Federal Register / Vol. 89, No. 231 / Monday, December 2, 2024 / Notices 95321 

68See Securities Exchange Act Release No. 

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

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

Amendment Nos. 2 and 3 and Order Granting 

Accelerated Approval of a Proposed Rule Change, 

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

the Listing and Trading of Options on Bitcoin 

Exchange-Traded Funds). See also Securities 

Exchange Act Release No. 101386 (October 18, 

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

NYSEAMER–2024–49) (Notice of Filing of 

Amendment No. 3 and Order Granting Accelerated 

Approval of a Proposed Rule Change, as Modified 

by Amendment No. 3, To Permit the Listing and 

Trading of Options on Bitcoin Exchange-Traded 

Funds). 

69For purposes only of waiving the 30-day 

operative delay, the Commission has also 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

15 U.S.C. 78c(f). 70 17 CFR 200.30–3(a)(12), (59). 

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

2 17 CFR 240.19b–4. 

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

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

Origin Bitcoin Fund, the ARK21Shares 

Bitcoin ETF, the Grayscale Bitcoin Trust 

(BTC), the Grayscale Bitcoin Mini Trust 

BTC, and the Bitwise Bitcoin ETF.68 The 

Exchange has provided information 

regarding the underlying Bitcoin Trusts, 

including, among other things, 

information regarding trading volume, 

the number of beneficial holders, and 

the market capitalization of the Bitcoin 

Trusts. The proposal also establishes 

position and exercise limits for options 

on the Bitcoin Trusts and provides 

information regarding the surveillance 

procedures that will apply to Bitcoin 

Trust options. The Commission believes 

that waiver of the operative delay could 

benefit investors by providing an 

additional venue for trading Bitcoin 

Trust options. Therefore, the 

Commission believes that waiver of the 

30-day operative delay is consistent 

with the protection of investors and the 

public interest. Accordingly, the 

Commission hereby waives the 30-day 

operative delay and designates the 

proposed rule change as operative upon 

filing.69

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

should be approved or disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (https://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

ISE–2024–54 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to file 

number SR–ISE–2024–54. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

internet website (https://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549, on official 

business days between the hours of 10 

a.m. and 3 p.m. Copies of the filing also 

will be available for inspection and 

copying at the principal office of the 

Exchange. Do not include personal 

identifiable information in submissions; 

you should submit only information 

that you wish to make available 

publicly. We may redact in part or 

withhold entirely from publication 

submitted material that is obscene or 

subject to copyright protection. All 

submissions should refer to file number 

SR–ISE–2024–54 and should be 

submitted on or before December 23, 

2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.70

Vanessa A. Countryman, 

Secretary. 

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

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

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

2024–048] 

Self-Regulatory Organizations; Nasdaq 

BX, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change to Adopt an OTTO 

Protocol 

November 25, 2024. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’),1 and Rule 19b-4 thereunder,2

notice is hereby given that on November 

15, 2024, Nasdaq BX, Inc. (‘‘BX’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III, below, which Items have been 

prepared by the Exchange. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to adopt a 

new protocol, ‘‘Ouch to Trade Options’’ 

or ‘‘OTTO’’ and establish pricing for this 

new protocol.3

The text of the proposed rule change 

is available on the Exchange’s website at 

https://listingcenter.nasdaq.com/ 

rulebook/nasdaq/rules, at the principal 

office of the Exchange, and at the 

Commission’s Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

forth in sections A, B, and C below, of 

the most significant aspects of such 

statements. 


ddrumheller on DSK120RN23PROD with NOTICES1
95322 Federal Register / Vol. 89, No. 231 / Monday, December 2, 2024 / Notices 

4FIX is an interface that allows Participants and 

their Sponsored Customers to connect, send, and 

receive messages related to orders and auction 

orders and responses to and from the Exchange. 

Features include the following: (1) execution 

messages; (2) order messages; and (3) risk protection 

triggers and cancel notifications. In addition, a BX 

Participant may elect to utilize FIX to send a 

message and PRISM Order, as defined within 

Options 3, Section 13, to all BX Participants that 

opt in to receive Requests for PRISM requesting that 

it submit the sender’s PRISM Order with 

responder’s Initiating Order, as defined within 

Options 3, Section 13, into the Price Improvement 

Auction (‘‘PRISM’’) mechanism, pursuant to 

Options 3, Section 13 (‘‘Request for PRISM’’). See 

Options 3, Section 7(e)(1)(A). 

5 General 2, Section 22 describes Sponsored 

Access arrangements. 

6The term ‘‘System’’ or ‘‘Trading System’’ means 

the automated system for order execution and trade 

reporting owned and operated by BX as the BX 

Options market. The BX Options market comprises: 

(A) an order execution service that enables 

Participants to automatically execute transactions 

in option series; and provides Participants with 

sufficient monitoring and updating capability to 

participate in an automated execution environment; 

(B) a trade reporting service that submits ‘‘lockedin’’ trades for clearing to a registered clearing 

agency for clearance and settlement; transmits lastsale reports of transactions automatically to the 

Options Price Reporting Authority for 

dissemination to the public and industry; and 

provides participants with monitoring and risk 

management capabilities to facilitate participation 

in a ‘‘locked-in’’ trading environment; and (C) the 

data feeds described in Options 3, Section 23. See 

BX Options 1, Section 1(a)(59). 

7For example, a Participant may desire to utilize 

multiple FIX or OTTO Ports for accounting 

purposes, to measure performance, for regulatory 

reasons, segregating order flow among different 

trading desks, or other determinations that are 

specific to that Participant. A market participant 

may utilize multiple ports in some cases to send 

multiple orders through different ports to avoid any 

latency or queuing of orders. The Exchange notes 

that to the extent that different OTTO Ports are used 

to send multiple orders as compared to sending 

multiple orders through one OTTO Port the 

difference from a latency standpoint would be in 

nanoseconds. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

BX proposes to offer a new order 

entry protocol called OTTO. Today, BX 

Participants may enter orders into the 

Exchange through the ‘‘Financial 

Information eXchange’’ or ‘‘FIX.’’ 4 The 

proposed new OTTO protocol is 

identical to the OTTO protocol offered 

today on 3 Nasdaq affiliated exchanges, 

Nasdaq ISE, LLC (‘‘ISE’’), Nasdaq 

GEMX, LLC (‘‘GEMX’’) and Nasdaq 

MRX, LLC (‘‘MRX’’). 

The OTTO protocol is a proprietary 

protocol of Nasdaq, Inc. The Exchange 

continues to innovate and modernize 

technology so that it may continue to 

compete among options markets. The 

ability to continue to innovate with 

technology and offer new products to 

market participants allows BX to remain 

competitive in the options space which 

currently has eighteen options markets 

and potential new entrants. 

OTTO Protocol 

As proposed, OTTO would allow 

Participants and their Sponsored 

Customers 5 to connect, send, and 

receive messages related to orders, 

auction orders, and auction responses to 

the Exchange. OTTO features would 

include the following: (1) options 

symbol directory messages (e.g., 

underlying and complex instruments); 

(2) System 6 event messages (e.g., start of 

trading hours messages and start of 

opening); (3) trading action messages 

(e.g., halts and resumes); (4) execution 

messages; (5) order messages; (6) risk 

protection triggers and cancel 

notifications; (7) auction notifications; 

(8) auction responses; and (9) post trade 

allocation messages. The Exchange 

notes that unlike FIX, which offers 

routing capability, OTTO does not 

permit routing. The Exchange proposes 

to include this description of OTTO in 

new Options 3, Section 7(e)(1)(B) and 

re-letter current ‘‘B’’ as ‘‘C’’. 

Only one order protocol is required 

for a BX Participant to submit orders 

into BX. Only BX Participants may 

utilize ports on BX. Any market 

participant that sends orders to a BX 

Participant would not need to utilize a 

port. The BX Participant may send all 

orders, proprietary and agency, through 

one port to BX. Participants may elect 

to obtain multiple ports to organize their 

business,7 however only one port is 

necessary for a Participant to enter 

orders on BX. 

Participants may elect to enter their 

orders through FIX, OTTO, or both 

protocols, although both protocols are 

not necessary. Participants may prefer 

one protocol as compared to another 

protocol, for example, the ability to 

route may cause a Participant to utilize 

FIX and a Participant that desires to 

execute an order locally may prefer 

OTTO. Also, the OTTO Port offers lower 

latency as compared to the FIX Port, 

which may be attractive to Participants 

depending on their trading behavior. 

Nasdaq believes that the addition of 

OTTO will provide BX Participants with 

additional choice when submitting 

orders to BX. 

While the Exchange has no way of 

predicting with certainty the amount or 

type of OTTO Ports market participants 

will in fact purchase, the Exchange 

anticipates that some Participants will 

subscribe to multiple OTTO Ports in 

combination with FIX Ports. The 

Exchange notes that Options 

Participants may use varying number of 

OTTO ports based on their business 

needs. 

Other Amendments 

In connection with offering OTTO, 

the Exchange proposes to amend other 

rules within Options 3. Each 

amendment is described below. 

Options 3, Section 7 

BX proposes to amend Options 3, 

Section 7, Types of Orders and Quote 

Protocols. Specifically, BX proposes to 

amend Options 3, Section 7 (b)(2) that 

describes the Immediate-or-Cancel’’ or 

‘‘IOC’’ order. Today, Options 3, Section 

7(b)(2)(B) notes that an IOC order may 

be entered through FIX or SQF, 

provided that an IOC Order entered by 

a Market Maker through SQF is not 

subject to the Order Price Protection, the 

Market Order Spread Protection, or Size 

Limitation in Options 3, Section 

15(a)(1), (a)(2), and (b)(2), respectively. 

The Exchange proposes to add ‘‘OTTO’’ 

to the list of protocols to note that an 

IOC order may also be entered through 

OTTO. 

BX also proposes to amend the 

‘‘DAY’’ order in Options 3, Section 

7(b)(3) that currently provides that a 

Day order may be entered through FIX. 

With the addition of OTTO, a Day order 

may also be entered through OTTO. 

BX also proposes to amend the ‘‘Good 

Til Cancelled’’ or ‘‘GTC’’ order which 

currently does not specify that a GTC 

order may be entered through FIX. GTC 

orders would only be able to be entered 

through FIX and not OTTO. The 

Exchange proposes to amend Options 3, 

Section 7(b)(4) to add a sentence to note 

that GTC orders may be entered through 

FIX. 

Options 3, Section 8 

BX proposes to amend Options 3, 

Section 8, Options Opening Process. BX 

proposes to amend Options 3, Section 

8(l) that describes the Opening Process 

Cancel Timer. The Opening Process 

Cancel Timer represents a period of 

time since the underlying market has 

opened. If an option series has not 

opened before the conclusion of the 

Opening Process Cancel Timer, a 

Participant may elect to have orders 

returned by providing written 

notification to the Exchange. Today, 

these orders include all non-Good Til 

Cancelled Orders received over the FIX 

protocol. The Exchange proposes to add 

the OTTO protocol as well to the rule 

text language in that paragraph. 

Options 3, Section 12 

The Exchange proposes to amend the 

Options 3, Section 12, Crossing Orders. 


ddrumheller on DSK120RN23PROD with NOTICES1
Federal Register / Vol. 89, No. 231 / Monday, December 2, 2024 / Notices 95323 

8See MRX Options 3, Section 17. 9See Securities Exchange Act Release No. 76116 

(October 8, 2015), 80 FR 62147 (October 15, 2015) 

(SR–BX–2015–050) (Order Approving Proposed 

Rule Change To Adopt a Kill Switch). 

10A permissible group could include all badges 

associated with a Market Maker. Today, a 

Participant is able to set up these groups in the 

interface to include all or some of the Identifiers 

associated with the Participant firm so that a GUI 

Kill Switch request could apply to this pre-defined 

group. 

11The Exchange proposes to remove this 

sentence, ‘‘Permissible groups must reside within a 

single broker-dealer’’ as the group option would no 

longer exist. 

Specifically, the Exchange proposes to 

amend Customer Crossing Orders in 

Options 3, Section 12(a) that currently 

provides Public Customer-to-Public 

Customer Cross Orders are 

automatically executed upon entry 

provided that the execution is at or 

between the best bid and offer on the 

Exchange and (i) is not at the same price 

as a Public Customer Order on the 

Exchange’s limit order book and (ii) will 

not trade through the NBBO. Public 

Customer-to-Public Customer Cross 

Orders must be entered through FIX. 

The Exchange proposes to remove the 

sentence that provides that Public 

Customer-to-Public Customer Cross 

Orders must be entered through FIX 

because they will be able to be entered 

through both FIX and OTTO. 

Options 3, Section 17 

The Exchange proposes to amend the 

Kill Switch at Options 3, Section 17. 

The Kill Switch provides Participants 

with an optional risk management tool 

to promptly cancel and restrict orders. 

With the introduction of OTTO, the 

Exchange proposes to align its Kill 

Switch rule text with MRX’s Kill 

Switch.8 The Exchange proposes to note 

in Options 3, Section 17(a) that BX 

Participants may initiate a message(s) to 

the System to promptly cancel and 

restrict their order activity on the 

Exchange, as is the case today, as 

described in section (a)(1). This 

amendment simply rewords the rule 

text without a substantive amendment 

to the rule text. 

The Exchange proposes to renumber 

Options 3, Section 17(a)(i) and (ii) as 

(a)(1) and (2). Current Options 3, 

Section 17(a)(i) states, ‘‘If orders are 

cancelled by the BX Participant utilizing 

the Kill Switch, it will result in the 

cancellation of all orders requested for 

the Identifier(s). The BX Participant will 

be unable to enter additional orders for 

the affected Identifier(s) until re-entry 

has been enabled pursuant to section 

(a)(ii).’’ The Exchange proposes to 

instead provide, ‘‘A BX Participant may 

submit a request to the System through 

FIX or OTTO to cancel all existing 

orders and restrict entry of additional 

orders for the requested Identifier(s) on 

a user level on the Exchange.’’ With the 

addition of OTTO, the Exchange notes 

that both FIX and OTTO orders may be 

cancelled. Further, today, BX 

Participants utilize an interface to send 

a message to the Exchange to initiate a 

Kill Switch.9 The Exchange notes that in 

lieu of the interface, BX Participants 

will only be able to initiate a 

cancellation of their orders by sending 

a mass purge request through FIX or 

OTTO. This change will align the Kill 

Switch functionality to that of ISE, 

GEMX and MRX Options 3, Section 17 

and will enable BX Participants to 

initiate the Kill Switch more seamlessly 

without the need to utilize a separate 

interface. When initiating a cancellation 

of their orders by sending a mass purge 

request through FIX or OTTO, 

Participants will be able to submit a Kill 

Switch request on a user level only. 

This is a change from the ability to 

cancel orders on either a user or group 

level 10 with the interface. The Exchange 

proposes to amend Options 3, Section 

17(a) to note this change by removing 

the words ‘‘or group’’ and the following 

sentence that applies to a group.11

Finally, the Exchange proposes to 

amend proposed Options 3, Section 

17(a)(2) to align to MRX’s rule text by 

providing ‘‘Once a BX Participant 

initiates a Kill Switch pursuant to (a)(1) 

above . . .’’ in the first sentence. This 

amendment simply rewords the rule 

text without a substantive amendment 

to the rule text. 

Options 3, Section 18 

The Exchange proposes to amend 

Options 3, Section 18, Detection of Loss 

of Communication. The Exchange 

proposes to add OTTO to Options 3, 

Section 18 as OTTO would also be 

subject to this rule. Today, when the 

SQF Port or the FIX Port detects the loss 

of communication with a Participant’s 

Client Application because the 

Exchange’s server does not receive a 

Heartbeat message for a certain time 

period, the Exchange will automatically 

logoff the Participant’s affected Client 

Application and automatically cancel 

all of the Participant’s open quotes 

through SQF and open orders through 

FIX. Quotes and orders are cancelled 

across all Client Applications that are 

associated with the same BX Options 

Market Maker ID and underlying issues. 

At this time, the Exchange proposes to 

permit orders entered through OTTO to 

be cancelled similar to FIX orders when 

the Exchange’s server does not receive 

a Heartbeat message for a certain time 

period. The Exchange is proposing to 

amend Options 3, Section 18 to also 

rearrange the rule text to add the word 

‘‘Definitions’’ next to ‘‘a’’ and move the 

rule text in current ‘‘a’’ to ‘‘b’’ and reletter the other paragraphs accordingly. 

Also, the Exchange proposes to define 

‘‘Session of Connectivity’’ for purposes 

of this rule to mean each time the 

Participant connects to the Exchange’s 

System. Further, each new connection, 

intra-day or otherwise, is a new Session 

of Connectivity. The Exchange proposes 

to use the new definition throughout 

Options 3, Section 18. 

Similar to FIX, when the OTTO Port 

detects the loss of communication with 

a Participant’s Client Application 

because the Exchange’s server does not 

receive a Heartbeat message for a certain 

time period, the Exchange will 

automatically logoff the Participant’s 

affected Client Application and 

automatically cancel all of the 

Participant’s open orders through 

OTTO. Orders would be cancelled 

across all Client Applications that are 

associated with the same BX Options 

Market Maker ID and underlying issues. 

The Exchange proposes to update 

Options 3, Section 18 to provide in 

proposed Options 3, Section 18(a)(3) 

that the OTTO Port is the Exchange’s 

proprietary System component through 

which Participants communicate their 

orders from the Client Application. 

Further, the Exchange would note in 

proposed Options 3, Section 18(c) that 

when the OTTO Port detects the loss of 

communication with a Participant’s 

Client Application because the 

Exchange’s server does not receive a 

Heartbeat message for a certain time 

period (‘‘nn’’ seconds), the Exchange 

will automatically logoff the 

Participant’s affected Client Application 

and if the Participant has elected to 

have its orders cancelled pursuant to 

proposed Section 18(f), automatically 

cancel all orders. Proposed Options 3, 

Section 18(f) would provide that the 

default period of ‘‘nn’’ seconds for 

OTTO Ports would be fifteen (15) 

seconds for the disconnect and, if 

elected, the removal of orders. A 

Participant may determine another time 

period of ‘‘nn’’ seconds of no technical 

connectivity, as required in proposed 

paragraph (c), to trigger the disconnect 

and, if so elected, the removal of orders 

and communicate that time to the 

Exchange. The period of ‘‘nn’’ seconds 

may be modified to a number between 

one hundred (100) milliseconds and 

99,999 milliseconds for OTTO Ports 

prior to each Session of Connectivity to 

the Exchange. This feature may be 

disabled for the removal of orders; 


ddrumheller on DSK120RN23PROD with NOTICES1
95324 Federal Register / Vol. 89, No. 231 / Monday, December 2, 2024 / Notices 

12The Exchange proposes to update internal 

cross-references to accommodate relocated text. 

13The term ‘‘account number’’ means a number 

assigned to a Participant. Participants may have 

more than one account number. See Options 1, 

Section 1(a)(2). Account numbers are free on BX. 

14See BX Options 7, Section 3(i). 

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

16 15 U.S.C. 78f(b)(5). 

17For example, a Participant may desire to utilize 

multiple FIX or OTTO Ports for accounting 

purposes, to measure performance, for regulatory 

reasons or other determinations that are specific to 

that Participant. 

18For example, a Participant may desire to utilize 

multiple FIX or OTTO Ports for accounting 

purposes, to measure performance, for regulatory 

reasons or other determinations that are specific to 

that Participant. 

however, the Participant will be 

disconnected. 

Proposed Options 3, Section 18(f)(1) 

would provide that if the Participant 

changes the default number of ‘‘nn’’ 

seconds, that new setting shall be in 

effect throughout the current Session of 

Connectivity and will then default back 

to fifteen seconds. The Participant may 

change the default setting prior to each 

Session of Connectivity. Finally, as 

proposed in Options 3, Section 18(f)(2), 

if the time period is communicated to 

the Exchange by calling Exchange 

operations, the number of ‘‘nn’’ seconds 

selected by the Participant will persist 

for each subsequent Session of 

Connectivity until the Participant either 

contacts Exchange operations by phone 

and changes the setting or the 

Participant selects another time period 

through the Client Application prior to 

the next Session of Connectivity. The 

trigger for OTTO Ports is event and 

Client Application specific. The 

automatic cancellation of the BX 

Options Market Maker’s open orders for 

OTTO Ports entered into the respective 

OTTO Ports via a particular Client 

Application will neither impact nor 

determine the treatment of orders of the 

same or other Participants entered into 

the OTTO Ports via a separate and 

distinct Client Application. The 

proposed amendments for OTTO mirror 

the manner in which FIX Ports are 

treated when the Exchange’s server does 

not receive a Heartbeat message for a 

certain time period for a FIX Port.12

Pricing 

BX proposes to amend its Pricing 

Schedule at Options 7, Section 3, BX 

Options Market—Ports and other 

Services, to adopt a port fee for the new 

OTTO protocol of $650 per port, per 

month, per account number. OTTO 

would be an additional order entry 

protocol for BX Participants in addition 

to FIX, which is currently utilized by 

BX Participants to enter orders into BX. 

The Exchange currently assesses a FIX 

Port Fee of $650 per port, per month, 

per account number.13 The Exchange 

will provide each Participant the first 

FIX Port at no cost to submit orders into 

BX. BX Participants utilizing the first 

FIX Port offered at no cost do not need 

to purchase an OTTO Port, which is 

optional. 

The Exchange also proposes to add 

OTTO to the list of ports that are capped 

at $7,500 on BX. Today, the maximum 

monthly fees in the aggregate for FIX 

Port, CTI Port, FIX DROP Port, BX 

Depth Port and BX TOP Port Fees on BX 

is $7,500.14 These ports are available to 

all BX Participants. To the extent that a 

Participant expended more than $7,500 

for FIX or OTTO Ports in a month, BX 

would not charge a Participant for 

additional FIX or OTTO Ports, 

respectively, beyond the cap. 

Implementation 

The Exchange will implement this 

rule change on or before December 20, 

2025. The Exchange will announce the 

operative date to Participants in an 

Options Trader Alert. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,15 in general, and furthers the 

objectives of Section 6(b)(5) of the Act,16

in particular, in that it is designed to 

promote just and equitable principles of 

trade, 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. 

OTTO Protocol 

The Exchange’s proposal to adopt 

OTTO is consistent with the Act 

because OTTO would provide BX 

Participants with an alternative protocol 

to submit orders to the Exchange. As 

proposed, BX would offer the first FIX 

Port at no cost to submit orders into BX, 

which would remove impediments to 

and perfect the mechanism of a free and 

open market. While BX Participants 

may elect to obtain multiple ports to 

organize their business,17 only one 

order port is necessary for a Participant 

to enter orders on BX. A BX Participant 

may send all orders, proprietary and 

agency, through one port to BX without 

incurring any cost with this proposal. In 

the alternative, BX Participants may 

elect to obtain multiple ports to organize 

their business.18

With the addition of OTTO, a BX 

Participant may elect to enter their 

orders through FIX, OTTO, or both 

protocols, although both protocols are 

not necessary. Each BX Participant 

would receive one FIX Port at no cost, 

thereby promoting just and equitable 

principles of trade. The Exchange notes 

that Participants may prefer one order 

protocol as compared to another order 

protocol, for example, the ability to 

route an order may cause a Participant 

to utilize FIX and a Participant that 

desires to execute an order locally may 

utilize OTTO. Also, the OTTO Port 

offers lower latency as compared to the 

FIX Port, which may be attractive to 

Participants depending on their trading 

behavior. With this proposal, BX 

Participant may organize their business 

as they chose with the ability to send 

orders to BX at no cost. The proposed 

new OTTO protocol is identical to the 

OTTO protocol offered today on ISE, 

GEMX, and MRX. 

Other Amendments 

In connection with offering OTTO, 

the Exchange proposes to amend other 

rules within Options 3 to make clear 

where the FIX and OTTO protocols may 

be utilized. IOC Orders may be entered 

through FIX, OTTO or SQF. A Day order 

may be entered through FIX or OTTO. 

A GTC order may only be entered 

through FIX. A Public Customer-toPublic Customer Cross Order may be 

entered through FIX or OTTO. Other 

processes such the Opening Cancel 

Timer would impact FIX and OTTO 

equally. 

The Exchange’s proposal to amend 

the Kill Switch at Options 3, Section 17 

to align its rule text in proposed Options 

3, Section 17(a) and (a)(2) with MRX’s 

Options 3, Section 17 is consistent with 

the Act because it does not 

substantively amend the functionality 

beyond removing the group level cancel 

capability. The Exchange’s proposal to 

amend proposed Options 3, Section 

17(a)(2) to specify that FIX and OTTO 

orders may be cancelled is consistent 

with the Act as it will make clear that 

all orders entered on BX may be purged 

through the Kill Switch. Finally, 

allowing BX Participants to send a mass 

purge request through FIX or OTTO, in 

lieu of an interface, is consistent with 

Act and the protection of investors and 

the general public because it will enable 

BX Participants to initiate the Kill 

Switch more seamlessly without the 

need to utilize a separate interface. 

Further, utilizing the order protocols 

directly, in lieu of the interface, will 

align the Kill Switch functionality to 

that of ISE, GEMX and MRX. When 

initiating a cancellation of their orders 

by sending a mass purge request 

through FIX or OTTO, Participants will 

be able to submit a Kill Switch request 

on a user level only because the purge 


ddrumheller on DSK120RN23PROD with NOTICES1
Federal Register / Vol. 89, No. 231 / Monday, December 2, 2024 / Notices 95325 

19See 15 U.S.C. 78f(b)(4) and (5). 20MRX offers one free FIX Port to its Members 

and assesses the same OTTO Port fee of $650 per 

port, per month, per account number. MRX also 

offers a free FIX Disaster Recovery Port. Today, BX 

does not assess Disaster Recovery Port fees. Finally, 

today, MRX offers a $7,500 monthly cap for OTTO 

Ports, CTI Ports, FIX Ports, FIX Drop Ports and all 

Disaster Recovery Ports. BX’s proposed monthly 

cap is $7,500 and includes the same ports as MRX, 

except that BX also includes two data ports in 

addition to the other ports, BX Depth Ports and BX 

Top Ports. BX Depth Ports and BX Top Ports are 

assessed fees of $650 per port, per month. 

Therefore, BX’s proposed cap can also be obtained 

utilizing BX Depth Port and BX Top Port in 

addition to the same ports that MRX aggregates for 

purposes of the monthly cap. 

21 GEMX does not offer the first FIX Port for free 

and assesses the same OTTO Port fee of $650 per 

port, per month, per account number. Also, GEMX 

caps OTTO Ports, CTI Ports, FIX Ports, FIX Drop 

Ports and all Disaster Recovery Ports at $7,500 a 

month the same as the proposed fee for BX. 

22MEMX assesses $450 per port for an order entry 

port. 

23Emerald assesses $550 for the first FIX Port, 

$350 for 2 through 5 FIX Ports and $150 for over 

5 FIX Ports. 

24BatsEDGX assesses $750 per port, per month 

for a Logical Port. 

25Market share is the percentage of volume on a 

particular exchange relative to the total volume 

across all exchanges, and indicates the amount of 

order flow directed to that exchange. High levels of 

market share enhance the value of trading and 

ports. Total contracts include both multi-list 

options and proprietary options products. 

Proprietary options products are products with 

intellectual property rights that are not multi-listed. 

BX does not list proprietary products. 

will be specific to a FIX or OTTO user 

for these ports. 

Finally, the Detection of Loss of 

Communication would apply equally to 

FIX and OTTO. The Exchange believes 

that its proposal is consistent with the 

Act and protects investors as the 

Exchange is making clear what types of 

order types and other mechanisms may 

utilize OTTO. Today, BX Participants 

utilize FIX to enter their orders. Despite 

the fact that OTTO would not be 

available for the GTC Time-In-Force 

modifier, the Exchange notes that one 

FIX Port is being provided to 

Participants at no cost. Today, FIX is the 

only manner in which to enter orders 

into BX. 

Pricing 

Proposed Port Fees Are Reasonable, 

Equitable and Not Unfairly 

Discriminatory 

The Exchange believes that its 

proposal furthers the objectives of 

Sections 6(b)(4) and 6(b)(5) of the Act,19

in particular, in that it provides for the 

equitable allocation of reasonable dues, 

fees, and other charges among members 

and issuers and other persons using any 

facility, and is not designed to permit 

unfair discrimination between 

customers, issuers, brokers, or dealers. 

This belief is based on comparability: 

the proposed fees are comparable to, 

and in some cases less than, those of 

similarly situated exchanges. 

The proposed fees for BX OTTO are 

nearly identical to fees on MRX 20 and 

GEMX 21 for OTTO, an identical 

protocol. Additionally, the proposed 

fees for BX OTTO are comparable to 

those of its closest competitors, Cboe C2 

Exchange, Inc. (‘‘C2’’), MEMX LLC 

(‘‘MEMX’’),22 MIAX Emerald, LLC 

(‘‘Emerald’’) 23 and Cboe EDGX 

Exchange, Inc.’s (‘‘BatsEDGX’’) 24 based 

on market share. Below is a chart 

comparing BX to affiliated Nasdaq 

exchanges that have an identical OTTO 

Port. 

Exchange Market share 

(%) OTTO First free FIX port Cap 

BX ............................ 2 $650 per port, per month, per account 

number.

yes ......................... OTTO Port subject to monthly cap of 

$7,500. 

MRX ........................ 2.5 $650 per port, per month, per account 

number.

yes ......................... OTTO Port currently subject to monthly 

cap of $7,500. 

GEMX ...................... 2.4 $650 per port, per month, per account 

number.

no ........................... OTTO Port currently subject to monthly 

cap of $7,500. 

Below is a chart comparing BX to 

unaffiliated exchanges with comparable 

logical ports. 

Exchange Market share 

(%) Proprietary port First free port Cap 

BX ............................ 2 $650 per port, per month, per account 

number.

yes ......................... OTTO Port subject to monthly cap of 

$7,500. 

C2 ............................ 2.8 BOE Port fee of $650 per port .............. no ........................... no. 

MEMX ...................... 2.3 MEMO SBE Port fee of $450 per port .. no ........................... no. 

Emerald ................... 3.6 Emerald does not offer a proprietary 

port similar to OTTO.

no ........................... no. 

BatsEDGX ............... 3.6 BOE Port fee of $750 per port, per 

month.

no ........................... no. 

The Exchange’s analysis utilizes the 

below graph representing the market 

share 25 for each of the eighteen options 

markets based on total options contracts 

traded in 2024 through October 28, 

2024. 


ddrumheller on DSK120RN23PROD with NOTICES1
95326 Federal Register / Vol. 89, No. 231 / Monday, December 2, 2024 / Notices 

26https://cdn.cboe.com/resources/membership/ 

US_Options_BOE_Specification.pdf. 

27See MEMO SBE V1.12 specifications. 

Specifications must be downloaded from MEMX’s 

website to be viewed. 

28MRX had no port fees for the first 6 years of 

trading. 

29https://www.miaxglobal.com/miax_emerald_

user_manual.pdf. 

MRX 

MRX has market share of 2.5% which 

is comparable to BX’s market share of 

2.0%. MRX offers one free FIX Port to 

its Members and assesses the same 

OTTO Port fee of $650 per port, per 

month, per account number. MRX also 

offers a free FIX Disaster Recovery Port. 

Today, BX does not assess Disaster 

Recovery Port fees. Finally, today, MRX 

offers a $7,500 monthly cap for OTTO 

Ports, CTI Ports, FIX Ports, FIX Drop 

Ports and all Disaster Recovery Ports. 

BX’s proposed monthly cap is $7,500 

and includes the same ports as MRX, 

except that BX also includes two data 

ports in addition to the other ports, BX 

Depth Ports and BX Top Ports. BX 

Depth Ports and BX Top Ports are 

assessed fees of $650 per port, per 

month. Therefore, BX’s proposed cap 

can also be obtained utilizing BX Depth 

Port and BX Top Port in addition to the 

same ports that MRX aggregates for 

purposes of the monthly cap. The 

proposed fees are nearly identical to 

MRX’s OTTO fees. 

GEMX 

GEMX has market share of 2.4% 

which is comparable to BX’s market 

share of 2.0%. GEMX does not offer the 

first FIX Port for free and assesses the 

same OTTO Port fee of $650 per port, 

per month, per account number. Also, 

GEMX caps OTTO Ports, CTI Ports, FIX 

Ports, FIX Drop Ports and all Disaster 

Recovery Ports at $7,500 a month the 

same as the proposed fee for BX. The 

proposed fees are nearly identical to 

GEMX’s fees. 

C2 

C2 has market share of 2.8% which is 

comparable to BX’s market share of 

2.0%. C2 assesses $650 per port for its 

Binary Order Entry (‘‘BOE’’) Logical 

Port, a Cboe proprietary order entry 

protocol.26 BOE provide users the 

ability to enter order/quotes. Unlike 

BOE, OTTO is only for order submission 

and is similarly a proprietary protocol. 

While OTTO is subject to a cap, BOE’s 

logical port fee is applicable when used 

to enter up to 20,000 orders per trading 

day per logical port as measured on 

average in a single month. Each 

incremental usage of up to 20,000 per 

day per logical port will incur an 

additional logical port fee of $650 per 

month. Incremental usage will be 

determined on a monthly basis based on 

the average orders per day entered in a 

single month across all of a market 

participant’s subscribed BOE Logical 

Ports. OTTO does not have a similar 

limitation on its port for number of 

orders which would require additional 

ports if the orders per day were 

exceeded. With its proposal, BX is 

offering the first FIX at no cost, while C2 

does not offer any ports at no cost. The 

proposed fees are similar to C2’s fees. 

MEMX 

MEMX has market share of 2.3% 

which is comparable to BX’s market 

share of 2.0%. MEMX assesses $450 per 

port for an order entry port. MEMO SBE, 

a binary, proprietary protocol used for 

order submission on MEMX Options,27

would be similar to OTTO. MEMX does 

not cap its fees and also does not offer 

any ports at no cost. The proposed fees 

are higher than MEMX’s fees. MEMX is 

a new options market that only recently 

began trading as compared to BX which 

began trading in 2012, Typically, new 

options entrants have no port fees 28 or 

lower port fees. 

Emerald 

Emerald has market share of 3.6% 

which is comparable to BX’s market 

share of 2.0%. Emerald assesses $550 

for the first FIX Port, $350 for 2 through 

5 FIX Ports and $150 for over 5 FIX 

Ports. FIX is a universal protocol while 

BX OTTO is a proprietary protocol. 

Emerald offers a FIX Port but not a 

similar proprietary logical port.29

Emerald does not cap its fees and does 

not offer a FIX Port at no cost. The 

proposed fees are similar to Emerald’s 

FIX fees for the first port and higher for 

subsequent Emerald FIX ports, however 


ddrumheller on DSK120RN23PROD with NOTICES1EN02DE24.004</GPH>

US Options Market Share 

Data using total options contracts traded from start of 2024 • October 28, 2024 

20%· 

18% 

f 16% 

cu 

Vi 14% 

:512% 

I,, S 10% 

~N 8% 

6% 

4% 

2% 

I 

u 

N Ill 

u 'lil 

m 

>)( X <t & ::! w <I) w ~ 0 !!? 

;B 

en :le 

<:t: < ~ z 

X 'E ti ~ X 'ti X ,:: ~ .t ·s ~ ~ .!!l 'II :x: V al :l?: l, .c a. <II ~ :E ~ Q. 

I:, Q. 

w ~ 

Source: OCC, Nasdaq Economic Research 
Federal Register / Vol. 89, No. 231 / Monday, December 2, 2024 / Notices 95327 

30https://cdn.cboe.com/resources/membership/ 

US_Options_BOE_Specification.pdf. 

31 15 U.S.C. 78s(b)(3)(A)(iii). 

32 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

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

the Commission written notice of its intent to file 

the proposed rule change at least five business days 

prior to the date of filing of the proposed rule 

change, or such shorter time as designated by the 

Commission. The Exchange has satisfied this 

requirement. 

Emerald does not offer any FIX ports at 

no cost. 

BatsEDGX 

BatsEDGX has market share of 3.6% 

which is comparable to BX’s market 

share of 2.0%. BatsEDGX assesses $750 

per port, per month for its Binary Order 

Entry (‘‘BOE’’) Logical Port, a Cboe 

proprietary order entry protocol.30 BOE 

provide users the ability to enter order/ 

quotes. Unlike BOE, OTTO is only for 

order submission and is similarly a 

proprietary protocol. BatsEDGX does 

not cap its fees and also does not offer 

any ports at no cost. The proposed fees 

are lower than BatsEDGX’s fees. 

In summary, (i) the proposed OTTO 

Port fees are (i) substantially similar to 

GEMX and MRX; (ii) comparable to C2; 

(iii) comparable, but less than 

BatsEDGX; and (iv) comparable, but 

higher than MEMX. Emerald offers a 

FIX Port but not a similar proprietary 

logical port. 

The Proposal is equitable as the 

proposed fees would apply to all BX 

Participants in a uniform manner. Each 

BX Participant would be entitled to the 

first FIX Port at no cost. Also, the 

proposed BX OTTO fees would be 

assessed uniformly to each BX 

Participant that subscribes to OTTO. 

Finally, the proposed monthly cap 

would be applied uniformly to all BX 

Participants. The Proposal is not 

unfairly discriminatory. BX OTTO, a 

new protocol, would be an optional 

protocol available to all Participants on 

a non-discriminatory basis. 

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 not 

necessary or appropriate in furtherance 

of the purposes of the Act. 

OTTO Protocol 

The OTTO protocol is a proprietary 

protocol of Nasdaq, Inc. The Exchange 

continues to innovate and modernize 

technology so that it may continue to 

compete among options markets. The 

ability to continue to innovate with 

technology and offer new products to 

market participants allows BX to remain 

competitive in the options space which 

currently has eighteen options markets 

and potential new entrants. The 

Exchange’s proposal to adopt an OTTO 

Protocol does not impose an undue 

burden on intramarket competition. 

Today, all BX Participants utilize FIX to 

send orders to BX. The Exchange would 

offer each BX Participant the first FIX 

Port at no cost with this proposal. With 

the addition of OTTO Ports, a BX 

Participant may elect to enter their 

orders through FIX, OTTO, or both 

protocols, although both protocols are 

not necessary. The Exchange’s proposal 

to adopt an OTTO Protocol does not 

impose an undue burden on intermarket 

competition as other options exchanges 

offer multiple protocols today such as 

ISE, GEMX and MRX. 

Other Amendments 

The Exchange’s proposal to amend 

other rules within Options 3 to make 

clear where the FIX and OTTO 

protocols may be utilized does not 

impose an undue burden on intramarket 

competition as these rules will apply in 

the same manner to all Participants. The 

Exchange’s proposal to amend other 

rules within Options 3 to make clear 

where the FIX and OTTO protocols may 

be utilized does not impose an undue 

burden on intermarket competition as 

other options exchanges may elect to 

utilize their order entry protocols in 

different ways. 

Pricing 

Nothing in the proposal burdens 

inter-market competition (the 

competition among self-regulatory 

organizations) because approval of the 

Proposal does not impose any burden 

on the ability of other options exchanges 

to compete. BX OTTO fees are 

comparable to, and in some cases less 

than, those of other exchanges, as 

discussed above. 

Nothing in the Proposal burdens 

intra-market competition (the 

competition among consumers of 

exchange data) because BX OTTO is 

available to any Participant at the same 

price and any Participant that elects to 

subscribe to OTTO may do so on a nondiscriminatory basis. 

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 

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 31 and 

subparagraph (f)(6) of Rule 19b-4 

thereunder.32

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

should be approved or disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (https://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

BX–2024–048 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–BX–2024–048. 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 


ddrumheller on DSK120RN23PROD with NOTICES1
95328 Federal Register / Vol. 89, No. 231 / Monday, December 2, 2024 / Notices 

33 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The Exchange notes that its affiliate options 

exchanges, Miami International Securities 

Exchange, LLC (‘‘MIAX’’) and MIAX PEARL, LLC 

(‘‘MIAX Pearl’’), plan to submit (or have already 

submitted) substantively identical proposals to list 

and trade options on the Bitcoin Funds. The 

Exchange notes that all the rules of Chapter III of 

MIAX, including Exchange Rules 307 and 309, are 

incorporated by reference to the MIAX Pearl and 

MIAX Sapphire Rulebooks. The Exchange also 

notes that all of the rules of Chapter III of MIAX, 

including Exchange Rules 307 and 309, and the 

rules of Chapter IV of MIAX, including Exchange 

Rule 402, are incorporated by reference into the 

Exchange’s affiliate, MIAX Emerald, LLC (‘‘MIAX 

Emerald’’). 

4On January 10, 2024, the Securities and 

Exchange Commission (‘‘Commission’’) approved 

proposals by NYSE Arca, Inc., The Nasdaq Stock 

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

and trade the shares of 11 bitcoin-based 

commodity-based trust shares and trust units, 

including the iShares Bitcoin Trust. See Securities 

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

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

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

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

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

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

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

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

Order’’). 

5See Securities Exchange Act Release No. 101386 

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

(SR–NYSEAMER–2024–49) (Self-Regulatory 

Organizations; NYSE American LLC; 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). 

6See Securities Exchange Act Release No. 101128 

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

2024) (SR–ISE–2024–03) (Notice of Filing of 

Amendment Nos. 4 and 5 and Order Granting 

Accelerated Approval of a Proposed Rule Change, 

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

Permit the Listing and Trading of Options on the 

iShares Bitcoin Trust (‘‘IBIT’’) (‘‘ISE IBIT Approval 

Order’’). 

7See Exchange Rule 402(i), which permits 

options trading on ETFS that: (1) 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 (‘‘Funds’’), 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 

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–BX–2024–048 and should be 

submitted on or before December 23, 

2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.33

Vanessa A. Countryman, 

Secretary. 

[FR Doc. 2024–28113 Filed 11–29–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–101745; File No. SR– 

SAPPHIRE–2024–37] 

Self-Regulatory Organizations; MIAX 

Sapphire, LLC; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Amend Exchange 

Rule 402, Criteria for Underlying 

Securities, To List and Trade Options 

on the Grayscale Bitcoin Trust, the 

Grayscale Bitcoin Mini Trust, and the 

Bitwise Bitcoin ETF 

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, MIAX Sapphire, LLC 

(‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) a proposed rule change 

as described in Items I and II below, 

which Items have been prepared by the 

Exchange. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend 

Exchange Rule 402, Criteria for 

Underlying Securities. The text of the 

proposed rule change is available on the 

Exchange’s website at https://

www.miaxglobal.com/markets/usoptions/miax-sapphire/rule-filings, at 

the Exchange’s principal office, 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 3 proposes to amend 

Exchange Rule 402, Criteria for 

Underlying Securities, to allow the 

Exchange to list and trade options on 

the following exchange-traded products: 

the Grayscale Bitcoin Trust (BTC) (the 

‘‘Grayscale Fund’’ or ‘‘GBTC’’), the 

Grayscale Bitcoin Mini Trust BTC (the 

‘‘Grayscale Mini Fund’’ or ‘‘BTC’’), and 

the Bitwise Bitcoin ETF (the ‘‘Bitwise 

Fund’’ or ‘‘BITB’’ and, collectively, the 

‘‘Bitcoin Funds’’ or ‘‘Funds’’).4 As noted 

above, MIAX’s rules governing position 

limits and exercise limits for options 

positions are incorporated by reference 

into the MIAX Sapphire Rulebook and 

are therefore MIAX Sapphire rules 

applicable to market participants on 

MIAX Sapphire. MIAX is filing a 

substantively similar proposal to list 

and trade options on the Bitcoin Funds. 

That filing includes proposed change to 

Exchange Rules 307 (position limits) 

and 309 (exercise limits), which changes 

will be incorporated by reference into 

the MIAX Sapphire Rulebook. 

The Exchange notes that this is a 

competitive filing based on a similar 

proposal submitted by NYSE American 

LLC (‘‘NYSE American’’), which was 

approved by the Commission.5 The 

Commission also recently approved a 

rule proposal by Nasdaq ISE, LLC 

(‘‘ISE’’) to allow the listing and trading 

of options on iShares Bitcoin Trust (or 

IBIT), which is a trust that holds bitcoin 

(referred to herein as the ‘‘ISE IBIT 

Approval Order’’).6 As discussed herein, 

the Exchange believes, like the recentlyapproved options on IBIT, options on 

the Bitcoin Funds would permit 

hedging, and allow for more liquidity, 

better price efficiency, and less 

volatility with respect to the underlying 

Funds. Further, permitting the listing of 

such options would enhance the 

transparency and efficiency of markets 

in these and correlated products. 

Current Exchange Rule 402(i)(4) 

provides that securities deemed 

appropriate for options trading include 

shares or other securities (‘‘Exchange 

Traded Fund Shares’’ or ‘‘ETFs’’) that 

represent certain types of interests,7


ddrumheller on DSK120RN23PROD with NOTICES1