Federal Register #SR-CBOE-2026-035

SEC Notice: Proposed Rule Change by Cboe Exchange, Inc. for FLEX ETF Options

This notice concerns a proposed regulatory change by Cboe Exchange, Inc. affecting the trading of FLEX Equity Options on exchange-traded funds (ETFs): - Government Buyer: - Securities and Exchange Commission (SEC) is the regulatory authority overseeing the proposed rule change - OEM/Vendor: - Cboe Exchange, Inc. is the entity proposing the amendments - Products/Services: - No physical products or services are being procured; the notice pertains to amendments in the trading framework for cash-settled FLEX ETF Options - Key Proposed Rule Changes: - Newly FLEX-eligible ETFs may qualify for cash settlement based on one month of trading statistics - Tiered criteria will be established for ETFs that cease to meet eligibility requirements - The cap limiting cash settlement to no more than 50 underlying ETFs will be removed - Notable Requirements: - The amendments specifically impact the eligibility and operational rules for cash-settled FLEX Equity Options where the underlying security is an ETF - The SEC is soliciting public comment on these proposed changes - No procurement of goods or services is involved; this is a regulatory action impacting market participants and trading operations

Description

This notice concerns a proposed rule change filed by Cboe Exchange, Inc. to amend Rule 4.21 related to Series of FLEX Options. The amendments focus on FLEX Equity Options where the underlying security is an exchange-traded fund (ETF) eligible for cash settlement. The proposed changes include permitting newly FLEX-eligible ETFs to qualify for cash settlement based on one month of trading statistics, establishing tiered criteria for ETFs that cease to meet eligibility requirements, and removing the cap limiting cash settlement to no more than 50 underlying ETFs. The proposal aims to enhance liquidity and operational flexibility for cash-settled FLEX ETF Options.

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