Federal Register #SR-CboeBZX-2026-051

Cboe BZX Exchange Proposes Tiered LMM Rebate Structure Based on Security Volume

This notice announces a proposed rule change by Cboe BZX Exchange, Inc. regarding its fee schedule for lead market maker (LMM) rebates. - Government Buyer: - Securities and Exchange Commission (SEC) - Cboe BZX Exchange, Inc. (self-regulatory organization under SEC oversight) - No OEMs, vendors, or physical products are involved; this is a regulatory action affecting financial market participants. - Key Proposal Details: - Amends the fee schedule for LMM rebates on the exchange. - Introduces a tiered incentive structure for LMMs, with rebates based on the average daily auction volume (CADV) of individual securities. - Replaces the current uniform daily incentive rate with volume-based tiers to better align incentives with market quality needs. - Aims to encourage LMMs to provide liquidity and support market quality, especially in securities with varying trading volumes. - No procurement of goods or services is taking place; this is a rule change impacting exchange fee structures. - No unique technical requirements, part numbers, or quantities are specified, as this is not a material procurement.

Description

This notice pertains to a proposed rule change filed by Cboe BZX Exchange, Inc. with the Securities and Exchange Commission. The proposal aims to amend the fee schedule related to lead market maker rebates. The amendment introduces a tiered incentive structure based on the average daily auction volume of individual securities, replacing the current uniform daily incentive rate. The change is intended to create stronger, more targeted incentives for lead market makers to maintain market quality across securities of varying volume levels.

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