`[Federal Register Volume 89, Number 229 (Wednesday, November 27, 2024)]
[Notices]
[Pages 93802-93810]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-27741]


-----------------------------------------------------------------------

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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

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.

[[Page 93803]]

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\
---------------------------------------------------------------------------

    \3\ The 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.
    \4\ On 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'').
    \5\ See 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).
---------------------------------------------------------------------------

    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[supreg] 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
---------------------------------------------------------------------------

    \6\ 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) (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.
---------------------------------------------------------------------------

    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 peer-to-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,

[[Page 93804]]

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 cost-effective for many investors to access 
directly.
---------------------------------------------------------------------------

    \7\ The 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.
    \8\ The 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.
---------------------------------------------------------------------------

    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 commodity-based trusts 
on which options may be listed on the Exchange (e.g. SPDR[supreg] 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.
---------------------------------------------------------------------------

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

    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 long-term equity 
option series (``LEAPS'') that expire from 12 to 39 months from the 
time they are listed.\15\
---------------------------------------------------------------------------

    \10\ See 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).
    \11\ See 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.
    \12\ See Exchange Rule 404, Interpretations and Policies .02.
    \13\ See Exchange Rule 404, Interpretations and Policies .13.
    \14\ See Exchange Rule 404, Interpretations and Policies .03.
    \15\ See Exchange Rule 404(d).
---------------------------------------------------------------------------

    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

[[Page 93805]]

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.
---------------------------------------------------------------------------

    \16\ See Exchange Rule 404, Interpretations and Policies .02(e).
    \17\ Id.
    \18\ See Exchange Rule 404, Interpretation and Policy .01.
    \19\ See Exchange Rule 404, Interpretation and Policy .04.
    \20\ See Exchange Rule 404(f).
    \21\ See Exchange Rule 510.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \22\ See 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'').
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \23\ The computations are based on OCC data from August 6, 2024. 
Data displaying zero values in market capitalization or ADV were 
removed.
    \24\ The Trust has one asset and therefore is not comparable to 
a broad based ETF where there are typically multiple components.
    \25\ See 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.
    \27\ See ISE Letter at 10.
    \28\ See, eg,. iShares[supreg] iBoxx[supreg] $ 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-yield-corporate-bond-etf. The Exchange notes that HYG has a position limit 
of 500,000 contracts.
---------------------------------------------------------------------------

    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

[[Page 93806]]

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.
---------------------------------------------------------------------------

    \29\ See ISE Letter at 10.
    \30\ Id.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \31\ CME Bitcoin Futures are described in Chapter 350 of CME's 
Rulebook.
    \32\ See the Position Accountability and Reportable Level Table 
in the Interpretations & Special Notices Section of Chapter 5 of 
CME's Rulebook.
    \33\ See https://finance.yahoo.com/quote/BTC%3DF/history/
?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_refe
rrer_sig=AQAAAM7ngaS6ZQS9c2Wzx7JW2IUe-_-_1FnLyr8T-
Qw4jjkleHyCENfSMIEpPPt2hCzPDEryTVyB78NIwxkwFB5Fuw-jA-
YiuSmYJHBriWbV6dYn91VQfzQNt3p0I2RkYLD3HhzXPwu4AP5as-
_WzHNpEBon4sk5sUZXgkapMrZR--CS.
    \34\ Each bitcoin futures contract is valued at 5 bitcoins as 
defined by the CME CF Bitcoin Reference Rate (``BRR''). See CME Rule 
35001.
    \35\ See ISE Letter at 11.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \36\ See https://www.cmegroup.com/education/courses/market-regulation/position-limits/positionlimits-aggregation-of-contracts-and-table.htm.
    \37\ Id.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \38\ See https://www.ishares.com/us/products/333011/ishares-bitcoin-trust.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \39\ This 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.
    \40\ As 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.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \41\ A 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://bitcoinmagazine.com/business/94-of-bitcoins-supply-has-now-been-issued. August 19, 2024.
---------------------------------------------------------------------------

    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

[[Page 93807]]

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.
---------------------------------------------------------------------------

    \42\ A supply consideration would likely be valuable for an 
option symbol that had far less liquidity than the Trust.
    \43\ See https://companiesmarketcap.com/usa/largest-companies-in-the-usa-by-market-cap/.
---------------------------------------------------------------------------

    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 options-related market 
surveillance that are common to rules of all options exchanges.\45\
---------------------------------------------------------------------------

    \44\ The surveillance program includes real-time patterns for 
price and volume movements and post-trade surveillance patterns 
(e.g., spoofing, marking the close, pinging, phishing).
    \45\ Section 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.
---------------------------------------------------------------------------

    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\
---------------------------------------------------------------------------

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

    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\
---------------------------------------------------------------------------

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

    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.
---------------------------------------------------------------------------

    \48\ See 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)).
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \49\ Effective 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.
---------------------------------------------------------------------------

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

[[Page 93808]]

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.
---------------------------------------------------------------------------

    \50\ 15 U.S.C. 78f(b).
    \51\ 15 U.S.C. 78f(b)(5).
    \52\ Id.
---------------------------------------------------------------------------

    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\
---------------------------------------------------------------------------

    \53\ See Securities Exchange Act Release No. 39489 (December 24, 
1997), 63 FR 276 (January 5, 1998) (SR-CBOE-1997-11).
---------------------------------------------------------------------------

    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\
---------------------------------------------------------------------------

    \54\ The surveillance program includes real-time patterns for 
price and volume movements and post-trade surveillance patterns 
(e.g., spoofing, marking the close, pinging, phishing).
    \55\ Section 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.
---------------------------------------------------------------------------

    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.

[[Page 93809]]

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\
---------------------------------------------------------------------------

    \56\ See supra note 5.
---------------------------------------------------------------------------

    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\
---------------------------------------------------------------------------

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

    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.
---------------------------------------------------------------------------

    \58\ See 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)).
---------------------------------------------------------------------------

    Finally, the Commission has previously approved the listing and 
trading of options on other commodity ETFs structured as a trust, such 
as SPDR[supreg] 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\
---------------------------------------------------------------------------

    \59\ See 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).
    \60\ See 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.
    \62\ See 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.
---------------------------------------------------------------------------

    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\
---------------------------------------------------------------------------

    \64\ See supra note 6.
---------------------------------------------------------------------------

    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\
---------------------------------------------------------------------------

    \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 as designated by the Commission. 
The Exchange has satisfied this requirement.

---------------------------------------------------------------------------

[[Page 93810]]

    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\
---------------------------------------------------------------------------

    \69\ 17 CFR 240.19b-4(f)(6).
    \70\ 17 CFR 240.19b-4(f)(6)(iii).
    \71\ See 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).
    \72\ For 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).
---------------------------------------------------------------------------

    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 [email protected]. 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\
---------------------------------------------------------------------------

    \73\ 17 CFR 200.30-3(a)(12), (59).
---------------------------------------------------------------------------

Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-27741 Filed 11-26-24; 8:45 am]
BILLING CODE 8011-01-P`