Federal Register / Vol. 89, No. 231 / Monday, December 2, 2024 / Notices 95309 

10 15 U.S.C. 78s(b)(3)(A)(iii). 

11 17 CFR 240.19b–4(f)(6). 

12 15 U.S.C. 78s(b)(3)(A)(iii). 

13 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 Commission 

waives this requirement. 

14 17 CFR 240.19b–4(f)(6). 

15 17 CFR 240.19b–4(f)(6)(iii). 

16See Securities Exchange Act Release No. 

101387 (October 18, 2024), 89 FR 84948 (October 

24, 2024) (SR–Cboe–2024–035) (Notice of Filing of 

Amendment Nos. 2 and 3 and Order Granting 

Accelerated Approval of a Proposed Rule Change, 

as Modified by Amendment Nos. 2 and 3, To Permit 

the Listing and Trading of Options on Bitcoin 

Exchange-Traded Funds). See also Securities 

Exchange Act Release No. 101386 (October 18, 

2024), 89 FR 84960 (October 24, 2024) (SR– 

NYSEAMER–2024–49) (Notice of Filing of 

Amendment No. 3 and Order Granting Accelerated 

Approval of a Proposed Rule Change, as Modified 

by Amendment No. 3, To Permit the Listing and 

Trading of Options on Bitcoin Exchange-Traded 

Funds). 

17See SR–ISE–2024–54. 

18For 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). 

19 17 CFR 200.30–3(a)(12), (59). 

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

2 17 CFR 240.19b–4. 

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 10 and Rule 

19b–4(f)(6) thereunder.11 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 12 and 

subparagraph (f)(6) of Rule 19b–4 

thereunder.13

A proposed rule change filed under 

Rule 19b–4(f)(6) 14 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),15 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 the Fidelity Wise 

Origin Bitcoin Fund, the ARK21Shares 

Bitcoin ETF, the Grayscale Bitcoin Trust 

(BTC), the Grayscale Bitcoin Mini Trust 

BTC, and the Bitwise Bitcoin ETF.16 As 

noted above, Nasdaq’s Options 4 Rules 

were amended by an ISE rule change 17

as those Rules are incorporated by 

reference to ISE’s Options 4 Rules, so 

Nasdaq has the ability to list the options 

on the Bitcoin Trusts. This proposal 

establishes position and exercise limits 

for options on the Bitcoin Trusts. The 

Commission believes that waiver of the 

operative delay could benefit investors 

by assuring that trading in Bitcoin Trust 

options are subject to the same position 

and exercise limits in place on other 

exchanges. 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.18

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– 

NASDAQ–2024–073 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–NASDAQ–2024–073. 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–NASDAQ–2024–073 and should be 

submitted on or before December 23, 

2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.19

Vanessa A. Countryman, 

Secretary. 

[FR Doc. 2024–28106 Filed 11–29–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–101744; File No. SR–ISE– 

2024–54] 

Self-Regulatory Organizations; Nasdaq 

ISE, LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To List and Trade Various 

Bitcoin Options 

November 25, 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 

21, 2024, Nasdaq ISE, LLC (‘‘ISE’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission (‘‘SEC’’ or 

‘‘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 


ddrumheller on DSK120RN23PROD with NOTICES1
95310 Federal Register / Vol. 89, No. 231 / Monday, December 2, 2024 / Notices 

3See Securities Exchange Act Release No. 101387 

(October 18, 2024), 89 FR 84948 (October 24, 2024) 

(SR–Cboe–2024–035) (Notice of Filing of 

Amendment Nos. 2 and 3 and Order Granting 

Accelerated Approval of a Proposed Rule Change, 

as Modified by Amendment Nos. 2 and 3, To Permit 

the Listing and Trading of Options on Bitcoin 

Exchange-Traded Funds) (‘‘CBOE–2024–035’’). See 

also Securities Exchange Act Release No. 101386 

(October 18, 2024), 89 FR 84960 (October 24, 2024) 

(SR–NYSEAMER–2024–49) (Notice of Filing of 

Amendment No. 3 and Order Granting Accelerated 

Approval of a Proposed Rule Change, as Modified 

by Amendment No. 3, To Permit the Listing and 

Trading of Options on Bitcoin Exchange-Traded 

Funds) (‘‘NYSEAMER–2024–49’’). 

4Options 4, Section 3(h)(1) and (2) state that the 

Exchange-Traded Fund Shares either (i) meet the 

criteria and guidelines set forth in paragraphs (a) 

and (b) described herein; or (ii) the ExchangeTraded Fund Shares are available for creation or 

redemption each business day from or through the 

issuing trust, investment company, commodity pool 

or other entity in cash or in kind at a price related 

to net asset value, and the issuer is obligated to 

issue Exchange-Traded Fund Shares in a specified 

aggregate number even if some or all of the 

investment assets and/or cash required to be 

deposited have not been received by the issuer, 

subject to the condition that the person obligated 

to deposit the investment assets has undertaken to 

deliver them 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 of the 

Exchange-Traded Fund Shares, all as described in 

the Exchange-Traded Fund Shares’ prospectus. 

Also, the Exchange-Traded Fund Shares based on 

international or global indexes, or portfolios that 

include non-U.S. securities, shall meet the criteria 

in Options 4, Section 3(h)(2)(A)–(F). 

5Specifically, the Exchange proposes to amend 

Options 3, Section 4(h)(iv) to include the name of 

each Bitcoin Trust to enable options to be listed on 

the Bitcoin Trusts on the Exchange. 

6The trust may include minimal cash. 

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 to amend Options 4, 

Section 3, Criteria for Underlying 

Securities. 

The text of the proposed rule change 

is available on the Exchange’s website at 

https://listingcenter.nasdaq.com/ 

rulebook/ise/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 

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 

Options 4, Section 3, Criteria for 

Underlying Securities, to allow the 

Exchange to list and trade options the 

(1) Fidelity Wise Origin Bitcoin Fund 

(‘‘Fidelity Fund’’); (2) ARK21Shares 

Bitcoin ETF (‘‘ARK 21 Fund’’); (3) 

Grayscale Bitcoin Trust (BTC) (the 

‘‘Grayscale Fund’’ or ‘‘GBTC’’); (4) 

Grayscale Bitcoin Mini Trust BTC (the 

‘‘Grayscale Mini Fund’’ or ‘‘BTC’’); (5) 

and Bitwise Bitcoin ETF (the ‘‘Bitwise 

Fund’’ or ‘‘BITB’’), (collectively ‘‘Bitcoin 

Trusts’’) as ‘‘Units’’ deemed appropriate 

for options trading on the Exchange. 

Options on each Bitcoin Trust were 

approved for trading on other options 

exchanges.3

Currently, Options 4, Section 3(h) 

provides that securities deemed 

appropriate for options trading shall 

include shares or other securities 

(‘‘Exchange-Traded Fund Shares’’ or 

‘‘ETFs’’) that are traded on a national 

securities exchange and are defined as 

an ‘‘NMS’’ stock under Rule 600 of 

Regulation NMS, and that meet certain 

criteria specified in Options 4, Section 

3(h), including that they: 

(i) represent interests in registered 

investment companies (or series thereof) 

organized as open-end management 

investment companies, unit investment trusts 

or similar entities that hold portfolios of 

securities and/or financial instruments, 

including, but not limited to, stock index 

futures contracts, options on futures, options 

on securities and indices, equity caps, collars 

and floors, swap agreements, forward 

contracts, repurchase agreements and reverse 

repurchase agreements (the ‘‘Financial 

Instruments’’), and money market 

instruments, including, but not limited to, 

U.S. government securities and repurchase 

agreements (the ‘‘Money Market 

Instruments’’) comprising or otherwise based 

on or representing investments in broadbased indexes or portfolios of securities and/ 

or Financial Instruments and Money Market 

Instruments (or that hold securities in one or 

more other registered investment companies 

that themselves hold such portfolios of 

securities and/or Financial Instruments and 

Money Market Instruments) or 

(ii) represent interests in a trust or similar 

entity that holds a specified non-U.S. 

currency or currencies deposited with the 

trust when aggregated in some specified 

minimum number may be surrendered to the 

trust or similar entity by the beneficial owner 

to receive the specified non-U.S. currency or 

currencies and pays the beneficial owner 

interest and other distributions on the 

deposited non-U.S. currency or currencies, if 

any, declared and paid by the trust 

(‘‘Currency Trust Shares’’) or 

(iii) represent commodity pool interests 

principally engaged, directly or indirectly, in 

holding and/or managing portfolios or 

baskets of securities, commodity futures 

contracts, options on commodity futures 

contracts, swaps, forward contracts and/or 

options on physical commodities and/or nonU.S. currency (‘‘Commodity Pool ETFs’’) or 

(iv) represent interests in the SPDR® Gold 

Trust, the iShares COMEX Gold Trust, the 

iShares Silver Trust, the Aberdeen Standard 

Physical Gold Trust, or the iShares Bitcoin 

Trust or 

(v) represents an interest in a registered 

investment company (‘‘Investment 

Company’’) organized as an open-end 

management company or similar entity, that 

invests in a portfolio of securities selected by 

the Investment Company’s investment 

adviser consistent with the Investment 

Company’s investment objectives and 

policies, which is issued in a specified 

aggregate minimum number in return for a 

deposit of a specified portfolio of securities 

and/or a cash amount with a value equal to 

the next determined net asset value (‘‘NAV’’), 

and when aggregated in the same specified 

minimum number, may be redeemed at a 

holder’s request, which holder will be paid 

a specified portfolio of securities and/or cash 

with a value equal to the next determined 

NAV (‘‘Managed Fund Share’’). 

In addition to the aforementioned 

requirements, Options 4, Section 3(h)(1) 

and (2) must be met to list options on 

ETFs.4

Proposal 

The Exchange proposes to expand the 

list of ETFs that are appropriate for 

options trading on the Exchange in 

Options 3, Section 4(h)(iv) to include 

the Bitcoin Trusts.5

The Bitcoin Trusts are Bitcoin-backed 

commodity ETFs structured as trusts. 

Similar to any Unit currently deemed 

appropriate for options trading under 

Options 3, Section 4(h), the investment 

objective of each Bitcoin Trust is for its 

shares to reflect the performance of 

Bitcoin (less the expenses of the trust’s 

operations), offering investors an 

opportunity to gain exposure to Bitcoin 

without the complexities of Bitcoin 

delivery. As is the case for Units 

currently deemed appropriate for 

options trading, a Bitcoin Trust’s shares 

represent units of fractional undivided 

beneficial interest in the trust, the assets 

of which consist principally of Bitcoin 

and are designed to track Bitcoin or the 

performance of the price of Bitcoin and 

offer access to the Bitcoin market.6 The 

Bitcoin Trusts provide investors with 

cost-efficient alternatives that allow a 

level of participation in the Bitcoin 

market through the securities market. 

The primary substantive difference 


ddrumheller on DSK120RN23PROD with NOTICES1
Federal Register / Vol. 89, No. 231 / Monday, December 2, 2024 / Notices 95311 

7 ISE Options 4, Section 3(b) states that, in 

addition, the Exchange shall from time to time 

establish guidelines to be considered in evaluating 

potential underlying securities for Exchange 

options transactions. There are many relevant 

factors which must be considered in arriving at 

such a determination, and the fact that a particular 

security may meet the guidelines established by the 

Exchange does not necessarily mean that it will be 

selected as an underlying security. Further, in 

exceptional circumstances an underlying security 

may be selected by the Exchange even though it 

does not meet all of the guidelines. The Exchange 

may also give consideration to maintaining 

diversity among various industries and issuers in 

selecting underlying securities. Notwithstanding 

the forgoing, however, absent exceptional 

circumstances, an underlying security will not be 

selected unless: (1) There are a minimum of seven 

(7) million shares of the underlying security which 

are owned by persons other than those required to 

report their stock holdings under Section 16(a) of 

the Exchange Act; (2) There are a minimum of 2,000 

holders of the underlying security; (3) The issuer is 

in compliance with any applicable requirements of 

the Exchange Act; (4) Trading volume (in all 

markets in which the underlying security is traded) 

has been at least 2,400,000 shares in the preceding 

twelve (12) months; (5) Either: (i) If the underlying 

security is a ‘‘covered security’’ as defined under 

Section 18(b)(1)(A) of the Securities Act of 1933: (A) 

the market price per share of the underlying 

security has been at least $3.00 for the previous 

three consecutive business days preceding the date 

on which the Exchange submits a certificate to the 

Clearing Corporation for listing and trading, as 

measured by the closing price reported in the 

primary market in which the underlying security is 

traded; however, (B) the requirements set forth in 

(5)(i)(A) will be waived during the three days 

following its initial public offering day for an 

underlying security having a market capitalization 

of at least $3 billion based upon the offering price 

of its initial public offering, and may be listed and 

traded starting on or after the second business day 

following the initial public offering day; or (ii) If the 

underlying security is not a ‘‘covered security,’’ the 

market price per share of the underlying security 

has been at least $7.50 for the majority of business 

days during the three calendar months preceding 

the date of selection, as measured by the lowest 

closing price reported in any market in which the 

underlying security traded on each of the subject 

days. Notwithstanding the requirements set forth in 

Paragraphs 1, 2, 4 and 5 above, the Exchange may 

list and trade an options contract if (i) the 

underlying security meets the guidelines for 

continued approval in Options 4, Section 4; and (ii) 

options on such underlying security are traded on 

at least one other registered national securities 

exchange. 

8The criteria and guidelines for a security to be 

considered widely held and actively traded are set 

forth in Options 4, Section 3(b), subject to 

exceptions. 

9An ‘‘NMS stock’’ means any NMS security other 

than an option, and an ‘‘NMS security’’ means any 

security or class of securities for which transaction 

reports are collected, processed, and made available 

pursuant to an effective transaction reporting plan 

(or an effective national market system plan for 

reporting transaction in listed options). See 17 CFR 

242.600(b)(64) (definition of ‘‘NMS security’’) and 

(65) (definition of ‘‘NMS stock’’). 

10See supra note 7. 

11See supra note 7. 

between Bitcoin Trusts and Units 

currently deemed appropriate for 

options trading are that Units may hold 

securities, certain financial instruments, 

and specified precious metals (which 

are deemed commodities), while Bitcoin 

Trusts hold Bitcoin (which is also 

deemed a commodity). 

The Exchange believes each Bitcoin 

Trust satisfies the Exchange’s initial 

listing standards for Units on which the 

Exchange may list options. Specifically, 

each Bitcoin Trust satisfies the initial 

listing standards set forth in Options 3, 

Section 4(h), as is the case for other 

Units on which the Exchange lists 

options (including trusts that hold 

commodities). Currently, Options 4, 

Section 3(h)(1) and (2) requires that 

Units must either (i) meet the criteria 

and guidelines set forth in paragraphs 

(a) and (b) described herein; or (ii) be 

available for creation or redemption 

each business day from or through the 

issuing trust, investment company, 

commodity pool or other entity in cash 

or in kind at a price related to net asset 

value, and the issuer is obligated to 

issue Exchange-Traded Fund Shares in 

a specified aggregate number even if 

some or all of the investment assets and/ 

or cash required to be deposited have 

not been received by the issuer, subject 

to the condition that the person 

obligated to deposit the investment 

assets has undertaken to deliver them 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 of the Exchange-Traded Fund 

Shares, all as described in the ExchangeTraded Fund Shares’ prospectus. Each 

Bitcoin Trust Fund satisfies Options 4, 

Section 3(h)(1) and (2), as each is 

subject to this creation and redemption 

process. 

While not required by the Rules for 

purposes of options listings, the 

Exchange believes each Bitcoin Trust 

satisfies the criteria and guidelines set 

forth in Options 4, Section 3(b).7

Options 4, Section 3(a), a security 

(which includes a Unit) on which 

options may be listed and traded on the 

Exchange must be duly registered (with 

the Commission) and be an NMS stock 

(as defined in Rule 600 of Regulation 

NMS under the Securities Exchange Act 

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

be characterized by a substantial 

number of outstanding shares that are 

widely held and actively traded.8 Each 

Bitcoin Trust is an NMS Stock as 

defined in Rule 600 of Regulation NMS 

under the Act.9 The Exchange believes 

each Bitcoin Trust is characterized by a 

substantial number of outstanding 

shares that are widely held and actively 

traded. 

Fidelity Fund and ARK 21 

Cboe Exchange, Inc. (‘‘Cboe’’) noted in 

CBOE–2024–035 that, as of August 7, 

2024, that the Fidelity Fund had 

201,100,100 shares outstanding and the 

ARK 21 Fund had 45,495,000 shares 

outstanding. Further, each Bitcoin Trust 

had significantly more than 7,000,000 

shares outstanding (approximately 29 

and 6.5 times that amount, 

respectively), which is the minimum 

number of shares of a corporate stock 

that the Exchange generally requires to 

list options on that stock pursuant to 

Options 4, Section 3(b).10 Cboe noted in 

CBOE–2024–035 that this demonstrated 

that the Fidelity Fund and the ARK 21 

Fund were both characterized by a 

substantial number of outstanding 

shares. Further, in CBOE–2024–035, 

Cboe noted that the Fidelity Fund, as of 

June 27, 2024, had 279,656 beneficial 

owners and the ARK 21 Fund, as of June 

26, 2024, had 69,425 beneficial owners. 

Cboe noted that the Fidelity Fund and 

the ARK 21 Fund both had significantly 

more than 2,000 beneficial holders 

(approximately 140 and 35 times more, 

respectively), which is the minimum 

number of holders the Exchange 

generally requires for corporate stock in 

order to list options on that stock 

pursuant to Options 4, Section 3(b).11

Therefore, Cboe noted in CBOE–2024– 

035, that it believed the shares of the 

Fidelity Fund and the ARK 21 Fund are 

widely held. Cboe noted in CBOE– 

2024–035 that it believed that the shares 

of the Fidelity Fund and the ARK 21 

Fund are both actively traded. Cboe 

noted in CBOE–2024–035 that as of 

August 7, 2024, the total trading volume 

(by shares) for each fund for the sixmonth period of February 8 through 

August 7, 2024, and the approximate 

average daily volume (‘‘ADV’’) (in 

shares and notional) over the 30-day 

period of July 9 through August 7, 2024, 

for each Bitcoin Trust was as follows: 

Bitcoin Trust 

6-Month trading 

volume 

(shares) 

30-Day ADV 

(shares) 

30-Day ADV 

(notional $) 

Fidelity Fund .......................................................................................................................... 1,112,861,581 6,014,335 250,354,755 

ARK 21 Fund ......................................................................................................................... 297,360,739 1,893,335 90,484,307 


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Cboe noted that as demonstrated 

above, despite the fact that the Fidelity 

Fund and the ARK 21 Fund had been 

trading for approximately seven months 

(as of January 10, 2024) only as of 

August 7, 2024, the six-month trading 

volume for each as of that date was 

substantially higher than 2,400,000 

shares (approximately 464 and 124 

times that amount, respectively), which 

is the minimum 12-month volume the 

Exchange generally requires for a 

corporate stock in order to list options 

on that security as set forth in Options 

4, Section 3(b). Additionally, Cboe 

noted in in CBOE–2024–035 that as of 

August 7, 2024, the trading volume for 

the Fidelity Fund and the ARK 21 Fund 

was in the top 5% of all ETFs that are 

currently trading. Cboe noted in CBOE– 

2024–035 that this data demonstrates 

the Fidelity Fund and the ARK 21 Fund 

are characterized as having shares that 

are actively traded. 

Cboe determined the proposed 

position and exercise limits considering, 

among other things, the approximate 

six-month average daily volume 

(‘‘ADV’’) and outstanding shares of the 

Fidelity Fund and the ARK 21 Fund 

noted in the filing (which as discussed 

above demonstrate that these Bitcoin 

Trusts are widely held and actively 

traded and thus justify these 

conservatively proposed position 

limits), as set forth in in CBOE–2024– 

035 and below, along with market 

capitalization (as of August 7, 2024): 

Underlying Bitcoin Trust 

Six-month 

ADV 

(shares) 

Outstanding 

shares 

Market 

capitalization 

($) 

Fidelity Fund ................................................................................................................ 8,902,893 201,100,100 14,217,013,188 

ARK 21 Fund ............................................................................................................... 2,378,886 45,495,000 2,487,666,600 

Cboe then compared the number of 

outstanding shares of the Fidelity Fund 

and the ARK 21 Fund to those of other 

ETFs. The following table in CBOE– 

2024–035 provided the approximate 

average position (and exercise limit) of 

ETF options with similar outstanding 

shares (as of August 27, 2024), 

compared to the proposed position and 

exercise limit for options on the Fidelity 

Fund and the ARK 21 Fund: 

Underlying Bitcoin Trust 

Average limit 

of other ETF 

options 

(contracts) 

Proposed limit 

(contracts) 

Fidelity Fund .................................... 188,11023 25,000 Cboe noted in Cboe–2024–035 that over 80% of the ETFs used for 

comparison had a limit of at least 200,000, and more than half had a 

limit of 250,000. Additionally, the three-month ADV of the majority of 

the ETFs used for comparison was lower than the Fidelity Fund 

three-month ADV of 5,665,027 shares. 

ARK 21 Fund ................................... 108,69624 25,000 Cboe noted in Cboe–2024–035 that nearly 80% of the ETFs used for

comparison had a limit of at least 75,000 (and up to 250,000). Additionally, the three-month ADV of the majority of ETFs used for comparison was lower (many more than four times lower) than the ARK 

21 Fund three-month ADV of 1,737,327 shares. 

Cboe considered current position and 

exercise limits of options on ETFs with 

outstanding shares comparable to those 

of each the Fidelity Fund and the ARK 

21 Fund, with the proposed limit 

significantly lower (between two and 

ten times lower) than the average limits 

of the options on the other ETFs. As 

discussed above in in CBOE–2024–035, 

the Fidelity Fund and the ARK 21 Fund 

are actively held and widely traded: (1) 

each of these Bitcoin Trusts (as of 

August 7, 2024) had significantly more 

than 7,000,000 shares outstanding, 

which is the minimum number of shares 

of a corporate stock that the Exchange 

generally requires to list options on that 

stock pursuant to Options 4, Section 

3(b); (2) the Fidelity Fund and the ARK 

21 Fund (as of the dates listed above) 

had significantly more than 2,000 

beneficial holders, which is the 

minimum number of holders the 

Exchange generally requires for 

corporate stock in order to list options 

on that stock pursuant to Options 4, 

Section 3(b)(2) and; (3) the Fidelity 

Fund and the ARK 21 Fund had a sixmonth trading volume substantially 

higher than 2,400,000 shares, which is 

the minimum 12-month volume the 

Exchange generally requires for a 

security in order to list options on that 

security as set forth in Options 4, 

Section 3. 

Cboe noted in in CBOE–2024–035 that 

with respect to outstanding shares, if a 

market participant held the maximum 

number of positions possible pursuant 

to the proposed position and exercise 

limits, the equivalent shares represented 

by the proposed position/exercise limit 

would represent the following 

approximate percentage of current 

outstanding shares: 

Underlying Bitcoin Trust 

Proposed position 

/exercise limit 

(in equivalent 

shares) 

Outstanding 

shares 

Percentage of 

outstanding 

shares 

(%) 

Fidelity Fund .......................................................................................................................... 2,500,000 201,100,100 1.2 

ARK 21 Fund ......................................................................................................................... 2,500,000 45,495,000 5.5 

As this table demonstrated in CBOE– 

2024–035, if a market participant held 

the maximum permissible options 

positions in either the Fidelity Fund or 

the ARK 21 Fund and exercised all of 

them at the same time, that market 


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12As these percentages are based on the 

minimum number of outstanding shares an 

underlying security must have to qualify for the 

applicable position limit, these are the highest 

possible percentages that would apply to any option 

subject to that position and exercise limit. 13See supra note 7. 14 GBTC and BITB began trading on January 11th 

and BTC began trading on July 31st. Thus, the 

measurement period for the trading volume (shares/ 

notional) was January 11 through September 20, 

2024, for GBTC and BITB (i.e., nine months) and 

July 31 through September 20, 2024, for BTC (i.e., 

two months). 

participant would control a small 

percentage of the outstanding shares of 

the particular underlying Bitcoin Trust. 

Cboe provided a table in in CBOE– 

2024–035 noting the equivalent shares 

of the position limits applicable to 

equity options, including ETFs, further 

represents the percentages of the 

minimum number of outstanding shares 

that an underlying stock or ETF must 

have to qualify for that position limit 

(under the second method described 

above), all of which are higher than the 

percentages for the Fidelity Fund and 

the ARK 21 Fund. 

Position/exercise limit 

(in equivalent shares) 

Minimum 

outstanding 

shares 

Percentage of 

outstanding 

shares 

(%) 

2,500,000 ................................................................................................................................................................. 6,300,000 40.0 

5,000,000 ................................................................................................................................................................. 40,000,000 12.5 

7,500,000 ................................................................................................................................................................. 120,000,000 6.3 

20,000,000 ............................................................................................................................................................... 240,000,000 8.3 

25,000,000 ............................................................................................................................................................... 300,000,000 8.3 

6,300,000 is the minimum number of 

outstanding shares an underlying 

security must have for the Exchange to 

continue to list options on that security, 

so this would be the smallest number of 

outstanding shares permissible for any 

corporate option that would have a 

position limit of 25,000 contract. See 

Options 4, Section 3(b). This rule 

applies to corporate stock options but 

not ETF options, which currently have 

no requirement regarding outstanding 

shares of the underlying ETF for the 

Exchange to continue listing options on 

that ETF. Therefore, there may be ETF 

options trading for which the 25,000 

contract position limits represent an 

even larger percentage of outstanding 

shares of the underlying ETF than set 

forth above. 

CBOE–2024–035 provided that the 

equivalent shares represented by the 

proposed position and exercise limits 

for the Fidelity Fund and the ARK 21 

Fund as a percentage of outstanding 

shares of the underlying Bitcoin Trust is 

significantly lower than the percentage 

for the lowest possible position limit for 

equity options of 25,000 (under 6% 

compared to 40%) and is lower than 

that percentage for each current position 

limit bucket.12

GBTC, BTC and BITB 

NYSE American LLC (‘‘NYSE 

American’’) noted in NYSEAmerican– 

2024–49 that, as of August 30, 2024, 

GBTC, BTC and BITB had the following 

number of shares outstanding (and 

corresponding market capitalization): 

Bitcoin Trust Shares 

outstanding 

Market value 

(08/30/2024) 

($) 

GBTC ................................................................................................................................................................. 284,570,100 13,443,091,524 

BTC .................................................................................................................................................................... 366,950,100 1,930,157,526 

BITB ................................................................................................................................................................... 68,690,000 2,221,640,670 

NYSE American noted in 

NYSEAmerican–2024–49 that, as 

displayed in the above table, GBTC, 

BTC and BITB had significantly more 

than 7,000,000 shares outstanding, 

which is the minimum number of shares 

of a corporate stock that the Exchange 

generally requires to list options on that 

stock pursuant to Options 4, Section 

3(b). NYSE American noted in 

NYSEAmerican–2024–49 that this 

demonstrated that GBTC, BTC and BITB 

are characterized by a substantial 

number of outstanding shares. Further, 

as provided in NYSEAmerican–2024–49 

the below table contained information 

regarding the number of beneficial 

holders of GBTC, BTC and BITB as of 

August 14, 2024. 

Bitcoin Trust 

Beneficial 

holders 

(8/14/24) 

GBTC .................................... 464,364 

BTC ....................................... 13,403 

BITB ...................................... 75,437 

As shown in NYSEAmerican–2024– 

49, the table showed that GBTC, BTC 

and BITB each had significantly more 

than 2,000 beneficial holders 

(approximately 232, 7, and 38 times 

more, respectively), which is the 

minimum number of holders the 

Exchange generally requires for 

corporate stock in order to list options 

on that stock pursuant to pursuant to 

Options 4, Section 3(b)(2).13 Therefore, 

NYSE American noted that the shares of 

each GBTC, BTC and BITB are widely 

held. In addition, NYSE American noted 

that the shares of each GBTC, BTC and 

BITB are actively traded. 

NYSEAmerican–2024–49 provided, as 

of September 30, 2024, that the total 

trading volume (by shares and notional) 

for these funds since they began 

trading 14 and the average daily volume 

(‘‘ADV’’) over the 30-day period of 

September 1 through September 30, 

2024, was as follows: 

Bitcoin Trust 

Trading 

volume 

(shares) 

Trading volume 

(notional $) 

ADV 

(shares) 

GBTC ......................................................................................................................... 1,803,567,700 93,472,544,497 3,266,138 


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15See https://www.theocc.com/Market-Data/ 

Market-Data-Reports/Series-and-Trading-Data/ 

Series-Search (including the following symbols that have a position limit of 250,000: GLD, IAU, SLV, 

SIVR, SGOL). 

Bitcoin Trust 

Trading 

volume 

(shares) 

Trading volume 

(notional $) 

ADV 

(shares) 

BTC ............................................................................................................................ 335,492,930 1,792,866,521 6,838,546 

BITB ........................................................................................................................... 434,815,840 14,433,361,384 1,949,835 

As demonstrated above and in 

NYSEAmerican–2024–49, even though 

GBTC, BTC and BITB were trading for 

less than one year (and in the case of the 

BTC, less than two months), the trading 

volume for each was substantially 

higher than 2,400,000 shares (between 

roughly 165 and 700 times that amount), 

which is the minimum 12-month 

volume the Exchange generally requires 

for a security in order to list options on 

that security as set forth in Options 4, 

Section 3(b). NYSE American noted that 

this data demonstrated that GBTC, BTC 

and BITB are characterized by a 

substantial number of outstanding 

shares that are actively traded. 

NYSE American noted in 

NYSEAmerican–2024–49 that BTC 

began trading on July 31, 2024, and 

therefore had only two months of 

trading data available at the time of 

filing NYSEAmerican–2024–49. In 

terms of total volume, NYSEAmerican– 

2024–49 provided the below table. 

Bitcoin Trust Total volume 

(9/30/2024) 

GBTC .................................... 723,758,100 

(6-months). 

BTC ....................................... 335,492,930 

(2-months). 

BITB ...................................... 263,965,870 

(6-months). 

NYSE American noted in 

NYSEAmerican–2024–49 that based on 

the most-recent trading volume, GBTC, 

BTC and BITB exceeded the requisite 

minimum of 100,000,000 shares 

necessary to qualify for the 250,000- 

contract position and exercise limits. By 

comparison, NYSE American noted that 

other options symbols with six-month 

trading volume less than GBTC, BITB, 

and BTC were eligible for position and 

exercise limits of at least 250,000.15

NYSEAmerican–2024–49 provided, 

with respect to the outstanding shares of 

each Bitcoin Trust, if a market 

participant held the maximum number 

of contracts possible pursuant to the 

proposed position and exercise limits 

(25,000 contracts), the equivalent shares 

represented by the proposed position/ 

exercise limit (2,500,000 shares) would 

represent the following approximate 

percentage of current outstanding 

shares: 

Bitcoin Trust 

Proposed 

position/exercise 

limit in 

equivalent 

shares 

Outstanding 

shares 

(8/30/24) 

Percentage of 

outstanding 

shares 

(%) 

GBTC ..................................................................................................................................... 2,500,000 284,570,100 0.9 

BTC ........................................................................................................................................ 2,500,000 366,950,100 0.7 

BITB ....................................................................................................................................... 2,500,000 68,690,000 3.6 

As this table demonstrated in 

NYSEAmerican–2024–49, if a market 

participant held the maximum 

permissible options positions in any one 

of GBTC, BTB or BITB options and 

exercised all of them at the same time, 

that market participant would control a 

small percentage of the outstanding 

shares of the underlying GBTC, BTB or 

BITB. For example, as noted above, a 

position limit of 25,000 same side 

contracts effectively restricts a market 

participant from holding positions that 

could result in the receipt of no more 

than 2,500,000 shares of the applicable 

Bitcoin Trust (if that market participant 

exercised all its options). Based on the 

number of shares outstanding for each 

of GBTC, BTB or BITB as of August 30, 

2024, NYSE American noted in 

NYSEAmerican–2024–49 and the table 

below, that the approximate number of 

market participants that could hold the 

maximum of 25,000 same side positions 

in each of GBTC, BTB and BITB that 

would equate to the number of shares 

outstanding of that Bitcoin Trust: 

Bitcoin Trust Shares 

outstanding 

Number of 

market 

participants with 

25,000 same side 

positions 

GBTC ....................................................................................................................................................... 284,570,100 114 

BTC .......................................................................................................................................................... 366,950,100 147 

BITB ......................................................................................................................................................... 68,690,000 27 

NYSE American concluded in 

NYSEAmerican–2024–49 that this 

meant if 114 market participants had 

25,000 same side positions in options 

on GBTC, each of them would have to 

simultaneously exercise all of those 

options to create a scenario that may put 

the underlying security under stress. 

Similarly, this means if 147 market 

participants had 25,000 same side 

positions in options on BTC, each of 

them would have to simultaneously 

exercise all of those options to create a 

scenario that may put the underlying 

security under stress. Finally, this 

means if 27 market participants had 

25,000 same side positions in options 

on BITB, each of them would have to 

simultaneously exercise all of those 

options to create a scenario that may put 

the underlying security under stress. 


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16See https://www.blockchain.com/explorer/ 

charts/total-bitcoins. 

17See https://www.blockchain.com/explorer/ 

assets/btc (citing 21 million as the ‘‘total supply’’ 

of bitcoin). 

18The market capitalization of Bitcoin would 

rank in the top 10 among securities. See https://

companiesmarketcap.com/usa/largest-companiesin-the-usa-by-market-cap/. 

NYSE American noted in 

NYSEAmerican–2024–49 that it 

believed it was highly unlikely for this 

to occur; however, even if such event 

did occur, NYSE American would not 

expect GBTC, BTB or BITC to be under 

stress because such an event would 

merely induce the creation of more 

shares through the trust’s creation and 

redemption process. Further, given that 

the issuer of each of GBTC, BTB or BITC 

may create and redeem shares that 

represent an interest in Bitcoin, NYSE 

American noted in NYSEAmerican– 

2024–49 that it is relevant to compare 

the size of a position limit to the market 

capitalization of the Bitcoin market. 

NYSE American noted in 

NYSEAmerican–2024–49 that, as of 

August 30, 2024, the global supply of 

Bitcoin was 19,747, 066, and the price 

of one Bitcoin was approximately 

$59,108.23,39 which equates to a market 

capitalization of approximately $1.167 

trillion.16 NYSE American stated in 

NYSEAmerican–2024–49 that a position 

and exercise limit of 25,000 same side 

contracts effectively restricts a market 

participant from holding positions that 

could result in the receipt of no more 

than 2,500,000 shares of GBTC, BTC, or 

BITB, as applicable (if that market 

participant exercised all its options). 

NYSE American presented the below 

table with the share price of each of 

GBTC, BTC and BITB on August 30, 

2024, the value of 2,500,000 shares of 

the particular Bitcoin Trust at that price, 

and the approximate percentage of that 

value of the size of the Bitcoin market: 

Bitcoin Trust 

Aug. 30th 

share price 

($) 

Value of 

2,500,000 

shares of 

Bitcoin Trust 

($) 

Percentage of 

Bitcoin market 

(%) 

GBTC ........................................................................................................................................... 46.75 116,875,000 0.010 

BTC .............................................................................................................................................. 5.20 13,000,000 0.001 

BITB ............................................................................................................................................. 31.95 79,875,000 0.007 

NYSE American concluded that, if a 

market participant with the maximum 

25,000 same side contracts in options on 

GBTC, BTC, or BITB exercised all 

positions at one time, such an event 

would have no practical impact on the 

Bitcoin market. NYSE American also 

reviewed the market capitalization of 

each Bitcoin Trust relative to the market 

capitalization of the entire bitcoin 

market, as of August 30, 2024. 

Bitcoin/shares 

outstanding 

Market value 

(8/30/2024) 

($) 

% of total 

Bitcoin market 

(%) 

Total Bitcoin Market ..................................................................................................... 19,747,066 $1,167,214,096,788 100.00 

GBTC .................................................................................................................... 284,570,100 $13,443,091,524 1.15 

BTC ....................................................................................................................... 366,950,100 $1,930,157,526 0.17 

BITB ...................................................................................................................... 68,690,000 $2,221,640,670 0.19 

As shown above and in 

NYSEAmerican–2024–49, GBTC, BTC 

and BITB collectively represented 

approximately 1.51% of the global 

supply of Bitcoin (19,747,066). Based on 

the $46.75 price of a GBTC share on 

August 30, 2024, a market participant 

could have redeemed one Bitcoin for 

approximately 1,264 GBTC shares. 

Further, NYSE American noted that 

another 24,967,146,455 GBTC shares 

could be created before the supply of 

Bitcoin was exhausted. NYSEAmerican– 

2024–49 provided that as a result, 9,987 

market participants would have to 

simultaneously exercise 25,000 same 

side positions in GBTC options to 

receive shares of the GBTC holding the 

entire global supply of Bitcoin. 

NYSEAmerican–2024–49 also provided 

that based on the $5.20 price of a BTC 

share on August 30, 2024, a market 

participant could have redeemed one 

Bitcoin for approximately 11,367 BTC 

shares. Another 224,464,249,382 BTC 

shares could be created before the 

supply of Bitcoin was exhausted. NYSE 

American stated that as a result, 89,786 

market participants would have to 

simultaneously exercise 25,000 same 

side positions in BTC options to receive 

shares of BTC holding the entire global 

supply of Bitcoin. Similarly, NYSE 

American noted that based on the 

$31.95 price of a BITB share on August 

30, 2024, a market participant could 

have redeemed one Bitcoin for 

approximately 1,850 BITB shares. 

NYSEAmerican–2024–49 provided that 

another 36,532,522,591 BITB shares 

could be created before the supply of 

Bitcoin was exhausted. NYSE American 

concluded that as a result, 14,613 

market participants would have to 

simultaneously exercise 25,000 same 

side positions in BITB options to receive 

shares of BITB holding the entire global 

supply of Bitcoin. NYSE American also 

concluded that, unlike GBTC, BTB and 

BITB, the number of shares that 

corporations may issue is limited. 

NYSEAmerican–2024–49 provided that, 

however, like corporations, which 

authorize additional shares, repurchase 

shares, or split their shares, the Bitcoin 

Trusts may create, redeem, or split 

shares in response to demand and while 

the supply of Bitcoin is limited to 

21,000,000, it is believed that it will 

take more than 100 years to fully mine 

the remaining Bitcoin.17 NYSE 

American noted that the supply of 

Bitcoin is larger than the available 

supply of most securities.18 NYSE 

American concluded that given the 

significant unlikelihood of any of these 

events ever occurring, NYSE American 

noted that it did not believe options on 

GBTC, BTC and BITB should be subject 

to position and exercise limits even 

lower than those proposed (which are 

already equal to the lowest available 

limit for equity options in the industry) 

to protect the supply of Bitcoin. NYSE 

American also noted in 


ddrumheller on DSK120RN23PROD with NOTICES1
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19See CME Rulebook Chapter 350 (description of 

CME Bitcoin Futures) and Chapter 5, Position 

Limit, Position Accountability and Reportable Level 

Table in the Interpretations & Special Notices. Each 

CME Bitcoin futures contract is valued at five 

Bitcoins as defined by the CME CF Bitcoin 

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

20See CME Rulebook Chapter 5, Position Limit, 

Position Accountability and Reportable Level Table 

in the Interpretations & Special Notices. 

21 Id. 

22NYSE American in NYSEAmerican–2024–49 

stated that it is unaware of any proposed rule 

change related to position and exercise limits for 

any equity option (including commodity ETF 

options) for which the Commission required 

consideration of whether the available supply of an 

underlying (whether it be a corporate stock or an 

ETF) or the contents of an ETF (commodity or 

otherwise) should be considered when an exchange 

proposed to establish those limits. See, e.g., 

Securities Exchange Act Release No. 57894 May 30, 

2008), 73 FR 32061 (June 5, 2008) (SR–CBOE2005– 

11) (approval order in which the Commission stated 

that the ‘‘listing and trading of Gold Trust Options 

will be subject to the exchanges’ rules pertaining to 

position and exercise limits and margin’’). The 

Exchange notes when the Commission approved 

this filing, the position limits in Rule 9054 were the 

same as they are today. For reference, the current 

position and exercise limits for options on SPDR 

Gold Shares ETF (‘‘GLD’’) and options on iShares 

Silver Trust (‘‘SLV’’) are 250,000 contracts, or 10 

times that proposed position and exercise limit for 

the Bitcoin Trust options. 

23NYSE American in NYSEAmerican–2024–49 

provided an example that supposed an option had 

a position limit of 25,000 option contracts and there 

were a total of 10 investors trading that option. If 

all 10 investors maxed out their positions, that 

would result in 250,000 option contracts 

outstanding at that time. However, if 10 more 

investors decided to begin trading that option and 

also maxed out their positions. This would result 

in 500,000 option contracts outstanding at that 

time. NYSE American concluded that an increase 

in the number of investors could cause an increase 

in outstanding options even if position limits 

remain unchanged. 

24See Securities Exchange Act Release No. 39489 

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

(SRCBOE–1997–11). 

25 Id. 

26See, e.g., GBTC Form S–1 Registration 

Statement, at p. 17, https://www.sec.gov/Archives/ 

edgar/data/1588489/000119312517013693/ 

d157414ds1.htm; BTC Form S–1 Registration 

Statement, at p. 21, https://www.sec.gov/Archives/ 

edgar/data/2015034/000119312524065444/ 

d785023ds1.htm; and BITB Amendment No 2. to S– 

1, at p. 47, https://www.sec.gov/Archives/edgar/ 

data/1763415/000199937123000735/bitwise-s1a_

120423.htm (‘‘Bitcoin Trusts Reg. Stmts.’’). 

NYSEAmerican–2024–49 that it 

believed the proposed limits are 

appropriate given position limits for 

Bitcoin futures. NYSE American noted 

that the Chicago Mercantile Exchange 

(‘‘CME’’) imposed a position limit of 

2,000 futures (for the initial spot month) 

on its Bitcoin futures contract.19

Further, NYSE American provided that 

on August 28, 2024, CME Aug 24 

Bitcoin Futures settled at $58,950. 

NYSE American noted that a position of 

2,000 CME Bitcoin futures, therefore, 

would have a notional value of 

$589,500,000. NYSEAmerican–2024–49 

provided the following table with the 

share price of each of GBTC, BTC and 

BITB on August 28, 2024, and the 

approximate number of option contracts 

that equates to that notional value: 

Bitcoin Trust Aug. 28th 

share price 

Number of 

options 

contracts 

GBTC ................................................................................................................................................................. 46.94 125,585 

BTC .................................................................................................................................................................... 5.23 1,127,151 

BITB ................................................................................................................................................................... 32.08 183,759 

NYSE American stated that 

approximate number of option contracts 

for GBTC, BTC and BITB that equate to 

the notional value of CME Bitcoin 

futures was significantly higher than the 

proposed limit of 25,000 options 

contract for each option on GBTC, BTC 

and BITB. Further, NYSE American 

noted that the fact that many options 

ultimately expire out-of-the-money and 

thus are not exercised for shares of the 

underlying, while the delta of a Bitcoin 

Future is 1, further demonstrated how 

conservative the proposed limits of 

25,000 options contracts are for options 

on GBTC, BTC and BITB. 

The Exchange notes, 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 

contracts according to an aggregation 

ratio(s).20 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.21 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 that the 

proposed same side position limits are 

more than appropriate for the options 

on Bitcoin Trusts. 

NYSE American noted in 

NYSEAmerican–2024–049 that the 

available supply of Bitcoin is not 

relevant to the determination of position 

and exercise limits for options overlying 

the GBTC, BTC and BITB.22 NYSE 

American noted stated that position and 

exercise limits are not a tool that should 

be used to address a potential limited 

supply of the underlying of an 

underlying. NYSE American noted that 

position and exercise limits do not limit 

the total number of options that may be 

held, but rather they limit the number 

of positions a single customer may hold 

or exercise at one time.23 ‘‘Since the 

inception of standardized options 

trading, the options exchanges have had 

rules imposing limits on the aggregate 

number of options contracts that a 

member or customer could hold or 

exercise.’’ 24 NYSE American noted that 

position and exercise limit rules are 

intended ‘‘to prevent the establishment 

of options positions that can be used or 

might create incentives to manipulate or 

disrupt the underlying market so as to 

benefit the options position. In 

particular, position and exercise limits 

are designed to minimize the potential 

for mini-manipulations and for corners 

or squeezes of the underlying market. In 

addition, such limits serve to reduce the 

possibility for disruption of the options 

market itself, especially in illiquid 

options classes.’’ 25

The Exchange notes that a 

Registration Statement on Form S–1 was 

filed with the Commission for each of 

GBTC, BTC and BITB, each of which 

described the supply of Bitcoin as being 

limited to 21,000,000 (of which 

approximately 90% had already been 

mined), and that the limit would be 

reached around the year 2140.26 Each 

Registration Statement permits an 

unlimited number of shares of the 

applicable Bitcoin Trust to be created. 


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Federal Register / Vol. 89, No. 231 / Monday, December 2, 2024 / Notices 95317 

27See NYSEAMER–2024–49. 

28Options 4, Section 4(b)(5) provides, If an 

underlying security is approved for options listing 

and trading under the provisions of Options 4, 

Section 3(c), the trading volume of the Original 

Security (as therein defined) prior to but not after 

the commencement of trading in the Restructure 

Security (as therein defined), including ‘whenissued’ trading, may be taken into account in 

determining whether the trading volume 

requirement of (3) of this paragraph (b) is satisfied. 

29See Options 4, Section 4(g). 

30Options 4, Section 4(b)(5)(1) through (4) 

provides, if: (1) there are fewer than 6,300,000 

shares of the underlying security held by persons 

other than those who are required to report their 

security holdings under Section 16(a) of the Act, (2) 

there are fewer than 1,600 holders of the underlying 

security, (3) the trading volume (in all markets in 

which the underlying security is traded) has been 

less than 1,800,000 shares in the preceding twelve 

(12) months, or (4) the underlying security ceases 

to be an ‘NMS stock’ as defined in Rule 600 of 

Regulation NMS under the Exchange Act. Options 

4, Section 3(h)(i) refers to Financial Instruments 

and Money Market Instruments. In addition, the 

Exchange proposes to amend the citation to 

‘‘Options 4, Section 3(h)(A)(i)’’ herein to ‘‘Options 

4, Section 3(h)(i).’’ 

31Options 4, Section 3(h)(ii) refers to Currency 

Trust Shares. In addition, the Exchange proposes to 

amend the citation to ‘‘Options 4, Section 

3(h)(A)(ii)’’ herein to ‘‘Options 4, Section 3(h)(ii).’’ 

32See Options 4, Section 2, Rights and 

Obligations of Holders and Writers, which provides 

that the rights and obligations of holders and 

writers shall be as set forth in the Rules of the 

Clearing Corporation. See also OCC Rules, Chapter 

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. OCC 

Rules can be located at: https://www.theocc.com/ 

getmedia/9d3854cd-b782-450f-bcf7-33169b0576ce/ 

occ_rules.pdf. 

33See Supplementary .03 to Options 4, Section 5. 

34See Supplementary .04 to Options 4, Section 5. 

35See Options 4, Section 8. 

36See Supplementary Material .03(e) to Options 

4, Section 5. 

37 Id. 

Further, the Commission approved 

proposed rule changes that permitted 

the listing and trading of shares of each 

of GBTC, BTC and BITB, which 

approval did not comment on the 

sufficient supply of Bitcoin or address 

whether there was a risk that permitting 

an unlimited number of shares for a 

Bitcoin Trust would impact the supply 

of Bitcoin.27 Therefore, the Exchange 

believes the Commission had ample 

time and opportunity to consider 

whether the supply of Bitcoin was 

sufficient to permit the creation of 

unlimited Bitcoin Trust shares, and 

does not believe considering this supply 

with respect to the establishment of 

position and exercise limits is 

appropriate given its lack of relevance to 

the purpose of position and exercise 

limits. However, given the significant 

size of the Bitcoin supply, the proposed 

positions limits are more than sufficient 

to protect investors and the market. 

Based on the foregoing and 

notwithstanding the position limits in 

Options 9, Section 13(d) and exercise 

limits in Options 9, Section 15(c), ISE 

proposes the position and exercise 

limits for the options Fidelity Fund, the 

ARK 21 Fund, GBTC, BTC and BITB to 

be 25,000 contracts on the same side 

pursuant to proposed Supplementary 

Material .01 to Options 9, Section 13 

and proposed Supplementary Material 

.01 to Options 9, Section 15. Further, 

Exchange Rules that currently govern 

the listing and trading of options on 

ETFs, including permissible expirations, 

strike prices, minimum increments, and 

margin requirements, will govern the 

listing and trading of options on the 

Bitcoin Trusts. The proposed position 

limit, and exercise limit, is consistent 

with the Act as it addresses concerns 

related to manipulation and protection 

of investors because the position limit 

(and exercise limit) is conservative and 

appropriate given the Bitcoin Trusts are 

actively traded. 

Options on the Bitcoin Trusts will be 

subject to the Exchange’s continued 

listing standards for options on ETFs set 

forth in Options 4, Section 4(g). 

Specifically, options approved for 

trading pursuant to Options 4, Section 

3(h) will not be deemed 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 such 

ETFs if the ETFs are delisted from 

trading as provided in subparagraph 

(b)(5) of Options 4, Section 4 28 or the 

ETFs are halted or suspended from 

trading on their primary market.29 In 

addition, the Exchange shall consider 

the suspension of opening transactions 

in any series of options of the class 

covering ETFs in any of the following 

circumstances: 

(1) in the case of options covering 

Exchange-Traded Fund Shares approved 

pursuant to Options 4, Section 

3(h)(A)(i), in accordance with the terms 

of subparagraphs (b)(1), (2), (3) and (4) 

of Options 4, Section 4; 30

(2) in the case of options covering Fund 

Shares approved pursuant to Options 4, 

Section 3(h)(A)(ii),31 following the initial 

twelve-month period beginning upon the 

commencement of trading in the ExchangeTraded Fund Shares on a national securities 

exchange and are defined as an ‘‘NMS stock’’ 

under Rule 600 of Regulation NMS, there 

were fewer than 50 record and/or beneficial 

holders of such Exchange-Traded Fund 

Shares for 30 or more consecutive trading 

days; 

(3) the value of the index or portfolio of 

securities or non-U.S. currency, portfolio of 

commodities including commodity futures 

contracts, options on commodity futures 

contracts, swaps, forward contracts, options 

on physical commodities and/or Financial 

Instruments and Money Market Instruments, 

on which the Exchange-Traded Fund Shares 

are based is no longer calculated or available; 

or 

(4) such other event occurs or condition 

exists that in the opinion of the Exchange 

makes further dealing in such options on the 

Exchange inadvisable. 

Options on the Bitcoin Trusts would 

be physically settled contracts with 

American-style exercise.32 Consistent 

with current Options 4, Section 5, 

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 Bitcoin Trusts and may 

also list series of options on the Bitcoin 

Trusts for trading on a weekly 33 or 

quarterly 34 basis. The Exchange may 

also list long-term equity option series 

(‘‘LEAPS’’) 35 that expire from twelve to 

thirty-nine from the time they are listed. 

Pursuant to Options 4, Section 5(d), 

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 Section 3(h) of Options 4 shall be 

fixed at a price per share which is 

reasonably close to the price per share 

at which the 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.36

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 $150.37 Additionally, the 

Exchange may list series of options 

pursuant to the $1 Strike Price Interval 


ddrumheller on DSK120RN23PROD with NOTICES1
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38See Supplementary Material .01 to Options 4, 

Section 5. 

39See Supplementary Material .05 to Options 4, 

Section 5. 

40See Supplementary Material .02 to Options 4, 

Section 5. 

41See Supplementary Material .06 to Options 4, 

Section 5. 

42Options that are eligible to participate in the 

Penny Interval Program have a minimum increment 

of $0.01 below $3.00 and $0.50 above $3.00. See 

Supplementary Material .01 to Options 3, Section 

3. 

43The surveillance program includes real-time 

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

the close, pinging, phishing). 

44The Nasdaq Stock Market LLC is an affiliated 

market of ISE. 

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 Securities Exchange Act Release No. 99306 

(January 10, 2024), 89 FR 3008, 3009 (January 17, 

2024) (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; SRCboeBZX– 

2023–044; and 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) (‘‘Bitcoin ETP 

Approval Order’’). 

47 Id. 

48 Id. 

49 Id. 

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

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

52 15 U.S.C. 78(f)(b)(5). 

Program,38 the $0.50 Strike Program,39

the $2.50 Strike Price Program,40 and 

the $5 Strike Program.41 Options 3, 

Section 3 governs the minimum 

increment for bids and offers for both 

equity and index options. Pursuant to 

Options 3, Section 3, where the price of 

a series of options for the Bitcoin Trusts 

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 42 consistent 

with the minimum increments for 

options on other ETFs listed on the 

Exchange. Any and all new series of 

options on the Bitcoin Trusts that the 

Exchange lists will be consistent and 

comply with the expirations, strike 

prices, and minimum increments set 

forth in Options 4, Section 5 and 

Options 3, Section 3, as applicable. 

Today, the Exchange has an adequate 

surveillance program in place for 

options. The Exchange intends to apply 

those same program procedures to 

options the Bitcoin Trusts that it applies 

to the Exchange’s other options 

products.43 ISE’s market surveillance 

staff would have access to the 

surveillances conducted by Nasdaq 44

with respect to the Bitcoin Trusts and 

would review activity in the underlying 

Bitcoin Trusts when conducting 

surveillances for market abuse or 

manipulation in the options on the 

Bitcoin Trusts. Additionally, ISE 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, ISE 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

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 

Bitcoin Trusts. 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 options 

on the Bitcoin Trusts. The underlying 

shares of spot bitcoin ETPs, including 

the Bitcoin Trusts, are also subject to 

safeguards related to addressing market 

abuse and manipulation. As the 

Commission stated in the orders 

approving proposals of several 

exchanges to list and trade shares of 

spot bitcoin-based exchange-traded 

products: 46

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.47

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].’’ 48 In light of 

surveillance measures related to both 

options and futures as well as the 

underlying Bitcoin Trusts,49 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 Bitcoin Trusts. 

The Exchange has also analyzed its 

capacity and represents that it believes 

the Exchange and the 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 Bitcoin Trusts up to the number 

of expirations currently permissible 

under the Exchange Rules. Because the 

proposal is limited to one class, the 

Exchange believes any additional traffic 

that may be generated from the 

introduction of the options on the 

Bitcoin Trust will be manageable. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,50 in general, and furthers the 

objectives of Section 6(b)(5) of the Act,51

in particular, in that it is designed to 

prevent fraudulent and manipulative 

acts and practices, to promote just and 

equitable principles of trade, to foster 

cooperation and coordination with 

persons engaged in regulating, clearing, 

settling, processing information with 

respect to, and facilitating transactions 

in securities, to remove impediments to 

and perfect the mechanism of a free and 

open market and a national market 

system, and, in general, to protect 

investors and the public interest. 

Additionally, the Exchange believes the 

proposed rule change is consistent with 

the Section (6)(b)(5) 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 Bitcoin Trusts will 

remove impediments to and perfect the 

mechanism of a free and open market 

and a national market system and, in 


ddrumheller on DSK120RN23PROD with NOTICES1
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53See Options 4, Section 3(h)(iv). 

54The Exchange notes that IBIT—which has been 

approved for options trading—represents a larger 

percentage of the bitcoin market than all proposed 

Bitcoin Trusts. As noted herein, the Bitcoin Trusts 

collectively represent approximately 1.51% of the 

bitcoin market. By comparison, IBIT options have 

an approved position limit of 25,000 contracts per 

side, which represents 4% of total underlying spot 

BTC liquidity, and IBIT is the most liquid spot 

Bitcoin ETF. 

55The surveillance program includes real-time 

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

the close, pinging, phishing). 56The Nasdaq Stock Market LLC is an affiliated 

market of ISE. 57Section 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. 

general, protect investors because 

offering options on the Bitcoin Trusts 

will provide investors with an 

opportunity to realize the benefits of 

utilizing options on a Bitcoin Trust, 

including cost efficiencies and 

increased hedging strategies. The 

Exchange believes that offering options 

on the Bitcoin Trusts will benefit 

investors by providing them with a 

relatively lower-cost risk management 

tool, which will allow them to manage 

their positions and associated risk in 

their portfolios more easily in 

connection with exposure to the price of 

Bitcoin and with Bitcoin-related 

products and positions. Additionally, 

the Exchange’s offering of options on 

the Bitcoin Trusts will provide investors 

with the ability to transact in such 

options in a listed market environment 

as opposed to in the unregulated OTC 

options market, which would increase 

market transparency and enhance the 

process of price discovery conducted on 

the Exchange through increased order 

flow to the benefit of all investors. The 

Exchange also notes that it already lists 

options on other commodity-based 

Units,53 which, as described above, are 

trusts structured in substantially the 

same manner as Bitcoin Trusts and 

essentially offer the same objectives and 

benefits to investors, just with respect to 

a different commodity (i.e., Bitcoin 

rather than precious metals) and for 

which the Exchange has not identified 

any issues with the continued listing 

and trading of commodity-backed Unit 

options it currently lists for trading. 

The Exchange also believes the 

proposed rule change will remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system, because 

it is consistent with current Exchange 

Rules previously filed with the 

Commission. Options on the Bitcoin 

Trusts satisfy the initial listing 

standards and continued listing 

standards currently in the Exchange 

Rules applicable to options on all Units, 

including Units that hold other 

commodities already deemed 

appropriate for options trading on the 

Exchange. Additionally, as 

demonstrated above, each Bitcoin Trust 

is characterized by a substantial number 

of shares that are widely held and 

actively traded. Options on the Bitcoin 

Trusts will trade in the same manner as 

any other Unit options—the same 

Exchange Rules that currently govern 

the listing and trading of all Unit 

options, including permissible 

expirations, strike prices and minimum 

increments, and applicable margin 

requirements, will govern the listing 

and trading of options on Bitcoin Trusts 

in the same manner. 

The Exchange also believes the 

proposed rule change will remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system, because 

it is consistent with current Exchange 

Rules previously filed with the 

Commission. Options on Bitcoin Trusts 

satisfy the initial listing standards and 

continued listing standards currently in 

the Exchange Rules applicable to 

options on all ETFs and ETPs, including 

ETPs that hold other commodities 

already deemed appropriate for options 

trading on the Exchange. Additionally, 

as demonstrated above, each Bitcoin 

Trust is characterized by a substantial 

number of shares that are widely held 

and actively traded. Options on the 

Bitcoin Trust will trade in the same 

manner as any other ETF or ETP 

options—the same Exchange Rules that 

currently govern the listing and trading 

of options, including permissible 

expirations, strike prices, minimum 

increments, and margin requirements, 

will govern the listing and trading of 

options on Bitcoin Trusts in the same 

manner. 

The proposed position and exercise 

limit for options on the Bitcoin Trusts 

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 Bitcoin Trusts’ market 

capitalization, average daily volume, 

number of beneficial holders, and high 

number of outstanding shares.54 The 

proposed position and exercise limits 

are consistent with the Act as they 

addresses concerns related to 

manipulation and protection of 

investors because the position and 

exercise limits are extremely 

conservative and more than appropriate 

given the Bitcoin Trusts are actively 

traded. 

Today, the Exchange has an adequate 

surveillance program in place for 

options. The Exchange intends to apply 

those same program procedures to 

options the Bitcoin Trusts that it applies 

to the Exchange’s other options 

products.55 ISE’s market surveillance 

staff would have access to the 

surveillances conducted by Nasdaq 56

with respect to the Bitcoin Trusts and 

would review activity in the underlying 

Bitcoin Trusts when conducting 

surveillances for market abuse or 

manipulation in the options on the 

Bitcoin Trusts. Additionally, ISE 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. ISE would 

be able to obtain information regarding 

trading and shares of the Bitcoin Trusts 

from their primary listing market, and 

from other markets that trade shares of 

the Bitcoin Trusts, through ISG. In 

addition, ISE 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.57

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 

Bitcoin Trusts. 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 options 

on the Bitcoin Trusts. The underlying 

shares of spot bitcoin ETPs, including 


ddrumheller on DSK120RN23PROD with NOTICES1
95320 Federal Register / Vol. 89, No. 231 / Monday, December 2, 2024 / Notices 

58See Securities Exchange Act Release No. 99306 

(January 10, 2024), 89 FR 3008, 3009 (January 17, 

2024) (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; 

SRCboeBZX–2023–044; and SR–CboeBZX–2023– 

072) (Order Granting Accelerated Approval of 

Proposed Rule Changes, as Modified by 

Amendments Thereto, to List and Trade BitcoinBased Commodity-Based Trust Shares and Trust 

Units). 

59 Id. 

60 Id. 61See supra note 3. 

62 15 U.S.C. 78s(b)(3)(A)(iii). 

63 17 CFR 240.19b–4(f)(6). 

64 15 U.S.C. 78s(b)(3)(A)(iii). 

65 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 Commission 

waives this requirement. 

66 17 CFR 240.19b–4(f)(6). 

67 17 CFR 240.19b–4(f)(6)(iii). 

the Bitcoin Trusts, are also subject to 

safeguards related to addressing market 

abuse and manipulation. As the 

Commission stated in its order 

approving proposals of several 

exchanges to list and trade shares of 

spot bitcoin-based exchange-traded 

products (‘‘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.58

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].’’ 59 In light of 

surveillance measures related to both 

options and futures as well as the 

underlying Bitcoin Trusts,60 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 Bitcoin Trusts. 

The Exchange has also analyzed its 

capacity and represents that it believes 

the Exchange and the 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 Bitcoin Trusts up to the number 

of expirations currently permissible 

under the Exchange Rules. Because the 

proposal is limited to one class, the 

Exchange believes any additional traffic 

that may be generated from the 

introduction of the options on the 

Bitcoin Trusts will be manageable. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on intramarket competition 

that is not necessary or appropriate in 

furtherance of the purposes of the Act 

as Bitcoin Trusts would need to satisfy 

the initial listing standards set forth in 

the Exchange Rules in the same manner 

as any other ETF before the Exchange 

could list options on them. 

Additionally, options on the Bitcoin 

Trusts will be equally available to all 

market participants who wish to trade 

such options. The Exchange Rules 

currently applicable to the listing and 

trading of options on ETFs on the 

Exchange will apply in the same 

manner to the listing and trading of all 

options on Bitcoin Trusts. Also, and as 

stated above, the Exchange already lists 

options on other commodity-based 

ETPs. 

The Exchange does not believe that 

the proposal to list and trade options on 

Bitcoin Trusts will impose any burden 

on intermarket competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. To the extent 

that the advent of options on the Bitcoin 

Trusts trading on the Exchange may 

make the Exchange a more attractive 

marketplace to market participants at 

other exchanges, such market 

participants are free to elect to become 

market participants on the Exchange. As 

noted herein, this is a competitive filing 

as the Commission recently approved 

the listing and trading of options on an 

ETP that, like the Bitcoin Trusts, holds 

bitcoin.61 Additionally, other options 

exchanges are free to amend their listing 

rules, as applicable, to permit them to 

list and trade options on Bitcoin Trusts. 

The Exchange notes that listing and 

trading options on Bitcoin Trust on the 

Exchange will subject such options to 

transparent exchange-based rules as 

well as price discovery and liquidity, as 

opposed to alternatively trading such 

options in the OTC market. 

The Exchange believes that the 

proposed rule change may relieve any 

burden on, or otherwise promote, 

competition as it is designed to increase 

competition for order flow on the 

Exchange in a manner that is beneficial 

to investors by providing them with a 

lower-cost option to hedge their 

investment portfolios. The Exchange 

notes that it operates in a highly 

competitive market in which market 

participants can readily direct order 

flow to competing venues that offer 

similar products. Ultimately, the 

Exchange believes that offering options 

on the Bitcoin Trusts for trading on the 

Exchange will promote competition by 

providing investors with an additional, 

relatively low-cost means to hedge their 

portfolios and meet their investment 

needs in connection with Bitcoin prices 

and Bitcoin-related products and 

positions on a listed options exchange. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were either 

solicited or 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 62 and Rule 

19b–4(f)(6) thereunder.63 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 64 and 

subparagraph (f)(6) of Rule 19b–4 

thereunder.65

A proposed rule change filed under 

Rule 19b–4(f)(6) 66 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),67 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 the Fidelity Wise 


ddrumheller on DSK120RN23PROD with NOTICES1
Federal Register / Vol. 89, No. 231 / Monday, December 2, 2024 / Notices 95321 

68See Securities Exchange Act Release No. 

101387 (October 18, 2024), 89 FR 84948 (October 

24, 2024) (SR–Cboe–2024–035) (Notice of Filing of 

Amendment Nos. 2 and 3 and Order Granting 

Accelerated Approval of a Proposed Rule Change, 

as Modified by Amendment Nos. 2 and 3, To Permit 

the Listing and Trading of Options on Bitcoin 

Exchange-Traded Funds). See also Securities 

Exchange Act Release No. 101386 (October 18, 

2024), 89 FR 84960 (October 24, 2024) (SR– 

NYSEAMER–2024–49) (Notice of Filing of 

Amendment No. 3 and Order Granting Accelerated 

Approval of a Proposed Rule Change, as Modified 

by Amendment No. 3, To Permit the Listing and 

Trading of Options on Bitcoin Exchange-Traded 

Funds). 

69For 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). 70 17 CFR 200.30–3(a)(12), (59). 

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

2 17 CFR 240.19b–4. 

3On November 15, 2024, BX is withdrawing SR– 

BX–2024–019 and is filing this rule change. 

Origin Bitcoin Fund, the ARK21Shares 

Bitcoin ETF, the Grayscale Bitcoin Trust 

(BTC), the Grayscale Bitcoin Mini Trust 

BTC, and the Bitwise Bitcoin ETF.68 The 

Exchange has provided information 

regarding the underlying Bitcoin Trusts, 

including, among other things, 

information regarding trading volume, 

the number of beneficial holders, and 

the market capitalization of the Bitcoin 

Trusts. The proposal also establishes 

position and exercise limits for options 

on the Bitcoin Trusts and provides 

information regarding the surveillance 

procedures that will apply to Bitcoin 

Trust options. The Commission believes 

that waiver of the operative delay could 

benefit investors by providing an 

additional venue for trading 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.69

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– 

ISE–2024–54 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–ISE–2024–54. 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–ISE–2024–54 and should be 

submitted on or before December 23, 

2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.70

Vanessa A. Countryman, 

Secretary. 

[FR Doc. 2024–28114 Filed 11–29–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–101743; File No. SR–BX– 

2024–048] 

Self-Regulatory Organizations; Nasdaq 

BX, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change to Adopt an OTTO 

Protocol 

November 25, 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 

15, 2024, Nasdaq BX, Inc. (‘‘BX’’ 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 adopt a 

new protocol, ‘‘Ouch to Trade Options’’ 

or ‘‘OTTO’’ and establish pricing for this 

new protocol.3

The text of the proposed rule change 

is available on the Exchange’s website at 

https://listingcenter.nasdaq.com/ 

rulebook/nasdaq/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 

the most significant aspects of such 

statements. 


ddrumheller on DSK120RN23PROD with NOTICES1