93802 Federal Register / Vol. 89, No. 229 / Wednesday, November 27, 2024 / Notices 

298See FICC Letter at 25. 

299See id. 

300See id. 

301See id. 

302See 15 U.S.C. 78s(b)(2)(C)(i). 

303See 17 CFR 240.17ad–22(e)(18)(iv)(C). 

304 17 CFR 240.17ad–22(e)(23)(ii). 

305See FIA–PTG Letter I at 4; MFA Letter I at 8; 

AIMA Letter at 6. 

306See id. 

307See FICC Letter at 20–21. 

308See FIA–PTG Letter II at 4. 

309See 15 U.S.C. 78s(b)(2)(C)(i). 

310 17 CFR 240.17ad–22(e)(23)(ii). 

311 15 U.S.C. 78q–1. 

312 15 U.S.C. 78s(b)(2). 

313 In approving the proposed rule change, the 

Commission considered the proposals’ impact on 

efficiency, competition, and capital formation. 15 

U.S.C. 78c(f). 

314 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

CCPs, to make clear that porting is 

possible for FICC-cleared trades.298

FICC also states its belief that it will be 

more efficient to wait until the 

Commission decides whether to 

approve or disapprove the Proposed 

Rule Change before proposing a specific 

porting framework, and states that it 

will seek to facilitate porting before 

December 31, 2025.299 FICC also states 

that any porting framework would need 

to take into consideration the fact that 

many FICC-cleared customer 

transactions are overnight, and that 

porting may not be practical for such 

transactions because they will generally 

settle before the porting can be 

completed.300 FICC further states that 

the ability to settle (which is currently 

included in the GSD Rules governing 

the Sponsored Service) is therefore 

substantially more important than the 

ability to port.301

The Proposed Rule Change does not 

contain any provisions related to 

porting customer transactions at FICC. 

However, the Commission shall approve 

a proposed rule change of a selfregulatory organization if it finds that it 

is consistent with the Act,302 and the 

lack of porting provisions is not 

inconsistent with the Act. 

Accordingly, for the reasons above, 

the Proposed Rule Change is consistent 

with Rule 17ad–22(e)(18)(iv)(C).303

E. Consistency With Rule 17ad– 

22(e)(23)(ii) 

Rule 17ad–22(e)(23)(ii) under the 

Exchange Act requires a covered 

clearing agency, such as FICC, to 

establish, implement, maintain, and 

enforce written policies and procedures 

reasonably designed to provide 

sufficient information to enable 

participants to identify and evaluate the 

risks, fees, and other material costs they 

incur by participating in the covered 

clearing agency.304

Several commenters state that FICC 

should regularly publish statistics 

regarding the GSD access models, such 

as the volumes and proportion of 

transactions cleared through each access 

model and transactions executed on 

done-with and done-away bases.305 The 

commenters suggest that FICC’s 

publication of such data would enable 

market participants to better evaluate 

which access model best fits their 

business needs.306 FICC responds that it 

intends to collect and publish 

information regarding the GSD access 

models, including the (1) number of 

Netting Members enabled to use each 

model, (2) number of Sponsoring 

Members enabled to offer done-away 

clearing, and (3) volumes of trading 

through each access model, including 

the number of transactions and total 

notional.307 The Commission agrees that 

FICC’s regular publication of the 

foregoing data should provide 

information that would better enable 

market participants to evaluate the GSD 

access models. 

One commenter states that in addition 

to regularly publishing the data 

referenced in the immediately preceding 

paragraph, FICC should also regularly 

publish the number of clearing members 

who are in fact clearing more than de 

minimis volumes pursuant to each such 

model, and clearly separate out donewith and done-away activity.308 The 

Proposed Rule Change does not contain 

any provisions related to FICC’s 

publication of the specific data 

requested by the commenter. The 

Commission shall approve a proposed 

rule change of a self-regulatory 

organization if it finds that it is 

consistent with the Act,309 and the lack 

of provisions regarding FICC’s regular 

publication of the data requested by the 

commenter is not inconsistent with the 

Act. 

For the reasons discussed above, the 

Proposed Rule Change would enable 

FICC to establish, implement, maintain, 

and enforce written policies and 

procedures reasonably designed to 

provide sufficient information to enable 

members to identify and evaluate the 

risks, fees, and other material costs they 

incur as FICC’s members, consistent 

with Rule 17ad–22(e)(23)(ii).310

III. Conclusion 

On the basis of the foregoing, the 

Commission finds that the Proposed 

Rule Change is consistent with the 

requirements of the Exchange Act and 

in particular with the requirements of 

Section 17A of the Exchange Act 311 and 

the rules and regulations promulgated 

thereunder. 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Exchange Act 312

that proposed rule change SR–FICC– 

2024–005, be, and hereby is, 

Approved.313

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.314

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–27762 Filed 11–26–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–101698; File No. SR–MIAX– 

2024–40] 

Self-Regulatory Organizations; MIAX 

Exchange LLC; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Amend Exchange 

Rule 402, Criteria for Underlying 

Securities, Exchange Rule 307, 

Position Limits, and Exchange Rule 

309, Exercise Limits To Allow the 

Exchange To List and Trade Options 

on the iShares Bitcoin Trust (the 

‘‘Trust’’) 

November 21, 2024. 

Pursuant to 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 November 

18, 2024, Miami International Securities 

Exchange, LLC (‘‘MIAX’’ or ‘‘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 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 proposes to amend 

Exchange Rule 402, Criteria for 

Underlying Securities, Exchange Rule 

307, Position Limits, and Exchange Rule 

309, Exercise Limits. 

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. 


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3The Exchange notes that its affiliate exchanges, 

MIAX Pearl and MIAX Sapphire, submitted 

substantively identical proposals. The Exchange 

notes that all the rules of Chapter III of the MIAX 

Options Exchange, including Rules 307 and 309, are 

incorporated by reference to MIAX Pearl and MIAX 

Sapphire. The Exchange also notes that all of the 

rules of Chapter III of the MIAX Options Exchange, 

including Rules 307 and 309, and the rules of 

Chapter IV of the MIAX Options Exchange, 

including Rule 402, are incorporated by reference 

to MIAX Emerald. 

4On January 10, 2024, the Commission approved 

proposals by NYSE Arca, Inc., The Nasdaq Stock 

Market LLC, and Cboe BZX Exchange, Inc. to list 

and trade the shares of 11 bitcoin-based 

commodity-based trust shares and trust units, 

including the iShares Bitcoin Trust. See Securities 

Exchange Act Release No. 99306 (Jan. 10, 2024), 89 

FR 3008 (Jan. 17, 2024) (order approving File Nos. 

SR–NYSEARCA–2021–90; SR–NYSEARCA–2023– 

44; SR–NYSEARCA–2023–58; SR–NASDAQ–2023– 

016; SR–NASDAQ–2023–019; SR–CboeBZX–2023– 

028; SR–CboeBZX–2023–038; SR–CboeBZX–2023– 

040; SR–CboeBZX–2023–042; SR–CboeBZX–2023– 

044; SR–CboeBZX–2023–072) (‘‘Bitcoin ETP 

Order’’). 

5See Securities Exchange Act Release No. 101128 

(September 20, 2024), 89 FR 78942 (September 26, 

2024) (SR–ISE–2024–03) (Self-Regulatory 

Organizations; Nasdaq ISE, LLC; Notice of Filing of 

Amendment Nos. 4 and 5 and Order Granting 

Accelerated Approval of a Proposed Rule Change, 

as Modified by Amendment Nos. 1, 4, and 5, to 

Permit the Listing and Trading of Options on the 

iShares Bitcoin Trust). 

6See Securities Exchange Act Release No. 99306 

(Jan. 10, 2024), 89 FR 3008 (Jan. 17, 2024) (order 

approving File Nos. SR–NYSEARCA–2021–90; SR– 

NYSEARCA–2023–44; SR–NYSEARCA–2023–58; 

SR–NASDAQ–2023–016; SR–NASDAQ–2023–019; 

SR–CboeBZX–2023–028; SR–CboeBZX–2023–038; 

SR–CboeBZX–2023–040; SR–CboeBZX–2023–042; 

SR–CboeBZX–2023–044; SR–CboeBZX–2023–072) 

(Order Granting Accelerated Approval of Proposed 

Rule Changes, as Modified by Amendments 

Thereto, To List and Trade Bitcoin-Based 

Commodity-Based Trust Shares and Trust Units) for 

a complete description of the Trust. 

7The Trust issues and redeems Shares only in 

blocks of 40,000 or integral multiples thereof. A 

block of 40,000 Shares is called a ‘‘Basket.’’ These 

transactions take place in exchange for Bitcoin. 

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, Exchange Rule 

307, Position Limits, and Exchange Rule 

309, Exercise Limits,3 to allow the 

Exchange to list and trade options on 

the iShares Bitcoin Trust (the ‘‘Trust’’), 

designating the Trust as appropriate for 

options trading on the Exchange.4 This 

is a competitive filing based on a similar 

proposal submitted by Nasdaq ISE, LLC 

(‘‘ISE’’) and approved by the Securities 

and Exchange Commission 

(‘‘Commission’’).5

Current Exchange Rule 402(i)(4) 

provides that securities deemed 

appropriate for options trading include 

shares or other securities (‘‘Exchange 

Traded Fund Shares’’) that are traded on 

a national securities exchange and are 

defined as ‘‘NMS stock’’ under Rule 600 

of Regulation NMS, and that meet 

specified criteria enumerated in the 

rule. Sub Section 4 of Exchange Rule 

402(i) provides that such shares or other 

securities: 

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

the iShares COMEX Gold Trust or the iShares 

Silver Trust or the ETFS Silver Trust or the 

ETFS Gold Trust or the ETFS Palladium 

Trust or the ETFS Platinum Trust or the 

Sprott Physical Gold Trust; or 

In addition, the underlying securities 

and Exchange Rule 402i, including the 

commodity based trusts in Exchange 

Rule 402(i)(4), must meet the 

requirements of Exchange Rule 402(i), 

Sections (5)(i)(A) or (B). 

Proposal 

The Exchange proposes to amend 

Exchange Rule 402(i)(4) to expand the 

list of securities that are appropriate for 

options trading on the Exchange. 

Description of the Trust 6

The shares are issued by the Trust, a 

Delaware statutory trust. The Trust 

operates pursuant to a trust agreement 

(the ‘‘Trust Agreement’’) between the 

Sponsor, BlackRock Fund Advisors (the 

‘‘Trustee’’) as the trustee of the Trust 

and Wilmington Trust, National 

Association, as Delaware trustee . The 

Trust issues shares representing 

fractional undivided beneficial interests 

in its net assets. The assets of the Trust 

consist only of bitcoin, held by a 

custodian on behalf of the Trust except 

under limited circumstances when 

transferred through the Trust’s prime 

broker temporarily (described below), 

and cash. Coinbase Custody Trust 

Company, LLC (the ‘‘Bitcoin 

Custodian’’) is the custodian for the 

Trust’s bitcoin holdings, and maintains 

a custody account for the Trust 

(‘‘Custody Account’’); Coinbase, Inc. 

(the ‘‘Prime Execution Agent’’), an 

affiliate of the Bitcoin Custodian, is the 

prime broker for the Trust and 

maintains a trading account for the 

Trust (‘‘Trading Account’’); and Bank of 

New York Mellon is the custodian for 

the Trust’s cash holdings (the ‘‘Cash 

Custodian’’ and together with the 

Bitcoin Custodian, the ‘‘Custodians’’) 

and the administrator of the Trust (the 

‘‘Trust Administrator’’). Under the Trust 

Agreement, the Trustee may delegate all 

or a portion of its duties to any agent, 

and has delegated the bulk of the day to 

day responsibilities to the Trust 

Administrator and certain other 

administrative and record-keeping 

functions to its affiliates and other 

agents. The Trust is not an investment 

company registered under the 

Investment Company Act of 1940, as 

amended. 

The investment objective of the Trust 

is to reflect generally the performance of 

the price of bitcoin. The Trust seeks to 

reflect such performance before 

payment of the Trust’s expenses and 

liabilities. The shares are intended to 

constitute a simple means of making an 

investment similar to an investment in 

bitcoin through the public securities 

market rather than by acquiring, holding 

and trading bitcoin directly on a peerto-peer or other basis or via a digital 

asset exchange. The shares have been 

designed to remove the obstacles 

represented by the complexities and 

operational burdens involved in a direct 

investment in bitcoin, while at the same 

time having an intrinsic value that 

reflects, at any given time, the 

investment exposure to the bitcoin 

owned by the Trust at such time, less 

the Trust’s expenses and liabilities. 

Although the shares are not the exact 

equivalent of a direct investment in 

bitcoin, they provide investors with an 

alternative method of achieving 

investment exposure to bitcoin through 

the public securities market, which may 

be more familiar to them. 

Custody of the Trust’s Bitcoin 

An investment in the shares is backed 

by bitcoin held by the Bitcoin Custodian 

on behalf of the Trust. All of the Trust’s 

bitcoin will be held in the Custody 

Account, other than the Trust’s bitcoin 

which is temporarily maintained in the 

Trading Account under limited 

circumstances, i.e., in connection with 

creation and redemption Basket 7

activity or sales of bitcoin deducted 

from the Trust’s holdings in payment of 

Trust expenses or the Sponsor’s fee (or, 

in extraordinary circumstances, upon 

liquidation of the Trust). The Custody 

Account includes all of the Trust’s 

bitcoin held at the Bitcoin Custodian, 


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8The term ‘‘cold storage’’ refers to a safeguarding 

method by which the private keys corresponding to 

the Trust’s bitcoins are generated and stored in an 

offline manner, subject to layers of procedures 

designed to enhance security. Private keys are 

generated by the Bitcoin Custodian in offline 

computers that are not connected to the internet so 

that they are more resistant to being hacked. 

9See Exchange Rule 402(i)(4). 

10See Exchange Rule 401, which provides that 

the rights and obligations of holders and writers are 

set forth in the Rules of the Options Clearing 

Corporation (‘‘OCC’’); 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 Exchange Rule 404(b). The monthly 

expirations are subject to certain listing criteria for 

underlying securities described within Exchange 

Rule 404 and its Interpretations and Policies. 

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 Exchange Rule 404(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 demand or when the market price of the 

underlying stock moves more than five strike prices 

from the initial exercise price or prices. Pursuant 

to Exchange Rule 404(e), 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 Exchange Rule 404, Interpretations and 

Policies .02. 

13See Exchange Rule 404, Interpretations and 

Policies .13. 

14See Exchange Rule 404, Interpretations and 

Policies .03. 

15See Exchange Rule 404(d). 

but does not include the Trust’s bitcoin 

temporarily maintained at the Prime 

Execution Agent in the Trading Account 

from time to time. The Bitcoin 

Custodian will keep all of the private 

keys associated with the Trust’s bitcoin 

held in the Custody Account in ‘‘cold 

storage’’.8 The hardware, software, 

systems, and procedures of the Bitcoin 

Custodian may not be available or costeffective for many investors to access 

directly. 

The Exchange believes that offering 

options on the Trust will benefit 

investors by providing them with an 

additional, relatively lower cost 

investing tool to gain exposure to spot 

Bitcoin as well as a hedging vehicle to 

meet their investment needs in 

connection with Bitcoin products and 

positions. Similar to other commoditybased trusts on which options may be 

listed on the Exchange (e.g. SPDR® Gold 

Trust, the iShares COMEX Gold Trust, 

the iShares Silver Trust, or the ETFS 

Gold Trust),9 the Trust essentially offers 

the same objectives and benefits to 

investors as do other commodity-based 

trusts on which options may be listed 

on the Exchange. 

Options on the Trust will trade in the 

same manner as options on other ETFs 

on the Exchange. Exchange Rules that 

currently apply to the listing and 

trading of all options on ETFs on the 

Exchange, including, for example, Rules 

that govern listing criteria, expirations, 

exercise prices, minimum increments, 

position and exercise limits (including 

as proposed herein), margin 

requirements, customer accounts and 

trading halt procedures, will apply to 

the listing and trading of options on the 

Trust on the Exchange. Today, these 

rules apply to options on the various 

commodities-based trusts deemed 

appropriate for options trading on the 

Exchange pursuant to Exchange Rule 

402(i)(4). 

The Exchange’s initial listing 

standards for ETFs on which options 

may be listed and traded on the 

Exchange will apply to the Trust. 

Pursuant to Exchange Rule 402(a), a 

security (which includes ETFs) on 

which options may be listed and traded 

on the Exchange must be 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. Exchange Rule 

402(i) requires that, in relevant part, 

ETFs must either (1) meet the criteria 

and standards set forth in Exchange 

Rule 402(a) or Exchange Rule 402(b), 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 

ETFs 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. 

Options on the Trust will also be 

subject to the Exchange’s continued 

listing standards set forth in Exchange 

Rule 403(g), for ETFs deemed 

appropriate for options trading pursuant 

to Exchange Rule 402(i). Specifically, 

Exchange Rule 403(g) provides that 

ETFs that were initially approved for 

options trading pursuant to Exchange 

Rule 402(i) 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 such ETFs, if the ETFs are delisted 

from trading pursuant to Exchange Rule 

403(b)(4), are halted or suspended from 

trading in their primary market. 

Additionally, options on ETFs may be 

subject to the suspension of opening 

transactions in any of the following 

circumstances: (1) in the case of options 

covering ETFs approved for trading 

under Exchange Rule 402(i)(5)(i)(A), in 

accordance with the terms of paragraphs 

(b)(1), (2), and (3) of Exchange Rule 403; 

(2) in the case of options covering ETFs 

approved for trading under Exchange 

Rule 402(i)(5)(i)(B), following the initial 

twelve-month period beginning upon 

the commencement of trading in the 

ETFs on a national securities exchange 

and are defined as an NMS stock, there 

are fewer than 50 record and/or 

beneficial holders of such ETFs 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 ETFs 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 the Trust would be 

physically settled contracts with 

American-style exercise.10 Consistent 

with current Exchange Rule 404, which 

governs the opening of options series on 

a specific underlying security (including 

ETFs), the Exchange will open at least 

one expiration month for options on the 

Trust 11 and may also list series of 

options on the Trust 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 39 months from 

the time they are listed.15

Pursuant to Exchange Rule 404, 

Interpretation and Policy .06, which 

governs strike prices of series of options 

on ETFs, the interval between strike 

prices of series of options on ETFs 

approved for options trading pursuant 

to Exchange Rule 402(i) shall be fixed at 

a price per share which is reasonably 

close to the price per share at which the 


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16See Exchange Rule 404, Interpretations and 

Policies .02(e). 

17 Id. 

18See Exchange Rule 404, Interpretation and 

Policy .01. 

19See Exchange Rule 404, Interpretation and 

Policy .04. 

20See Exchange Rule 404(f). 

21See Exchange Rule 510. 

22See Securities Exchange Act Release No. 

101128 (September 20, 2024), 89 FR 78942 

(September 26, 2024) (SR–ISE–2024–03) (Order 

Granting Accelerated Approval of a Proposed Rule 

Change, as Modified by Amendment Nos. 1, 4, and 

5, to Permit the Listing and Trading of Options on 

the iShares Bitcoin Trust) (Exhibit 3) (‘‘IBIT 

Approval Order’’) (letter from Angela Dunn, Nasdaq 

ISE, LLC, to Vanessa Countryman, Secretary, 

Commission, dated August 21, 2024)(‘‘ISE Letter’’). 

23The computations are based on OCC data from 

August 6, 2024. Data displaying zero values in 

market capitalization or ADV were removed. 

24The Trust has one asset and therefore is not 

comparable to a broad based ETF where there are 

typically multiple components. 

25See ISE Letter at 10. 

26 ISE acquired this figure as of August 13, 2024. 

See https://www.ishares.com/us/products/333011/ 

ishares-bitcoin-trust. The global supply of bitcoin 

grows each day bitcoin are minted. 

27See ISE Letter at 10. 

28See, eg,. iShares® iBoxx® $ High Yield 

Corporate Bond ETF (‘‘HYG’’) with a market 

capitalization of 13,859,235,000 billion as of 

November 4, 2024. See https://www.ishares.com/ 

us/products/239565/ishares-iboxx-high-yieldcorporate-bond-etf. The Exchange notes that HYG 

has a position limit of 500,000 contracts. 

29See ISE Letter at 10. 

30 Id. 

underlying security is traded in the 

primary market at or about the same 

time such series of options is first open 

for trading on the Exchange, or at such 

intervals as may have been established 

on another options exchange prior to the 

initiation of trading on the Exchange. 

With respect to the Short Term Options 

Series or Weekly Program, during the 

month prior to expiration of an option 

class that is selected for the Short Term 

Option Series Program, the strike price 

intervals for the related non-Short Term 

Option (‘‘Related non-Short Term 

Option’’) shall be the same as the strike 

price intervals for the Short Term 

Option.16 Specifically, the Exchange 

may open for trading Short Term Option 

Series at strike price intervals of (i) 

$0.50 or greater where the strike price 

is less than $100, and $1 or greater 

where the strike price is between $100 

and $150 for all option classes that 

participate in the Short Term Options 

Series Program; (ii) $0.50 for option 

classes that trade in one dollar 

increments and are in the Short Term 

Option Series Program; or (iii) $2.50 or 

greater where the strike price is above 

$150.17 Additionally, the Exchange may 

list series of options pursuant to the $1 

Strike Price Interval Program,18 the 

$0.50 Strike Program,19 and the $2.50 

Strike Price Program.20 Pursuant to 

Exchange Rule 510, where the price of 

a series of options for the Trust 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 consistent 

with the minimum increments for 

options on other ETFs listed on the 

Exchange. Any and all new series of 

Trust options that the Exchange lists 

will be consistent and comply with the 

expirations, strike prices, and minimum 

increments set forth in Rules 404 and 

510, as applicable. 

Position and exercise limits for 

options on ETFs, including options on 

the Trust, are determined pursuant to 

Exchange Rules 307 and 309, 

respectively. Position and exercise 

limits for ETF options vary according to 

the number of outstanding shares and 

the trading volumes of the underlying 

ETF over the past six months, where the 

largest in capitalization and the most 

frequently traded ETFs have an option 

position and exercise limit of 250,000 

contracts (with adjustments for splits, 

re-capitalizations, etc.) on the same side 

of the market; and smaller capitalization 

ETFs 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. The Exchange proposes to 

cap the position and exercise limits for 

the Trust at 25,000 contracts. Capping 

the position and exercise limits at 

25,000 contracts, the lowest limits 

available in options, would address 

concerns related to manipulation and 

protection of investors as this number is 

extremely conservative for the Trust and 

is more than appropriate given its 

liquidity. 

For purposes of addressing position 

and exercise limits, the Exchange 

applies position and exercise limits for 

options for each underlying security and 

does not aggregate position and exercise 

limits. In considering the appropriate 

position and exercise limits for the 

Trust, the Exchange reviewed the data 

presented by ISE in its filing, 

specifically in Exhibit 3 of the filing,22

where ISE measured the Trust’s market 

capitalization and ADV against other 

industry data as explained further 

below. The Commission should 

consider the position and exercise limits 

for options on the Trust exclusive of 

other options on bitcoin. 

In its filing, ISE considered the Trust’s 

market capitalization and ADV, and 

prospective position limit in relation to 

other securities. In measuring the Trust 

against other securities, ISE aggregated 

market capitalization and volume data 

for securities that have defined position 

limits utilizing data from The Options 

Clearing Corporations (‘‘OCC’’).23 This 

pool of data took into consideration 

3,984 options on single stock securities, 

excluding broad based ETFs.24 Next, ISE 

aggregated the data based on market 

capitalization and ADV and grouped 

option symbols by position limit 

utilizing statistical thresholds for ADV 

and market capitalization that were one 

standard deviation above the mean for 

each position limit category (i.e. 25,000, 

50,000 to 65,000, 75,000, 100,000 to less 

than 250,000, 250,000 to 400,000, 

450,000 to 1,000,000, and greater than 

or equal to 1,000,000)(sic).25 Exchange 

Rule 307(d) sets out position limits for 

various contracts. For example, on the 

Exchange like on ISE, a 25,000 contract 

limit applies to those options having an 

underlying security that does not meet 

the requirements for a higher options 

contract limit. ISE performed an 

exercise to demonstrate the Trust’s 

position limit relative to other options 

symbols in terms of market 

capitalization and ADV. For reference 

the market capitalization for the Trust 

was 19,789,068 billion 26 with an ADV, 

for the preceding three months prior to 

August 7, 2024, of greater than 26 

million shares.27 Today, by comparison, 

other options symbols with similar 

market capitalization and ADV have a 

position limit in excess of 400,000.28

Therefore, the proposed 25,000 same 

side position limit for options on the 

Trust is extremely conservative relative 

to these options symbols which are a 

full standard deviation above the mean 

in comparison. 

Second, ISE reviewed the Trust’s data 

relative to the market capitalization of 

the entire bitcoin market in terms of 

exercise risk and availability of 

deliverables. Utilizing data as of August 

3, 2024, there were 19,737,193 bitcoins 

in circulation.29 ISE took a price of 

$57,000 that equates to a market 

capitalization of greater than 1.125 

trillion US dollars, and applied that to 

a position limit of 400,000 for options 

on the Trust.30 If a position limit of 

400,000 options were considered (the 

position limit that would be typically 

assigned based upon data) the 

exercisable risk would represent only 

6.6% of the outstanding shares of the 

Trust. The 25,000 position limit being 

sought only represents 0.4% of the 

outstanding shares of the Trust. Since 

the Trust has a creation and redemption 

process managed through the issuer, 

additionally it can be compared the 

position limit sought to the total market 

capitalization of the entire bitcoin 

market. In this case, the exercisable risk 

for options on the Trust would be less 


ddrumheller on DSK120RN23PROD with NOTICES1
93806 Federal Register / Vol. 89, No. 229 / Wednesday, November 27, 2024 / Notices 

31CME Bitcoin Futures are described in Chapter 

350 of CME’s Rulebook. 

32See the Position Accountability and Reportable 

Level Table in the Interpretations & Special Notices 

Section of Chapter 5 of CME’s Rulebook. 

33See https://finance.yahoo.com/quote/ 

BTC%3DF/history/?guccounter=1&guce_referrer

=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_

referrer_sig=AQAAAM7ngaS6ZQS9c2Wzx7JW2IUe- 

_-_1FnLyr8T-Qw4jjkleHyCENfSMIEpPPt2hCzPDEry

TVyB78NIwxkwFB5Fuw-jA-YiuSmYJHBriWbV6

dYn91VQfzQNt3p0I2RkYLD3HhzXPwu4AP5as-_

WzHNpEBon4sk5sUZXgkapMrZR—CS. 

34Each bitcoin futures contract is valued at 5 

bitcoins as defined by the CME CF Bitcoin 

Reference Rate (‘‘BRR’’). See CME Rule 35001. 

35See ISE Letter at 11. 

36See https://www.cmegroup.com/education/ 

courses/market-regulation/position-limits/ 

positionlimits-aggregation-of-contracts-andtable.htm. 

37 Id. 

38See https://www.ishares.com/us/products/ 

333011/ishares-bitcoin-trust. 

39This figure was acquired as of August 13, 2024. 

See https://www.ishares.com/us/products/333011/ 

ishares-bitcoin-trust. The global supply of bitcoin 

grows each day bitcoin are minted. 

40As of August 13, 2024, GLD had 294,000,000 

shares outstanding and SLV had 510,200,000 shares 

outstanding. See https://www.ssga.com/us/en/ 

intermediary/etfs/funds/spdr-gold-shares-gld and 

https://www.ishares.com/us/products/239855/ 

ishares-silver-trust-fund. 

41A recent article suggested that the remaining 

supply will take over 100 years to fully mint. See 

Sen, Vivek. ‘‘94% of Bitcoin’s Supply Has Now 

Been Issued.’’ Bitcoin Magazine, https://bitcoin

magazine.com/business/94-of-bitcoins-supply-hasnow-been-issued. August 19, 2024. 

42A supply consideration would likely be 

valuable for an option symbol that had far less 

liquidity than the Trust. 

than 0.01% of the market capitalization 

of all outstanding bitcoin. Assuming a 

scenario where all options on the 

Trust’s shares were exercised given the 

proposed 25,000 per same side position 

limit, this would have a virtually 

unnoticed impact on the entire bitcoin 

market. This analysis demonstrates that 

the proposed 25,000 per same side 

position limit is also extremely 

conservative and more than appropriate 

for options on the Trust. 

Third, ISE reviewed the proposed 

position limit by comparing it to 

position limits for derivative products 

regulated by the Commodity Futures 

Trading Commission (‘‘CFTC’’). While 

the CFTC, through the relevant 

Designated Contract Markets, only 

regulates options positions based upon 

delta equivalents (creating a less 

stringent standard), ISE examined 

equivalent bitcoin futures position 

limits. In particular, ISE looked at the 

CME bitcoin futures contract 31 that has 

a position limit of 2,000 futures.32 On 

August 7, 2024, CME bitcoin futures 

settled at $55,000.33 Taking the position 

limit of 2,000 futures at a $5 

multiplier 34 equates to $550 million of 

notional value for bitcoin futures. By 

way of comparison, on August 7, 2024, 

the Trust settled at $31.19 per share, 

which would equate to 17,633,857 

shares of the Trust 35 if the CME 

notional position limit were utilized. 

Since substantial portions of any 

distributed options portfolio are likely 

to be out of the money on expiration, an 

options position limit equivalent to the 

CME position limit for bitcoin futures 

(considering that all options deltas are 

≤1.00) should be a bit higher than the 

CME implied 176,338 limit. 

Of note, unlike options contracts, 

CME position limits are calculated on a 

net futures equivalent basis by contract 

and include contracts that aggregate into 

one or more base contract according to 

an aggregation ratio(s).36 Therefore, if a 

portfolio includes positions in options 

on futures, CME would aggregate those 

positions into the underlying futures 

contracts in accordance with a table 

published by CME on a delta equivalent 

value for the relevant spot month, 

subsequent spot month, single month 

and all month position limits.37 If a 

position exceeds position limits because 

of an option assignment, CME permits 

market participants to liquidate the 

excess position within one business day 

without being considered in violation of 

its rules. Additionally, if at the close of 

trading, a position that includes options 

exceeds position limits for futures 

contracts, when evaluated using the 

delta factors as of that day’s close of 

trading, but does not exceed the limits 

when evaluated using the previous 

day’s delta factors, then the position 

shall not constitute a position limit 

violation. Considering CME’s position 

limits on futures for bitcoin, the 

Exchange believes that the proposed 

25,000 per same side position limit is 

conservative and more than appropriate 

for options on the Trust. 

In analyzing the proposed position 

limit for options on the Trust, ISE also 

considered the supply of bitcoin. 

Specifically, ISE examined the number 

of market participants with position 

limits that would need to exercise in 

unison to put the underlying asset 

under stress. In the case of options on 

the Trust, the proposed 25,000 same 

side position limit effectively restricts a 

market participant from holding 

positions that could be exercised in 

excess of 2,500,000 shares of the Trust. 

Utilizing data from August 12, 2024, the 

Trust had 611,040,000 shares 

outstanding, therefore 244 market 

participants would have to 

simultaneously exercise position limits 

in order to create a scenario that may 

put the underlying asset (the Trust) 

under stress.38 The Exchange notes that 

historically, from observation only, it 

appears that no more than five market 

participants holding position limits in 

any security have exercised in unison in 

any option. As unlikely an occurrence 

as all market participants exercising 

their position limits in unison would be, 

if it were to occur, it should be noted 

that even such an occurrence would not 

likely put the Trust under stress as 

economic incentives, would induce the 

creation of more shares through the ETF 

creation and redemption process. 

By way of example, given that the 

current global supply of bitcoin, the 

underlying asset of the Trust, is 

19,789,068 39 and that each bitcoin can 

currently be redeemed for 1,755 shares 

of the Trust, another 34,729,814,340 

shares of the Trust could be created. To 

exhaust this supply of the Trust, 13,891 

market participants would have to 

simultaneously exercise their position 

limit. Comparing the Trust to the SPDR 

Gold Shares (‘‘GLD’’) ETF or the iShares 

Silver Trust (‘‘SLV’’) ETF, which have 

position limits of 250,000 or ten times 

the proposed position limit for the Trust 

as well as lower shares outstanding in 

both products,40 it is unjustified to 

mandate a different level of stringency 

with respect to a position limit for 

options on the Trust. 

The supply of bitcoin does have a 

limit, which will take years to fully 

mint.41 The Exchange notes that bitcoin 

is a viable economic alternative to 

traditional assets. The price of goods 

denominated by bitcoin has actually 

declined. This dynamic not only makes 

a fixed supply desirable, but a necessary 

condition of the value added by this 

asset in the broader economy. Further, 

the Exchange notes that corporations 

have a limited number of outstanding 

shares. Corporations may authorize 

additional shares, repurchase shares or 

split their shares. Similarly, ETFs, like 

the Trust, may also create, redeem, or 

split shares to suit the demand of the 

marketplace. 

Importantly, because the supply of 

bitcoin is much larger than the available 

supply of most securities and the 

proposed 25,000 contract position limit 

is so conservative, the Exchange 

believes that evaluating the available 

supply of bitcoin in establishing a 

position limit for options on the Trust 

would demonstrate that the proposed 

limit is safe for investors and the 

market.42 The Trust constitutes less than 

2% of the entire bitcoin supply. When 

comparing the market capitalization of 

bitcoin against the largest securities, 

bitcoin would rank 7th among those 


ddrumheller on DSK120RN23PROD with NOTICES1
Federal Register / Vol. 89, No. 229 / Wednesday, November 27, 2024 / Notices 93807 

43See https://companiesmarketcap.com/usa/ 

largest-companies-in-the-usa-by-market-cap/. 

44The surveillance program includes real-time 

patterns for price and volume movements and posttrade surveillance patterns (e.g., spoofing, marking 

the close, pinging, phishing). 

45Section 19(g)(1) of the Act, among other things, 

requires every SRO registered as a national 

securities exchange or national securities 

association to comply with the Act, the rules and 

regulations thereunder, and the SRO’s own rules, 

and, absent reasonable justification or excuse, 

enforce compliance by its members and persons 

associated with its members. See 15 U.S.C. 

78q(d)(1) and 17 CFR 240.17d–2. Section 17(d)(1) 

of the Act allows the Commission to relieve an SRO 

of certain responsibilities with respect to members 

of the SRO who are also members of another SRO 

(‘‘common members’’). Specifically, Section 

17(d)(1) allows the Commission to relieve an SRO 

of its responsibilities to: (i) receive regulatory 

reports from such members; (ii) examine such 

members for compliance with the Act and the rules 

and regulations thereunder, and the rules of the 

SRO; or (iii) carry out other specified regulatory 

responsibilities with respect to such members. 

46See Bitcoin ETP Order, 89 FR at 3010–11. 

47See Bitcoin ETP Order, 89 FR at 3010–11. 

48See Securities Exchange Act Release No. 99295 

(January 8, 2024), 89 FR 2321, 2334–35 (January 12, 

2024) (SR–NASDAQ–2023–016) (Notice of Filing of 

Amendment No. 1 to a Proposed Rule Change To 

List and Trade Shares of the iShares Bitcoin Trust 

Under Nasdaq Rule 5711(d)). 

49Effective October 1, 2018 ETFS Gold Trust was 

renamed Aberdeen Standard Gold ETF Trust. 

https://www.sec.gov/Archives/edgar/data/1450923/ 

000138713118005292/ex10-2.htm. 

50 15 U.S.C. 78f(b). 

51 15 U.S.C. 78f(b)(5). 

securities.43 Further, the Exchange 

believes that its proposal to list options 

on the Trust with a position limit of 

25,000 on the same side is a 

conservative position limit that does not 

lend itself to manipulation in the market 

given the ample market capitalization 

and liquidity in the Trust. If we look to 

the liquidity statistics of similar 

instruments and their concomitant 

position limits, we are able to 

extrapolate a reasonable standard for 

arriving at a position limit for a new 

product. In this case we can look to 

GLD, SLV, and the ProShares Bitcoin 

Strategy ETF (‘‘BITO’’). These products 

have volume statistics and ‘‘float’’ 

statistics, which gauge liquidity, which 

are in line, yet slightly lower than the 

Trust. All three of these reference 

products have position limits of 250,000 

contracts. These reference products are 

remarkably similar in nature to the 

Trust; they are exchange-traded 

products (‘‘ETPs’’) holding one asset in 

a trust. 

The Exchange further notes that 

Exchange Rule 1502, which governs 

margin requirements applicable to 

trading on the Exchange, including 

options on ETFs, will also apply to the 

trading of the Trust options. 

Notwithstanding the position limits in 

Exchange Rule 307(d) and exercise 

limits in Exchange Rule 309, the 

Exchange proposes the position and 

exercise limits for the options on the 

Trust to be 25,000 contracts on the same 

side pursuant to proposed 

Supplementary Material .01 to Exchange 

Rule 307 and proposed Supplementary 

Material .01 to Exchange Rule 309. 

The Exchange represents that the 

same surveillance procedures applicable 

to all other options on other ETFs 

currently listed and traded on the 

Exchange will apply to options on the 

Trust. Also the Exchange represents 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 

options on ETFs, including the 

proposed Trust options. 

Today, the Exchange has an adequate 

surveillance program in place for 

options. The Exchange intends to apply 

those same program procedures to 

options on the Trust that it applies to 

the Exchange’s other options 

products.44 The Exchange’s staff will 

have access to the surveillance programs 

conducted by its affiliate exchanges, 

MIAX Pearl and MIAX Sapphire with 

respect to trading in the shares of the 

underlying Trust when conducting 

surveillances for market abuse or 

manipulation in the options on the 

Trust. Additionally, the Exchange is a 

member of the Intermarket Surveillance 

Group (‘‘ISG’’) under the Intermarket 

Surveillance Group Agreement. ISG 

members work together to coordinate 

surveillance and investigative 

information sharing in the stock, 

options, and futures markets. In 

addition to obtaining surveillance data 

from MIAX Pearl and MIAX Sapphire, 

the Exchange will be able to obtain 

information regarding trading in the 

shares of the underlying Trust from 

Nasdaq, LLC and other markets through 

ISG. In addition, the Exchange has a 

Regulatory Services Agreement with the 

Financial Industry Regulatory Authority 

(‘‘FINRA’’). Pursuant to a multi-party 

17d–2 joint plan, all options exchanges 

allocate regulatory responsibilities to 

FINRA to conduct certain optionsrelated market surveillance that are 

common to rules of all options 

exchanges.45

The underlying shares of spot bitcoin 

ETPs, including the Trust, are also 

subject to safeguards related to 

addressing market abuse and 

manipulation. As the Commission 

stated in Bitcoin ETP Order: 

Each Exchange has a comprehensive 

surveillance-sharing agreement with the CME 

via their common membership in the 

Intermarket Surveillance Group. This 

facilitates the sharing of information that is 

available to the CME through its surveillance 

of its markets, including its surveillance of 

the CME bitcoin futures market.46

The Exchange states that, given the 

consistently high correlation between the 

CME bitcoin futures market and the spot 

bitcoin market, as confirmed by the 

Commission through robust correlation 

analysis, the Commission was able to 

conclude that such surveillance sharing 

agreements could reasonably be ‘‘expected to 

assist in surveilling for fraudulent and 

manipulative acts and practices in the 

specific context of the [Bitcoin ETPs].’’ 47

In light of surveillance measures 

related to both options and futures as 

well as the underlying Trust,48 the 

Exchange believes that existing 

surveillance procedures are designed to 

deter and detect possible manipulative 

behavior which might potentially arise 

from listing and trading the proposed 

options on the Trust. Further, the 

Exchange represents that it will 

implement any new surveillance 

procedures it deems necessary to 

effectively monitor the trading of 

options on the Trust. 

The Exchange has also analyzed its 

capacity and represents that it believes 

the Exchange and Options Price 

Reporting Authority or ‘‘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 the Trust up to the number of 

expirations currently permissible under 

the Rules. Because the proposal is 

limited to one class, the Exchange 

believes any additional traffic that may 

be generated from the introduction of 

the Trust options will be manageable. 

Finally, the Exchange proposes a 

technical amendment to Exchange Rule 

402(i)(4) to amend the name ‘‘ETFS 

Gold Trust’’ to ‘‘Aberdeen Standard 

Physical Gold Trust.’’ In 2018 ETFS 

Gold Trust was renamed.49 At this time, 

the Exchange proposes to amend the 

name of the ETF to reflect its current 

name. 

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 

Section 6(b) of the Act.50 Specifically, 

the Exchange believes the proposed rule 

change is consistent with the Section 

6(b)(5) 51 requirements that the rules of 

an exchange be designed to prevent 

fraudulent and manipulative acts and 


ddrumheller on DSK120RN23PROD with NOTICES1
93808 Federal Register / Vol. 89, No. 229 / Wednesday, November 27, 2024 / Notices 

52 Id. 

53See Securities Exchange Act Release No. 39489 

(December 24, 1997), 63 FR 276 (January 5, 1998) 

(SR–CBOE–1997–11). 

54The surveillance program includes real-time 

patterns for price and volume movements and posttrade surveillance patterns (e.g., spoofing, marking 

the close, pinging, phishing). 

55Section 19(g)(1) of the Act, among other things, 

requires every SRO registered as a national 

securities exchange or national securities 

association to comply with the Act, the rules and 

regulations thereunder, and the SRO’s own rules, 

and, absent reasonable justification or excuse, 

enforce compliance by its members and persons 

associated with its members. See 15 U.S.C. 

78q(d)(1) and 17 CFR 240.17d–2. Section 17(d)(1) 

of the Act allows the Commission to relieve an SRO 

of certain responsibilities with respect to members 

of the SRO who are also members of another SRO 

(‘‘common members’’). Specifically, Section 

17(d)(1) allows the Commission to relieve an SRO 

of its responsibilities to: (i) receive regulatory 

reports from such members; (ii) examine such 

members for compliance with the Act and the rules 

and regulations thereunder, and the rules of the 

SRO; or (iii) carry out other specified regulatory 

responsibilities with respect to such members. 

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) 52 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 the Trust 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 the Trust will 

provide investors with a greater 

opportunity to realize the benefits of 

utilizing options on an ETF based on 

spot bitcoin, including cost efficiencies 

and increased hedging strategies. The 

Exchange believes that offering options 

on a competitively priced ETF based on 

spot bitcoin will benefit investors by 

providing them with an additional, 

relatively lower-cost risk management 

tool, allowing them to manage, more 

easily, their positions and associated 

risks in their portfolios in connection 

with exposure to spot bitcoin. Today, 

the Exchange lists options on other 

commodity ETFs structured as a trust, 

which essentially offer the same 

objectives and benefits to investors, and 

for which the Exchange has not 

identified any issues with the continued 

listing and trading of options on those 

ETFs. 

The Exchange also believes the 

proposal to permit options on the Trust 

will remove impediments to and perfect 

the mechanism of a free and open 

market and a national market system, 

because options on the Trust will 

comply with current Exchange Rules. 

Options on the Trust must satisfy the 

initial listing standards and continued 

listing standards currently in the 

Exchange Rules, applicable to options 

on all ETFs, including options on other 

commodity ETFs already deemed 

appropriate for options trading on the 

Exchange pursuant to Exchange Rule 

402(i)(4). Additionally, as demonstrated 

above, the Trust is characterized by a 

substantial number of shares that are 

widely held and actively traded. 

Further, Exchange Rules that currently 

govern the listing and trading of options 

on ETFs, including permissible 

expirations, strike prices, minimum 

increments, position and exercise limits 

(as proposed herein), and margin 

requirements, will govern the listing 

and trading of options on the Trust. The 

proposed position and exercise limits 

for options on the Trust is 25,000 

contracts. These position and exercise 

limits are the lowest position and 

exercise limits available in the options 

industry, are extremely conservative 

and more than appropriate given the 

Trust’s market capitalization, average 

daily volume, and high number of 

outstanding shares. The proposed 

position limit, and exercise limit, is 

consistent with the Act as it addresses 

concerns related to manipulation and 

protection of investors because, as 

demonstrated above, the position limit 

(and exercise limit) is extremely 

conservative and more than appropriate 

given the Trust is actively traded. In 

support of the proposed position and 

exercise limits for options on the Trust 

is 25,000 contracts, the Exchange is 

citing the in depth analysis ISE did in 

its filing. As noted above, in the IBIT 

Approval Order, ISE considered the: (i) 

Trust’s market capitalization and ADV, 

and prospective position limit in 

relation to other securities; (ii) market 

capitalization of the entire bitcoin 

market in terms of exercise risk and 

availability of deliverables; (iii) 

proposed position limit by comparing it 

to position limits for derivative products 

regulated by the CFTC; and (iv) supply 

of bitcoin. Based on the Exchange’s 

review of IBIT Approval Order, the 

Exchange believes that the setting 

position and exercise limits for options 

on the Trust is 25,000 contracts is more 

than appropriate for the Trust. The 

proposed position and exercise limits 

reasonably and appropriately balance 

the liquidity provisioning in the market 

against the prevention of manipulation. 

The Exchange believes these proposed 

limits are effectively designed to 

prevent an individual customer or entity 

from establishing options positions that 

could be used to manipulate the market 

of the underlying as well as the Bitcoin 

market.53

The Exchange represents that it has 

the necessary systems capacity to 

support options on the Trust. 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 options on 

ETFs, including the Trust options. 

Today, the Exchange has an adequate 

surveillance program in place for 

options. The Exchange intends to apply 

those same program procedures to 

options on the Trust that it applies to 

the Exchange’s other options 

products.54 The Exchange’s staff will 

have access to the surveillance programs 

conducted by its affiliate exchanges, 

MIAX Pearl and MIAX Sapphire with 

respect to the underlying Trust when 

conducting surveillances for market 

abuse or manipulation in the options on 

the Trust. The Exchange will review 

activity in the underlying Trust when 

conducting surveillances for market 

abuse or manipulation in the options on 

the Trust. Additionally, the Exchange is 

a member of the ISG under the 

Intermarket Surveillance Group 

Agreement. ISG members work together 

to coordinate surveillance and 

investigative information sharing in the 

stock, options, and futures markets. In 

addition to obtaining surveillance data 

from MIAX Pearl and MIAX Sapphire, 

the Exchange will be able to obtain 

information from Nasdaq, LLC and other 

markets through ISG. In addition, the 

Exchange has a Regulatory Services 

Agreement with FINRA. Pursuant to a 

multi-party 17d–2 joint plan, all options 

exchanges allocate regulatory 

responsibilities to FINRA to conduct 

certain options-related market 

surveillance that are common to rules of 

all options exchanges.55

The underlying shares of spot bitcoin 

ETPs, including the Trust, are also 

subject to safeguards related to 

addressing market abuse and 

manipulation. As the Commission 

stated in Bitcoin ETP Order: 

Each Exchange has a comprehensive 

surveillance-sharing agreement with the 

CME via their common membership in 

the Intermarket Surveillance Group. 


ddrumheller on DSK120RN23PROD with NOTICES1
Federal Register / Vol. 89, No. 229 / Wednesday, November 27, 2024 / Notices 93809 

56See supra note 5. 

57See Bitcoin ETP Order, 89 FR at 3010–11. 

58See Securities Exchange Act Release No. 99295 

(January 8, 2024), 89 FR 2321, 2334–35 (January 12, 

2024) (SR–NASDAQ–2023–016) (Notice of Filing of 

Amendment No. 1 to a Proposed Rule Change To 

List and Trade Shares of the iShares Bitcoin Trust 

Under Nasdaq Rule 5711(d)). 

59See Securities Exchange Act Release No. 57897 

(May 30, 2008), 73 FR 32061 (June 5, 2008) (SR– 

Amex–2008–15; SR–CBOE–2005–11; SR–ISE–2008– 

12; SR–NYSEArca–2008–52; and SRPhlx–2008–17) 

(Order Granting Approval of a Proposed Rule 

Change, as Modified, and Notice of Filing and 

Order Granting Accelerated Approval of Proposed 

Rule Changes, as Modified, Relating to Listing and 

Trading Options on the SPDR Gold Trust). 

60See Securities Exchange Act Release No. 59055 

(December 4, 2008), 73 FR 75148 (December 10, 

2008) (SR–Amex–2008–68; SR–BSE–2008–51; SR– 

CBOE–2008–72; SR–ISE–2008–58; SRNYSEArca– 

2008–66; and SR–Phlx–2008–58) (Notice of Filing 

and Order Granting Accelerated Approval of 

Proposed Rule Changes Relating to the Listing and 

Trading Options on Shares of the iShares COMEX 

Gold Trust and the iShares Silver Trust). 

61 Id. 

62See Securities Exchange Act Release No. 61483 

(February 3, 2010), 75 FR 6753 (February 10, 2010) 

(SR–CBOE–2010–007; SR–ISE–2009–106; SR– 

NYSEAmex–2009–86; and SR–NYSEArca–2009– 

110) (Order Granting Approval of Proposed Rule 

Changes and Notice of Filing and Order Granting 

Accelerated Approval of a Proposed Rule Change 

Relating to Listing and Trading Options on the 

ETFS Gold Trust and the ETFS Silver Trust). 

63 Id. 

64See supra note 6. 

65 15 U.S.C. 78s(b)(3)(A)(iii). 

66 17 CFR 240.19b–4(f)(6). 

67 15 U.S.C. 78s(b)(3)(A)(iii). 

68 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6)(iii) requires a self-regulatory organization to 

give the Commission written notice of its intent to 

file the proposed rule change, along with a brief 

description and text of the proposed rule change, 

at least five business days prior to the date of filing 

of the proposed rule change, or such shorter time 

Continued 

This facilitates the sharing of 

information that is available to the CME 

through its surveillance of its markets, 

including its surveillance of the CME 

bitcoin futures market.56

The Exchange states that, given the 

consistently high correlation between 

the CME bitcoin futures market and the 

spot bitcoin market, as confirmed by the 

Commission through robust correlation 

analysis, the Commission was able to 

conclude that such surveillance sharing 

agreements could reasonably be 

‘‘expected to assist in surveilling for 

fraudulent and manipulative acts and 

practices in the specific context of the 

[Bitcoin ETPs].’’ 57

In light of surveillance measures 

related to both options and futures as 

well as the underlying Trust,58 the 

Exchange believes that existing 

surveillance procedures are designed to 

deter and detect possible manipulative 

behavior which might potentially arise 

from listing and trading the proposed 

options on the Trust. Further, the 

Exchange represents that it will 

implement any new surveillance 

procedures it deems necessary to 

effectively monitor the trading of 

options on the Trust. 

Finally, the Commission has 

previously approved the listing and 

trading of options on other commodity 

ETFs structured as a trust, such as 

SPDR® Gold Trust,59 the iShares 

COMEX Gold Trust 60 the iShares Silver 

Trust,61 the ETFS Gold Trust,62 and the 

ETFS Silver Trust.63

Further, the Exchange’s proposal to 

amend the name ‘‘ETFS Gold Trust’’ to 

‘‘Aberdeen Standard Physical Gold 

Trust’’ in Exchange Rule 402(i)(4) is 

consistent with the Act and the 

protection of investors as this 

amendment reflects the current name of 

this product. 

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. In this regard 

and as indicated above, the Exchange 

notes that the rule change is being 

proposed as a competitive response to 

filings submitted by ISE.64

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 options on the Trust will be subject 

to initial listing standards and 

continued listing standards the same as 

other options on ETFs listed on the 

Exchange. Further, options on the Trust 

will be subject to Exchange Rules that 

currently govern the listing and trading 

of options on ETFs, including 

permissible expirations, strike prices, 

minimum increments, position and 

exercise limits (including as proposed to 

modify herein), and margin 

requirements. Options on the Trust will 

be equally available to all market 

participants who wish to trade such 

options. Also, and as stated above, the 

Exchange already lists options on other 

commodity ETFs structured as a trust. 

The Exchange does not believe that 

the proposal to list to list and trade 

options on the Trust 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 permitting options on 

the Trust to trade on the Exchange may 

make the Exchange a more attractive 

marketplace to market participants, 

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 the Trust. 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 options 

on the Trust 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 spot bitcoin prices and 

bitcoin related products and positions. 

Finally, the Exchange’s proposal to 

amend the name ‘‘ETFS Gold Trust’’ to 

‘‘Aberdeen Standard Physical Gold 

Trust’’ in Exchange Rule 402(i)(4) does 

not impose an undue burden on 

competition as this amendment reflects 

the current name of this product. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

Written comments were neither 

solicited nor received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The Exchange has filed the proposed 

rule change pursuant to Section 

19(b)(3)(A)(iii) of the Act 65 and Rule 

19b–4(f)(6) thereunder.66 Because the 

foregoing proposed rule change does 

not: (i) significantly affect the protection 

of investors or the public interest; (ii) 

impose any significant burden on 

competition; and (iii) become operative 

for 30 days from the date on which it 

was filed, or such shorter time as the 

Commission may designate, it has 

become effective pursuant to Section 

19(b)(3)(A)(iii) of the Act 67 and 

subparagraph (f)(6) of Rule 19b–4 

thereunder.68


ddrumheller on DSK120RN23PROD with NOTICES1
93810 Federal Register / Vol. 89, No. 229 / Wednesday, November 27, 2024 / Notices 

as designated by the Commission. The Exchange 

has satisfied this requirement. 

69 17 CFR 240.19b–4(f)(6). 

70 17 CFR 240.19b–4(f)(6)(iii). 

71See Securities Exchange Act Release No. 

101128 (September 20, 2024), 89 FR 78942 

(September 26, 2024) (SR–ISE–2024–03) (SelfRegulatory Organizations; Nasdaq ISE, LLC; Notice 

of Filing of Amendment Nos. 4 and 5 and Order 

Granting Accelerated Approval of a Proposed Rule 

Change, as Modified by Amendment Nos. 1, 4, and 

5, to Permit the Listing and Trading of Options on 

the iShares Bitcoin Trust). 

72For purposes only of waiving the 30-day 

operative delay, the Commission has also 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

15 U.S.C. 78c(f). 

73 17 CFR 200.30–3(a)(12), (59). 

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

2 17 CFR 240.19b–4. 

A proposed rule change filed under 

Rule 19b–4(f)(6) 69 under the Act does 

not normally become operative prior to 

30 days after the date of the filing. 

However, pursuant to Rule 19b– 

4(f)(6)(iii),70 the Commission may 

designate a shorter time if such action 

is consistent with the protection of 

investors and the public interest. The 

Exchange has requested that the 

Commission waive the 30-day operative 

delay so that the proposal may become 

operative immediately upon filing. The 

Commission previously approved the 

listing of options on iShares Bitcoin 

Trust.71 The Exchange has provided 

information regarding the underlying 

iShares Bitcoin Trust, including, among 

other things, information regarding 

trading volume, the number of 

beneficial holders, and the market 

capitalization of the iShares Bitcoin 

Trust. The proposal also establishes 

position and exercise limits for options 

on the iShares Bitcoin Trust and 

provides information regarding the 

surveillance procedures that will apply 

to iShares Bitcoin Trust options. The 

Commission believes that waiver of the 

operative delay could benefit investors 

by providing an additional venue for 

trading iShares Bitcoin Trust options. 

Therefore, the Commission believes that 

waiver of the 30-day operative delay is 

consistent with the protection of 

investors and the public interest. 

Accordingly, the Commission hereby 

waives the 30-day operative delay and 

designates the proposed rule change as 

operative upon filing.72

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

should be approved or 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– 

MIAX–2024–40 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–MIAX–2024–40. 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–MIAX–2024–40 and should be 

submitted on or before December 18, 

2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.73

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–27741 Filed 11–26–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–101688; File No. SR– 

GEMX–2024–40] 

Self-Regulatory Organizations; Nasdaq 

GEMX, LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend Its Fees for 

Connectivity and Co-Location Services 

November 21, 2024. 

Pursuant to 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 November 

8, 2024, Nasdaq GEMX, LLC (‘‘GEMX’’ 

or ‘‘Exchange’’) 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 

The Exchange proposes to amend the 

Exchange’s fees for connectivity and colocation services, as described further 

below. 

The text of the proposed rule change 

is available on the Exchange’s website at 

https://listingcenter.nasdaq.com/ 

rulebook/gemx/rules, 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 

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 


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