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Cboe BZX Exchange, Inc.Rules of Cboe BZX Exchange, Inc.(Updated as of April 28, 2022)

TABLE OF CONTENTSPageADOPTION, INTERPRETATION AND APPLICATION OFRULES, AND DEFINITIONS . 1Adoption of Exchange Rules . 1Interpretation . 1Applicability . 1Effective Time . 1Definitions. 1Procedures for Exemptions . 6MEMBERS OF THE EXCHANGE . 8Rights, Privileges and Duties of Members . 8Obligations of Members and the Exchange . 8Member Eligibility . 8Mandatory Participation in Testing of Backup Systems. 8Restrictions . 9Application Procedures for Membership or to become anAssociated Person of a Member . 16Revocation of Membership or Association with a Member . 17Voluntary Termination of Rights as a Member . 18Dues, Assessments and Other Charges . 18No Affiliation between Exchange and any Member. 18Cboe Trading, Inc. as Outbound Router . 18Cboe Trading, Inc. as Inbound Router . 21Continuing Education . 22RULES OF FAIR PRACTICE . 29Business Conduct of Members . 29Violations Prohibited . 29Use of Fraudulent Devices . 29False Statements. 29Communications with the Public . 29Fair Dealing with Customers . 29Recommendations to Customers. 30The Prompt Receipt and Delivery of Securities . 31Charges for Services Performed . 31Use of Information . 31Publication of Transactions and Quotations . 31Offers at Stated Prices . 31Payments Involving Publications that Influence the Market Price ofa Security . 31Disclosure on Confirmations . 32Disclosure of Control . 32i

Discretionary Accounts . 32Customer’s Securities or Funds . 33Prohibition Against Guarantees . 33Sharing in Accounts; Extent Permissible. 33Reserved . 33Customer Disclosures . 33Influencing or Rewarding Employees of Others . 34Telemarketing . 35BOOKS AND RECORDS . 45Requirements . 45Furnishing of Records . 45Record of Written Complaints . 45Disclosure of Financial Condition . 46Consolidated Audit Trail – Definitions. 46Consolidated Audit Trail - Clock Synchronization . 52Consolidated Audit Trail – Industry Member Data Reporting . 54Consolidated Audit Trail – Customer Information Reporting . 62Consolidated Audit Trail – Industry Member InformationReporting. 63Consolidated Audit Trail - Time Stamps . 63Consolidated Audit Trail – Clock Synchronization Rule Violation . 64Consolidated Audit Trail – Connectivity and Data Transmission . 64Consolidated Audit Trail – Development and Testing . 64Consolidated Audit Trail - Recordkeeping . 65Consolidated Audit Trail – Timely, Accurate and Complete Data . 66Consolidated Audit Trail – Compliance Dates . 66Consolidated Audit Trail – Fee Dispute Resolution . 68SUPERVISION . 72Written Procedures. 72Responsibility of Members . 72Records . 72Review of Activities . 72Prevention of the Misuse of Material, Non-Public Information . 72Anti-Money Laundering Compliance Program . 73EXTENSIONS OF CREDIT. 75Prohibitions and Exemptions . 75Day Trading Margin . 75SUSPENSION BY CHIEF REGULATORY OFFICER . 76Imposition of Suspension. 76Investigation Following Suspension . 76Reinstatement . 76Failure to be Reinstated . 77Termination of Rights by Suspension . 77ii

Summary Suspension of Exchange Services . 77Commission Action . 77DISCIPLINE . 78Disciplinary Jurisdiction . 78Complaint and Investigation . 79Expedited Proceeding . 80Charges . 81Answer . 81Hearings . 81Summary Proceedings . 83Offers of Settlement . 84Decision . 84Review . 85Judgment and Sanction . 85Miscellaneous Provisions. 87Costs of Proceedings . 88Agency Review . 88Imposition of Fines for Minor Violation(s) of Rules . 88Ex Parte Communications . 90Expedited Client Suspension Proceeding . 91Release of Disciplinary Complaints, Decisions and OtherInformation . 94Rule 9.8ARBITRATION . 96Code of Arbitration . 96Matters Eligible for Submission . 96Predispute Arbitration Agreements. 96Referrals . 96Failure to Act under Provisions of FINRA Code of Arbitration . 97Non-Waiver of Exchange’s Rights . 97Mediation . 97Regulatory Services Agreement with FINRA . 98ADVERSE ACTION . 59Scope of Chapter . 59Submission and Time Limitation on Application to Exchange . 59Procedure Following Applications for Hearing . 59Hearing and Decision . 59Review . 60Miscellaneous Provisions. 60Agency Review . 61TRADING RULES . 62Hours of Trading and Trading Days . 62Securities Eligible for Trading . 63Access . 63iii

Authorized Traders . 65Registration of Market Makers . 65Obligations of Market Maker Authorized Traders . 66Registration of Market Makers in a Security . 67Obligations of Market Makers . 68Orders and Modifiers . 89Units of Trading . 102Price Variations . 102Priority of Orders . 102Order Execution and Routing . 104Trade Execution and Reporting . 113Clearance and Settlement; Anonymity . 114LIMITATION OF LIABILITY . 114Clearly Erroneous Executions. 118Trading Halts Due to Extraordinary Market Volatility. 125Short Sales . 129Locking or Crossing Quotations in NMS Stocks. 130Input of Accurate Information . 131Data Products . 132Auctions . 135Opening Process for Non-BZX-Listed Securities. 149Retail Order Attribution Program . 151Usage of Data Feeds . 153Compliance with Regulation NMS Plan to Implement a Tick SizePilot Program . 154Cboe Market Close, a Closing Match Process for Non-BZX-ListedSecurities . 165TRADING PRACTICE RULES . 167Market Manipulation . 167Fictitious Transactions . 167Excessive Sales by a Member . 167Manipulative Transactions . 167Dissemination of False Information. 168Prohibition Against Trading Ahead of Customer Orders . 168Joint Activity. 172Influencing the Consolidated Tape . 172Trade Shredding . 172Options . 172Best Execution . 173Publication of Transactions and Changes . 173Trading Ahead of Research Reports . 173Front Running of Block Transactions . 173Disruptive Quoting and Trading Activity Prohibited . 174MISCELLANEOUS PROVISIONS . 176Comparison and Settlement Requirements . 176iv

Failure to Deliver and Failure to Receive . 176Forwarding of Proxy and Other Issuer-Related Materials; ProxyVoting . 176Reserved . 178Commissions . 178Off-Exchange Transactions . 178Regulatory Services Agreements . 178Cboe Connect . 179CBOE BZX EXCHANGE LISTING RULES . 180The Qualification, Listing, and Delisting of Companies Definitions. 180Regulatory Authority of Exchange . 183General Procedures and Prerequisites for Initial and ContinuedListing on the Exchange. 189Listing Requirements for Units – Tier I. 195Listing Requirements for Units – Tier II . 196Obligations for Companies Listed on the Exchange. 197Direct Registration Program . 206General Listings Requirements – Tier I . 207General Listings Requirements – Tier II . 213Corporate Governance Requirements . 218Other Securities . 255Failure to Meet Listing Standards . 363Company Listing Fees . 389DUES, FEES, ASSESSMENTS AND OTHER CHARGES;EFFECTIVE DATE. 394Authority to Prescribe Dues, Fees, Assessments and Other Charges . 394Regulatory Revenues . 394GENERAL PROVISIONS – BZX OPTIONS . 395Definitions. 395Applicability . 404PARTICIPATION ON CBOE BZX OPTIONS . 405Options Participation . 405Requirements for Options Participation. 406Persons Associated with Options Members . 408Good Standing for Options Members . 408BUSINESS CONDUCT . 410Adherence to Law . 410Conduct and Compliance with the Rules . 410Rumors . 410Prevention of the Misuse of Material Nonpublic Information. 411Disciplinary Action by Other Organizations . 412v

Other Restrictions on Members . 413Position Limits . 413Exemptions from Position Limits . 413Exercise Limits . 414Reports Related to Position Limits . 414Liquidation Positions . 415Other Restrictions on Options Transactions and Exercises . 415Mandatory Systems Testing. 417Limit on Outstanding Uncovered Short Positions . 418SECURITIES TRADED ON CBOE BZX OPTIONS . 419Designation of Securities . 419Rights and Obligations of Holders and Writers . 419Criteria for Underlying Securities . 419Withdrawal of Approval of Underlying Securities . 428(Reserved.) . 432Series of Options Contracts Open for Trading . 432Adjustments . 441Long-Term Options Contracts . 441REGULATION OF TRADING ON BZX OPTIONS . 442Access to and Conduct on the BZX Options Market . 442Surveillance. 443Trading Halts . 443Resumption of Trading After a Halt . 444Unusual Market Conditions . 444Nullification and Adjustment of Options Transactions includingObvious Errors . 445Audit Trail . 455Failure to Pay Premium . 456Prohibition on Transactions Off the Exchange . 457Off-Floor Transfers of Positions . 457Off-Floor RWA Transfers. 460In-Kind Exchange of Options Positions and Fund Shares and UITInterests . 460TRADING SYSTEMS . 462Definitions. 462Days and Hours of Business . 471Units of Trading . 472Meaning of Premium Quotes and Orders . 472Minimum Increments . 473Entry of Orders . 475Opening Auction Process . 475Order Display and Book Processing . 481Order Routing . 482Anonymity . 485vi

Transaction Price Binding. 486Clearing Member Give Up. 486Submission for Clearance . 489Message Traffic Mitigation. 489Data Dissemination . 490Risk Monitor Mechanism . 491Additional Price Protection Mechanisms and Risk Controls . 493MARKET PARTICIPANTS . 496Customer Orders and Order Entry Firms . 496Options Market Maker Registration . 496Market Maker Class Appointments . 496Good Standing for Market Makers . 497Obligations of Market Makers . 497Market Maker Quotations . 498Securities Accounts and Orders of Market Makers . 500Letters of Guarantee . 501Financial Requirements for Market Makers . 501(Reserved.) . 502Mass Cancellation of Trading Interest . 502Order Exposure Requirements . 502EXERCISES AND DELIVERIES. 504Exercise of Options Contracts . 504Allocation of Exercise Notices . 509Delivery and Payment . 509RECORDS, REPORTS AND AUDITS. 511Maintenance, Retention and Furnishing of Books, Records andOther Information . 511Reports of Uncovered Short Positions . 511Financial Reports and Audits . 511Automated Submission of Trade Data . 512Regulatory Cooperation . 513Risk Analysis of Options Market Maker Accounts . 513DISCIPLINE AND SUMMARY SUSPENSIONS. 515Suspensions . 515Contracts of Suspended Members . 515Penalty for Minor Rule Violations . 515DOING BUSINESS WITH THE PUBLIC . 519Eligibility . 519Opening of Accounts . 519Supervision of Accounts . 522Suitability of Recommendations . 523Discretionary Accounts . 523vii

Confirmation to Public Customers. 524Statement of Accounts to Public Customers. 524Statements of Financial Condition to Public Customers . 525Addressing of Communications to Public Customers . 525Delivery of Current Options Disclosure Documents and Prospectus . 525Restrictions on Pledge and Lending of Public Customers’Securities . 527Transactions of Certain Public Customers . 527Guarantees. 528Profit Sharing . 528Assuming Losses . 528Communications with Public Customers . 529Public Customer Complaints . 529OPTIONS ORDER PROTECTION AND LOCKEDAND CROSSED MARKET RULES. 530Definitions. 530Order Protection .

Cboe BZX Exchange, Inc. Rules of Cboe BZX Exchange, Inc. (Updated as of April 28, 2022)