SEC Opens Proceedings on Cboe Plan for DPMs in GTH and Curb Sessions

The SEC has opened formal proceedings on Cboe’s proposal to extend its Designated Primary Market-Maker, or DPM, framework into Global Trading Hours and Curb trading sessions. The May 18 Federal Register notice does not approve or reject the filing yet, but it does mean the Commission wants a fuller review before deciding whether the rule should move ahead.

Cboe’s proposal would let the exchange appoint a DPM for regular trading hours, Global Trading Hours, and Curb trading either on the same basis or session by session. In practice, that means one firm could cover all sessions for an option class, different firms could cover different sessions, or a class could have no DPM in a given session. The filing also says DPM quoting obligations and participation entitlements would apply in those extra sessions, with the 90% quoting standard measured in the aggregate across the sessions where the DPM is appointed.

That matters because extended-hours options trading only works if traders can consistently find quotes and usable spreads. Cboe is effectively trying to build a clearer liquidity-provider structure around trading that happens before the main session and just after the close.

Comments are due by June 8, with rebuttals due by June 22.

Why it matters

For traders, this is a market-structure question about whether longer-hours options trading can develop with predictable liquidity instead of thin, patchy quoting.

What to watch next

Watch whether the SEC focuses on incentives, conflicts, or quote quality across sessions. The key issue is whether Cboe’s DPM model can support wider trading hours without weakening execution quality.