The Cboe quietly dropped a proposal to amend its interpretation of rule 6.2, which you might know better as "stuff pertaining to VIX settlement." The proposed rule change expands/clarifies the exchange's interpretation of "strategy orders" and "non-strategy orders" to better determine whether or not someone is gaming the settlement calculation.
So, am I understanding this correctly that they were aiming to extend definitions to make enforcement easier with respects to manipulation of the VIX vis-a-vis the SOQ? Also, this is an interesting section of that article describing the theoretical way in which settlement could be traded to replicate delivery of 'shares' with respects to the VIX (all the way down to settlement in shares of SPX components 30 days later). Also provides a very good context in which VIX should be traded and allows you to identify specific exposures that can be addressed with the VIX products: That begins on page 6 of the link above.
As an alternative to the actual delivery of the strip (which is a pain), they could just make VIX futures settle into a variance futures position. They already have them listed and semi-functional, just need to modify the definitions a little bit. A side benefit for CBOE would be increased liquidity in the variance futures which they have been trying to achieve forever.
With so many new product failures I’m surprised how people keep their jobs. I shouldn’t be saying this in public but I am truly appalled at some of their leadership. I have attended many of their “industry” parties and let me tell you that for a public company that’s looking to grow its product line they are really stuck in the past and completely unreceptive to change. It’s almost as if the organization is plagued by ex government bureaucrats.
Was wondering what happened to that proposal. Didn't know how they were going to enforce it anyway. Most likely CBOE came up with that proposal to quell down the criticism and avoid any lawsuits by showing some due diligence on their part.