```

[Federal Register Volume 89, Number 231 (Monday, December 2, 2024)]
[Notices]
[Pages 95309-95321]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-28114]

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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

[[Page 95310]]

solicit comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

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

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange 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\
---------------------------------------------------------------------------

    \3\ See 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'').
---------------------------------------------------------------------------

    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 broad-based 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 non-U.S. currency (``Commodity Pool 
ETFs'') or
    (iv) represent interests in the SPDR[supreg] 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\
---------------------------------------------------------------------------

    \4\ Options 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 
Exchange-Traded 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).
---------------------------------------------------------------------------

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

    \5\ Specifically, 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.
---------------------------------------------------------------------------

    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

[[Page 95311]]

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).
---------------------------------------------------------------------------

    \6\ The trust may include minimal cash.
---------------------------------------------------------------------------

    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 
Exchange-Traded 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.
---------------------------------------------------------------------------

    \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.
    \8\ The 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.
    \9\ An ``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'').
---------------------------------------------------------------------------

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 six-
month 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:
---------------------------------------------------------------------------

    \10\ See supra note 7.
    \11\ See supra note 7.

----------------------------------------------------------------------------------------------------------------
                                                                6-Month trading     30-Day ADV      30-Day ADV
                        Bitcoin Trust                           volume (shares)      (shares)      (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
----------------------------------------------------------------------------------------------------------------

[[Page 95312]]

    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):

----------------------------------------------------------------------------------------------------------------
                                                          Six-month ADV    Outstanding    Market capitalization
                Underlying Bitcoin Trust                    (shares)         shares                ($)
----------------------------------------------------------------------------------------------------------------
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:

----------------------------------------------------------------------------------------------------------------
                                              Average limit
                                              of other ETF   Proposed limit
          Underlying Bitcoin Trust               options       (contracts)
                                               (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 six-month 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:

----------------------------------------------------------------------------------------------------------------
                                                               Proposed position
                                                                /exercise limit     Outstanding    Percentage of
                   Underlying Bitcoin Trust                      (in equivalent       shares        outstanding
                                                                    shares)                         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

[[Page 95313]]

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.

------------------------------------------------------------------------
                                              Minimum      Percentage of
 Position/exercise limit (in equivalent     outstanding     outstanding
                 shares)                      shares        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\
---------------------------------------------------------------------------

    \12\ As 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.
---------------------------------------------------------------------------

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):

------------------------------------------------------------------------
                                           Shares      Market value (08/
            Bitcoin Trust                outstanding      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.

------------------------------------------------------------------------
                                                            Beneficial
                      Bitcoin Trust                       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:
---------------------------------------------------------------------------

    \13\ See 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).

----------------------------------------------------------------------------------------------------------------
                                                           Trading volume     Trading volume
                     Bitcoin Trust                            (shares)         (notional $)       ADV (shares)
----------------------------------------------------------------------------------------------------------------
GBTC...................................................      1,803,567,700     93,472,544,497          3,266,138

[[Page 95314]]

 
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.

------------------------------------------------------------------------
                                                           Total volume
                      Bitcoin Trust                         (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:
---------------------------------------------------------------------------

    \15\ See 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).

----------------------------------------------------------------------------------------------------------------
                                                               Proposed position/   Outstanding    Percentage of
                        Bitcoin Trust                          exercise limit in   shares (8/30/    outstanding
                                                               equivalent shares        24)         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:

------------------------------------------------------------------------
                                                     Number of market
                                     Shares         participants with
         Bitcoin Trust             outstanding       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.

[[Page 95315]]

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:
---------------------------------------------------------------------------

    \16\ See https://www.blockchain.com/explorer/charts/total-bitcoins.

----------------------------------------------------------------------------------------------------------------
                                                                                     Value of
                                                                     Aug. 30th       2,500,000     Percentage of
                          Bitcoin Trust                             share price      shares of    Bitcoin market
                                                                        ($)        Bitcoin Trust        (%)
                                                                                        ($)
----------------------------------------------------------------------------------------------------------------
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.

----------------------------------------------------------------------------------------------------------------
                                                                                                    % of total
                                                         Bitcoin/shares    Market value (8/30/    Bitcoin market
                                                           outstanding          2024) ($)               (%)
----------------------------------------------------------------------------------------------------------------
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

[[Page 95316]]

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:
---------------------------------------------------------------------------

    \17\ See https://www.blockchain.com/explorer/assets/btc (citing 
21 million as the ``total supply'' of bitcoin).
    \18\ The market capitalization of Bitcoin would rank in the top 
10 among securities. See https://companiesmarketcap.com/usa/largest-companies-in-the-usa-by-market-cap/.
    \19\ See 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.

------------------------------------------------------------------------
                                          Aug. 28th    Number of options
            Bitcoin Trust                share price       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.
---------------------------------------------------------------------------

    \20\ See CME Rulebook Chapter 5, Position Limit, Position 
Accountability and Reportable Level Table in the Interpretations & 
Special Notices.
    \21\ Id.
---------------------------------------------------------------------------

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

    \22\ NYSE 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.
    \23\ NYSE 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.
    \24\ See Securities Exchange Act Release No. 39489 (December 24, 
1997), 63 FR 276 (January 5, 1998) (SRCBOE-1997-11).
    \25\ Id.
---------------------------------------------------------------------------

    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.

[[Page 95317]]

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

    \26\ See, 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.'').
    \27\ See NYSEAMER-2024-49.
---------------------------------------------------------------------------

    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:
---------------------------------------------------------------------------

    \28\ Options 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 `when-issued' trading, may be taken into account 
in determining whether the trading volume requirement of (3) of this 
paragraph (b) is satisfied.
    \29\ See Options 4, Section 4(g).
---------------------------------------------------------------------------

    (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\
---------------------------------------------------------------------------

    \30\ Options 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).''

    (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 Exchange-Traded 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;
---------------------------------------------------------------------------

    \31\ Options 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).''
---------------------------------------------------------------------------

    (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.
---------------------------------------------------------------------------

    \32\ See 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.
    \33\ See Supplementary .03 to Options 4, Section 5.
    \34\ See Supplementary .04 to Options 4, Section 5.
    \35\ See Options 4, Section 8.
---------------------------------------------------------------------------

    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

[[Page 95318]]

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

    \36\ See Supplementary Material .03(e) to Options 4, Section 5.
    \37\ Id.
    \38\ See Supplementary Material .01 to Options 4, Section 5.
    \39\ See Supplementary Material .05 to Options 4, Section 5.
    \40\ See Supplementary Material .02 to Options 4, Section 5.
    \41\ See Supplementary Material .06 to Options 4, Section 5.
    \42\ Options 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.
---------------------------------------------------------------------------

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

    \43\ The surveillance program includes real-time patterns for 
price and volume movements and post-trade surveillance patterns 
(e.g., spoofing, marking the close, pinging, phishing).
    \44\ The Nasdaq Stock Market LLC is an affiliated market of ISE.
    \45\ Section 19(g)(1) of the Act, among other things, requires 
every SRO registered as a national securities exchange or national 
securities association to comply with the Act, the rules, and 
regulations thereunder, and the SRO's own rules, and, absent 
reasonable justification or excuse, enforce compliance by its 
members and persons associated with its members. See 15 U.S.C. 
78q(d)(1) and 17 CFR 240.17d-2. Section 17(d)(1) of the Act allows 
the Commission to relieve an SRO of certain responsibilities with 
respect to members of the SRO who are also members of another SRO 
(``common members''). Specifically, Section 17(d)(1) allows the 
Commission to relieve an SRO of its responsibilities to: (i) receive 
regulatory reports from such members; (ii) examine such members for 
compliance with the Act and the rules and regulations thereunder, 
and the rules of the SRO; or (iii) carry out other specified 
regulatory responsibilities with respect to such members.
---------------------------------------------------------------------------

    The 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\
---------------------------------------------------------------------------

    \46\ See 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'').

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

    \47\ Id.

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

    \48\ Id.
    \49\ Id.
---------------------------------------------------------------------------

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

[[Page 95319]]

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.
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    \53\ See Options 4, Section 3(h)(iv).
---------------------------------------------------------------------------

    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.
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    \54\ The 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.
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    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\
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    \55\ The surveillance program includes real-time patterns for 
price and volume movements and post-trade surveillance patterns 
(e.g., spoofing, marking the close, pinging, phishing).
    \56\ The Nasdaq Stock Market LLC is an affiliated market of ISE.
    \57\ 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 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

[[Page 95320]]

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\
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    \58\ See 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 Bitcoin-Based Commodity-Based Trust Shares and Trust 
Units).

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

    \59\ Id.
    \60\ Id.
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    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.
---------------------------------------------------------------------------

    \61\ See supra note 3.
---------------------------------------------------------------------------

    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\
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    \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.
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    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

[[Page 95321]]

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\
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    \66\ 17 CFR 240.19b-4(f)(6).
    \67\ 17 CFR 240.19b-4(f)(6)(iii).
    \68\ See 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).
    \69\ For purposes only of waiving the 30-day operative delay, 
the Commission has also considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings to 
determine whether the proposed rule should be approved or disapproved.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
file number SR-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\
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    \70\ 17 CFR 200.30-3(a)(12), (59).
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Vanessa A. Countryman,
Secretary.
[FR Doc. 2024-28114 Filed 11-29-24; 8:45 am]
BILLING CODE 8011-01-P
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