Cboe Updates Rules for Lead Market Maker Performance Standards
Published Date: 12/29/2025
Notice
Summary
Cboe BZX Exchange is updating the rules for its Lead Market Maker (LMM) program that supports trading of certain exchange-traded products (ETPs). They’re raising the performance standards for LMMs and removing closed-end funds (CEFs) from the program. These changes take effect immediately and aim to boost market quality and fairness for traders and investors.
Analyzed Economic Effects
4 provisions identified: 2 benefits, 1 costs, 1 mixed.
Higher LMM Performance Standards
If you are a Lead Market Maker (LMM) on Cboe BZX, the Exchange raised and memorialized minimum performance standards in its fee schedule. For example, across all six asset-class categories an ETP LMM must now maintain two-sided quotes at least 98% of the time during Regular Trading Hours, and NBBO-related standards will be applied based on consolidated average daily volume (CADV).
Memorialized Standards Aim to Improve Market Quality
The Exchange says memorializing detailed, asset-class based LMM standards in the fee schedule will increase transparency and is intended to enhance market quality and protect investors. The standards include six asset-class categories and CADV‑based application of NBBO time requirements.
CEFs Removed From ETP LMM Program
Cboe BZX will remove closed-end funds (CEFs) from the Exchange's ETP LMM program and create a separate ‘‘Qualified CEF LMM’’ definition. CEF LMMs will instead be subject to the LMM performance standards set forth in Rule 11.8(e)(1)(E)(ii).
Incentive Amounts Remain Unchanged
The Exchange states it is changing the criteria for earning daily LMM incentives but is not changing the dollar amounts of the daily incentives in the fee schedule. That means the existing incentive payment levels will remain the same under the proposed rule change.
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