SEC Approves Cboe Rule Change Allowing Solicitation of Appointed Market-Makers as Contra-Side Orders in AIM and SAM Auctions
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The SEC approved Cboe's proposed rule change to allow orders for Market-Makers who hold an appointment in a specific options class to be solicited as the contra-side Initiating Order in AIM, SAM, FLEX AIM, and FLEX SAM auctions for all option classes. Previously, this was prohibited except for SPX options. The change aims to increase available liquidity, enable more auctions to occur, improve price improvement opportunities for customer orders, and promote competition among liquidity providers. The Commission determined the rule is consistent with the Exchange Act, noting existing information barrier rules (Cboe Rule 8.10) remain in place to prevent misuse of material nonpublic information.
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Key Changes
- Permits solicitation of appointed Market-Makers as contra-side Initiating Orders in simple AIM, SAM, FLEX AIM and FLEX SAM auctions for all option classes
- Removes previous prohibition that applied to all classes except SPX Index options
- Expands pool of available liquidity providers for auction initiation
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