Options Exchanges Seek ORF Reform: Move to Charge Only on Own Market Transactions

Options exchanges Cboe Global Markets Inc. (Cboe), Nasdaq Inc. (NDAQ), and Miami International Holdings Inc. (MIA) are seeking SEC approval to abolish the current Options Regulatory Fee (ORF) model that allows收取 fees on transactions conducted on rival exchanges. The ORF, collected by the Options Clearing Corp., covers compliance costs including market surveillance. Currently, exchanges earn $181M–$234M annually from ORF, with small per-contract levies adding up due to high post-pandemic volumes and zero-days-to-expiry contracts. The reform proposes an “eat what you kill” model where ORF is charged only on transactions on one’s own exchange. Proposals face hurdles including disparate fee calculation methods and the subsidy of new entrants. While some exchanges support the change, BOX Options Exchange has not filed a proposal. The SEC is reviewing the issue, with Commissioner Hester Peirce signaling ongoing examination.