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CREDIT LOSSES | 9 Months Ended
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Sep. 30, 2025
Credit Loss [Abstract] |
CREDIT LOSSES | CREDIT LOSSES Current expected credit losses are estimated for accounts receivable and certain notes receivable. Accounts receivable represent amounts due from the Company’s member firms. The allowance for accounts receivable credit losses is calculated using an aging schedule. The allowance for notes receivable credit losses is associated with notes receivable included within other assets, net on the condensed consolidated balance sheets and relates to promissory notes to fund the implementation and operation of the Consolidated Audit Trail (“CAT”), a portion of which notes are expected to be repaid by Consolidated Audit Trail, LLC (“CATLLC”). CAT involves the creation, implementation, and maintenance of an audit trail that is required by Rule 613 under the Securities Exchange Act of 1934 (“Rule 613”), and it strives to enhance regulators’ ability to monitor trading activity in the U.S. national securities markets. CATLLC is a national market system (“NMS”) plan that was created by self-regulatory organizations that include the Cboe U.S. national securities exchanges, the other U.S. national securities exchanges, and FINRA (who collectively are referred to as the “Plan Participants”) to implement and operate the CAT. On September 6, 2023, the SEC issued an order approving an amendment to the CAT NMS plan to implement a revised funding model (“CAT Funding Model”) for CATLLC to fund the CAT. The approved CAT Funding Model contemplates two categories of CAT fees calculated based on the “executed equivalent shares” of transactions in eligible securities: (i) CAT fees assessed by CATLLC to Industry Members who are CAT Executing Brokers (the brokers responsible for executing each side of the transaction) to recover a portion of historical CAT costs previously paid by CATLLC and funded through loans made by the Plan Participants; and (ii) CAT fees assessed by CATLLC to CAT Executing Brokers and Plan Participants to fund prospective CAT costs. Prior to September 3, 2024, the funding of the CAT was solely provided to CATLLC by the Plan Participants through non-interest bearing loans in exchange for promissory notes. P ursuant to the CAT Funding Model, the Plan Participants submitted fee filings on behalf of CATLLC for CATLLC to recover a portion of historical CAT costs incurred prior to 2022, and those filings became effective as of October 1, 2024. CATLLC began remitting funds collected from CAT Executing Brokers to the Plan Participants in December 2024 to begin paying back a portion of the loans made by the Plan Participants to fund the CAT prior to 2022. Additional CAT fees related to a portion of other historical CAT costs incurred between January 1, 2022 and July 15, 2024 are planned to be introduced at a later time through separate fee filings submitted by the Plan Participants on behalf of CATLLC. Portions of promissory notes related to the funding of the implementation and operation of the CAT may not be collectible, including if the SEC finds that the Plan Participants did not satisfy any of the financial accountability milestones. Pursuant to fee filings submitted by Plan Participants, as of September 3, 2024, CATLLC began assessing transaction-based fees to CAT Executing Brokers (on each side of the transaction) to cover a portion of prospective CAT costs. At the same time, CATLLC also began assessing a transaction-based fee to the respective Plan Participants for the same amount. To continue to fund CATLLC as it transitioned to collecting fees from Industry Members and Plan Participants to cover ongoing CAT costs in accordance with the CAT Funding Model, Plan Participants temporarily issued short-term loans to CATLLC in exchange for notes to cover CAT costs that were payable by CATLLC until CATLLC collected sufficient proceeds from the fees to cover those costs. As of January 2025, CATLLC has fully repaid these short-term loans through funds collected from the fees assessed to CAT Executing Brokers and Plan Participants. CATLLC has also used the funds collected to pay CATLLC expenses and has retained excess funds as a reserve per the CAT Funding Model and budget. The Plan Participants submit prospective fee filings on behalf of CATLLC with updated rates approximately every six months to update the transaction fee rates as necessary to cover prospective CAT costs. The Cboe Exchanges have no plans to make further short-term loans to CATLLC to fund CAT, but if prospective fee filings are no longer able to be submitted by Plan Participants on behalf of CATLLC as a result of ongoing litigation or regulatory developments, the extension of additional short-term loans to CATLLC in exchange for notes to fund the CAT may occur. On July 25, 2025, the 11th Circuit issued an opinion and held that the CAT Funding Model Order is arbitrary and capricious and in violation of the Administrative Procedures Act. The 11th Circuit vacated the CAT Funding Model Order, stayed its decision for sixty days after issuance of the mandate, and remanded the matter to the SEC for further proceedings consistent with the 11th Circuit's opinion. On September 30, 2025, the 11th Circuit issued its mandate and the deadline for the SEC to act is November 29, 2025. As a result, the Plan Participants may continue to incur additional significant costs related to the historical, current, and future funding of the implementation and operation of the CAT, and/or it may result in them not being able to collect on the promissory notes related to the funding of the implementation and operation of the CAT. The Company plans to continue to explore potential applicable avenues to recoup historical and potential future CAT costs. The allowance for notes receivable credit losses associated with the CAT is calculated using a methodology that is primarily based on the structure of the notes and various potential outcomes under the CAT Funding Model. See Note 21 (“Commitments, Contingencies, and Guarantees”) for more information. The following represents the changes in allowance for credit losses during the nine months ended September 30, 2025 (in millions):
| Allowance for notes receivable credit losses |  | Allowance for accounts receivable credit losses |  | Total allowance for credit losses
Balance at December 31, 2024 | $ | 30.1 |  |  | $ | 6.6 |  |  | $ | 36.7 |
Current period provision for expected credit losses | — |  |  | 0.5 |  |  | 0.5 |
Write-offs charged against the allowance | — |  |  | (0.4) |  |  | (0.4) |
Recoveries collected | — |  |  | (0.1) |  |  | (0.1) |
Balance at September 30, 2025 | $ | 30.1 |  |  | $ | 6.6 |  |  | $ | 36.7 |

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