Exchange Quietly Tweaks Its Rulebook on Discipline
Published Date: 5/28/2026
Notice
Summary
Cboe EDGA Exchange just updated its rulebook to make how they investigate and handle rule-breaking clearer and smoother. This change affects traders and firms on the exchange by improving fairness and speeding up disciplinary actions. The new rules took effect right after filing on May 13, 2026, with no extra costs involved.
Analyzed Economic Effects
8 provisions identified: 4 benefits, 3 costs, 1 mixed.
Discipline for Unpaid Arbitration Awards
The Exchange clarified that Members and associated persons remain subject to disciplinary jurisdiction for failing to honor EDGA arbitration awards, and the notice exception in Rule 8.1(d) is removed so that the Exchange can take disciplinary measures for unpaid arbitration awards even after membership termination. These changes align Rule 8.1 with the affiliated exchanges and took effect upon filing on May 13, 2026.
Longer Response Times and File-Access Tolling
The Exchange extended timeframes in Chapter 8 so a Subject now has 25 days (up from 15 days) to submit written responses and videotaped responses, and added a 25-day tolling period while a request for access to the investigative file is pending; videotaped responses are limited to 12 minutes and must include a written transcript. These timing and format rules were adopted as part of Rule 8.2 and Rule 8.3 changes effective May 13, 2026.
Decisions Posted; Review Timelines Changed
The Exchange will require decisions to include sanctions and reasons and will post the complete decision on the EDGA website once the decision is final. The time to petition for review by a Respondent is extended from 10 to 15 days, and the Board's review period is extended from 20 to 30 days; service by certified mail also adds three days to response periods. These amendments to Rules 8.9, 8.10, and 8.12 took effect upon filing on May 13, 2026.
Investigation Initiation Shifted to Regulatory Staff
The Exchange moved responsibility to initiate investigations to its Regulatory staff when they determine a reasonable basis exists or upon receipt of a complaint (including complaints from the Board, employees, or Members). This change was adopted to align Rule 8.2 with the affiliated exchanges and is effective as of May 13, 2026.
BCC Defined; Hearings Held by BCC Panels
The Exchange added a formal definition and composition for the Business Conduct Committee (BCC) in new Rule 8.2(m) and specified that hearings on charges will be held before a Hearing Panel of three or five BCC members (rather than by appointee of the CEO). The BCC is described as including one or more Members or associated persons, one or more public representatives, and possibly other industry-affiliated individuals appointed by the Nominating and Governance Committee with Board approval.
Remove Old Rules; Add CRD Reporting
The Exchange removed Rule 8.14 (Agency Review) and Rule 8.18 (Release of Disciplinary Complaints, Decisions and Other Information) and replaced agency-review text with a rule regarding reporting to the Central Registration Depository (CRD), aligning Chapter 8 with affiliated exchanges. These changes were adopted effective May 13, 2026.
Minor Rule Violation Program Updated
The Exchange revised Rule 8.15 to provide additional details and to align the Imposition of Fines for Minor Rule Violations program with Rule 13.15 of the affiliated exchanges, clarifying how certain minor violations may be resolved via fines. The amendments became effective upon filing on May 13, 2026.
Ex Parte Communications Rules Clarified
The Exchange updated Rule 8.16 to clarify that ex parte communication provisions apply to all Members and associated persons, amended the definition of 'Adjudicator' to include Hearing Panel, BCC, Board or committee members, and added subparagraphs defining ex parte communications and clarifying what is not a violation. These changes took effect on May 13, 2026.
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