# Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Apply Its Wide Market Protection Mechanism on a Trading Session-By-Trading Session Basis
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”), [^1] and Rule 19b-4 thereunder, [^2] notice is hereby given that on March 20, 2026, Cboe Exchange, Inc. (the “Exchange” or “Cboe Options”) filed with the Securities and Exchange Commission (the “Commission”) the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons.
[^1] 15 U.S.C. 78s(b)(1).
[^2] 17 CFR 240.19b-4.
**I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change**
The Exchange proposes to amend Rule 5.34(a)(5) to permit the Exchange to apply its wide market protection mechanism on a trading session-by-trading session basis. [^3] The text of the proposed rule change is also available on the Commission's website ( *https://www.sec.gov/rules/sro.shtml* ), the Exchange's website ( *https://www.cboe.com/us/options/regulation/rule_filings/bzx/* ), and at the principal office of the Exchange.
[^3] The term “trading session” means the hours during which the Exchange is open for trading for Regular Trading Hours, Global Trading Hours or Curb Trading Hours (each of which may referred to as a trading session), each as set forth in Rule 5.1. Unless otherwise specified in the Rules or the context otherwise indicates, all Rules apply in the same manner during each trading session. *See* Rule 1.1.
**II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change**
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 purpose of this rule filing is to amend Rule 5.34(a), Order and Quote Price Protection Mechanisms and Risk Controls (Simple Orders). Specifically, the Exchange proposes changes to the wide market protection mechanism set forth in Rule 5.34(a)(5). By way of background, the wide market protection mechanism is designed to reduce the risk of orders executing at extreme or adverse prices when the NBBO is determined to be wide. The wide market protection mechanism leverages the Exchange's iterative drill-through protection mechanism for certain orders when the NBBO is wide and initiates a drill-through pause on applicable inbound market or limit orders or elected Stop (Stop-Loss) [^4] or Stop-Limit [^5] orders which would either execute or post to the Book [^6] at potentially extreme prices. Current Rule 5.34(a)(4)(B) provides that the wide market protection mechanism applies during all trading sessions except for a predetermined amount of time prior to the close of the RTH and Curb trading sessions (such time will be determined by the Exchange).
[^4] A “Stop (Stop-Loss)” order is an order to buy (sell) that becomes a market order when the consolidated last sale price (excluding prices from complex order trades if outside of the NBBO) or NBB (NBO) for a particular option contract is equal to or above (below) the stop price specified by the User. Users may not designate a Stop Order as All Sessions. Users may not designate bulk messages as Stop Orders. A User may not designate a Stop order as Direct to PAR. *See* Rule 5.6(c) (definition of “Stop (Stop-Loss)” order).
[^5] A “Stop-Limit” order is an order to buy (sell) that becomes a limit order when the consolidated last sale price (excluding prices from complex order trades if outside the NBBO) or NBB (NBO) for a particular option contract is equal to or above (below) the stop price specified by the User. A User may not designate a Stop-Limit Order as All Sessions or RTH and Curb. Users may not designate bulk messages as Stop-Limit Orders. A User may not designate a Stop-Limit order as Direct to PAR. *See* Rule 5.6(c) (definition of “Stop-Limit” order).
[^6] “Book” means the electronic book of simple orders and quotes maintained by the System, which single book is used during both the regular trading hours and global trading hours trading sessions. *See* Rule 1.1 (definition of, “Book”).
Pursuant to current Rule 5.34(a)(5)(D), the Exchange may apply the wide market protection mechanism on a class-by-class basis. The Exchange proposes to amend current Rule 5.34(a)(4)(D) [^7] to permit the Exchange to apply the wide market protection mechanism on a trading session-by-trading session basis as well. As part of the proposed change, the Exchange proposes to delete current Rule 5.34(a)(4)(B) and add to current Rule 5.34(a)(4)(D) language contained within Rule 5.34(a)(4)(B), which provides that the wide market protection mechanism will not apply during a predetermined amount of time prior to the close of the RTH and Curb trading sessions (such time will be determined by the Exchange).
[^7] As part of the proposed change, the Exchange proposes to amend current Rules 5.34(a)(4)(C) and (D) to Rules 5.34(a)(4)(B) and (C), respectively.
Finally, the Exchange proposes to amend Rule 5.34(a)(5)(A)(i). Currently, Rule 5.34(a)(5)(A)(i) states that for purposes of the wide market protection mechanism, the NBBO is “wide” if there is no NBO or the width of the NBBO for the series is equal to or greater than an amount the Exchange determines on a class-by-class basis and which is applied based on the NBB; the Exchange proposes to amend this provision to provide that the Exchange-determined amount may also be determined on a trading session-by-trading session basis.
**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. [^8] Specifically, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) [^9] 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 facilitating 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) [^10] requirement that the rules of an exchange not be designed to permit unfair discrimination between customers, issuers, brokers, or dealers.
[^8] 15 U.S.C. 78f(b).
[^9] 15 U.S.C. 78f(b)(5).
[^10]*Id.*
In particular, the Exchange believes 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, protect investors. In general, the wide market protection is designed to protect market participants from executing transactions at potentially extreme prices. The proposed change to permit the Exchange to apply its wide market protection mechanism on a trading session-by-trading session basis is designed to better tailor the protection in a way that better reflect the trading environment of each trading session.
The Exchange believes the proposed change to apply the wide market protection on a trading session-by-trading session basis is reasonable, because, similar to trading in different classes, trading in different trading sessions may result in different trading considerations due, for example, to different trading characteristics, liquidity profiles, and market conditions. The proposal will provide the Exchange with flexibility to apply wide market protections in a manner which accounts for these differences across trading sessions, thereby enhancing investor protection while minimizing unnecessary market disruption.
Similarly, the Exchange believes the proposal to amend the wide market protection mechanism rules to provide that the Exchange-determined amount used in ascertaining whether the NBBO is wide may vary by trading session is reasonable. The Exchange believes the proposed change will allow it to more precisely tailor the wide market mechanism in a way that considers the trading characteristics of each class within each trading session. Permitting the Exchange to calibrate the wide market mechanism on a class-by-class and/or trading session-by-trading session basis provides the Exchange with flexibility necessary to account for the full range of trading characteristics and market conditions that may vary across both classes and trading sessions.
The Exchange also believes the proposed change to contain all information regarding the applicability of wide market protection mechanism as it relates to trading sessions within a singular provision is reasonable, as it will bring transparency and clarity to the rulebook, to the benefit of investors.
Finally, the Exchange believes the proposed changes are not unfairly discriminatory, as wide market protection will apply uniformly to all applicable orders in a trading session in the same manner.
**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 the proposed change will apply uniformly to all applicable orders in a trading session in the same manner. This approach is consistent with the Exchange's existing practice of applying the wide market mechanism on a class-by-class basis, where product characteristics may warrant differential treatment in regard to risk protections.
The Exchange does not believe that the proposed rule change will impose any burden on intermarket competition that is not necessary or appropriate in furtherance of the purposes of the Act, as the proposed rule change relates specifically to price protections offered on the Exchange and which orders are subject to the price protection mechanism.
**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. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action**
The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A) of the Act [^11] and Rule 19b-4(f)(6) [^12] thereunder. Because the foregoing proposed rule change does not: (i) significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act [^13] and Rule 19b-4(f)(6) [^14] thereunder.
[^11] 15 U.S.C. 78s(b)(3)(A).
[^12] 17 CFR 240.19b-4(f)(6).
[^13] 15 U.S.C. 78s(b)(3)(A).
[^14] 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) requires a self-regulatory organization to give the Commission written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Exchange has satisfied this requirement.
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved.
**IV. Solicitation of Comments**
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change 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-2026-027 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-2026-027. 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-2026-027 and should be submitted on or before April 21, 2026.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority. [^15]
[^15] 17 CFR 200.30-3(a)(12).
Sherry R. Haywood,
Assistant Secretary.