`[Federal Register Volume 89, Number 232 (Tuesday, December 3, 2024)]
[Notices]
[Pages 95871-95878]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-28345]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-101778; File No. SR-MEMX-2024-45]


Self-Regulatory Organizations; MEMX LLC; Notice of Filing and 
Immediate Effectiveness of a Proposed Rule Change To Amend Exchange 
Rule 19.3, Criteria for Underlying Securities, To Allow the Exchange To 
List and Trade Options on the iShares Bitcoin Trust (``the Trust'')

November 27, 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 27, 2024, MEMX LLC (``MEMX'' or ``Exchange'') filed with 
the Securities and Exchange Commission (``Commission'') the proposed 
rule change as described in Items I and II below, which Items have been 
prepared by the Exchange. The Commission is publishing this notice to 
solicit comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange is filing with the Commission a proposed rule change 
to amend Rule 19.3, Criteria for Underlying Securities. The text of the 
proposed rule change is provided in Exhibit 5.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
sections A, B, and C below, of the most significant aspects of such 
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend Exchange Rule 19.3 (Criteria for 
Underlying Securities) to allow the Exchange to list and trade options 
on the iShares Bitcoin Trust (``the Trust''), designating the Trust as 
appropriate for options trading on the Exchange. This is a competitive 
filing that is based on a similar proposal submitted by Nasdaq ISE, LLC 
(``ISE'') and approved by the Securities and Exchange Commission 
(``Commission'').\3\
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    \3\ See Securities Exchange Act Release No. 101128 (September 
20, 2024), 89 FR 78942 (September 26, 2024) (SR-ISE-2024-03) (Self-
Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing of 
Amendment Nos. 4 and 5 and Order Granting Accelerated Approval of a 
Proposed Rule Change, as Modified by Amendment Nos. 1, 4, and 5, to 
Permit the Listing and Trading of Options on the iShares Bitcoin 
Trust).
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    Current Exchange Rule 19.3(i) provides that, subject to certain 
other criteria set forth in that Rule, securities deemed appropriate 
for options trading include shares or other securities (``Fund 
Shares''), including but not limited to Partnership Units as defined in 
the Rule, that are principally traded on a national securities exchange 
and are defined as an ``NMS stock'' under Rule 600 of Regulation NMS 
and that meet specified criteria enumerated in the rule. Exchange Rule 
19.3(i) provides that such shares or other securities:
    (4) represent interests in the SPDR Gold Trust or are issued by the 
iShares COMEX Gold Trust or iShares Silver Trusts, provided that all 
conditions described under Rule 19.3(i)(1)-(2) are met.
Proposal
    The Exchange proposes to amend Exchange Rule 19.3(i) to expand the 
list of securities that are appropriate for options trading on the 
Exchange.
Description of the Trust \4\
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    \4\ See Securities Exchange Act Release No. 99306 (Jan. 10, 
2024), 89 FR 3008 (Jan. 17, 2024) (order approving File Nos. SR-
NYSEARCA-2021-90; SR-NYSEARCA-2023-44; SR-NYSEARCA-2023-58; 
SRNASDAQ-2023-016; SR-NASDAQ-2023-019; SR-CboeBZX-2023-028; SR-
CboeBZX-2023-038; SRCboeBZX-2023-040; SR-CboeBZX-2023-042; SR-
CboeBZX-2023-044; SR-CboeBZX-2023-072) (Order Granting Accelerated 
Approval of Proposed Rule Changes, as Modified by Amendments 
Thereto, To List and Trade Bitcoin-Based Commodity-Based Trust 
Shares and Trust Units) for a complete description of the Trust.
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    The shares are issued by the Trust, a Delaware statutory trust. The 
Trust operates pursuant to a trust agreement (the ``Trust Agreement'') 
between the Sponsor, BlackRock Fund Advisors (the ``Trustee'') as the 
trustee of the Trust and Wilmington Trust, National Association, as 
Delaware trustee. The Trust issues shares representing fractional 
undivided beneficial interests in its net assets. The assets of the 
Trust consist only of bitcoin, held by a custodian on behalf of the 
Trust except under limited circumstances when transferred through the 
Trust's prime broker temporarily (described below), and cash. Coinbase 
Custody Trust Company, LLC (the ``Bitcoin Custodian'') is the custodian 
for the Trust's bitcoin holdings, and maintains a custody account for 
the Trust (``Custody Account''); Coinbase, Inc. (the ``Prime Execution 
Agent''), an affiliate of the Bitcoin Custodian, is the prime broker 
for the Trust and maintains a trading account for the Trust (``Trading 
Account''); and Bank of New York Mellon is the custodian for the 
Trust's cash holdings (the ``Cash Custodian'' and together with the 
Bitcoin Custodian, the ``Custodians'') and the administrator of the 
Trust (the ``Trust Administrator''). Under the Trust Agreement, the 
Trustee may delegate all or a portion of its duties to any agent, and 
has delegated the bulk of the day to day responsibilities to the Trust 
Administrator and certain other administrative and recordkeeping 
functions to its affiliates and other agents. The Trust is not an 
investment company registered under the Investment Company Act of 1940, 
as amended. The investment objective of the Trust is to reflect 
generally the performance of the price of bitcoin. The Trust seeks to 
reflect such performance before payment of the Trust's expenses and 
liabilities. The shares are intended to constitute a simple means of 
making an investment similar to an investment in bitcoin through the 
public securities market rather than by acquiring, holding and trading 
bitcoin directly on a peer-to-peer or other basis or via a digital 
asset exchange. The shares have been designed to remove the obstacles 
represented by the complexities and operational burdens involved in a 
direct investment in bitcoin, while at the same time having an 
intrinsic value that reflects, at any given time, the investment 
exposure to the bitcoin owned by the Trust at such time, less the 
Trust's expenses and liabilities. Although the shares are not the exact 
equivalent of a direct investment in bitcoin, they provide investors 
with an alternative method of achieving investment exposure to bitcoin 
through the public securities market, which may be more familiar to 
them.

[[Page 95872]]

Custody of the Trust's Bitcoin
    An investment in the shares is backed by bitcoin held by the 
Bitcoin Custodian on behalf of the Trust. All of the Trust's bitcoin 
will be held in the Custody Account, other than the Trust's bitcoin 
which is temporarily maintained in the Trading Account under limited 
circumstances, i.e., in connection with creation and redemption Basket 
\5\ activity or sales of bitcoin deducted from the Trust's holdings in 
payment of Trust expenses or the Sponsor's fee (or, in extraordinary 
circumstances, upon liquidation of the Trust). The Custody Account 
includes all of the Trust's bitcoin held at the Bitcoin Custodian, but 
does not include the Trust's bitcoin temporarily maintained at the 
Prime Execution Agent in the Trading Account from time to time. The 
Bitcoin Custodian will keep all of the private keys associated with the 
Trust's bitcoin held in the Custody Account in ``cold storage''.\6\ The 
hardware, software, systems, and procedures of the Bitcoin Custodian 
may not be available or cost-effective for many investors to access 
directly.
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    \5\ The Trust issues and redeems Shares only in blocks of 40,000 
or integral multiples thereof. A block of 40,000 Shares is called a 
``Basket.'' These transactions take place in exchange for Bitcoin.
    \6\ The term ``cold storage'' refers to a safeguarding method by 
which the private keys corresponding to the Trust's bitcoins are 
generated and stored in an offline manner, subject to layers of 
procedures designed to enhance security. Private keys are generated 
by the Bitcoin Custodian in offline computers that are not connected 
to the internet so that they are more resistant to being hacked.
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    The Exchange believes that offering options on the Trust will 
benefit investors by providing them with an additional, relatively 
lower cost investing tool to gain exposure to spot Bitcoin as well as a 
hedging vehicle to meet their investment needs in connection with 
Bitcoin products and positions. Similar to other commodity-based trusts 
on which options may be listed on the Exchange (e.g., SPDR[supreg] Gold 
Trust, the iShares COMEX Gold Trust, or the iShares Silver Trust),\7\ 
the Trust essentially offers the same objectives and benefits to 
investors as do other commodity-based trusts on which options may be 
listed on the Exchange.
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    \7\ See Exchange Rule 19.3(i).
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    Options on the Trust will trade in the same manner as options on 
other ETFs (otherwise referred to as ``Fund Shares'') on the Exchange. 
Exchange Rules that currently apply to the listing and trading of all 
options on ETFs on the Exchange, including, for example, Rules that 
govern listing criteria, expirations, exercise prices, minimum 
increments, position and exercise limits, margin requirements, customer 
accounts and trading halt procedures, will apply to the listing and 
trading of options on the Trust on the Exchange. Today, these rules 
apply to options on the various commodities-based trusts deemed 
appropriate for options trading on the Exchange pursuant to Exchange 
Rule 19.3(i).
    The Exchange's initial listing standards for ETFs on which options 
may be listed and traded on the Exchange will apply to the Trust. 
Pursuant to Exchange Rule 19.3(a), a security (which includes ETFs) on 
which options may be listed and traded on the Exchange must be 
registered (with the Commission) and be an NMS stock (as defined in 
Rule 600 of Regulation NMS under the Act) and be characterized by a 
substantial number of outstanding shares that are widely held and 
actively traded. Exchange Rule 19.3(i)(1) requires that, in relevant 
part, Funds Shares must either (A) meet the criteria and standards set 
forth in Exchange Rule 19.3(a) or Exchange Rule 19.3(b), or (B) be 
available for creation or redemption each business day in cash or in 
kind from the investment company, commodity pool or other entity at a 
price related to net asset value, and the investment company, commodity 
pool or other entity is obligated to provide that Fund Shares may be 
created even if some or all of the securities and/or cash required to 
be deposited have not been received by the Fund, the unit investment 
trust or the management investment company, provided the authorized 
creation participant has undertaken to deliver the securities and/or 
cash 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 Fund, all as described in the Fund's or 
unit trust's prospectus.
    Options on the Trust will also be subject to the Exchange's 
continued listing standards set forth in Exchange Rule 19.4(g), for 
Fund Shares deemed appropriate for options trading pursuant to Exchange 
Rule 19.3(i). Specifically, Exchange Rule 19.4(g) provides that Fund 
Shares that were initially approved for options trading pursuant to 
Exchange Rule 19.3(i) 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 Fund 
Shares, if the Fund Shares are delisted from trading pursuant to 
Exchange Rule 19.4(b)(4). In addition, options on Fund Shares may be 
subject to the suspension of opening transactions in any of the 
following circumstances: (1) in the case of options covering Fund 
Shares approved for trading under Exchange Rule 19.3(i)(4)(A), in 
accordance with the terms of paragraphs (b)(1), (2), and (3) of 
Exchange Rule 19.4; (2) in the case of options covering Fund Shares 
approved for trading under Exchange Rule 19.3(i)(4)(B), following the 
initial twelve-month period beginning upon the commencement of trading 
in the 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 Fund Shares for 30 consecutive 
days; (3) the value of the index, non-U.S. currency, or portfolio of 
commodities including commodity futures contracts, options on commodity 
futures contracts, swaps, forward contracts and/or options on physical 
commodities and/or financial instruments and money market instruments 
on which the 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 Trust would be physically settled contracts with 
American-style exercise.\8\ Consistent with current Exchange Rule 19.5, 
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 Trust \9\ and may also list series 
of

[[Page 95873]]

options on the Trust for trading on a weekly,\10\ monthly,\11\ or 
quarterly \12\ basis.
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    \8\ See Exchange Rule 19.2, which provides that the rights and 
obligations of holders and writers are set forth in the Rules of the 
Options Clearing Corporation (``OCC''); see also OCC Rules, Chapters 
VIII (which governs exercise and assignment) and Chapter IX (which 
governs the discharge of delivery and payment obligations arising 
out of the exercise of physically settled stock option contracts).
    \9\ See Exchange Rule 19.5(b). The monthly expirations are 
subject to certain listing criteria for underlying securities 
described within Exchange Rule 19.5 and its Interpretations and 
Policies. Monthly listings expire the third Friday of the month. The 
term ``expiration date'' (unless separately defined elsewhere in the 
OCC By-Laws), when used in respect of an option contract (subject to 
certain exceptions), means the third Friday of the expiration month 
of such option contract, or if such Friday is a day on which the 
exchange on which such option is listed is not open for business, 
the preceding day on which such exchange is open for business. See 
OCC By-Laws Article I, Section 1. Pursuant to Exchange Rule 19.5(c), 
additional series of options of the same class may be opened for 
trading on the Exchange when the Exchange deems it necessary to 
maintain an orderly market, to meet customer demand or when the 
market price of the underlying stock moves more than five strike 
prices from the initial exercise price or prices. Pursuant to 
Exchange Rule 19.5(c), new series of options on an individual stock 
may be added until the beginning of the month in which the options 
contract will expire. Due to unusual market conditions, the 
Exchange, in its discretion, may add a new series of options on an 
individual stock until the close of trading on the business day 
prior to expiration.
    \10\ See Exchange Rule 19.5, Interpretation and Policy .05.
    \11\ See Exchange Rule 19.5, Interpretation and Policy .08.
    \12\ See Exchange Rule 19.5, Interpretation and Policy .04.
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    Pursuant to Exchange Rule 19.5(d)(4), which governs strike prices 
of series of options on ETFs, the interval between strike prices of 
series of options on ETFs approved for options trading pursuant to 
Exchange Rule 19.3(i) 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.\13\ 
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.\14\ Additionally, the Exchange may list series of options 
pursuant to the $1 Strike Price Interval Program,\15\ the $0.50 Strike 
Program,\16\ and the $2.50 Strike Price Program.\17\ Pursuant to 
Exchange Rule 21.5, where the price of a series of options for the 
Trust is less than $3.00, the minimum increment will be $0.05, and 
where the price is $3.00 or higher, the minimum increment will be $0.10 
\18\ consistent with the minimum increments for options on other ETFs 
listed on the Exchange. Any and all new series of Trust options that 
the Exchange lists will be consistent and comply with the expirations, 
strike prices, and minimum increments set forth in Rules 19.5 and 21.5, 
as applicable.
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    \13\ See Exchange Rule 19.5, Interpretation and Policy .05(e).
    \14\ Id.
    \15\ See Exchange Rule 19.5, Interpretation and Policy .02.
    \16\ See Exchange Rule 19.5, Interpretation and Policy .06.
    \17\ See Exchange Rule 19.5, Interpretation and Policy .03.
    \18\ See Exchange Rule 21.5.
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    Pursuant to Exchange Rules 18.7 \19\ and 18.9, the position and 
exercise limits, respectively, for options on the Trust will be 25,000 
same side options contracts. In considering the appropriate position 
and exercise limits for the Trust, the Exchange reviewed the data 
presented by ISE in its filing, specifically in Exhibit 3 of the 
filing,\20\ where ISE measured the Trust's market capitalization and 
ADV against other industry data as explained further below. In its 
filing, ISE considered the Trust's market capitalization and ADV, and 
prospective position limit in relation to other securities. In 
measuring the Trust against other securities, ISE aggregated market 
capitalization and volume data for securities that have defined 
position limits utilizing data from The Options Clearing Corporations 
(``OCC'').\21\ This pool of data took into consideration 3,984 options 
on single stock securities, excluding broad based ETFs.\22\ Next, ISE 
aggregated the data based on market capitalization and ADV and grouped 
option symbols by position limit utilizing statistical thresholds for 
ADV and market capitalization that were one standard deviation above 
the mean for each position limit category (i.e., 25,000, 50,000 to 
65,000, 75,000, 100,000 to less than 250,000, 250,000 to 400,000, 
450,000 to 1,000,000, and greater than or equal to 1,000,000) 
(sic).\23\ The OCC publishes a list of position limits for various 
contracts listed by other options exchanges, which the Exchange 
utilizes whenever it is listing a new product that has already been 
listed by another options exchange. For example, like on ISE, a 25,000 
contract limit on the Exchange applies to those options having an 
underlying security that does not meet the requirements for a higher 
options contract limit. ISE performed an exercise to demonstrate the 
Trust's position limit relative to other options symbols in terms of 
market capitalization and ADV. For reference the market capitalization 
for the Trust was 19,789,068 billion \24\ with an ADV, for the 
preceding three months prior to August 7, 2024, of greater than 26 
million shares.\25\ Today, by comparison, other options symbols with 
similar market capitalization and ADV have a position limit in excess 
of 400,000.\26\ Therefore, the proposed 25,000 same side position limit 
for options on the Trust is extremely conservative relative to these 
options symbols which are a full standard deviation above the mean in 
comparison.
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    \19\ See Regulatory Notice 23-12, available at: https://info.memxtrading.com/wp-content/uploads/2023/09/RegNotice-23-12-Options-Position-Limits.pdf, which informed Exchange members of the 
specific position limits applicable to options trading on MEMX 
Options, pursuant to Rule 18.7, as those position limits calculated 
and disseminated by the OCC, published daily and which can be found 
at: https://www.theocc.com/market-data/market-data-reports/series-and-trading-data/position-limits.
    \20\ See Securities Exchange Act Release No. 101128 (September 
20, 2024), 89 FR 78942 (September 26, 2024) (SR-ISE-2024-03) (Order 
Granting Accelerated Approval of a Proposed Rule Change, as Modified 
by Amendment Nos. 1, 4, and 5, to Permit the Listing and Trading of 
Options on the iShares Bitcoin Trust) (Exhibit 3) (``IBIT Approval 
Order'') (letter from Angela Dunn, Nasdaq ISE, LLC, to Vanessa 
Countryman, Secretary, Commission, dated August 21, 2024) (``ISE 
Letter'').
    \21\ The computations are based on OCC data from August 6, 2024. 
Data displaying zero values in market capitalization or ADV were 
removed.
    \22\ The Trust has one asset and therefore is not comparable to 
a broad based ETF where there are typically multiple components.
    \23\ See ISE Letter at 10.
    \24\ ISE acquired this figure as of August 13, 2024. See https://www.ishares.com/us/products/333011/isharesbitcoin-trust. The global 
supply of bitcoin grows each day bitcoin are minted.
    \25\ See ISE Letter at 10.
    \26\ See, e.g,. iShares[supreg] iBoxx[supreg] $ High Yield 
Corporate Bond ETF (``HYG'') with a market capitalization of 
13,859,235,000 billion as of November 4, 2024. See https://www.ishares.com/us/products/239565/isharesiboxx-high-yield-corporate-bond-etf. The Exchange notes that HYG has a position limit 
of 500,000 contracts.
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    Second, ISE reviewed the Trust's data relative to the market 
capitalization of the entire bitcoin market in terms of exercise risk 
and availability of deliverables. Utilizing data as of August 3, 2024, 
there were 19,737,193 bitcoins in circulation.\27\ ISE took a price of 
$57,000 that equates to a market capitalization of greater than 1.125 
trillion U.S. dollars, and applied that to a position limit of 400,000 
for options on the Trust.\28\ If a position limit of 400,000 options 
were considered (the position limit that would be typically assigned 
based upon data) the exercisable risk would represent only 6.6% of the 
outstanding shares of the Trust. The 25,000 position limit being sought 
only represents 0.4% of the outstanding shares of the Trust. Since the 
Trust has a creation and redemption process managed through the issuer, 
additionally it can be compared to the position limit sought to the 
total market capitalization of the entire bitcoin market. In this case, 
the exercisable risk for options on the Trust would be less than 0.01% 
of the market capitalization

[[Page 95874]]

of all outstanding bitcoin. Assuming a scenario where all options on 
the Trust's shares were exercised given the proposed 25,000 per same 
side position limit, this would have a virtually unnoticed impact on 
the entire bitcoin market. This analysis demonstrates that the proposed 
25,000 per same side position limit is also extremely conservative and 
more than appropriate for options on the Trust.
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    \27\ See ISE Letter at 10.
    \28\ Id.
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    Third, ISE reviewed the proposed position limit by comparing it to 
position limits for derivative products regulated by the Commodity 
Futures Trading Commission (``CFTC''). While the CFTC, through the 
relevant Designated Contract Markets, only regulates options positions 
based upon delta equivalents (creating a less stringent standard), ISE 
examined equivalent bitcoin futures position limits. In particular, ISE 
looked at the CME bitcoin futures contract \29\ that has a position 
limit of 2,000 futures.\30\ On August 7, 2024, CME bitcoin futures 
settled at $55,000.\31\ Taking the position limit of 2,000 futures at a 
$5 multiplier \32\ equates to $550 million of notional value for 
bitcoin futures. By way of comparison, on August 7, 2024, the Trust 
settled at $31.19 per share, which would equate to 17,633,857 shares of 
the Trust \33\ if the CME notional position limit were utilized. Since 
substantial portions of any distributed options portfolio are likely to 
be out of the money on expiration, an options position limit equivalent 
to the CME position limit for bitcoin futures (considering that all 
options deltas are <=1.00) should be a bit higher than the CME implied 
176,338 limit.
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    \29\ CME Bitcoin Futures are described in Chapter 350 of CME's 
Rulebook.
    \30\ See the Position Accountability and Reportable Level Table 
in the Interpretations & Special Notices Section of Chapter 5 of 
CME's Rulebook.
    \31\ See https://finance.yahoo.com/quote/BTC%3DF/history/?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cu 
Z29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAM7ngaS6ZQS9c2Wzx7JW2IUe-_-
_1FnLyr8TQw4jjkleHyCENfSMIEpPPt2hCzPDEryTVyB78NIwxkwFB5Fuw-
jAYiuSmYJHBriWbV6dYn91VQfzQNt3p0I2RkYL.
    \32\ Each bitcoin futures contract is valued at 5 bitcoins as 
defined by the CME CF Bitcoin Reference Rate (``BRR''). See CME Rule 
35001.
    \33\ See ISE Letter at 11.
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    Of note, unlike options contracts, CME position limits are 
calculated on a net futures equivalent basis by contract and include 
contracts that aggregate into one or more base contracts according to 
an aggregation ratio(s).\34\ 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.\35\ 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 25,000 per same side 
position limit is conservative and more than appropriate for options on 
the Trust.
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    \34\ See https://www.cmegroup.com/education/courses/market-regulation/position-limits/positionlimitsaggregation-of-contracts-and-table.htm.
    \35\ Id.
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    In analyzing the proposed position limit for options on the Trust, 
ISE also considered the supply of bitcoin. Specifically, ISE examined 
the number of market participants with position limits that would need 
to exercise in unison to put the underlying asset under stress. In the 
case of options on the Trust, the proposed 25,000 same side position 
limit effectively restricts a market participant from holding positions 
that could be exercised in excess of 2,500,000 shares of the Trust. 
Utilizing data from August 12, 2024, the Trust had 611,040,000 shares 
outstanding, therefore 244 market participants would have to 
simultaneously exercise position limits in order to create a scenario 
that may put the underlying asset (the Trust) under stress.\36\ The 
Exchange notes that historically, from observation only, it appears 
that no more than five market participants holding position limits in 
any security have exercised in unison in any option. As unlikely an 
occurrence as all market participants exercising their position limits 
in unison would be, if it were to occur, it should be noted that even 
such an occurrence would not likely put the Trust under stress as 
economic incentives, would induce the creation of more shares through 
the ETF creation and redemption process.
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    \36\ See https://www.ishares.com/us/products/333011/ishares-bitcoin-trust.
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    By way of example, given that the current global supply of bitcoin, 
the underlying asset of the Trust, is 19,789,068 \37\ and that each 
bitcoin can currently be redeemed for 1,755 shares of the Trust, 
another 34,729,814,340 shares of the Trust could be created. To exhaust 
this supply of the Trust, 13,891 market participants would have to 
simultaneously exercise their position limit. Comparing the Trust to 
the SPDR Gold Shares (``GLD'') ETF or the iShares Silver Trust 
(``SLV'') ETF, which have position limits of 250,000 or ten times the 
proposed position limit for the Trust as well as lower shares 
outstanding in both products,\38\ it is unjustified to mandate a 
different level of stringency with respect to a position limit for 
options on the Trust.
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    \37\ This figure was acquired as of August 13, 2024. See https://www.ishares.com/us/products/333011/isharesbitcoin-trust. The global 
supply of bitcoin grows each day bitcoin are minted.
    \38\ As of August 13, 2024, GLD had 294,000,000 shares 
outstanding and SLV had 510,200,000 shares outstanding. See https://www.ssga.com/us/en/intermediary/etfs/funds/spdr-gold-shares-gld and 
https://www.ishares.com/us/products/239855/ishares-silver-trust-fund.
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    The supply of bitcoin does have a limit, which will take years to 
fully mint.\39\ The Exchange notes that bitcoin is a viable economic 
alternative to traditional assets. The price of goods denominated by 
bitcoin has actually declined. This dynamic not only makes a fixed 
supply desirable, but a necessary condition of the value added by this 
asset in the broader economy. Further, the Exchange notes that 
corporations have a limited number of outstanding shares. Corporations 
may authorize additional shares, repurchase shares or split their 
shares. Similarly, ETFs, like the Trust, may also create, redeem, or 
split shares to suit the demand of the marketplace.
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    \39\ A recent article suggested that the remaining supply will 
take over 100 years to fully mint. See Sen. Vivek. ``94% of 
Bitcoin's Supply Has Now Been Issued.'' Bitcoin Magazine, https://bitcoinmagazine.com/business/94-of-bitcoins-supply-has-now-been-issued. August 19, 2024.
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    Importantly, because the supply of bitcoin is much larger than the 
available supply of most securities and the proposed 25,000 contract 
position limit is so conservative, the Exchange believes that 
evaluating the available supply of bitcoin in establishing a position 
limit for options on the Trust would demonstrate that the proposed 
limit is safe for investors and the market.\40\ The Trust constitutes 
less than 2% of the entire bitcoin supply. When comparing the market 
capitalization of bitcoin against the largest securities, bitcoin would 
rank 7th among those

[[Page 95875]]

securities.\41\ Further, the Exchange believes that its proposal to 
list options on the Trust with a position limit of 25,000 on the same 
side is a conservative position limit that does not lend itself to 
manipulation in the market given the ample market capitalization and 
liquidity in the Trust. If we look to the liquidity statistics of 
similar instruments and their concomitant position limits, we are able 
to extrapolate a reasonable standard for arriving at a position limit 
for a new product. In this case we can look to GLD, SLV, and the 
ProShares Bitcoin Strategy ETF (``BITO''). These products have volume 
statistics and ``float'' statistics, which gauge liquidity, which are 
in line, yet slightly lower than the Trust. All three of these 
reference products have position limits of 250,000 contracts. These 
reference products are remarkably similar in nature to the Trust; they 
are exchange-traded products (``ETPs'') holding one asset in a trust.
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    \40\ A supply consideration would likely be valuable for an 
option symbol that had far less liquidity than the Trust.
    \41\ See https://companiesmarketcap.com/usa/largest-companies-in-the-usa-by-market-cap/.
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    The Exchange further notes that Exchange Rule 28.3, which governs 
margin requirements applicable to trading on the Exchange, including 
options on ETFs, will also apply to the trading of the Trust options. 
The Exchange proposes the position and exercise limits for the options 
on the Trust to be 25,000 contracts on the same side.
    The Exchange represents that the same surveillance procedures 
applicable to all other options on other ETFs currently listed and 
traded on the Exchange will apply to options on the Trust. Also the 
Exchange represents that it has the necessary systems capacity to 
support the new option series. The Exchange believes that its existing 
surveillance and reporting safeguards are designed to deter and detect 
possible manipulative behavior which might potentially arise from 
listing and trading options on ETFs, including the proposed Trust 
options.
    Today, the Exchange has an adequate surveillance program in place 
for options. The Exchange intends to apply those same program 
procedures to options on the Trust that it applies to the Exchange's 
other options products.\42\ The Exchange's staff will have access to 
the surveillance programs conducted by its affiliate exchange, MEMX 
Equities, with respect to trading in the shares of the underlying Trust 
when conducting surveillances for market abuse or manipulation in the 
options on the Trust. Additionally, the Exchange is a member of the 
Intermarket Surveillance Group (``ISG'') under the Intermarket 
Surveillance Group Agreement. ISG members work together to coordinate 
surveillance and investigative information sharing in the stock, 
options, and futures markets. In addition to obtaining surveillance 
data from MEMX Equities, the Exchange will be able to obtain 
information regarding trading in the shares of the underlying Trust 
from Nasdaq, LLC and other markets through ISG. In addition, the 
Exchange has a Regulatory Services Agreement with the Financial 
Industry Regulatory Authority (``FINRA''). Pursuant to a multi-party 
17d-2 joint plan, all options exchanges allocate regulatory 
responsibilities to FINRA to conduct certain options related market 
surveillance that are common to rules of all options exchanges.\43\
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    \42\ The surveillance program includes patterns for price and 
volume movements and post-trade surveillance patterns (e.g., 
spoofing, marking the close, pinging).
    \43\ Section 19(g)(1) of the Act, among other things, requires 
every SRO registered as a national securities exchange or national 
securities association to comply with the Act, the rules and 
regulations thereunder, and the SRO's own rules, and, absent 
reasonable justification or excuse, enforce compliance by its 
members and persons associated with its members. See 15 U.S.C. 
78q(d)(1) and 17 CFR 240.17d-2. Section 17(d)(1) of the Act allows 
the Commission to relieve an SRO of certain responsibilities with 
respect to members of the SRO who are also members of another SRO 
(``common members''). Specifically, Section 17(d)(1) allows the 
Commission to relieve an SRO of its responsibilities to: (i) receive 
regulatory reports from such members; (ii) examine such members for 
compliance with the Act and the rules and regulations thereunder, 
and the rules of the SRO; or (iii) carry out other specified 
regulatory responsibilities with respect to such members.
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    The underlying shares of spot bitcoin ETPs, including the Trust, 
are also subject to safeguards related to addressing market abuse and 
manipulation. As the Commission stated in Bitcoin ETP Order:
    Each Exchange has a comprehensive surveillance-sharing agreement 
with the CME via their common membership in the Intermarket 
Surveillance Group. This facilitates the sharing of information that is 
available to the CME through its surveillance of its markets, including 
its surveillance of the CME bitcoin futures market.\44\
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    \44\ See Bitcoin ETP Order, 89 FR 3010-11.
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    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].'' \45\
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    \45\ See Bitcoin ETP Order, 89 FR 3010-11.
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    In light of surveillance measures related to both options and 
futures as well as the underlying Trust,\46\ the Exchange believes that 
existing surveillance procedures are designed to deter and detect 
possible manipulative behavior which might potentially arise from 
listing and trading the proposed options on the Trust. Further, the 
Exchange represents that it will implement any new surveillance 
procedures it deems necessary to effectively monitor the trading of 
options on the Trust.
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    \46\ See Securities Exchange Act Release No. 99295 (January 8, 
2024), 89 FR 2321, 2334-35 (January 12, 2024) (SR-NASDAQ-2023-016) 
(Notice of Filing of Amendment No. 1 to a Proposed Rule Change To 
List and Trade Shares of the iShares Bitcoin Trust Under Nasdaq Rule 
5711(d)).
---------------------------------------------------------------------------

    The Exchange has also analyzed its capacity and represents that it 
believes the Exchange and Options Price Reporting Authority or ``OPRA'' 
have the necessary systems capacity to handle the additional traffic 
associated with the listing of new series that may result from the 
introduction of options on the Trust up to the number of expirations 
currently permissible under the Rules. Because the proposal is limited 
to one class, the Exchange believes any additional traffic that may be 
generated from the introduction of the Trust options will be 
manageable.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the Act and the rules and regulations thereunder applicable to the 
Exchange and, in particular, the requirements of Section 6(b) of the 
Act.\47\ Specifically, the Exchange believes the proposed rule change 
is consistent with the Section 6(b)(5) \48\ requirements that the rules 
of an exchange be designed to prevent fraudulent and manipulative acts 
and practices, to promote just and equitable principles of trade, to 
foster cooperation and coordination with persons engaged in regulating, 
clearing, settling, processing information with respect to, and 
facilitating transactions in securities, to remove impediments to and 
perfect the mechanism of a free and open market and a national market 
system, and, in general, to protect investors and the public interest. 
Additionally, the Exchange believes the proposed rule change is 
consistent with the Section (6)(b)(5) \49\ requirement that the rules 
of an exchange not be designed

[[Page 95876]]

to permit unfair discrimination between customers, issuers, brokers, or 
dealers.
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    \47\ 15 U.S.C. 78f(b).
    \48\ 15 U.S.C. 78f(b)(5).
    \49\ Id.
---------------------------------------------------------------------------

    In particular, the Exchange believes that the proposal to list and 
trade options on the Trust will remove impediments to and perfect the 
mechanism of a free and open market and a national market system and, 
in general, protect investors because offering options on the Trust 
will provide investors with a greater opportunity to realize the 
benefits of utilizing options on an ETF based on spot bitcoin, 
including cost efficiencies and increased hedging strategies. The 
Exchange believes that offering options on a competitively priced ETF 
based on spot bitcoin will benefit investors by providing them with an 
additional, relatively lower-cost risk management tool, allowing them 
to manage, more easily, their positions and associated risks in their 
portfolios in connection with exposure to spot bitcoin. Today, the 
Exchange lists options on other commodity ETFs structured as a trust, 
which essentially offer the same objectives and benefits to investors, 
and for which the Exchange has not identified any issues with the 
continued listing and trading of options on those ETFs.
    The Exchange also believes the proposal to permit options on the 
Trust will remove impediments to and perfect the mechanism of a free 
and open market and a national market system, because options on the 
Trust will comply with current Exchange Rules. Options on the Trust 
must satisfy the initial listing standards and continued listing 
standards currently in the Exchange Rules, applicable to options on all 
ETFs, including options on other commodity ETFs already deemed 
appropriate for options trading on the Exchange pursuant to Exchange 
Rule 19.3(i). Additionally, as demonstrated above, the Trust is 
characterized by a substantial number of shares that are widely held 
and actively traded. Further, Exchange Rules that currently govern the 
listing and trading of options on ETFs, including permissible 
expirations, strike prices, minimum increments, position and exercise 
limits (as proposed herein), and margin requirements, will govern the 
listing and trading of options on the Trust. The proposed position and 
exercise limits for options on the Trust is 25,000 contracts. These 
position and exercise limits are the lowest position and exercise 
limits available in the options industry, are extremely conservative 
and more than appropriate given the Trust's market capitalization, 
average daily volume, and high number of outstanding shares. The 
proposed position limit, and exercise limit, is consistent with the Act 
as it addresses concerns related to manipulation and protection of 
investors because, as demonstrated above, the position limit (and 
exercise limit) is extremely conservative and more than appropriate 
given the Trust is actively traded. In support of the proposed position 
and exercise limits for options on the Trust is 25,000 contracts, the 
Exchange is citing the in depth analysis ISE did in its filing. As 
noted above, in the IBIT Approval Order, ISE considered the: (i) 
Trust's market capitalization and ADV, and prospective position limit 
in relation to other securities; (ii) market capitalization of the 
entire bitcoin market in terms of exercise risk and availability of 
deliverables; (iii) proposed position limit by comparing it to position 
limits for derivative products regulated by the CFTC; and (iv) supply 
of bitcoin. Based on the Exchange's review of IBIT Approval Order, the 
Exchange believes that setting position and exercise limits for options 
on the Trust of 25,000 contracts is more than appropriate for the 
Trust. The proposed position and exercise limits reasonably and 
appropriately balance the liquidity provisioning in the market against 
the prevention of manipulation. The Exchange believes these proposed 
limits are effectively designed to prevent an individual customer or 
entity from establishing options positions that could be used to 
manipulate the market of the underlying as well as the Bitcoin 
market.\50\
---------------------------------------------------------------------------

    \50\ See Securities Exchange Act Release No. 39489 (December 24, 
1997), 63 FR 276 (January 5, 1998) (SRCBOE-1997-11).
---------------------------------------------------------------------------

    The Exchange represents that it has the necessary systems capacity 
to support options on the Trust. The Exchange believes that its 
existing surveillance and reporting safeguards are designed to deter 
and detect possible manipulative behavior which might arise from 
listing and trading options on ETFs, including the Trust options. 
Today, the Exchange has an adequate surveillance program in place for 
options. The Exchange intends to apply those same program procedures to 
options on the Trust that it applies to the Exchange's other options 
products.\51\ The Exchange's staff will have access to the surveillance 
programs conducted by its affiliate exchange, MEMX Equities, with 
respect to the underlying Trust when conducting surveillances for 
market abuse or manipulation in the options on the Trust. The Exchange 
will review activity in the underlying Trust when conducting 
surveillances for market abuse or manipulation in the options on the 
Trust. Additionally, the Exchange is a member of the ISG under the 
Intermarket Surveillance Group Agreement. ISG members work together to 
coordinate surveillance and investigative information sharing in the 
stock, options, and futures markets. In addition to obtaining 
surveillance data from MEMX Equities, the Exchange will be able to 
obtain information from Nasdaq, LLC and other markets through ISG. In 
addition, the Exchange has a Regulatory Services Agreement with FINRA. 
Pursuant to a multi-party 17d-2 joint plan, all options exchanges 
allocate regulatory responsibilities to FINRA to conduct certain 
options-related market surveillance that are common to rules of all 
options exchanges.\52\
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    \51\ The surveillance program includes patterns for price and 
volume movements and post-trade surveillance patterns (e.g., 
spoofing, marking the close, pinging).
    \52\ Section 19(g)(1) of the Act, among other things, requires 
every SRO registered as a national securities exchange or national 
securities association to comply with the Act, the rules and 
regulations thereunder, and the SRO's own rules, and, absent 
reasonable justification or excuse, enforce compliance by its 
members and persons associated with its members. See 15 U.S.C. 
78q(d)(1) and 17 CFR 240.17d-2. Section 17(d)(1) of the Act allows 
the Commission to relieve an SRO of certain responsibilities with 
respect to members of the SRO who are also members of another SRO 
(``common members''). Specifically, Section 17(d)(1) allows the 
Commission to relieve an SRO of its responsibilities to: (i) receive 
regulatory reports from such members; (ii) examine such members for 
compliance with the Act and the rules and regulations thereunder, 
and the rules of the SRO; or (iii) carry out other specified 
regulatory responsibilities with respect to such members.
---------------------------------------------------------------------------

    The underlying shares of spot bitcoin ETPs, including the Trust, 
are also subject to safeguards related to addressing market abuse and 
manipulation. As the Commission stated in Bitcoin ETP Order:
    Each Exchange has a comprehensive surveillance-sharing agreement 
with the CME via their common membership in the Intermarket 
Surveillance Group. This facilitates the sharing of information that is 
available to the CME through its surveillance of its markets, including 
its surveillance of the CME bitcoin futures market.\53\
---------------------------------------------------------------------------

    \53\ See supra note 46.
---------------------------------------------------------------------------

    The Exchange states that, given the consistently high correlation 
between the CME bitcoin futures market and the spot bitcoin market, as 
confirmed by the Commission through robust correlation analysis, the 
Commission was able to conclude that such surveillance sharing 
agreements could reasonably be ``expected to assist in surveilling for 
fraudulent and manipulative acts and

[[Page 95877]]

practices in the specific context of the [Bitcoin ETPs].'' \54\
---------------------------------------------------------------------------

    \54\ See Bitcoin ETP Order, 89 FR 3010-11.
---------------------------------------------------------------------------

    In light of surveillance measures related to both options and 
futures as well as the underlying Trust,\55\ the Exchange believes that 
existing surveillance procedures are designed to deter and detect 
possible manipulative behavior which might potentially arise from 
listing and trading the proposed options on the Trust. Further, the 
Exchange represents that it will implement any new surveillance 
procedures it deems necessary to effectively monitor the trading of 
options on the Trust.
---------------------------------------------------------------------------

    \55\ See Securities Exchange Act Release No. 99295 (January 8, 
2024), 89 FR 2321, 2334-35 (January 12, 2024) (SR-NASDAQ-2023-016) 
(Notice of Filing of Amendment No. 1 to a Proposed Rule Change To 
List and Trade Shares of the iShares Bitcoin Trust Under Nasdaq Rule 
5711(d)).
---------------------------------------------------------------------------

    Finally, the Commission has previously approved the listing and 
trading of options on other commodity ETFs structured as a trust, such 
as SPDR[supreg] Gold Trust,\56\ the iShares COMEX Gold Trust \57\ the 
iShares Silver Trust,\58\ the ETFS Gold Trust,\59\ and the ETFS Silver 
Trust.\60\
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    \56\ See Securities Exchange Act Release No. 57897 (May 30, 
2008), 73 FR 32061 (June 5, 2008) (SR-Amex2008-15; SR-CBOE-2005-11; 
SR-ISE-2008-12; SR-NYSEArca-2008-52; and SRPhlx-2008-17) (Order 
Granting Approval of a Proposed Rule Change, as Modified, and Notice 
of Filing and Order Granting Accelerated Approval of Proposed Rule 
Changes, as Modified, Relating to Listing and Trading Options on the 
SPDR Gold Trust).
    \57\ See Securities Exchange Act Release No. 59055 (December 4, 
2008), 73 FR 75148 (December 10, 2008) (SR-Amex-2008-68; SR-BSE-
2008-51; SR-CBOE-2008-72; SR-ISE-2008-58; SRNYSEArca-2008-66; and 
SR-Phlx-2008-58) (Notice of Filing and Order Granting Accelerated 
Approval of Proposed Rule Changes Relating to the Listing and 
Trading Options on Shares of the iShares COMEX Gold Trust and the 
iShares Silver Trust).
    \58\ Id.
    \59\ See Securities Exchange Act Release No. 61483 (February 3, 
2010), 75 FR 6753 (February 10, 2010) (SRCBOE-2010-007; SR-ISE-2009-
106; SR-NYSEAmex-2009-86; and SR-NYSEArca-2009-110) (Order Granting 
Approval of Proposed Rule Changes and Notice of Filing and Order 
Granting Accelerated Approval of a Proposed Rule Change Relating to 
Listing and Trading Options on the ETFS Gold Trust and the ETFS 
Silver Trust).
    \60\ Id.
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. In this regard and as 
indicated above, the Exchange notes that the rule change is being 
proposed as a competitive response to filings submitted by ISE.\61\
---------------------------------------------------------------------------

    \61\ See supra note 5.
---------------------------------------------------------------------------

    The Exchange does not believe that the proposed rule change will 
impose any burden on intramarket competition that is not necessary or 
appropriate in furtherance of the purposes of the Act as options on the 
Trust will be subject to initial listing standards and continued 
listing standards the same as other options on ETFs listed on the 
Exchange. Further, options on the Trust will be subject to Exchange 
Rules that currently govern the listing and trading of options on ETFs, 
including permissible expirations, strike prices, minimum increments, 
position and exercise limits (including as proposed herein), and margin 
requirements. Options on the Trust will be equally available to all 
market participants who wish to trade such options. Also, and as stated 
above, the Exchange already lists options on other commodity ETFs 
structured as a trust.
    The Exchange does not believe that the proposal to list to list and 
trade options on the Trust will impose any burden on intermarket 
competition that is not necessary or appropriate in furtherance of the 
purposes of the Act. To the extent that permitting options on the Trust 
to trade on the Exchange may make the Exchange a more attractive 
marketplace to market participants, such market participants are free 
to elect to become market participants on the Exchange. Additionally, 
other options exchanges are free to amend their listing rules, as 
applicable, to permit them to list and trade options on the Trust. The 
Exchange believes that the proposed rule change may relieve any burden 
on, or otherwise promote, competition as it is designed to increase 
competition for order flow on the Exchange in a manner that is 
beneficial to investors by providing them with a lower-cost option to 
hedge their investment portfolios. The Exchange notes that it operates 
in a highly competitive market in which market participants can readily 
direct order flow to competing venues that offer similar products. 
Ultimately, the Exchange believes that offering options on the Trust 
for trading on the Exchange will promote competition by providing 
investors with an additional, relatively low-cost means to hedge their 
portfolios and meet their investment needs in connection with spot 
bitcoin prices and bitcoin related products and positions.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    The Exchange neither solicited nor received comments on the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    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) of the Act \62\ and Rule 19b-
4(f)(6) thereunder.\63\
---------------------------------------------------------------------------

    \62\ 15 U.S.C. 78s(b)(3)(A).
    \63\ 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.
---------------------------------------------------------------------------

    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act normally does not become operative for 30 days after the date of 
its filing. However, Rule 19b-4(f)(6)(iii) \64\ permits the Commission 
to designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has asked 
the Commission to 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 Trust.\65\ The Exchange has 
provided information regarding the underlying Trust, including, among 
other things, information regarding trading volume, the number of 
beneficial holders, and the market capitalization of the Trust. The 
proposal also establishes position and exercise limits for options on 
the Trust and provides information regarding the surveillance 
procedures that will apply to options on the Trust. The Commission 
believes that waiver of the operative delay could benefit investors by 
providing an additional venue for trading options on the Trust. 
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 operative upon 
filing.\66\
---------------------------------------------------------------------------

    \64\ 17 CFR 240.19b-4(f)(6)(iii).
    \65\ See supra note 3.
    \66\ For purposes only of waiving the 30-day operative delay, 
the Commission has also considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of such proposed rule 
change, the

[[Page 95878]]

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.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
file number SR-MEMX-2024-45 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-MEMX-2024-45. 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-MEMX-2024-45 and should be 
submitted on or before December 24, 2024.
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    \67\ 17 CFR 200.30-3(a)(12), (59).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\67\
Stephanie J. Fouse,
Assistant Secretary.
[FR Doc. 2024-28345 Filed 12-2-24; 8:45 am]
BILLING CODE 8011-01-P`