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Product LoginMonday, January 12, 2026
Options Regulatory Alert #2026 - 5
Options Shredding Rule Change - UPDATE
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The Exchanges have received questions about Rule Options 9, Section 25, which became effective on January 10. The Exchanges would like to clarify that Options 9, Section 25 is not a new prohibition; rather it codifies longstanding guidance that it shall be considered conduct inconsistent with just and equitable principles of trade for any member, member organization, or person associated with or employed by a member or member organization (“members”) to split an order into multiple smaller orders for any purpose other than seeking the best execution of the entire order. See #2016-4, #2016-6, and #2025-34. We note that the rule is substantially similar to anti-unbundling rules on other options exchanges. The Exchanges’ ORA issued on Friday (#2026–4) was intended to provide members with transparency and clarity on the factors the Exchanges will consider when enforcing the rules. The Exchanges’ appreciate their members attention to this matter and may provide a reasonable compliance period as appropriate for members to update supervisory systems and procedures in response to this guidance. |
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