Federal Register / Vol. 89, No. 224 / Wednesday, November 20, 2024 / Notices 91811 

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

2 17 CFR 240.19b–4. 

3Cboe Rule 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. 

4The Commission approved proposals by several 

exchanges to list and trade shares of trusts that hold 

Ether, including the Ethereum Funds. See 

Securities Exchange Act Release Nos. 100224 (May 

23, 2024), 89 FR 46937 (May 30, 2024); and 100541 

(July 17, 2024), 89 FR 59786 (July 23, 2024). 

5See Securities Exchange Act Release No. 100862 

(Aug. 28, 2024), 89 FR 72146 (‘‘Notice’’). 

6 15 U.S.C. 78s(b)(2). 

7See Securities Exchange Act Release No. 101321 

(Oct. 11, 2024), 89 FR 83723 (Oct. 17, 2024) 

(designating December 3, 2024, as the date by 

which the Commission shall either approve, 

disapprove, or institute proceedings to determine 

whether to disapprove the proposed rule change). 8 15 U.S.C. 78s(b)(2)(B). 

9See supra note 5. 10See Notice, 89 FR at 72146–7. 11See id. at 72147. 12The Exchange states that the trusts may include 

minimal cash. See id. at note 5. 

13See Notice, 89 FR at 72147. 

14See id. 

15See id. 

16See id. 

17The Exchange states that the criteria and 

guidelines for a security to be considered widely 

held and actively traded are set forth in Exchange 

Rule 4.3, Interpretation and Policy .01, subject to 

exceptions. See id. at note 7. 

By Authority of the Board. 

Stephanie Hillyard, 

Secretary to the Board. 

[FR Doc. 2024–27066 Filed 11–19–24; 8:45 am] 

BILLING CODE 7905–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–101631; File No. SR– 

CBOE–2024–036] 

Self-Regulatory Organizations; Cboe 

Exchange, Inc.; Order Instituting 

Proceedings To Determine Whether To 

Approve or Disapprove a Proposed 

Rule Change To List and Trade 

Options on Ethereum ExchangeTraded Funds 

November 14, 2024. 

I. Introduction 

On August 19, 2024, Cboe Exchange, 

Inc. (‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’), pursuant to Section 

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

of 1934 (‘‘Act’’ or ‘‘Exchange Act’’) 1 and 

Rule 19b–4 thereunder,2 a proposed rule 

change to allow the listing and trading 

of options on Units 3 that represent 

interests in the Fidelity Ethereum Fund 

(the ‘‘Fidelity Fund’’), the 21Shares Core 

Ethereum ETF (the ‘‘21Shares Fund’’), 

the Invesco Galaxy Ethereum ETF (the 

‘‘Invesco Fund’’), the Franklin Ethereum 

ETF (the ‘‘Franklin Fund’’), the VanEck 

Ethereum Trust (the ‘‘VanEck Fund’’), 

the Grayscale Ethereum Trust (the 

‘‘Grayscale Fund’’), the Grayscale Mini 

Ethereum Trust (the ‘‘Grayscale Mini 

Fund’’), the Bitwise Ethereum ETF (the 

‘‘Bitwise Fund’’), and the iShares 

Ethereum Trust ETF (the ‘‘iShares 

Fund’’ and, collectively, the ‘‘Ethereum 

Funds’’).4 The proposed rule change 

was published for comment in the 

Federal Register on September 4, 2024.5

The Commission has received no 

comments regarding the proposal. 

On October 11, 2024, pursuant to 

Section 19(b)(2) of the Exchange Act,6

the Commission designated a longer 

period within which to approve the 

proposed rule change, disapprove the 

proposed rule change, or institute 

proceedings to determine whether to 

disapprove the proposed rule change.7

This order institutes proceedings under 

Section 19(b)(2)(B) of the Act 8 to 

determine whether to approve or 

disapprove the proposed rule change. 

II. Description of the Proposed Rule 

Change 

As described more fully in the 

Notice,9 the Exchange proposes to 

amend Exchange Rule 4.3, 

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

allow the Exchange to list and trade 

options on Units of the Ethereum 

Funds. The Exchange states that current 

Exchange Rule 4.3, Interpretation and 

Policy .06(a) 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, 

including interests in certain specific 

trusts that hold financial instruments, 

money market instruments, or precious 

metals (which are deemed 

commodities).10

The Exchange states that the 

Ethereum Funds are Ethereum-backed 

commodity ETFs structured as trusts, 

and that, similar to any Unit currently 

deemed appropriate for options trading 

under Exchange Rule 4.3, Interpretation 

and Policy .06, the investment objective 

of each Ethereum Fund trust is for its 

shares to reflect the performance of 

Ethereum (less the expenses of the 

trust’s operations), offering investors an 

opportunity to gain exposure to 

Ethereum without the complexities of 

Ethereum delivery.11 The Exchange 

states that, as is the case for Units 

currently deemed appropriate for 

options trading, an Ethereum Fund’s 

shares represent units of fractional 

undivided beneficial interest in the 

trust, the assets of which consist 

principally of Ethereum and are 

designed to track Ethereum or the 

performance of the price of Ethereum 

and offer access to the Ethereum 

market.12 The Exchange states that the 

Ethereum Funds provide investors with 

cost-efficient alternatives that allow a 

level of participation in the Ethereum 

market through the securities market, 

and that the primary substantive 

difference between Ethereum Funds and 

Units currently deemed appropriate for 

options trading are that Units may hold 

securities, certain financial instruments, 

and specified precious metals (which 

are deemed commodities), while 

Ethereum Funds hold Ethereum (which 

is also deemed a commodity).13

The Exchange states that it believes 

that the Ethereum Funds satisfy the 

Exchange’s initial listing standards in 

Exchange Rule 4.3, Interpretation and 

Policy .06(b) that Units must either (1) 

meet the criteria and standards set forth 

in Rule 4.3, Interpretation and Policy 

.01(a), 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.14 The Exchange 

states that the Ethereum Funds satisfy 

Exchange Rule 4.3, Interpretation and 

Policy .06(b)(2), as they are all subject 

to this creation and redemption 

process.15

The Exchange further states that, 

while not required by the Exchange’s 

Rules for purposes of options listings, 

the majority of the Ethereum Funds 

satisfy the criteria and guidelines set 

forth in Exchange Rule 4.3, 

Interpretation and Policy .01.16 The 

Exchange states that, pursuant to 

Exchange 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 Act), and be characterized by 

a substantial number of outstanding 

shares that are widely held and actively 

traded.17 The Exchange states that each 

of the Ethereum Funds is an NMS Stock, 

as defined in Rule 600 of Regulation 


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18See Notice, 89 FR at 72147. 

19See id. 

20See id. 

21The Exchange states that all outstanding ETF 

shares are considered free float because there are no 

restricted ETF shares or shares held by insiders, as 

is the case with respect to corporate stocks. See id. 

at note 9. 

22See id. 

23See Notice, 89 FR at 72147. 

24The Exchange states that this is the primary 

reasoning for why the Exchange may list options on 

ETFs as long as they are subject to the creation and 

redemption process and generally do not need to 

satisfy the criteria set forth in Interpretation and 

Policy .01. See id. note 10. 

25See Notice, 89 FR at 72148. 

26See id. 

27See id. 

28See id. 

29See id. 

30See id. 

31See id. 

32See id. 

33See id. 

34See id. 

NMS under the Act, and that each 

Ethereum Fund is characterized by a 

substantial number of outstanding 

shares that are widely held and actively 

traded.18

The Exchange states that, as of August 

7, 2024, the Ethereum Funds had the 

following number of shares 

outstanding: 19

Ethereum fund Shares outstanding 

Fidelity Fund ................... 10,850,000 

21Shares Fund ............... 760,000 

Invesco Fund .................. 468,000 

Franklin Fund .................. 1,500,000 

VanEck Fund .................. 1,725,000 

Grayscale Fund .............. 228,468,500 

Grayscale Mini Fund ...... 380,898,500 

Bitwise Fund ................... 12,370,000 

iShares Fund .................. 37,200,000 

The Exchange states that, despite the 

fact that these Ethereum Funds were in 

only their third week of trading (they 

began trading on July 23, 2024), five of 

these funds already have more than 

7,000,000 shares outstanding, which is 

the minimum number of shares of a 

corporate stock that the Exchange 

generally requires to list options on that 

stock pursuant to Exchange Rule 4.3, 

Interpretation and Policy .01(a)(1).20

However, the Exchange states that 

shares outstanding (i.e., free float),21

while commonly used to determine 

investable capacities of corporate stocks, 

has little utility with respect to ETFs 

due to the market structure of ETFs.22

The Exchange states that proofing of 

ETF baskets, in addition to the 

efficiency of creation/redemption 

mechanisms, decouple concepts of 

‘‘floating’’ ETF shares against the 

impacts of ETF liquidity to the liquidity 

of ETF constituents.23 The Exchange 

states that although ETF market makers 

may often limit the amount of floating 

ETF shares, primary market 

mechanisms enable virtually limitless 

capacity to create and redeem ETF 

shares on a daily basis.24 The Exchange 

states that, as evidenced during their 

brief time in market, the gross value of 

daily shares created or redeemed for 

each Ethereum Fund approximates its 

assets under management (‘‘AUM’’) as 

of July 24, 2024, which were as 

follows: 25

Ethereum Fund AUM 

Fidelity Fund ................... 9,481,360 

21Shares Fund ............... 148,080,600 

Invesco Fund .................. 37,197,280 

Franklin Fund .................. 19,301,340 

VanEck Fund .................. 9,013,556 

Grayscale Fund .............. 8,040,436,000 

Ethereum Fund AUM 

Grayscale Mini Fund ...... 1,043,203,000 

Bitwise Fund ................... 230,788,700 

iShares Fund .................. 287,328,200 

The Exchange states that this 

demonstrates that each Ethereum Fund 

is characterized by a substantial number 

of outstanding shares.26 The Exchange 

further states that, given how recently 

Ethereum Funds began trading, the 

Exchange does not have access to the 

number of beneficial holders of 

Ethereum Funds at this time. 27

However, the Exchange states that, 

given the significant trading volumes of 

the Ethereum Funds, it is reasonable to 

expect that shares of all of the Ethereum 

Funds are characterized by a substantial 

number of outstanding shares that are 

widely held.28 The Exchange also 

believes each Ethereum Fund is 

characterized by a substantial number of 

outstanding shares that are actively 

traded.29 The Exchange states that, as of 

August 7, 2024, the total trading volume 

(by shares and notional) for each fund 

since they began trading on July 23, 

2024, and the average daily volume 

(‘‘ADV’’) over the five-day period of 

August 2 through August 7, 2024, for 

each Ethereum Fund was as follows: 30

Ethereum Fund Trading volume 

(shares) 

Trading volume 

(notional $) ADV (shares) 

Fidelity Fund .................................................................................................... 32,751,647 1,023,590,893.88 1,279,085.00 

21Shares Fund ................................................................................................ 2,995,673 46,584,597.69 183,032.80 

Invesco Fund ................................................................................................... 2,398,977 75,800,517.49 116,423.80 

Franklin Fund ................................................................................................... 3,726,018 89,987,417.90 114,194.60 

VanEck Fund ................................................................................................... 5,557,411 247,424,935.45 288,519.00 

Grayscale Fund ............................................................................................... 221,839,519 5,934,238,584.03 7,429,260.00 

Grayscale Mini Fund ........................................................................................ 387,753,619 1,117,121,565.01 24,800,550.00 

Bitwise Fund .................................................................................................... 27,454,355 638,820,845.28 806,202.19 

iShares Fund ................................................................................................... 124,839,230 2,896,601,784.35 6,720,303.00 

The Exchange states that the trading 

volume for each except one Ethereum 

Fund is higher (and several significantly 

higher) than 2,400,000 shares (and that 

one is only 1,023 shares below that 

number), which is the minimum 12- 

month volume the Exchange generally 

requires for a security in order to list 

options on that security as set forth in 

Exchange Rule 4.3, Interpretation and 

Policy .01.31 Additionally, the Exchange 

states that from July 23 (the first day the 

Ethereum Funds began trading) through 

August 7, 2024, the ADV for each 

Ethereum Fund is in the top 25% of all 

ETFs that are currently trading.32 The 

Exchange states that this data 

demonstrates each Ethereum Fund is 

characterized by a substantial number of 

outstanding shares that are actively 

traded.33

The Exchange states that options on 

Ethereum Funds will be subject to the 

Exchange’s continued listing standards 

in Exchange Rule 4.4, Interpretation and 

Policy .06 for Units deemed appropriate 

for options trading pursuant to 

Exchange Rule 4.3, Interpretation and 

Policy .06.34 The Exchange states that 

Exchange Rule 4.4, Interpretation and 

Policy .06 provides that Units that were 

initially approved for options trading 

pursuant to Exchange Rule 4.3, 

Interpretation and Policy .06 shall be 

deemed not to meet the requirements for 

continued approval, and the Exchange 


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35See id. 

36See id. 

37See id. 

38See id. at 72149. 

39See id. 

40See id. 

41See id. 

42See id. 

43See id. 

44See id. 

45See id. 

46See id. 

47See id. 

48See id. 

49See id. 

50See id. 

51See id. at 72150. 

52 15 U.S.C. 78f(b)(5). See Notice, 89 FR at 72150. 

shall not open for trading any additional 

series of option contracts of the class 

covering such Unit, if the Units cease to 

be an NMS stock or the Units are halted 

from trading in their primary market.35

Additionally, the Exchange states that 

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 Exchange 

Rule 4.3, Interpretation and Policy 

.06(b)(1), in accordance with the terms 

of paragraphs (a), (b), and (c) of 

Exchange Rule 4.4, Interpretation and 

Policy .01; (2) in the case of options 

covering Units approved for trading 

under Exchange Rule 4.3, Interpretation 

and Policy .06(b)(2) (as is the case for 

the Ethereum Funds), following the 

initial twelve-month period beginning 

upon the commencement of trading in 

the Units on a national securities 

exchange, 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.36

The Exchange states that options on 

each Ethereum Fund will be physically 

settled contracts with American-style 

exercise.37 As described more fully in 

the Notice, the Exchange states that 

Ethereum Fund options will trade in the 

same manner as any other Unit options 

on the Exchange.38 The Exchange states 

that Exchange Rules that currently 

apply to the listing and trading of all 

Unit options on the Exchange, 

including, for example, Exchange 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 Ethereum 

Funds 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 Exchange Rule 4.3, 

Interpretation and Policy .06(a)(4).39

The Exchange states that position and 

exercise limits for options on Units, 

including options on Ethereum Funds, 

will be determined pursuant to 

Exchange Rules 8.30 and 8.42, 

respectively.40 The Exchange states that 

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.41

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 Ethereum Funds, 

and that it has the necessary systems 

capacity to support the new option 

series.42 The Exchange states 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.43 The 

Exchange further states that it 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 Ethereum, as 

applicable.44 The Exchange states that it 

has analyzed its capacity and believes 

that the Exchange and the Options Price 

Reporting Authority 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 

Ethereum Funds up to the number of 

expirations currently permissible under 

the Exchange’s Rules.45 The Exchange 

states that because the proposal is 

limited to Units on a single commodity, 

any additional traffic that may be 

generated from the introduction of 

Ethereum Fund options will be 

manageable.46

The Exchange states that offering 

options on Ethereum Funds will benefit 

investors by providing them with an 

additional, relatively lower cost 

investing tool to gain exposure to the 

price of Ethereum and a hedging vehicle 

to meet their investment needs in 

connection with Ethereum-related 

products and positions.47 The Exchange 

states that it expects investors will 

transact in options on Ethereum Funds 

in the unregulated over-the-counter 

(‘‘OTC’’) options market, but may prefer 

to trade such options in a listed 

environment to receive the benefits of 

trading listed options, including (1) 

enhanced efficiency in initiating and 

closing out position; (2) increased 

market transparency; and (3) heightened 

contra party creditworthiness due to the 

role of OCC as issuer and guarantor of 

all listed options.48 The Exchange states 

that listing Ethereum Fund options may 

cause investors to bring this liquidity to 

the Exchange, which would increase 

market transparency and enhance the 

process of price discovery conducted on 

the Exchange through increased order 

flow.49 The Exchange states that 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 the Ethereum Funds 

and essentially offer the same objectives 

and benefits to investors, just with 

respect to different assets.50 The 

Exchange states 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.51

The Exchange states that 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 

Section 6(b)(5) of the Act.52 The 

Exchange states that the proposal to list 

and trade options on Ethereum Funds 

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 Ethereum 

Funds will provide investors with an 


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53See id. 

54See id. 

55See id. 

56See id. 

57See id. 

58See id. 

59See id. 

60See id. 61See id. 62See id. 63See id. 64See id. 65See id. 66See id. 67 15 U.S.C. 78s(b)(2)(B). 

68 Id. 

69 15 U.S.C. 78f(b)(5). 

70 17 CFR 201.700(b)(3). 

71See id. 

72See id. 

opportunity to realize the benefits of 

utilizing options on a Ethereum Fund, 

including cost efficiencies and 

increased hedging strategies.53 The 

Exchange further states that offering 

Ethereum Fund options will benefit 

investors by providing them with a 

relatively lower-cost 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 

Ethereum and with Ethereum-related 

products and positions.54 Additionally, 

the Exchange states that its offering of 

Ethereum Fund 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.55 The Exchange states that it 

already lists options on other 

commodity-based Units, which are 

trusts structured in substantially the 

same manner as Ethereum Funds and 

essentially offer the same objectives and 

benefits to investors, just with respect to 

a different commodity (i.e., Ethereum 

rather than precious metals), and for 

which the Exchange has not identified 

any issues with their continued listing 

and trading.56 The Exchange states that 

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.57 The Exchange states that 

options on Ethereum Funds 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.58 In addition, the Exchange 

states that each Ethereum Fund is 

characterized by a substantial number of 

shares that are widely held and actively 

traded.59 In addition, the Exchange 

states that Ethereum Fund 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 

Ethereum Funds in the same manner.60

The Exchange states that the proposed 

position and exercise limits for the 

Ethereum Fund options are consistent 

with the Exchange Act, will remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system, and, in 

general, protect investors and the public 

interest, because they are designed to 

address potential manipulative schemes 

and adverse market impacts 

surrounding the use of options, such as 

disrupting the market in the security 

underlying the options.61 The Exchange 

states that the proposed position and 

exercise limits are the same limits that 

apply to other ETF options, including 

other commodity ETF options.62 The 

Exchange states that the proposed 

position and exercise limits balance the 

liquidity provisioning in the market 

against the prevention of manipulation, 

as they currently do for other equity 

options (including commodity ETF 

options).63 The Exchange further states 

that the available supply in the markets 

of Ethereum is not relevant when 

establishing position limits for options 

on the Ethereum Funds, as what is held 

by an ETF has historically not been a 

relevant factor considered by the 

Commission when it has considered 

rule filings to list options on ETFs, 

including commodity ETFs.64 The 

Exchange states that when the 

Commission previously approved rules 

to list options on other commodity 

ETFs, the Commission did not require 

consideration of whether the available 

supply of those commodities should be 

considered when the Exchange 

established those position limits.65 The 

Exchange states that position limits in 

the Exchange’s Rules at that time were 

the same as they are today as set forth 

in Exchange Rule 8.30 (and as proposed 

to be applicable to options on the 

Ethereum Funds).66

III. Proceedings To Determine Whether 

To Approve or Disapprove SR–CBOE– 

2024–036 and Grounds for Disapproval 

Under Consideration 

The Commission is instituting 

proceedings pursuant to Section 

19(b)(2)(B) of the Act 67 to determine 

whether the proposed rule change 

should be approved or disapproved. 

Institution of such proceedings is 

appropriate at this time in view of the 

legal and policy issues raised by the 

proposed rule change. Institution of 

proceedings does not indicate that the 

Commission has reached any 

conclusions with respect to any of the 

issues involved. Rather, as described 

below, the Commission seeks and 

encourages interested persons to 

provide comments on the proposed rule 

change. 

Pursuant to Section 19(b)(2)(B) of the 

Act,68 the Commission is providing 

notice of the grounds for disapproval 

under consideration. The Commission is 

instituting proceedings to allow for 

additional analysis of the proposed rule 

change’s consistency with Section 

6(b)(5) of the Act,69 which requires, 

among other things, that the rules of a 

national securities exchange be 

designed to prevent fraudulent and 

manipulative acts and practices, to 

promote just and equitable principles of 

trade, to remove impediments to and 

protect the mechanism of a free and 

open market and a national market 

system, and, in general, to protect 

investors and the public interest. 

Under the Commission’s Rules of 

Practice, the ‘‘burden to demonstrate 

that a proposed rule change is 

consistent with the Exchange Act and 

the rules and regulations issued 

thereunder . . . is on the self-regulatory 

organization that proposed the rule 

change.’’ 70 The description of a 

proposed rule change, its purpose and 

operation, its effect, and a legal analysis 

of its consistency with applicable 

requirements must all be sufficiently 

detailed and specific to support an 

affirmative Commission finding,71 and 

any failure of a self-regulatory 

organization to provide this information 

may result in the Commission not 

having a sufficient basis to make an 

affirmative finding that a proposed rule 

change is consistent with the Act and 

the applicable rules and regulations.72

The Commission is instituting 

proceedings to allow for additional 

consideration and comment on the 

issues raised herein, including as to 

whether the proposal is consistent with 

the Act. In particular, the Commission 

asks commenters to address whether the 

proposal includes sufficient data and 

analysis to support a conclusion that the 

proposal is consistent with the 


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73Section 19(b)(2) of the Act, as amended by the 

Securities Acts Amendments of 1975, Public Law 

94–29 (June 4, 1975), grants the Commission 

flexibility to determine what type of proceeding— 

either oral or notice and opportunity for written 

comments—is appropriate for consideration of a 

particular proposal by a self-regulatory 

organization. See Securities Acts Amendments of 

1975, Senate Comm. on Banking, Housing & Urban 

Affairs, S. Rep. No. 75, 94th Cong., 1st Sess. 30 

(1975). 

74 17 CFR 200.30–3(a)(57). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4The current text of Rule 7.13–E was adopted in 

2017 when the Exchange’s subsidiary NYSE Arca 

Equities Inc. was merged into the Exchange. See 

Securities and Exchange Act Release No. 81419 

(August 17, 2017), 82 FR 40044 (August 23, 2017) 

(SR–NYSEArca-2017–40) (Notice of Filing of 

Amendment No. 2 and Order Granting Accelerated 

Approval of a Proposed Rule Change, as Modified 

by Amendment No. 2, in Connection With the 

Proposed Merger of Its Wholly Owned Subsidiary 

NYSE Arca Equities, Inc. With and Into the 

Exchange). 

requirements of Section 6(b)(5) of the 

Act. 

IV. Procedure: Request for Written 

Comments 

The Commission requests that 

interested persons provide written 

submissions of their views, data, and 

arguments with respect to the issues 

identified above, as well as any other 

concerns they may have with the 

proposal. In particular, the Commission 

invites the written views of interested 

persons concerning whether the 

proposal is consistent with Section 

6(b)(5) or any other provision of the Act, 

and the rules and regulations 

thereunder. Although there do not 

appear to be any issues relevant to 

approval or disapproval that would be 

facilitated by an oral presentation of 

views, data, and arguments, the 

Commission will consider, pursuant to 

Rule 19b–4, any request for an 

opportunity to make an oral 

presentation.73

Interested persons are invited to 

submit written data, views, and 

arguments regarding whether the 

proposed rule change should be 

approved or disapproved by December 

11, 2024. Any person who wishes to file 

a rebuttal to any other person’s 

submission must file that rebuttal by 

December 26, 2024. 

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–2024–036 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–2024–036. 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–2024–036 and should be 

submitted on or before December 11, 

2024. Rebuttal comments should be 

submitted by December 26, 2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.74

Vanessa A. Countryman, 

Secretary. 

[FR Doc. 2024–27013 Filed 11–19–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–101630; File No. SR– 

NYSEARCA–2024–97] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend NYSE Arca 

Rule 7.13–E To Remove References to 

the Chair of the Board 

November 14, 2024. 

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

Securities Exchange Act of 1934 

(‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that, on 

November 8, 2024, NYSE Arca, Inc. 

(‘‘NYSE Arca’’ or the ‘‘Exchange’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change as described in 

Items I and II below, which Items have 

been prepared by the self-regulatory 

organization. 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 proposes to amend 

NYSE Arca Rule 7.13–E to remove 

references to the Chair of the Board. The 

proposed rule change is available on the 

Exchange’s website at www.nyse.com, at 

the principal office of the Exchange, 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 

self-regulatory organization 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 those 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 parts 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 

NYSE Arca Rule 7.13–E (Trading 

Suspensions) to remove references to 

the Chair of the Board of Directors of the 

Exchange (‘‘Board’’). 

Under current Rule 7.13–E,4 except as 

otherwise stated in Rule 5.5, the Chair 

of the Board or the President of the 

Exchange, or the officer designee of the 

Chair or the President, has the power to 

suspend trading on any and all 

securities traded on the Exchange 

whenever in his or her opinion such 

suspension would be in the public 

interest. No such action shall continue 

longer than two days or as soon 


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