Cboe announced that it will temporarily close its open outcry options trading floor as a precautionary measure to prevent the potential spread of COVID-19, and the US Securities and Exchange Commission noticed for immediate effectiveness a proposed rule filing submitted by Cboe Exchange to facilitate continued operations.
The Cboe rule filing modifies three trading rules with respect to Cboe’s exclusively listed index options to more fully replicate in an electronic trading environment the trading that occurs on the Cboe’s physical trading floor.
- permit market makers with an appointment in an options class to be solicited for orders submitted into Cboe’s price improvement auction in order to more closely replicate the sourcing of liquidity that occurs on the floor today and to ensure minimal disruption to the existing liquidity sources available via floor-based trading.
- exclude market makers that would not be subject to certain continuous quoting obligations in the trading floor environment from being subject to those requirements as a result of their participation in the all-electronic trading environment.
- permits Cboe to better enable certain complex strategies with multiple option components to function in an all-electronic trading environment.
Brett Redfearn, director of the SEC’s Division of Trading and Markets, said in a statement that the division is monitoring operational shifts necessitated by the implementation of business continuity plans and stand ready to advise and assist exchanges, clearing agencies and other market participants with operational and other matters.