Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Adopt Rule 8.23
Published Date: 2/2/2026
Notice
Summary
Cboe Exchange is rolling out Rule 8.23 to stop disruptive trading and order activities that mess with fair market play. This new rule affects all traders on Cboe Options and kicks in right away, helping keep trading smooth and fair without extra costs. It’s a smart move to keep the market honest and protect everyone involved.
Analyzed Economic Effects
3 provisions identified: 1 benefits, 2 costs, 0 mixed.
Cboe bans 11 disruptive trading practices
Cboe Exchange adopted Rule 8.23 (filed January 20, 2026) saying Trading Permit Holders (TPHs) on Cboe Options must submit orders and quotes only to execute bona fide trades. The rule lists 11 example behaviors that are non-bona fide (for example: entering orders to cancel before execution, signaling or coordinating order flow, submitting messages to overload systems, or intentionally submitting malformed data) that the Exchange may treat as prohibited.
Enforcement path and 60‑day Commission review
If the Exchange believes a TPH violated Rule 8.23, the Exchange will pursue alleged violations under its disciplinary process in Chapter XIII of the Rules. The Commission may temporarily suspend the rule change at any time within 60 days of the filing if it finds suspension necessary for investor protection.
Examples of allowed trading activity clarified
Rule 8.23 also lists activities that, absent other factors, do not violate the rule—six examples include cancelling or modifying orders in response to market changes, accidental submissions, two-sided markets with unequal sizes, legitimate queuing/opening orders, canceling orders after gaining priority in response to market changes, and test messages for legitimate testing. The Exchange says these examples are not violations on their face but could be violations if combined with other facts.
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