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Notice of Filing of Amendment No. 1 and Order Granting Accelerated Approval of a Proposed Rule Change, as Modified and Superseded by Amendment No. 1, To Amend Its Rules Related to Binary Options
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A Notice by the Securities and Exchange Commission on 07/22/2026 This document has been published in the Federal Register . Use the PDF linked in the document sidebar for the official electronic format. Document Details Published Content - Document Details Agency Securities and Exchange Commission Agency/Docket Numbers Release No. 34-105936 File No. SR-CBOE-2026-032 Document Citation 91 FR 46205 Document Number 2026-14743 Document Type Notice Pages 46205-46220 (16 pages) Publication Date 07/22/2026 Published Content - Document Details PDF Official Content View printed version (PDF) Table of Contents Enhanced Content - Table of Contents This table of contents is a navigational tool, processed from the headings within the legal text of Federal Register documents. This repetition of headings to form internal navigation links has no substantive legal effect. Footnotes Related Documents Enhanced Content - Related Documents FederalRegister.gov uses the agency dockets published with the document to display related documents. File No. SR-CBOE-2026-032 ( 3 Documents ) Date Action Title 07/22/2026 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Notice of Filing of Amendment No. 1 and Order Granting Accelerated Approval of a Proposed Rule Change, as Modified and Superseded by Amendment No. 1, To Amend Its Rules Related to Binary Options 06/05/2026 Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Designation of a Longer Period for Commission Action on a Proposed Rule Change To Amend It Rules Related to Binary Options 04/20/2026 Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing of a Proposed Rule Change To Amend Its Rules Related to Binary Options Enhanced Content - Related Documents Public Comments Enhanced Content - Public Comments This feature is not available for this document. Enhanced Content - Public Comments Regulations.gov Data Enhanced Content - Regulations.gov Data Additional information is not currently available for this document. Enhanced Content - Regulations.gov Data Sharing Enhanced Content - Sharing Shorter Document URL https://www.federalregister.gov/d/2026-14743 Email Email this document to a friend Enhanced Content - Sharing Print Enhanced Content - Print Print this document Other Formats Enhanced Content - Other Formats This document is also available in the following formats: JSON Normalized attributes and metadata XML Original full text XML MODS Government Publishing Office metadata More information and documentation can be found in our developer tools pages . Enhanced Content - Other Formats Public Inspection Public Inspection This PDF is FR Doc. 2026-14743 as it appeared on Public Inspection on 07/21/2026 at 8:45 am. It was viewed 16 times while on Public Inspection. If you are using public inspection listings for legal research, you should verify the contents of the documents against a final, official edition of the Federal Register. Only official editions of the Federal Register provide legal notice of publication to the public and judicial notice to the courts under 44 U.S.C. 1503 & 1507 . Learn more here . Public Inspection Document headings vary by document type but may contain the following: the agency or agencies that issued and signed a document the number of the CFR title and the number of each part the document amends, proposes to amend, or is directly related to the agency docket number / agency internal file number the RIN which identifies each regulatory action listed in the Unified Agenda of Federal Regulatory and Deregulatory Actions See the Document Drafting Handbook for more details. [Release No. 34-105936; File No. SR-CBOE-2026-032] On April 2, 2026, Cboe Exchange, Inc. (“Exchange” or “Cboe”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1)  [ 1 ] of the Securities Exchange Act of 1934 (“Act”)  [ 2 ] and Rule 19b-4 thereunder, [ 3 ] a proposed rule change that would permit the Exchange to list binary options on any index upon which it may list traditional, non-binary options; permit A.M.- and P.M.-settlement for all binary index options traded on the Exchange; and amend the position limits applicable to binary index options traded on the Exchange such that, among other things, the limits would apply on a per-expiration basis. The proposed rule change was published for comment in the Federal Register on April 20, 2026. [ 4 ] On June 2, 2026, pursuant to Section 19(b)(2)(A)(ii)(I) of the Act, [ 5 ] the Commission designated a longer period within which to approve the proposed rule change, disapprove the proposed rule change, or institute proceedings to determine whether to disapprove the proposed rule change. [ 6 ] On July 13, 2026, the Exchange submitted Amendment No. 1 to the proposed rule change, which amended and superseded the proposed rule change in its entirety. [ 7 ] The Commission received comment on the proposal. [ 8 ] The Commission is publishing this Notice and Order to solicit comment on Amendment No. 1 in Sections II and III below, which sections are being published verbatim as filed by the Exchange, and to approve the proposed rule change, as modified and superseded by Amendment No. 1, on an accelerated basis. Cboe Exchange, Inc. (the “Exchange” or “Cboe Options”) proposes to amend its Rules related to binary options. The Exchange initially submitted this rule filing SR-CBOE-2026-032 on April 2, 2026 (the “Initial Rule Filing”). This Amendment No. 1 supersedes the Initial Rule Filing and replaces it in its entirety. This Amendment No. 1 narrows the scope of the proposed rule change from permitting binary options to be listed on any non-broad-based index to the Cboe Magnificent 10 Index and to provide additional support for the proposal. The text of the proposed rule change is provided in Exhibit 5. 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/cone/ ), and at the principal office of the Exchange. 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. ( printed page 46206) The Exchange proposes to amend its Rules related to binary options. Binary options are based on the same framework as traditional, standardized options traded on the Exchange, except the payout of a binary option is an amount contingent upon the occurrence of the option being in- or at-the-money rather than the degree to which the option is in-the-money. As a result, payout at expiration of a binary option is an all-or-nothing occurrence. Current Rule 4.16 permits the Exchange to list binary options on broad-based indexes. [ 9 ] Current Rule 4.16(b) defines a binary option as a European-style option contract having an exercise settlement amount  [ 10 ] that is established at the creation of the option. Under current Rules, binary options are paid out if the settlement value  [ 11 ] of the underlying broad-based index equals, exceeds, or is less than the exercise price, depending on the type of option ( i.e., call or put). A call binary option is an option contract that returns an exercise settlement amount if the settlement value of the underlying broad-based index is at or above the exercise price  [ 12 ] at expiration ( i.e., in- or at-the-money), while a put binary option is an option contract that returns an exercise settlement amount if the settlement value of the underlying broad-based index is below the exercise price at expiration ( i.e., in-the-money). [ 13 ] The Exchange designates binary options as to expiration date, exercise price, exercise settlement amount, contract multiplier, and underlying broad-based index. [ 14 ] Currently, the Exchange may from time to time approve for listing and trading on the Exchange binary option contracts on a broad-based index that has been selected in accordance with Rule 4.10 and the Interpretations and Policies thereunder. [ 15 ] The Exchange may add new series of options of the same class as provided for in Rule 4.13 and the Interpretations and Policies thereunder. Additional series of the same binary option class may be opened for trading on the Exchange when the Exchange deems it necessary to maintain an orderly market or to meet customer demand (the opening of a new series of binary options on the Exchange will not affect any other series of options of the same class previously opened). [ 16 ] After a particular binary option class has been approved for listing and trading on the Exchange, the Exchange from time to time may open for trading series of options on that class. In order to afford investors maximum flexibility, binary option series may expire from one day up to 36 months from the time they are listed. [ 17 ] Binary options will be quoted based on the existing strike intervals utilized for traditional, non-binary index options  [ 18 ] with minimum price variations, established by class, to be no less than $0.01. [ 19 ] The proposed rule change moves the Rule provisions regarding binary options from current Rule 4.16 to new Chapter 4, Section H, which section will relate specifically to binary index options. Specifically, the proposed rule change:  [ 20 ] moves current Rule 4.16(a) to the introductory language for proposed Section H; moves the defined terms in current Rule 4.16(b) to proposed Rule 4.70; moves the provisions from current Rule 4.16(c)(1) and (d) regarding the listing and maintenance criteria for binary index options to Rule 4.71(a); moves the provision regarding binary index options being a separate class from the traditional options with the same underlying from current Rule 4.16(c)(1) to Rule 4.71(b); moves the provision regarding the designated terms of binary index options from current Rule 4.16(c)(2) to the introductory language of proposed Rule 4.72;  [ 21 ] moves the provision regarding settlement of binary index options from current Rule 4.16(b) (the provision that binary index options have European-style settlement) and 4.16(c)(2) to proposed Rule 4.72(a); moves the provision regarding permissible expirations of binary index options from current Rule 4.16(c)(3) to proposed Rule 4.72(b); moves the provision regarding additional series of binary index options from current Rule 4.16(c)(4) to proposed Rule 4.72(c); moves the provision regarding the determination of the settlement value from current Rule 4.16(e) to proposed Rule 4.73; moves the provision regarding adjustment of binary index options from current Rule 4.16(f) to proposed Rule 4.74; moves the provision regarding the availability of Flexible Exchange (“FLEX”) options for binary index options from current Rule 4.16(g) to proposed Rule 4.21(c); and ( printed page 46207) moves the provision regarding position limits for binary index options to Rules 8.35(e) and 8.36. While there is no current definition of the term “market capitalization ratio” in the Rules, that term is effectively defined in current Rule 8.36(b) as the ratio of the market capitalization of a broad-based index underlying a binary index option to the market capitalization of the S&P 500 Index. The proposed rule change creates a defined term of “market capitalization ratio” in proposed Rule 4.70, which means the ratio of the market capitalization of an index to the market capitalization of the S&P 500 Index. This is equivalent to the meaning of that term in the current Rules but expanded to apply to any index rather than just broad-based index, as the proposed Rules regarding all binary index options reference that term. The proposed rule change also adds a definition of “binary option” to Rule 1.1. Specifically, the proposed rule change defines “binary option” as an option contract having an exercise settlement amount that is established at the creation of an option and only two possible payoff outcomes: either a fixed amount equal to the exercise payout amount or nothing at all. Unless the context otherwise requires, references in the Rules to binary options apply to binary index options. This is consistent with the current definition of binary option in current Rule 4.16(b) and provides additional detail regarding how binary options work. The proposed definition is also consistent with the definition of binary option in the Options Disclosure Document. [ 22 ] In addition to the relocation of and nonsubstantive changes to the provisions of current Rule 4.16 regarding binary index options as described above, the proposed rule change amends the current Rules regarding the availability of binary index options to (1) permit the listing of binary options on the Cboe Magnificent 10 Index; and (2) permit A.M.-settlement and P.M.-settlement for all binary index options. First, the proposed rule change would make binary index options available on the Cboe Magnificent 10 Index (in addition to broad-based indexes). Currently, the Exchange may list binary index options only on broad-based index options. Proposed Rule 4.71(a) provides that the Exchange may from time to time approve for listing and trading on the Exchange binary option contracts on a broad-based index that satisfies the initial listing criteria in Rule 4.10 and the Interpretations and Policies thereunder and on the Cboe Magnificent 10 Index. The Exchange may currently list traditional ( i.e., non-binary) options on the Cboe Magnificent 10 Index (“MGTN options”) pursuant to Rule 4.10(b). [ 23 ] The Exchange believes being able to list binary MGTN options will provide more investors with access to a securities exchange-listed product with the simplified, limited risk structure of binary index options. Second, the Exchange proposes to amend the Rules regarding permissible settlements of binary index options. Pursuant to proposed Rule 4.72(a), the Exchange may designate binary index options as A.M.-settled or P.M.-settled. Current Rule 4.16(c)(2) provides that binary index options on broad-based index options for which traditional ( i.e., non-binary) options on the same broad-based index are A.M.-settled will be A.M.-settled, and binary index options on broad-based indexes for which traditional options on the same broad-based index are P.M.-settled will be P.M.-settled. Currently, nearly all of the traditional broad-based index options the Exchange lists for trading and MGTN options can be both A.M.-settled and P.M.-settled. [ 24 ] Therefore, current Rule 4.16 would permit the Exchange to list A.M.-settled and P.M.-settled binary index options overlying most broad-based indexes on which the Exchange lists non-binary options. Permitting both A.M.- and P.M.-settlement for binary index options for all broad-based indexes and the Cboe Magnificent 10 Index will afford investors further flexibility (coupled with the flexibility of permissible expirations, as noted above) with respect to their investment strategies, regardless of the index option market in which investors participate. Additionally, the Exchange believes it is appropriate to be able to list A.M.- and P.M.-settled binary index options to provide investors with the same flexibility currently available for similar products currently available on other trading platforms (as further discussed below).
AI 시장 분석
Cboe has submitted Amendment No. 1 to the proposed rule change regarding binary options and secured expedited approval. This regulatory change clarifies trading rules in the derivatives market and strengthens the institutional foundation for new investment instruments. Investors should monitor how regulatory shifts in the options market impact derivatives liquidity and trading strategies.
상승 영향
- Exchanges — Cboe's binary option rule revision and expedited approval are positive as they can lead to increased derivatives trading activity and higher fee revenue.
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