Federal Register / Vol. 89, No. 17 / Thursday, January 25, 2024 / Notices 5075 

48 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3Rule 1.1 defines a ‘‘Unit’’ (which may also be 

referred to as an exchange-traded fund (‘‘ETF’’)) as 

a share or other security traded on a national 

securities exchange and defined as an NMS stock 

as set forth in Rule 4.3. 

4See Rule 4.3, Interpretation and Policy .06(a), 

which permits options trading on Units that 

represent (1) interests in registered investment 

companies (or series thereof) organized as open-end 

management investment companies, unit 

investment trusts or similar entities that hold 

portfolios of securities and/or financial instruments 

including, but not limited to, stock index futures 

contracts, options on futures, options on securities 

and indexes, equity caps, collars and floors, swap 

agreements, forward contracts, repurchase 

agreements and reverse purchase agreements (the 

‘‘Financial Instruments’’), and money market 

instruments, including, but no limited to, U.S. 

government securities and repurchase agreements 

(the ‘‘Money Market Instruments’’) comprising or 

otherwise based on or representing investments in 

indexes or portfolios of securities and/or Financial 

Instruments and Money Market Instruments (or that 

hold securities in one or more other registered 

investment companies that themselves hold such 

portfolios of securities and/or Financial Instruments 

and Money Market Instruments); (2) interests in a 

trust or similar entity that holds a specified nonU.S. currency deposited with the trust or similar 

entity when aggregated in some specified minimum 

number may be surrendered to the trust by the 

beneficial owner to receive the specified non-U.S. 

currency and pays the beneficial owner interest and 

other distributions on deposited non-U.S. currency, 

if any, declared and paid by the trust (‘‘Currency 

Trust Shares’’); (3) commodity pool interests 

principally engaged, directly or indirectly, in 

holding and/or managing portfolios or baskets of 

securities, commodity futures contracts, options on 

commodity futures contracts, swaps, forward 

contracts and/or options on physical commodities 

and/or non-U.S. currency (‘‘Commodity Pool 

Units’’); (4) interests in the SPDR Gold Trust, the 

iShares COMEX Gold Trust, the iShares Silver 

Trust, the Aberdeen Standard Physical Silver Trust, 

the Aberdeen Standard Physical Gold Trust, the 

Aberdeen Standard Physical Palladium Trust, the 

Aberdeen Standard Physical Platinum Trust, the 

Sprott Physical Gold Trust or the Goldman Sachs 

Physical Gold ETF; or (5) an interest in a registered 

Continued 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (https://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

OCC–2024–002 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Vanessa Countryman, Secretary, 

Securities and Exchange Commission, 

100 F Street NE, Washington, DC 

20549–1090. 

All submissions should refer to file 

number SR–OCC–2024–002. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

internet website (https://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549, on official 

business days between the hours of 10 

a.m. and 3 p.m. Copies of the filing also 

will be available for inspection and 

copying at the principal office of OCC 

and on OCC’s website at https://

www.theocc.com/CompanyInformation/Documents-and-Archives/ 

By-Laws-and-Rules. 

Do not include personal identifiable 

information in submissions; you should 

submit only information that you wish 

to make available publicly. We may 

redact in part or withhold entirely from 

publication submitted material that is 

obscene or subject to copyright 

protection. 

All submissions should refer to file 

number SR–OCC–2024–002 and should 

be submitted on or before February 15, 

2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.48

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–01385 Filed 1–24–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–99395; File No. SR–CBOE– 

2024–005] 

Self-Regulatory Organizations; Cboe 

Exchange, Inc.; Notice of Filing of a 

Proposed Rule Change To Permit Cboe 

To List and Trade Options on ETPs 

That Hold Bitcoin 

January 19, 2024. 

Pursuant to Section 19(b)(1) 1 of the 

Securities Exchange Act of 1934 (‘‘Act’’) 

and Rule 19b–4 thereunder,2 notice is 

hereby given that on January 5, 2024, 

Cboe Exchange, Inc. (the ‘‘Exchange’’ or 

‘‘Cboe Options’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III below, which Items have been 

prepared by the Exchange. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

Cboe Exchange, Inc. (the ‘‘Exchange’’ 

or ‘‘Cboe Options’’) proposes to amend 

Rule 4.3. The text of the proposed rule 

change is provided in Exhibit 5. 

The text of the proposed rule change 

is also available on the Exchange’s 

website (http://www.cboe.com/ 

AboutCBOE/CBOELegalRegulatory

Home.aspx), at the Exchange’s Office of 

the Secretary, and at the Commission’s 

Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

forth in sections A, B, and C below, of 

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend 

Rule 4.3 regarding the criteria for 

underlying securities. Specifically, the 

Exchange proposes to amend Rule 4.3, 

Interpretation and Policy .06(a)(4) to 

allow the Exchange to list and trade 

options on Units 3 that represent 

interests in a trust that holds bitcoin 

(‘‘Bitcoin ETPs’’), designating them as 

‘‘Units’’ deemed appropriate for options 

trading on the Exchange. Current Rule 

4.3, Interpretation and Policy .06 

provides that, subject to certain other 

criteria set forth in that Rule, securities 

deemed appropriate for options trading 

include Units that represent certain 

types of interests,4 including interests in 


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investment company (‘‘Investment Company’’) 

organized as an open-end management investment 

company or similar entity, that invests in a portfolio 

of securities selected by the Investment Company’s 

investment adviser consistent with the Investment 

Company’s investment objectives and policies, 

which is issued in a specified aggregate minimum 

number in return for a deposit of a specified 

portfolio of securities and/or a cash amount with a 

value equal to the next determined net asset value 

(‘‘NAV’’), and when aggregated in the same 

specified minimum number, may be redeemed at a 

holder’s request, which holder will be paid a 

specified portfolio of securities and/or cash with a 

value equal to the next determined NAV (‘‘Managed 

Fund Share’’). 

5The Exchange notes several filings to list and 

trade Units that hold bitcoin as NMS stocks (and 

registration statements for those Units) are currently 

pending with the Securities and Exchange 

Commission (the ‘‘Commission’’). Pursuant to the 

Rules, the Exchange would only have authority to 

list and trade Units that are trading as NMS stocks. 

6The trust may include minimal cash. 

7As noted above, there are currently no Bitcoin 

ETPs trading as NMS stocks on a national securities 

exchange; however, registration statements and 

filings to list and trade several Bitcoin ETPs are 

currently pending with the Commission. The 

Exchange represents it would not list options on a 

Bitcoin ETP unless it satisfied the criteria in Rule 

4.3(a) the proposed listing criteria, and any other 

applicable listing criteria. 

8Rule 4.3, Interpretation and Policy .01 provides 

for guidelines to be by the Exchange when 

evaluating potential underlying securities for 

Exchange option transactions. 9See, e.g., Form S–1 Registration Statement filed 

on November 29, 2023 (Registration No. 333– 

275781) (pending registration statement for shares 

of the Pando Asset Spot Bitcoin Trust); and Form 

S–1 Registration Statement filed on September 12, 

2023 (Registration No. 333–274474) (pending 

registration statement for shares of the Franklin 

Bitcoin ETF). 

10See Rule 4.2, which provides that the rights 

and obligations of holders and writers are set forth 

in the Rules of the Options Clearing Corporation 

(‘‘OCC’’); and Equity Options Product 

Specifications January 3, 2024), available at Equity 

Options Specifications (cboe.com); see also OCC 

Rules, Chapters VIII (which governs exercise and 

assignment) and Chapter IX (which governs the 

discharge of delivery and payment obligations 

arising out of the exercise of physically settled stock 

option contracts). 

11See Rule 4.5(b). The monthly expirations are 

subject to certain listing criteria for underlying 

securities described within Rule 4.3. Monthly 

listings expire the third Friday of the month. The 

term ‘‘expiration date’’ (unless separately defined 

elsewhere in the OCC By-Laws), when used in 

respect of an option contract (subject to certain 

exceptions), means the third Friday of the 

expiration month of such option contract, or if such 

Friday is a day on which the exchange on which 

such option is listed is not open for business, the 

preceding day on which such exchange is open for 

business. See OCC By-Laws Article I, Section 1. 

Pursuant to Rule 4.5(c), additional series of options 

of the same class may be opened for trading on the 

Exchange when the Exchange deems it necessary to 

maintain an orderly market, to meet customer 

certain specific trusts that hold financial 

instruments, money market instruments, 

or precious metals (which are deemed 

commodities). 

Bitcoin ETPs are bitcoin-backed 

commodity ETPs structured as trusts.5

Similar to any Unit currently deemed 

appropriate for options trading under 

Rule 4.3, Interpretation and Policy .06, 

the investment objective of a Bitcoin 

ETP trust is for its shares to reflect the 

performance of bitcoin (less the 

expenses of the trust’s operations), 

offering investors an opportunity to gain 

exposure to bitcoin without the 

complexities of bitcoin delivery. As is 

the case for Units currently deemed 

appropriate for options trading, a 

Bitcoin ETP’s shares represent units of 

fractional undivided beneficial interest 

in the trust, the assets of which consist 

principally of bitcoin and are designed 

to track bitcoin or the performance of 

the price of bitcoin and offer access to 

the bitcoin market.6 Bitcoin ETPs 

provide investors with cost-efficient 

alternatives that allow a level of 

participation in the bitcoin market 

through the securities market. The 

primary substantive difference between 

Bitcoin ETPs and Units currently 

deemed appropriate for options trading 

are that Units may hold securities, 

certain financial instruments, and 

specified precious metals (which are 

commodities), while Bitcoin ETPs hold 

bitcoin (which is also deemed a 

commodity). 

The Exchange’s initial listing 

standards for ETFs on which options 

may be listed and traded on the 

Exchange will apply to the Bitcoin 

ETPs. The Exchange expects Bitcoin 

ETPs to satisfy the initial listing 

standards as set forth in Rule 4.3(a) and 

Rule 4.3, Interpretation and Policy 

.06(b). Pursuant to Rule 4.3(a), a security 

(which includes a Unit) on which 

options may be listed and traded on the 

Exchange must be duly registered (with 

the Commission) and be an NMS stock 

(as defined in Rule 600 of Regulation 

NMS under the Securities Exchange Act 

of 1934, as amended (the ‘‘Act’’)), and 

be characterized by a substantial 

number of outstanding shares that are 

widely held and actively traded.7 Rule 

4.3, Interpretation and Policy .06 

requires that Units must either (1) meet 

the criteria and standards set forth in 

Rule 4.3, Interpretation and Policy 

.01(a),8 or (2) be available for creation or 

redemption each business day from or 

through the issuer in cash or in kind at 

a price related to net asset value, and 

the issuer must be obligated to issue 

Units in a specified aggregate number 

even if some or all of the investment 

assets required to be deposited have not 

been received by the issuer, subject to 

the condition that the person obligated 

to deposit the investments has 

undertaken to deliver the investment 

assets as soon as possible and such 

undertaking is secured by the delivery 

and maintenance of collateral consisting 

of cash or cash equivalents satisfactory 

to the issuer, as provided in the 

respective prospectus. The Exchange 

expects that Bitcoin ETPs would satisfy 

Rule 4.3, Interpretation and Policy 

.06(b)(2).9

Options on Bitcoin ETPs will also be 

subject to the Exchange’s continued 

listing standards set forth in Rule 4.4, 

Interpretation and Policy .06 for Units 

deemed appropriate for options trading 

pursuant to Rule 4.3, Interpretation and 

Policy .06. Specifically, Rule 4.4, 

Interpretation and Policy .06 provides 

that Units that were initially approved 

for options trading pursuant to Rule 4.3, 

Interpretation and Policy .06 shall be 

deemed not to meet the requirements for 

continued approval, and the Exchange 

shall not open for trading any additional 

series of option contracts of the class 

covering that [sic] such Units, if the 

Units cease to be an NMS stock or the 

Units are halted from trading in their 

primary market. Additionally, options 

on Units may be subject to the 

suspension of opening transactions in 

any of the following circumstances: (1) 

in the case of options covering Units 

approved for trading under Rule 4.3, 

Interpretation and Policy .06(b)(1), in 

accordance with the terms of paragraphs 

(a), (b), and (c) of Rule 4.4, 

Interpretation and Policy .01; (2) in the 

case of options covering Units approved 

for trading under Rule 4.3 Interpretation 

and Policy .06(b)(2), following the 

initial twelve-month period beginning 

upon the commencement of trading in 

the Units on a national securities 

exchange and are defined as an NMS 

stock [sic], there are fewer than 50 

record and/or beneficial holders of such 

Units for 30 or more consecutive trading 

days; (3) the value of the index or 

portfolio of securities, non-U.S. 

currency, or portfolio of commodities 

including commodity futures contracts, 

options on commodity futures contracts, 

swaps, forward contracts and/or options 

on physical commodities and/or 

financial instruments and money market 

instruments on which the Units are 

based is no longer calculated or 

available; or (4) such other event shall 

occur or condition exist that in the 

opinion of the Exchange makes further 

dealing in such options on the Exchange 

inadvisable. 

Options on a Bitcoin ETP will be 

physically settled contracts with 

American-style exercise.10 Consistent 

with current Rule 4.5, which governs 

the opening of options series on a 

specific underlying security (including 

Units), the Exchange will open at least 

one expiration month for options on 

each Bitcoin ETP 11 at the 


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Federal Register / Vol. 89, No. 17 / Thursday, January 25, 2024 / Notices 5077 

demand or when the market price of the underlying 

stock moves more than five strike prices from the 

initial exercise price or prices. New series of 

options on an individual stock may be added until 

the beginning of the month in which the options 

contract will expire. Due to unusual market 

conditions, the Exchange, in its discretion, may add 

a new series of options on an individual stock until 

the close of trading on the business day prior to 

expiration. 

12See Rule 4.5(d). 

13See Rule 4.5(g). 

14See Rule 4.5(e). 

15See Rule 4.5(f). 

16The Exchange notes that for options listed 

pursuant to the Short Term Option Series Program, 

the Monthly Options Series Program, and the 

Quarterly Options Series Program, Rules 4.5(d), (e), 

and (g) specifically sets forth intervals between 

strike prices on Quarterly Options Series, Short 

Term Option Series, and Monthly Options Series, 

respectively. 

17See Rule 4.5, Interpretation and Policy .01(a). 

18See Rule 4.5, Interpretation and Policy .01(b). 

19See Rule 4.5, Interpretation and Policy .04. 

20See Rule 4.5, Interpretation and Policy .01(f). 

21 If options on a Bitcoin ETP are eligible to 

participate in the Penny Interval Program, the 

minimum increment will be $0.01 for series with 

a price below $3.00 and $0.05 for series with a price 

at or above $3.00. See 5.4(d) (which describes the 

requirements for the Penny Interval Program). 

22As Bitcoin ETPs do not currently trade, options 

on Bitcoin ETPs would be subject to the 25,000 

option contract limit. 

23The Exchange understands from customers that 

investors have historically transacted in options on 

Units in the OTC options market if such options 

were not available for trading in a listed 

environment. 

commencement of trading on the 

Exchange and may also list series of 

options on a Bitcoin ETP for trading on 

a weekly,12 monthly,13 or quarterly 14

basis. The Exchange may also list longterm equity option series (‘‘LEAPS’’) 

that expire from 12 to 180 months from 

the time they are listed.15

Pursuant to Rule 4.5, Interpretation 

and Policy .07, which governs strike 

prices of series of options on Units, the 

interval of strikes prices for series of 

options Bitcoin ETPs will be $1 or 

greater when the strike price is $200 or 

less and $5 or greater where the strike 

price is over $200.16 Additionally, the 

Exchange may list series of options 

pursuant to the $1 Strike Price Interval 

Program,17 the $0.50 Strike Program,18

the $2.50 Strike Price Program,19 and 

the $5 Strike Program.20 Pursuant to 

Rule 5.4, where the price of a series of 

a Bitcoin ETP option is less than $3.00, 

the minimum increment will be $0.05, 

and where the price is $3.00 or higher, 

the minimum increment will be $0.10.21

Any and all new series of Bitcoin ETP 

options that the Exchange lists will be 

consistent and comply with the 

expirations, strike prices, and minimum 

increments set forth in Rules 4.5 and 

5.4, as applicable. 

Bitcoin ETP options will trade in the 

same manner as any other Unit options 

on the Exchange. The Exchange Rules 

that currently apply to the listing and 

trading of all Unit options on the 

Exchange, including, for example, Rules 

that govern listing criteria, expiration 

and exercise prices, minimum 

increments, position and exercise limits, 

margin requirements, customer accounts 

and trading halt procedures will apply 

to the listing and trading of Bitcoin 

ETPs on the Exchange in the same 

manner as they apply to other options 

on all other Units that are listed and 

traded on the Exchange, including the 

precious-metal backed commodity Units 

already deemed appropriate for options 

trading on the Exchange pursuant to 

current Rule 4.3, Interpretation and 

Policy .06(a)(4). 

Position and exercise limits for 

options on Units, including options on 

Bitcoin ETPs, are determined pursuant 

to Rules 8.30 and 8.42, respectively. 

Position and exercise limits for Unit 

options vary according to the number of 

outstanding shares and the trading 

volumes of the underlying Unit over the 

past six months, where the largest in 

capitalization and the most frequently 

traded Units have an option position 

and exercise limit of 250,000 contracts 

(with adjustments for splits, recapitalizations, etc.) on the same side of 

the market; and smaller capitalization 

Units have position and exercise limits 

of 200,000, 75,000, 50,000 or 25,000 

contracts (with adjustments for splits, 

re-capitalizations, etc.) on the same side 

of the market.22 The Exchange further 

notes that Rule 10.3, which governs 

margin requirements applicable to the 

trading of all options on the Exchange, 

including options on Units, will also 

apply to the trading of Bitcoin ETP 

options. 

The Exchange represents that the 

same surveillance procedures applicable 

to all other options on Units currently 

listed and traded on the Exchange will 

apply to options on Bitcoin ETPs, and 

that it has the necessary systems 

capacity to support the new option 

series. The Exchange believes that its 

existing surveillance and reporting 

safeguards are designed to deter and 

detect possible manipulative behavior 

which might potentially arise from 

listing and trading Unit options, 

including precious metal-commodity 

backed Unit options, as proposed [sic]. 

Also, the Exchange may obtain 

information from CME Group Inc.’s 

designated contract markets that are 

members of the Intermarket 

Surveillance Group related to any 

financial instrument that is based, in 

whole or in part, upon an interest in or 

performance of bitcoin, as applicable. 

The Exchange has also analyzed its 

capacity and represents that it believes 

the Exchange and OPRA have the 

necessary systems capacity to handle 

the additional traffic associated with the 

listing of new series that may result 

from the introduction of options on 

Bitcoin ETPs up to the number of 

expirations currently permissible under 

the Rules. Because the proposal is 

limited to Units on a single commodity, 

the Exchange believes any additional 

traffic that may be generated from the 

introduction of Bitcoin ETP options will 

be manageable. 

The Exchange believes that offering 

options on Bitcoin ETPs will benefit 

investors by providing them with an 

additional, relatively lower cost 

investing tool to gain exposure to the 

price of bitcoin and hedging [sic] 

vehicle to meet their investment needs 

in connection with bitcoin-related 

products and positions. The Exchange 

expects investors will transact in 

options on Bitcoin ETPs in the 

unregulated over-the-counter (‘‘OTC’’) 

options market (if the Commission 

approves Bitcoin ETPs for exchangetrading),23 but may prefer to trade such 

options in a listed environment to 

receive the benefits of trading listing 

options, including (1) enhanced 

efficiency in initiating and closing out 

position; (2) increased market 

transparency; and (3) heightened contraparty creditworthiness due to the role of 

OCC as issuer and guarantor of all listed 

options. The Exchange believes that 

listing Bitcoin ETP options may cause 

investors to bring this liquidity to the 

Exchange, would increase market 

transparency and enhance the process of 

price discovery conducted on the 

Exchange through increased order flow. 

The Units that hold financial 

instruments, money market instruments, 

or precious metal commodities on 

which the Exchange may already list 

and trade options are trusts structured 

in substantially the same manner as 

Bitcoin ETPs and essentially offer the 

same objectives and benefits to 

investors, just with respect to different 

assets. The Exchange notes that it has 

not identified any issues with the 

continued listing and trading of any 

Unit options, including Units that hold 

commodities (i.e., precious metals) that 

it currently lists and trades on the 

Exchange. 

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with the Act 

and the rules and regulations 

thereunder applicable to the Exchange 

and, in particular, the requirements of 


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24 15 U.S.C. 78f(b). 

25 15 U.S.C. 78f(b)(5). 

26 Id. 

27See Rule 4.3, Interpretation and Policy 

.06(a)(4). 

28See Rule 4.3, Interpretation and Policy 

.06(a)(4). 

Section 6(b) of the Act.24 Specifically, 

the Exchange believes the proposed rule 

change is consistent with the Section 

6(b)(5) 25 requirements that the rules of 

an exchange be designed to prevent 

fraudulent and manipulative acts and 

practices, to promote just and equitable 

principles of trade, to foster cooperation 

and coordination with persons engaged 

in regulating, clearing, settling, 

processing information with respect to, 

and facilitating transactions in 

securities, to remove impediments to 

and perfect the mechanism of a free and 

open market and a national market 

system, and, in general, to protect 

investors and the public interest. 

Additionally, the Exchange believes the 

proposed rule change is consistent with 

the Section 6(b)(5) 26 requirement that 

the rules of an exchange not be designed 

to permit unfair discrimination between 

customers, issuers, brokers, or dealers. 

In particular, the Exchange believes 

that the proposal to list and trade 

options on Bitcoin ETPs will remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system and, in 

general, protect investors because 

offering options on Bitcoin ETPs will 

provide investors with an opportunity 

to realize the benefits of utilizing 

options on a bitcoin-based ETP, 

including cost efficiencies and 

increased hedging strategies. The 

Exchange believes that offering Bitcoin 

ETP options will benefit investors by 

providing them with a relatively lowercost risk management tool, which will 

allow them to manage their positions 

and associated risk in their portfolios 

more easily in connection with 

exposure to the price of bitcoin and 

with bitcoin-related products and 

positions. Additionally, the Exchange’s 

offering of Bitcoin ETP options will 

provide investors with the ability to 

transact in such options in a listed 

market environment as opposed to in 

the unregulated OTC options market, 

which would increase market 

transparency and enhance the process of 

price discovery conducted on the 

Exchange through increased order flow 

to the benefit of all investors. The 

Exchange also notes that it already lists 

options on other commodity-based 

Units,27 which, as described above, are 

trusts structured in substantially the 

same manner as Bitcoin ETPs and 

essentially offer the same objectives and 

benefits to investors, just with respect to 

a different commodity (i.e., bitcoin 

rather than precious metals) and for 

which the Exchange has not identified 

any issues with the continued listing 

and trading of commodity-backed Unit 

options it currently lists for trading. 

The Exchange also believes the 

proposed rule change will remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system, because 

it is consistent with current Exchange 

Rules, previously filed with the 

Commission. Options on Bitcoin ETPs 

must satisfy the initial listing standards 

and continued listing standards 

currently in the Exchange Rules, 

applicable to options on all Units, 

including Units that hold other 

commodities already deemed 

appropriate for options trading on the 

Exchange. Bitcoin ETP options will 

trade in the same manner as any other 

Unit options—the same Exchange Rules 

that currently govern the listing and 

trading of all Unit options, including 

permissible expirations, strike prices 

and minimum increments, and 

applicable position and exercise limits 

and margin requirements, will govern 

the listing and trading of options on 

Bitcoin ETPs in the same manner. 

The Exchange represents that it has 

the necessary systems capacity to 

support the new Unit option series. The 

Exchange believes that its existing 

surveillance and reporting safeguards 

are designed to deter and detect possible 

manipulative behavior which might 

arise from listing and trading Unit 

options, including Bitcoin ETP options. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. The 

Exchange does not believe that the 

proposed rule change will impose any 

burden on intramarket competition that 

is not necessary or appropriate in 

furtherance of the purposes of the Act 

as Bitcoin ETPs would need to satisfy 

the initial listing standards set forth in 

the Exchange Rules in the same manner 

as any other Unit before the Exchange 

could list options on them. 

Additionally, Bitcoin ETP options will 

be equally available to all market 

participants who wish to trade such 

options. The Exchange Rules currently 

applicable to the listing and trading of 

options on Units on the Exchange will 

apply in the same manner to the listing 

and trading of all options on Bitcoin 

ETPs. Also, and as stated above, the 

Exchange already lists options on other 

commodity-based Units.28

The Exchange does not believe that 

the proposal to list and trade options on 

Bitcoin ETPs will impose any burden on 

intermarket competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. To the extent 

that the advent of Bitcoin ETP options 

trading on the Exchange may make the 

Exchange a more attractive marketplace 

to market participants at other 

exchanges, such market participants are 

free to elect to become market 

participants on the Exchange. 

Additionally, other options exchanges 

are free to amend their listing rules, as 

applicable, to permit them to list and 

trade options on Bitcoin ETPs. 

Additionally, the Exchange notes that 

listing and trading Bitcoin ETP options 

on the Exchange will subject such 

options to transparent exchange-based 

rules as well as price discovery and 

liquidity, as opposed to alternatively 

trading such options in the OTC market. 

The Exchange believes that the 

proposed rule change may relieve any 

burden on, or otherwise promote, 

competition as it is designed to increase 

competition for order flow on the 

Exchange in a manner that is beneficial 

to investors by providing them with a 

lower-cost option to hedge their 

investment portfolios. The Exchange 

notes that it operates in a highly 

competitive market in which market 

participants can readily direct order 

flow to competing venues that offer 

similar products. Ultimately, the 

Exchange believes that offering Bitcoin 

ETP options for trading on the Exchange 

will promote competition by providing 

investors with an additional, relatively 

low-cost means to hedge their portfolios 

and meet their investment needs in 

connection with bitcoin prices and 

bitcoin-related products and positions 

on a listed options exchange. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

The Exchange neither solicited nor 

received written comments on the 

proposed rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period 

up to 90 days (i) as the Commission may 

designate if it finds such longer period 


khammond on DSKJM1Z7X2PROD with NOTICES
Federal Register / Vol. 89, No. 17 / Thursday, January 25, 2024 / Notices 5079 

29 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3The Exchange notes that its affiliate exchange, 

MIAX Pearl, has submitted a substantively identical 

proposal. 

4The Exchange notes that all the rules of Chapter 

IV of the MIAX Options Exchange, including Rule 

402, are incorporated by reference to MIAX 

Emerald. 

5See Exchange Rule 402(i), which permits 

options trading on ETFS that: (1) represent interests 

in registered investment companies (or series 

thereof) organized as open-end management 

investment companies, unit investment trusts or 

similar entities that hold portfolios of securities 

and/or financial instruments (‘‘Funds’’), including, 

but not limited to, stock index futures contracts, 

options on futures, options on securities and 

indices, equity caps, collars and floors, swap 

agreements, forward contracts, repurchase 

agreements and reverse repurchase agreements (the 

‘‘Financial Instruments’’), and money market 

instruments, including, but not limited to, U.S. 

government securities and repurchase agreements 

(the ‘‘Money Market Instruments’’) comprising or 

otherwise based on or representing investments in 

broad-based indexes or portfolios of securities and/ 

or Financial Instruments and Money Market 

Instruments (or that hold securities in one or more 

other registered investment companies that 

themselves hold such portfolios of securities and/ 

or Financial Instruments and Money Market 

Instruments); (2) represent interests in a trust or 

similar entity that holds a specified non-U.S. 

currency or currencies deposited with the trust 

which when aggregated in some specified minimum 

number may be surrendered to the trust or similar 

entity by the beneficial owner to receive the 

specified non-U.S. currency or currencies and pays 

the beneficial owner interest and other distributions 

on the deposited non-U.S. currency or currencies, 

if any, declared and paid by the trust (‘‘Currency 

Trust Shares’’); (3) represent commodity pool 

interests principally engaged, directly or indirectly, 

in holding and/or managing portfolios or baskets of 

securities, commodity futures contracts, options on 

commodity futures contracts, swaps, forward 

contracts and/or options on physical commodities 

and/or non-U.S. currency (‘‘Commodity Pool 

ETFs’’); (4) are issued by the SPDR® Gold Trust or 

the iShares COMEX Gold Trust or the iShares Silver 

Continued 

to be appropriate and publishes its 

reasons for so finding or (ii) as to which 

the Exchange consents, the Commission 

will: 

A. by order approve or disapprove 

such proposed rule change, or 

B. institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (https://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

CBOE–2024–005 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to file 

number SR–CBOE–2024–005. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

internet website (https://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549, on official 

business days between the hours of 10 

a.m. and 3 p.m. Copies of the filing also 

will be available for inspection and 

copying at the principal office of the 

Exchange. Do not include personal 

identifiable information in submissions; 

you should submit only information 

that you wish to make available 

publicly. We may redact in part or 

withhold entirely from publication 

submitted material that is obscene or 

subject to copyright protection. All 

submissions should refer to file number 

SR–CBOE–2024–005 and should be 

submitted on or before February 15, 

2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.29

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–01388 Filed 1–24–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–99397; File No. SR–MIAX– 

2024–03] 

Self-Regulatory Organizations; Miami 

International Securities Exchange LLC; 

Notice of Filing of a Proposed Rule 

Change To Amend Exchange Rule 402, 

Criteria for Underlying Securities 

January 19, 2024. 

Pursuant to the provisions of Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Act’’) 1 and Rule 19b–4 

thereunder,2 notice is hereby given that 

on January 12, 2024, Miami 

International Securities Exchange LLC 

(‘‘MIAX’’ or ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) a proposed rule change 

as described in Items I and II below, 

which Items have been prepared by the 

Exchange. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange is filing a proposal to 

amend Exchange Rule 402, Criteria for 

Underlying Securities. 

The text of the proposed rule change 

is available on the Exchange’s website at 

https://www.miaxglobal.com/markets/ 

us-options/miax-options/rule-filings at 

MIAX’s principal office, and at the 

Commission’s Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

forth in sections A, B, and C below, of 

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend 

Exchange Rule 402, Criteria for 

Underlying Securities,3 to allow the 

Exchange to list and trade options on 

Exchange-Traded Fund Shares (‘‘ETFs’’) 

that represent interests in a trust that 

holds bitcoin (‘‘Bitcoin ETPs’’), 

designating them as ETFs deemed 

appropriate for options trading on the 

Exchange.4

Current Exchange Rule 402(i)(4) 

provides that, subject to certain other 

criteria set forth in that Rule, securities 

deemed appropriate for options trading 

include ETFs that represent certain 

types of interests,5 including interests in 


khammond on DSKJM1Z7X2PROD with NOTICES