Effective September 21, 2026, Cboe BZX Equities Exchange will introduce Lead Market Maker (LMM)-managed price bands for the BZX exchange-traded product (ETP) initial public offering (IPO) Opening Auction.

This enhancement gives LMMs new tools to monitor and manage price discovery during ETP IPO openings, promoting smoother transitions to regular trading.

This functionality is optional. ETP issuers may choose either to use the new price validation test described below in a New Issue Auction or opt to launch their new issue in the 4:00 a.m. ET trading session.

Two prices are central to this change:

• Live Indicative Price – the live price at which the most shares from the Auction Book would match. The live Indicative Price is displayed to the LMM starting at 8:00 a.m. ET. This price changes as market participants enter and cancel orders during the Quote-Only Period.
• Expected Price (also referred to as the “Approved Indicative Price”) – the Indicative Price that the LMM has approved (locked in) at a specific point in time. The Approved Indicative Price does not change until the LMM approves a new one.

The LMM may approve or re-approve an Indicative Price at any time from 8:00 a.m. ET until 9:45 a.m. ET. Each time the LMM approves an Indicative Price, it becomes the new Approved Indicative Price. Price bands (described below) are applied around the Approved Indicative Price for auction validation purposes.

Beginning at 8:00 a.m. ET (start of the Quote-Only Period), the System will determine and display the live Indicative Price of the ETP IPO Security in the IPO Auction to the the LMM.

The LMM may approve an Indicative Price, or update a prior approval, as often as necessary prior to 9:45 a.m. ET. At any time prior to 9:45 a.m. ET, the LMM may select price bands for the purpose of applying the price validation test to the ETP IPO Security. Price bands are used for auction extension purposes only.

Starting at 9:30 a.m. ET, if an Expected Price has been provided by the LMM, the ETP IPO Security will automatically be subjected to the price validation test, which will be reapplied automatically in five-second increments following each failure. An ETP IPO Security does not pass the price validation test if the Indicative Price differs from the Expected Price by an amount in excess of the price bands or the LMM has not provided an Expected Price. If an ETP IPO Security does not pass the price validation test, the Quote-Only Period will be automatically extended by the system in five-second increments, but in no circumstances will the Quote-Only Period be extended past 9:45 a.m. ET under the price validation test.

The Quote-Only Period for IPO Auctions in an IPO Security may also be extended as provided in Exchange Rule 11.23(d)(2)(C), which include, but are not limited to:

• There are unmatched market orders on the Auction Book associated with the auction (existing check).
• The Indicative Price moves the greater of 10% or $0.50 in either direction in the 15 seconds prior to the auction (existing check).
• The LMM has not provided an Expected Price (new).
• The live Indicative Price is outside the price bands set around the Approved Indicative Price (new).

Price bands are denominated in U.S. dollars.

Available price bands range from $0.00 to $0.50, in increments of $0.01. A band of $0.00 means the Indicative Price must exactly equal the Approved Indicative Price for the auction to proceed.

The LMM may set different values for the upper price band (maximum amount the Indicative Price may exceed the Approved Indicative Price) and the lower price band (maximum amount the Indicative Price may fall below the Approved Indicative Price).

If the LMM does not change the price bands on the web tool when setting the indicative price, then the defaults of $0.10 are used.

The Exchange reserves the right to adjust the available price band increments or price points in the future. Any such change will be communicated through a notice at least one week in advance.

This functionality is now available to test in the BZX Equities certification environment.