The Securities and Exchange Commission on November 19, 2025, published notice of a proposed rule change filed by Cboe Exchange, Inc. on September 26, 2025. This filing seeks to amend Rule 5.1, allowing the exchange to list options on the Russell 2000 Index (RUT) and Mini-Russell 2000 Index (MRUT) during Global Trading Hours (GTH) and Curb Trading Hours. These products, already available during regular trading hours, would gain extended availability to meet growing investor demand for around-the-clock hedging tools. The change took immediate effect under Section 19(b)(3)(A) of the Securities Exchange Act of 1934, with a 60-day window for potential Commission suspension. This development reflects ongoing efforts to adapt U.S. options markets to global trading patterns, potentially increasing liquidity and efficiency for participants tracking small-cap equities amid international economic events.
Background on Cboe's Trading Sessions
Global Trading Hours run from 8:15 p.m. the previous day to 9:25 a.m. Eastern Time on weekdays, excluding holidays or unusual conditions. Curb Trading Hours extend from 4:15 p.m. to 5:00 p.m. Eastern Time on weekdays. These sessions were introduced to accommodate global demand for key index options. For instance, Cboe first adopted GTH in 2014 for S&P 500 (SPX) and Cboe Volatility Index (VIX) options, citing their role as hedging alternatives to VIX futures, as noted in Securities Exchange Act Release No. 34-73017. The exchange later added Mini-SPX (XSP) options in 2015, per Release No. 34-75914, and introduced Curb sessions to further overlap with international markets.
RUT and MRUT options track the Russell 2000 Index, which measures performance of approximately 2,000 small-cap U.S. companies. These are exclusively listed on Cboe, meaning they trade only on this exchange due to proprietary rights. Currently limited to Regular Trading Hours (9:30 a.m. to 4:15 p.m.), the proposal extends them without modifying underlying rules, such as those in Chapter 4, Section B, which govern index options.
Key Players and Regulatory Process
Cboe Exchange, a self-regulatory organization under the Securities Exchange Act of 1934, initiated this change to respond to investor needs. The filing invokes Section 19(b)(1) and Rule 19b-4, requiring public notice and comment solicitation. No comments were received prior to filing, as stated in the document. The SEC's role is oversight, ensuring compliance with investor protection standards. This mirrors past approvals, like the GTH expansion for XSP, where the Commission found no significant burden on competition or investor safeguards.
Relevant legal precedents include the Act's emphasis on fair markets and public interest, as in Section 6(b)(5). Cboe's statement asserts the change prevents fraudulent practices, promotes equitable trade, and protects investors by aligning options with related futures, such as E-mini Russell 2000 futures traded on CME Group platforms nearly 24 hours a day.
Purpose and Market Implications
The amendment addresses globalization in securities markets. Cboe notes that extending hours allows investors to react to macroeconomic events in real time, enhancing risk management. For example, during Asian or European market hours, traders could adjust positions in RUT or MRUT options alongside futures, reducing gaps in coverage. This builds on the original GTH rationale, where SPX and VIX options filled a void for overnight hedging.
Short-term implications include potential increases in trading volume and liquidity during non-regular hours, benefiting global participants like institutional investors and hedge funds. Long-term, it could strengthen Cboe's position in small-cap derivatives, fostering innovation in product offerings. However, perspectives vary: proponents see it as a step toward seamless global markets, while critics might argue it fragments liquidity or heightens operational risks for broker-dealers, though the filing claims no undue burden on competition. All Trading Permit Holders can participate voluntarily, and other exchanges remain free to extend their own product hours.
The proposal deems FLEX options on these indices eligible for extended hours, per Rules 5.1(c)(1) and 5.1(d)(1). Trading would follow existing rules, including business conduct in Chapters 8 and 9, with no open outcry during these sessions.
Statutory Basis and Competition Analysis
Cboe argues consistency with the Act, particularly Section 6(b)(5), by removing market impediments and facilitating transactions. It emphasizes no changes to core rules, ensuring investor protection. On competition, the exchange states no burden, as RUT and MRUT are proprietary, and rivals can adapt similarly. This aligns with prior SEC approvals, where extended hours were viewed as enhancing, not hindering, market efficiency.
In summary, this rule change positions Cboe to better serve a global audience without compromising regulatory standards. Potential next steps include monitoring trading activity post-implementation and addressing any SEC feedback within the 60-day review period. Ongoing debates may center on balancing extended access with risks like reduced oversight during off-hours or impacts on market fragmentation. Challenges could arise from technological demands on participants or evolving global regulations, highlighting the need for continued adaptation in U.S. exchanges.
