options, except that they are P.M.-settled.
Finally, the Exchange proposes to amend Rule 5.1, which governs trading days and hours, in conjunction with the proposed addition of MGTN options that are P.M.-settled and expire on Expiration Friday. Rule 5.1(b)(2)(C) currently provides that on their last trading day, Regular Trading Hours for index options with Nonstandard Expirations, as well as expiring P.M.-settled SPX, XSP, RUT, MRUT, CBTX, and MBTX options, may be effected on the Exchange between 9:30 a.m. and 4:00 p.m. Eastern Time [^9] (as opposed to the 9:30 a.m. to 4:15 p.m. Regular Trading Hours for options with those expirations that are non-expiring). The proposed rule change amends Rule 5.1(b)(2)(C) to include MGTN P.M.-settled options. [^10] The primary listing markets for the component securities that comprise the Cboe Magnificent 10 Index close trading in those securities at 4:00 p.m., just as the primary listing markets for the component securities that comprise the S&P 500, Mini-S&P 500, Russell 2000, Mini-Russell 2000, Cboe Bitcoin U.S. ETF, and Cboe Mini-Bitcoin U.S. ETF Indexes close trading at 4:00 p.m. The primary listing exchanges for the component securities disseminate closing prices for the component securities, which are used to calculate the exercise settlement value of these indexes. The Exchange believes that, under normal trading circumstances, the primary listing markets have sufficient bandwidth to prevent any data queuing that may cause any trades that are executed prior to the closing time from being reported after 4:00 p.m. If trading in expiring MGTN P.M.-settled options continued an additional fifteen minutes until 4:15 p.m. on their last trading day, these expiring options would be trading after the settlement index value for those expiring options was calculated. Therefore, in order to mitigate potential investor confusion and the potential for increased costs to investors as a result of potential pricing divergence at the end of the trading day, the Exchange believes that it is appropriate to cease trading in the expiring MGTN P.M.-Settled options at 4:00 p.m., as it already does for expiring P.M.-settled SPX, XSP, RUT, MRUT, CBTX, and MBTX options that expire on Expiration Fridays and for expiring indexes with Nonstandard Expirations (which are P.M.-settled) for the same aforementioned reasons. [^11] The Exchange does not believe that the proposed rule change will impact volatility on the underlying cash market comprising the Cboe Magnificent 10 Index at the close on Expiration Fridays, as it already closes trading on the last trading day for expiring P.M.-settled index options at 4:00 p.m., which the Exchange does not believe has had an adverse impact on fair and orderly markets on Expiration Fridays for the underlying securities comprising the corresponding indexes. [^12]
[^9]*See* Rule 1.6, which states that unless otherwise specified, all times in the Rules are Eastern Time.
[^10] Current Rule 5.1(b)(2)(C) would apply to MGTN options with Nonstandard Expirations and QIXs, as proposed; therefore, the addition of MGTN P.M.-settled options to the list of options set forth in this Rule covers these options that expire on Expiration Fridays.
[^11]*See* Securities Exchange Act Release Nos. 68888 (February 8, 2013), 78 FR 10668 (February 14, 2013) (SR-CBOE-2012-120) (“SPXPM Pilot Approval Order”); 70087 (July 31, 2013), 78 FR 47809 (August 6, 2013) (SR-CBOE-2013-055) (“XSPPM Pilot Approval Order”); and 91067 (February 5, 2021), 86 FR 9108 (February 11, 2021) (SR-CBOE-2020-116) (“MRUTPM Pilot Approval Order”).
[^12]*See* Securities Exchange Act Release Nos. 98454 (September 20, 2023), 88 FR 66103 (September 26, 2023) (SR-CBOE-2023-005) (“SPXPM Permanent Approval Order”); and 98455 (September 20, 2023), 88 FR 66073 (September 26, 2023) (SR-CBOE-2023-019) (“XSPPM and MRUTPM Permanent Approval Order”).
As noted above, current Rules permit the Exchange to list P.M.-settled MGTN options with expirations on the last calendar of the month and quarter. [^13] As a result, it is already possible under the Rules for options on the Cboe Magnificent 10 Index to be P.M.-settled and to expire on any day of the week (as the end of the month or the end of a quarter may fall on any day of the week). The Rules also already allow options on the Cboe Magnificent 10 Index to expire on Thursdays for normally Friday expiring options when the Exchange is not open for business on a respective Friday. Further, options on the Cboe Magnificent 10 Index will be available for FLEX trading pursuant to Rule 4.20 upon initial listing on the Exchange, which would permit market participants to select expiration dates for these FLEX options for any day of the week and may select p.m.-settlement.
[^13]*See* Rule 4.13(a)(2)(C) and (B), respectively.
The Exchange believes that the introduction of Weekly Expirations and Expiration Friday expirations for options on the Cboe Magnificent 10 Index that are P.M.-settled will provide market participants with additional hedging tools and greater trading opportunities, regardless of in which index option market they participate. By offering expanded expirations along with the current standard A.M.-settled expirations (as well as P.M.-settled monthly and quarterly expirations), the proposed rule change will allow market participants to purchase options on the Cboe Magnificent 10 Index available for trading on the Exchange in a manner more aligned with specific timing needs (such as to hedge special events) and more effectively tailor their investment and hedging strategies and manage their portfolios. In particular, the proposed rule change will allow market participants to roll their positions on more trading days, thus with more precision, spread risk across more trading days and incorporate daily changes in the markets, which may reduce the premium cost of buying protection. For example, the Exchange believes that market participants may pay for more protection than they need if they are seeking to hedge weekend or special event risk that occurs. Therefore, the Exchange believes that P.M.-settled daily expirations (including on all Fridays) would allow market participants to purchase an option based on their needed timing and allow them to tailor their investment or hedging needs more effectively. In addition, because P.M.-settlement permits trading throughout the day on the day the contract expires, the Exchange believes this will permit market participants to more effectively manage overnight risk and trade out of their positions up until the time the contract settles.
The Exchange believes there is sufficient investor interest and demand in Weekly Expirations and Expiration Friday P.M.-settled expirations for options on the Cboe Magnificent 10 Index to warrant inclusion in the Program and in the Rules, and that the Program and the Rules, as amended, will continue to provide investors with additional means of managing their risk exposures and carrying out their investment objectives. [^14]
[^14] The Exchange currently may list Weekly, EOM, QIX, and Expiration Friday P.M.-Settled Expirations for SPX, XSP, RUT, MRUT, CBTX, and MBTX options.
With regard to the impact of this proposal on system capacity, the Exchange has analyzed its capacity and represents that it believes that the Exchange and OPRA have the necessary systems capacity to handle any potential additional traffic associated with trading of P.M.-settled Weekly and Expiration Friday expirations for MGTN options. The Exchange does not believe that its Trading Permit Holders (“TPHs”) will experience any capacity issues as a result of this proposal and represents that it will monitor the trading volume associated with any possible additional series of options on the Cboe Magnificent 10 Index listed as a result of this proposal and the effect (if any) of these additional series on market fragmentation and on the capacity of the Exchange's automated systems.
In addition to this, 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 listing and trading MGTN options with Weekly Expirations or Expiration Friday expirations (as the Exchange currently applies these surveillances to other options that are P.M.-settled with these expirations and would for MGTN options that are P.M.-settled with monthly and quarterly expirations pursuant to current Rules) and will support the protection of investors and the public interest. Furthermore, the trading of MGTN options with Weekly and Expiration Friday expirations will be subject to the same rules that currently govern the trading of options on the Cboe Magnificent 10 Index with other expirations, including governing customer accounts, position and exercise limits, [^15] margin requirements and trading halt procedures, among other Rules, which are designed to prevent fraudulent and manipulative acts and practices.
[^15] Pursuant to Rule 8.32(f), positions in Nonstandard Expiration Program, QIXs, and P.M.-Settled Third Friday Index Options series are aggregated with positions in options contracts in the same index class. Therefore, MGTN options positions that have Nonstandard Expirations, QIXs, and third-Friday P.M.-settlement will be aggregated for purposes of position limits with positions in MGTN options, respectively with other expirations (including short-term, monthly, and quarterly expirations). This is consistent with the treatment of positions for purposes of position limits for other classes that participate in the Nonstandard Expiration Program, as well as QIXs and P.M.-Settled Third Fridays. *See* Rule 8.31(b). Pursuant to Rule 8.32(a) and 8.42(b) (which provides that the exercise limits for index options are equivalent to the position limits set forth in Rule 8.32), the current position and exercise limits for MGTN options are 24,000 contracts (and may not be more than 31,500 without rule changes). Therefore, investors would not be able to maintain significant open interest in these options, which may further prevent investors from being able to impact the value of the index.
**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. [^16] Specifically, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) [^17] 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 facilitation 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) [^18] requirement that the rules of an exchange not be designed to permit unfair discrimination between customers, issuers, brokers, or dealers.
[^16] 15 U.S.C. 78f(b).
[^17] 15 U.S.C. 78f(b)(5).
[^18]*Id.*
In particular, the Exchange believes that the proposed rule change 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. The Exchange believes that the introduction of P.M.-settled Weekly and Expiration Friday expirations for MGTN options will provide investors with expanded hedging tools and greater trading opportunities and flexibility for an additional index option. [^19] As a result, investors will have additional means to manage their risk exposures and carry out their investment objectives. By offering expanded expirations for options on the Cboe Magnificent 10 Index (along with the currently available P.M.-settled monthly and quarterly options and standard A.M.-settled options), the proposed rule change will allow market participants to purchase options on an additional index in a manner more aligned with specific timing needs and more effectively tailor their investment and hedging strategies and manage their portfolios. For example, the proposed rule change will allow market participants to roll their positions in options on the Cboe Magnificent 10 Index on more trading days, thus with more precision, spread risk across more trading days and incorporate daily changes in the markets, which may reduce the premium cost of buying protection. The Exchange represents that it believes that it has the necessary systems capacity to support any additional traffic associated with trading of options on the Cboe Magnificent 10 Index with Weekly and Expiration Friday (P.M.-settled) expirations and does not believe that its TPHs will experience any capacity issues as a result of this proposal.
[^19] Options on the Cboe Magnificent 10 Index may already be listed with P.M.-settlement and expirations on the last calendar day of the month or quarter pursuant to Rule 4.13(a)(2)(C) and (B), respectively; therefore, the additional series that this proposed rule would permit to be listed are P.M.-settled Weeklys and Expiration Friday expirations. The proposed rule change merely adds these options to different programs within the Rules that permit these same expirations for consistency within the Rules.
The Exchange does not believe that the addition of MGTN options to the Nonstandard Expirations Program, to the P.M.-settled Expiration Friday program, or the QIX program will raise any prohibitive regulatory concerns, nor adversely impact fair and orderly markets on expiration days. The Exchange has not experienced any meaningful regulatory concerns, nor adverse impact on fair and orderly markets, in connection with these programs and is unaware of any reason why adding P.M.-settled options with expirations each day of the week for MGTN options would be create such concerns or impact. Particularly, the Exchange does not believe increases in the number of P.M.-settled options series and expirations will have any significant adverse economic impact on the futures, index, or underlying index component securities markets. [^20] The Exchange believes that the proposed rule change will provide investors with greater trading and hedging opportunities and flexibility, allowing them to transact in options on the Cboe Magnificent 10 Index in a manner more aligned with specific timing needs and more effectively tailor their investment and hedging objectives by listing these options that expire each trading day of the week, in addition to options that expire at the end of calendar month and quarter (which, as noted above, current Rules already permit the Exchange to do).
[^20] The Exchange's affiliate, the Cboe Futures Exchange, LLC (“CFE”), currently lists MGTN futures.
As also discussed above, current Rules permit the Exchange to list P.M.-settled options on the Cboe Magnificent 10 Index that expire on the last calendar day of the month and quarter; the proposed rule change merely permits these listings to occur under different programs within the Rules for consistency within the Exchange's Rules. [^21] Therefore, it is already possible under the Rules for options on the Cboe Magnificent 10 Index to be P.M.-settled and to expire on any day of the week (as the end of the month or the end of a quarter may fall on any day of the week). The Rules also already allow options on the Cboe Magnificent 10 Index to expire on Thursdays for normally Friday expiring options when the Exchange is not open for business on a respective Friday. Further, options on the Cboe Magnificent 10 Index will be available for FLEX trading pursuant to Rule 4.20 when the Exchange begins listing these options, and thus, market participants will be able to select expiration dates for these FLEX options for any day of the week and may select p.m.-settlement. The Exchange has no reason to believe this proposed rule change will cause any significant adverse economic impact on the futures, index, or underlying index component securities markets as a result of these listings.
[^21] For example, it may be confusing to list Weeklys under the Nonstandard Expirations Program but monthlys under the Monthly program rather than the Nonstandard Expirations Program. As proposed, all index options the Exchange lists with expirations other than Expiration Fridays would be eligible for those expirations under the same programs.
The Commission previously recognized that listing P.M.-settled index options with Weekly Expirations and Expiration Friday expirations (in addition to EOM Expirations (which would include expirations on the last day of calendar quarters)) was consistent with the Act. [^22] The Commission noted that expirations in those index options would “offer additional investment options to investors and may be useful for their investment or hedging objectives . . . .” [^23] The Exchange also notes it previously listed P.M.-settled broad-based index options with Weekly, EOM, and Expiration Friday expirations pursuant to pilot programs, so the Commission could monitor the impact of P.M.-settlement of cash-settled index derivatives on the underlying cash markets (while recognizing that these risks may have been mitigated given enhanced closing procedures in use in the primary equity markets); however, the Commission approved proposed rule changes to make those pilot programs permanent. The Commission noted that the data it reviewed in connection with the pilot demonstrated that these options “benefitted investors and other market participants by providing more flexible trading and hedging opportunities while also having no disruptive impact on the market” and were thus consistent with the Act. [^24] The proposed rule change is consistent with these findings, as it will benefit investors and other market participants that participate in the markets for additional index options in the same manner by providing them with more flexible trading and hedging opportunities.
[^22]*See* Securities Exchange Act Release Nos. 98454 (September 20, 2023), 88 FR 66103 (September 26, 2023) (SR-CBOE-2023-005) (“SPXPM Permanent Approval Order”); 98455 (September 20, 2023), 88 FR 66073 (September 26, 2023) (SR-CBOE-2023-019) (“XSPPM and MRUTPM Permanent Approval Order”) (the Exchange initially listed P.M.-Settled SPX, XSP, and MRUT options that expire on Expiration Fridays pursuant to pilot programs, so the Commission could monitor the impact of P.M. settlement of cash-settled index derivatives on the underlying cash markets (while recognizing that these risks may have been mitigated given enhanced closing procedures in use in the primary equity markets); 94682 (April 12, 2022), 87 FR 22993, 22994 (April 18, 2022) (SR-CBOE-2022-005) (approval of proposed rule change to list P.M.-settled SPX options that expire on Tuesdays and Thursdays) (“Daily SPX Option Approval”); and 95795 (September 15, 2022), 87 FR 57745, 57746 (September 21, 2022) (SR-CBOE-2022-039) (approval of proposed rule change to list P.M.-settled XSP options that expire on Tuesdays and Thursdays) (“Daily XSP Option Approval”).
[^23]*See* Daily SPX Option Approval at 22995; and Daily XSP Option Approval at 57746.
[^24]*See* SPXPM Permanent Approval Order at 66106; and XSPPM and MRUTPM Permanent Approval Order at 66076 (citing data the Commission reviewed in connection with the pilot programs);
Further, the Exchange believes P.M.-settlement is appropriate for options on the Cboe Magnificent 10 Index because they will be trading within a complex of other correlated instruments that track the performance of the underlying components, in addition to the underlying components themselves ( *e.g.,* options on the components, ETFs that track the most active stocks (including the components), and futures on the Cboe Magnificent 10 Index). This reduces the risk that listing these options would strain liquidity providers. Further, the size of the markets of the underlying components [^25] and the equal weighting of the components make it unlikely the proposed rule change would materially impact the component markets, the index value, or the broader market.
[^25] The index is designed to measure the price return of a group of large capitalization U.S. technology and growth-oriented companies and are intended to be among the most actively traded stocks. Pursuant to the methodology for the Cboe Magnificent 10 Index, each component will have a market capitalization of at least $500,000,000, a free float of at least 25%, a minimum of 1,000,000 shares trading volume in the preceding six months, and one of the 100 largest market capitalizations. The Exchange notes the market capitalizations of the current ten constituents range from approximately 257,334,000,000 to 4,321,000,000,000 and are within the top 34 among listed stocks, the minimum free float of the constituents is approximately 84.1%, and the six-month trading volume ranges from approximately 787,775,000,000 to 4,262,320,000,000. Additionally, the narrow-based listing criteria pursuant to which these index options are listed impose various requirements on the component securities related to the market capitalization and liquidity, which further reduce the risk that the markets for the components would be impacted by additional derivatives. For example, pursuant to Rule 4.10(b): (1) the market capitalization for the lowest-weighted component securities in the index that in the aggregate account for no more than 10% of the weight of the index must be at least $50 million, and the market capitalization of all other components must be at least $75 million; (2) the trading volume in each component must be at least 1,000,000 shares for each of the last six months (from October 2024 through March 2025, the lowest monthly trading volume for a component was over 1.5 million shares), except that for each of the lowest-weighted component securities in the index that in the aggregate account for no more than 10% of the weight the index, the trading volume must be at least 500,000 shares for each of the last six months); and (3) no single component security may represent more than 25% of the weight of the index, and the five highest-weighted component securities in the index may not in the aggregate account for more than 50% (60% for an index consisting of fewer than 25 component securities) of the weight of the index.
As is the case for options on other indexes eligible for P.M.-settlement (including broad-based and narrow-based indexes), the Exchange does not believe the listing of additional P.M.-settled options on the Cboe Magnificent 10 Index (which are narrow-based index options) will have any significant economic impact (such as on market quality or volatility) on the component securities underlying the index surrounding the close as a result of expiring p.m.-settled options or impact market quality. This is based on the data provided to and reviewed by the Commission (and the Commission's own conclusions with respect to broad-based indexes based on that review, as noted above) and due to the significant changes in closing procedures in the decades since index options moved to a.m.-settlement. [^26] The Exchange believes the potential for any such impact is not only no greater for narrow-based indexes than broad-based indexes, but may be less likely for narrow-based indexes such as the Cboe Magnificent 10 Index, as the indexes underlying such options are by definition not representative of an entire market (as is the case for options on the S&P 500 Index). Therefore, any potential impact would likely be limited in scope (as noted above, the Commission found no material impact with respect to P.M.-settled broad-based index options). Therefore, because, as noted above, the Commission found no material impact with respect to broad-based index options, the Exchange believes that it is reasonable to infer that no material impact would occur with respect to MGTN options for the reasons described above (including the significant liquidity of the components and correlation of the component securities and the availability of multiple correlated instruments for hedging). The Exchange believes this to be particularly true given that the components of the Cboe Magnificent 10 Index are also components of the S&P 500 Index, which was the index the Commission considered in those findings. The narrow scope of narrow-based indexes aligns closer to the scope of equity options (which are P.M.-settled, such as the options overlying the constituent securities that comprise the Cboe Magnificent 10 Index).
[^26]*See id.*
Further, the Cboe Magnificent 10 Index satisfies the generic listing criteria in Rule 4.10(b). Upon approval of those listing criteria, the Commission noted that these generic standards were reasonably designed to ensure the protection of investors and the public interest and to ensure that the trading markets for the components were adequately capitalized and sufficiently liquid, and that no one component dominated the index, thus minimizing the potential for manipulation. [^27] This listing criteria includes the following:
[^27]*See* Securities Exchange Act Release No. 34157 (June 3, 1994), 59 FR 30062 (June 10, 1994) (SR-Amex-92-35, SR-CBOE-93-59, SR-NYSE-94-17, SR-PSE-94-07, and SR-Phlx-94-10). The Commission made substantially similar findings with respect to generic listing criteria for broad-based index options. *See* Securities Exchange Act Release No. 53266 (February 9, 2006), 71 FR 8321 (February 16, 2006) (SR-CBOE-2005-59) (the Commission noted that the listing criteria were “designed to ensure that the markets for the index's component stocks are adequately capitalized and sufficiently liquid, and that no one stock dominates the index” and thus “minimize the potential for manipulating the underlying index”).
• each component security has a market capitalization of at least $75 million, except that for each of the lowest weighted component securities in the index that in the aggregate account for no more than 10% of the weight of the index, the market capitalization is at least $50 million;
• trading volume of each component security has been at least one million shares for each of the last six months, except that for each of the lowest weighted component securities in the index that in the aggregate account for no more than 10% of the weight of the index, trading volume has been at least 500,000 shares for each of the last six months;
• in a capitalization-weighted index or a modified capitalization-weighted index, the lesser of the five highest weighted component securities in the index or the highest weighted component securities in the index that in the aggregate represent at least 30% of the total number of component securities in the index each have had an average monthly trading volume of at least 2,000,000 shares over the past six months;
• no single component security represents more than 25% of the weight of the index, and the five highest weighted component securities in the index do not in the aggregate account for more than 50% (60% for an index consisting of fewer than 25 component securities) of the weight of the index; and
• component securities that account for at least 90% of the weight of the index and at least 80% of the total number of component securities in the index satisfy the requirements of Rule 4.3 applicable to individual underlying securities.
Additionally, as described above, the constituents of the Cboe Magnificent 10 Index are large, highly capitalized, and heavily traded, which further reduce the potential for manipulation of the index. Therefore, by satisfying the generic listing criteria for narrow-based index options, the Cboe Magnificent 10 Index is, like broad-based indexes and the narrow-based Cboe Bitcoin U.S. ETF and Cboe Mini-Bitcoin U.S. ETF Indexes, designed to minimize the potential for manipulation, further reducing any potential concerns associated with P.M.-settlement.
Further, the Exchange believes that because MGTN options listed with Nonstandard Expirations, QIXs, and P.M.-settlement on Third Fridays will be aggregated with other options within those classes for purposes of position (and exercise) limits, will further prevent fraudulent and manipulative acts and practices and to promote just and equitable principles of trade, and thus protect investors. This aggregation is consistent with the treatment of positions for purposes of position (and exercise) limits for other classes that may be listed with Nonstandard Expirations, QIXs, and third Friday p.m.-settlement. [^28] Therefore, the current position and exercise limits that apply to options on the Cboe Magnificent 10 Index will continue to apply, as the proposed additional expirations for these options would have no impact on the number of positions that may be held (or exercised) within a single account.
[^28]*See* Rule 8.31(b).
In addition, the Exchange believes that the proposal to end trading at 4:00 p.m. on the last trading day for transactions in expiring P.M.-settled MGTN options will prevent continued trading on a product after the exercise settlement value has been fixed, thereby mitigating potential investor confusion and the potential for increased costs to investors as a result of potential pricing divergence at the end of the trading day.
**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 because P.M.-settled options on the Cboe Magnificent 10 Index with Weekly and Expiration Friday expirations will be available to all market participants. By listing options on the Cboe Magnificent 10 Index with these expirations (in addition to the monthly, quarterly, and standard Expiration Friday expirations (A.M.-settled) that are currently permitted under the Rules), the proposed rule change will provide all investors that participate in the markets for these index options available for trading on the Exchange with greater trading and hedging opportunities and flexibility to meet their investment and hedging needs, which are already available for several other index options (both broad-based and narrow-based). Further, the proposed change to make options on the Cboe Magnificent 10 Index that are P.M.-settled and expire on the last business day of the month or quarter eligible for listing under different programs under the Rules will have any burden on competition, as this proposed rule change is intended to maintain consistency within the Rules and will result in the same series being listed. The proposed 4:00 p.m. closing time for expiring P.M.-settled MGTN options on their expiration dates will apply equally to all market participants trading these options.
The Exchange does not believe that the proposal to list P.M.-options on the Cboe Magnificent 10 Index with Weekly and Expiration Friday expirations will impose any burden on intermarket competition that is not necessary or appropriate in furtherance of the purposes of the Act because these options are proprietary Exchange products. The Exchange may currently list the same expirations for other index options, so the proposed rule change merely expands the availability of these expiration programs to additional products. Other exchanges offer similar expirations for index options as well as short-term options programs for certain equity options that expire each day of the week, at the end of the calendar month, at the end of the calendar quarter, and on Expiration Fridays [^29] and are welcome to similarly propose to list options on those index or equity products with similar expirations. To the extent that the addition of these expirations for options on the Cboe Magnificent 10 Index makes the Exchange a more attractive marketplace to market participants at other exchanges, such market participants are free to elect to become market participants on the Exchange.
[^29]*See, e.g.,* Nasdaq PHLX, LLC Options 4A, Section 12 (permitting nonstandard expirations, including daily expirations for Nasdaq-100 index options and Nasdaq 100-Micro index options); and Nasdaq ISE, LLC Options 4, Section 5, Supplementary Material .03 (permitting short-term options series with daily expirations for SPY and QQQ options).
Additionally, options on the Cboe Magnificent 10 Index with these expirations will trade in the same manner as other options with these expirations currently do.
**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 comments on the proposed rule change.
**III. Discussion and Commission Findings**
After careful review, the Commission finds that the proposed rule change, as modified by Amendment No. 1, is consistent with the Act and the rules and regulations thereunder applicable to a national securities exchange. [^30] In particular, the Commission finds that the proposed rule change, as modified by Amendment No. 1, is consistent with Section 6(b)(5) of the Act, [^31] which requires, among other things, that the Exchange's rules be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, 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.
[^30] 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).
[^31] 15 U.S.C. 78f(b)(5).
In evaluating whether this proposal is consistent with Section 6(b)(5), and, in particular, whether it is designed to prevent fraudulent and manipulative acts and practices and to protect investors and the public interest, the Commission considered the potential impacts of p.m.-settled, cash-settled options on the underlying cash equities markets, and in particular, the potential for added market volatility and sharp price movements near the close on expiration days. The Commission has had concerns about the adverse effects and impact of p.m.-settlement upon market volatility and the operation of fair and orderly markets on the underlying cash market at or near the close of trading on expiration days. [^32] However, the Commission approved proposals from several exchanges, including the Exchange, to permanently establish programs permitting the listing and trading of certain p.m.-settled broad-based index options. [^33] In approving these proposals, the Commission reviewed data provided by the exchanges in their filings, the exchanges' pilot data and reports, as well as an analysis conducted at the direction of Staff from the Commission's Division of Economic and Risk Analysis and concluded that analysis of the pilot data did not identify any significant economic impact on the underlying component securities surrounding the close as a result of expiring p.m.-settled options nor did it indicate a deterioration in market quality for an existing product when a new p.m.-settled expiration was introduced. [^34] Further, the Commission stated that significant changes in closing procedures in the decades since index options moved to a.m.-settlement may also serve to mitigate the potential impact of p.m.-settled index options on the underlying cash markets. [^35] In addition, in September 2025, the Commission approved the listing of p.m.-settled options on two narrow-based indexes—CBTX and MBTX—with Weekly Expirations, EOM expirations, Expiration Friday expirations and QIX expirations. [^36]
[^32]*See* Securities Exchange Act Release No. 65256 (Sept. 2, 2011), 76 FR 55969, at 55972 (Sept. 9, 2011) (SR-C2-2011-008) (Order Approving Proposed Rule Change to Establish a Pilot Program to List and Trade SPXPM Options on the C2 Options Exchange, Inc.).
[^33]*See e.g.,* SPXPM Permanent Approval Order and XSPPM and MRUTPM Permanent Approval Order, *supra* note 12. *See also* Securities Exchange Act Release Nos. 98450 (Sept. 20, 2023), 88 FR 66111 (Sept. 26, 2023) (SR-ISE-2023-08) (Order Granting Approval of a Proposed Rule Change, as Modified by Amendment No. 1, to Make Permanent Certain P.M.-Settled Pilots); 98451 (Sept. 20, 2023), 88 FR 66088 (Sept. 26, 2023) (SR-PHLX-2023-07) (Order Approving a Nonstandard Expirations Pilot Program and P.M.-Settled XND Options); *and* Securities Exchange Act Release Nos. 98935 (Nov. 14, 2023), 88 FR 80792 (Nov. 20, 2023) (SR-ISE-2023-20) (Order Approving the Listing and Trading of P.M.-Settled Nasdaq-100 Index Options with a Third Friday-of-the-Month Expiration).
[^34]*See e.g.,* XSPPM and MRUTPM Permanent Approval Order, *supra* note 12, 88 FR at 66075-76.
[^35]*See id.*
[^36]*See* P.M.-Settled CBTX and MBTX Options Approval Order, *supra* note 5.
In support of this proposal, the Exchange states that it does not believe that the proposal would adversely impact fair and orderly markets on expiration days. [^37] The Exchange explains that it has not experienced any meaningful regulatory concerns, nor adverse impact on fair and orderly markets, in connection with its Nonstandard Expirations Program, Expiration Friday expirations, or QIX program. [^38]
[^37]*See* Amendment No. 1, *supra* note 5, at 14.
[^38]*See id.*
The Exchange states that p.m.-settlement is appropriate for MGTN options for several reasons. According to the Exchange, the size of the markets of the underlying components [^39] and the equal weighting of the components make it unlikely that the proposal would result in a material impact on the component markets, the index value, or the broader market. [^40] The Exchange states that MGTN is “designed to measure the price return of a group of large capitalization U.S. technology and growth-oriented companies and are intended to be among the most actively traded stocks,” [^41] and that “each [index] component will have a market capitalization of at least $500,000,000, a free float of at least 25%, a minimum of 1,000,000 shares trading volume in the preceding six months, one of the 100 largest market capitalizations, and one of the highest six-month aggregate dollar values of average daily trading volume.” [^42] In Amendment No. 1, the Exchange provides market capitalization and trading volume ranges for the current ten index components. [^43] The Exchange also states that MGTN options will trade within a complex of other correlated instruments that track the performance of the underlying components, in addition to the underlying components—such as options on the underlying components, ETFs that trade the most active stocks (including the components), and MGTN futures—and that this reduces the risk that listing these options would strain liquidity providers or materially impact the component markets, the index value, or the broader market. [^44]
[^39]*See id.* at 17. Further, according to the Exchange, MGTN satisfies the generic listing criteria for narrow-based index options in Rule 4.10(b), which are designed to ensure that the trading markets for the components are adequately capitalized and sufficiently liquid, and that no one component dominates the index, thus minimizing the potential for manipulation. *See id.* at 19.
[^40]*See id.* at 17-18.
[^41]*Id.* at 17, n.21.
[^42]*Id.*
[^43]*See id.* The Exchange states that, for the current index components, the market capitalizations range from approximately $257,334,000,000 to $4,321,000,000,000, the minimum free float is approximately 84.1%, and six-month trading volumes range from approximately 787,775,000,000 to 4,262,320,000,000 shares. *See id.*
[^44]*See id.* at 17-18.
As noted above, in evaluating the proposals permitting the listing and trading of other p.m.-settled index options, the Commission evaluated the potential for negative impacts on the underlying component securities of the indexes and on options market quality. [^45] In its approval of p.m.-settled CBTX and MBTX options, the Commission observed that the index components for CBTX and MBTX trade within a complex with multiple highly correlated instruments available for hedging and that the underlying components of the indexes are generally highly liquid and closely correlated with one another. [^46] The Commission stated that, as a result, it would be unlikely for p.m.-settled options on CBTX and MBTX to increase market and price volatility in the underlying index components or in the CBTX and MBTX options market. [^47] The index components for MGTN similarly trade within a complex of other correlated instruments that track the performance of the underlying components, in addition to the underlying components—such as options on the underlying components, ETFs that trade the most active stocks (including the components), and MGTN futures. Further, the index components have large market capitalizations and the trading markets for the components are highly liquid. [^48] As a result, it would be unlikely for p.m.-settled MGTN options to increase market and price volatility in the underlying index components or in the market for MGTN options.
[^45]*See e.g.,* SPXPM Permanent Approval Order, *supra* note 12, 88 FR at 66106.
[^46]*See* P.M.-Settled CBTX and MBTX Options Approval Order, *supra* note 5, 90 FR at 45434.
[^47]*See id.*
[^48]*See supra* note 43.
The Exchange's proposal to expand the Nonstandard Expirations Program and the QIX program to MGTN options and make the options eligible for p.m.-settled Expiration Friday expirations, is a reasonably designed expansion of existing p.m.-settled index option programs that may provide the investing public and other market participants with more flexible trading and hedging opportunities. Further, pursuant to Rule 8.32(a) and 8.42(b), MGTN options are subject to position and exercise limits of 24,000 contracts (and may not be more than 31,500 without rule changes), [^49] and p.m.-settled MGTN options would be subject to Rule 8.32(f), which provides that positions in the Nonstandard Expirations Program series, QIXs, and P.M.-Settled Third Friday Index Options will be aggregated with positions in options contracts in the same index class. [^50] Therefore positions in MGTN options would be aggregated across expirations in the same class, which could reduce the potential incentives to manipulate or disrupt the underlying market to benefit the options position and would not allow the maintenance of significant open interest in the options. The Exchange also represents that it has a surveillance program in place to monitor trading in the proposed p.m.-settled MGTN options and the systems capacity to support the proposed new options series. [^51] The Commission expects the Exchange to continue to monitor any potential risks from large P.M.-settled positions and take appropriate action on a timely basis if warranted.
[^49]*See* Amendment No. 1, *supra* note 5, at 12, n.11.
[^50]*See id.*
[^51]*See id.* at 11-12.
For the foregoing reasons, the Commission finds that the proposed rule change is consistent with Section 6(b)(5) of the Act [^52] and the rules and regulations thereunder applicable to a national securities exchange.
[^52] 15 U.S.C. 78f(b)(5).
**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. 1 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-2025-068 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-2025-068 on the subject line. 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 filing will be available for inspection and 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-2025-068 on the subject line, and should be submitted on or before January 13, 2026.
**V. Accelerated Approval of Proposed Rule Change, as Modified and Superseded by Amendment No. 1**
The Commission finds good cause to approve the proposed rule change, as modified by Amendment No. 1, prior to the thirtieth day after the date of publication of notice of the filing of Amendment No. 1 in the *Federal Register* . Amendment No. 1 updates the proposed rule change to reflect Commission approval of changes to the rule text made by a separate filing, [^53] and adds market capitalization and trading volume ranges for the current MGTN index component securities. [^54] Amendment No. 1 makes no substantive changes to the proposed rule change. Accordingly, the Commission finds good cause, pursuant to Section 19(b)(2) of the Act, [^55] to approve the proposed rule change, as modified by Amendment No. 1, on an accelerated basis prior to the 30th day after publication of notice of the filing of Amendment No. 1 in the *Federal Register* .
[^53]*See* P.M.-Settled CBTX and MBTX Options Approval Order, *supra* note 5.
[^54]*See supra* note 25.
[^55] 15 U.S.C. 78s(b)(2).
**VI. Conclusion**
*It is therefore ordered,* pursuant to Section 19(b)(2) of the Act, [^56] that the proposed rule change (SR-CBOE-2025-068), as modified by Amendment No. 1, be and hereby is approved on an accelerated basis.
[^56]*Id.*
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority. [^57]
[^57] 17 CFR 200.30-3(a)(12).
Sherry R. Haywood,
Assistant Secretary.