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Cboe Clear Item 13 Order: Binary Options Margin Gets OCC Treatment

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Cboe Clear Item 13 Order: Binary Options Margin Gets OCC Treatment
November 6, 2026

The SEC Extended OCC-Style Reserve Treatment to a Clearinghouse Registered One Day Earlier

The SEC has granted Cboe Clear U.S., LLC (CCUS) clearing members conditional relief to count customer binary options margin held at CCUS as a debit under Item 13 of the Rule 15c3-3 reserve formula. The order, Release No. 34-106726, is dated October 23, 2026 and was published in the Federal Register on October 28, 2026 as document 2026-21931.

But here is the part a quick read misses. Until now, Item 13 and Note F confined that debit to margin on deposit with the Options Clearing Corporation (OCC). The SEC granted this order one day after issuing Release No. 34-106723 on October 22, 2026, which gave CCUS only temporary clearing agency registration for 18 months.

For a broker-dealer, that means a new venue for binary options can now carry the same reserve-formula economics as listed options at OCC, if the conditions are met.

What the Order Actually Covers

CCUS filed its application on September 18, 2026 under Section 36(a)(1) of the Exchange Act. The SEC issued notice of the application, Release No. 34-106493, on September 25, 2026, and it appeared in the Federal Register on September 29, 2026. The SEC received one comment before acting.

The scope is narrow:

  • Binary options only. The relief covers customer margin required and on deposit with CCUS for customer positions in binary options.
  • Both reserve computations. Clearing Members may include the resulting Item 13 debit in their customer and PAB reserve computations.
  • Cash-settled products. According to the SEC's order, CCUS is registered to clear cash-settled binary security options, including options overlying key performance indicators reported by certain issuers.

Nothing in the order reaches margin for other products at CCUS. Reading it more broadly invites a reserve deficiency.

Why the Item 13 Debit Is a Balance Sheet Decision

Rule 15c3-3 is the broker-dealer customer protection rule. The reserve formula nets credits owed to customers against debits, and the result drives how much cash or qualified securities a firm locks in its reserve account.

The distinction that matters

Permission to clear binary options and permission to count their margin as a reserve debit are two separate questions. Without the debit, customer margin posted at CCUS would not offset customer credits under Item 13, which would raise the reserve deposit and tie up capital that funds operations.

That is why this order matters to a CFO. Product economics for binary options at a clearing member can turn on whether that offset is available.

What Broker-Dealer Leadership Should Decide Now

The relief is conditional, and the conditions sit with CCUS as much as with the member firm. According to the order, the conditions include that CCUS remain registered with the Commission as a clearing agency under Section 17A(b) of the Exchange Act and Rule 17Ab2-1, that CCUS rules be amended to conform to the order, that the Clearing Member deposit the full required margin with CCUS, and that CCUS keep customer margin separate from proprietary margin.

Action items

  • First, confirm CCUS rule conformity before computing anything. Confirm that CCUS has amended its rules to conform to the order before including the debit in any reserve computation.
  • Second, have your financial and operations principal model reserve impact both ways. Compare reserve deposits with and without the Item 13 debit for projected binary options volume.
  • Third, map segregation in your books and records. The debit depends on customer margin being kept apart from proprietary margin at CCUS.
  • Fourth, ask your general counsel or outside counsel to read the full order. The conditions are more detailed than this summary, and the full text of the order controls.

The board-level question is concentration: CCUS holds temporary, 18-month registration, and the order conditions the debit on CCUS being registered as a clearing agency, so a clearing commitment should include a plan for reserve treatment if that registration status changes.

Key Takeaways

The order is narrow, conditional, and commercially significant for firms weighing binary options.

  • OCC margin is no longer the only basis for an Item 13 debit, subject to conditions. Release No. 34-106726 extends the treatment to binary options margin held at CCUS.
  • The scope stops at binary options. Margin for any other product at CCUS is outside the exemption.
  • The debit depends on CCUS, not just your firm. CCUS rules must conform, margin must be fully deposited, and customer margin must be segregated.
  • Both reserve computations benefit. The debit can be included in customer and PAB reserve computations.
  • The counterparty is new. CCUS received temporary, 18-month registration one day before the order's date.

Before You Clear Binary Options at CCUS

The SEC has made binary options margin at CCUS reserve-formula eligible, but only on conditions that a firm must verify and document before taking the debit. Clearing members should consider having their reserve computation procedures, segregation controls, and written supervisory procedures reviewed before the first binary options customer trade; you can reach our team here.

Our SEC and broker-dealer compliance practice works with broker-dealers on SEC and FINRA compliance obligations.

This blog post is for informational purposes only and does not constitute legal advice. No attorney-client relationship is formed by reading this content. If you need legal advice, please contact a qualified attorney.

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