3266 Federal Register / Vol. 90, No. 8 / Tuesday, January 14, 2025 / Notices 

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

2 17 CFR 240.19b–4. 

3Nasdaq received approval to list and trade 

Bitcoin-Based Commodity-Based Trust Shares in 

IBIT pursuant to Rule 5711(d) of Nasdaq. See 

Securities Exchange Act Release No. 99306 (January 

10, 2024), 89 FR 3008 (January 17, 2024) (SR– 

NASDAQ–2023–016) (Order Granting Accelerated 

Approval of Proposed Rule Changes, as Modified by 

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

Units). 

4See Securities Exchange Act Release No. 101128 

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

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

to Add Priority Mail & USPS Ground 

Advantage Contract 587 to the 

Competitive Product List and Notice of 

Filing Materials Under Seal; Filing 

Acceptance Date: January 6, 2025; Filing 

Authority: 39 U.S.C. 3642, 39 CFR 

3035.105, and 39 CFR 3041.310; Public 

Representative: Jennaca Upperman; 

Comments Due: January 15, 2025. 

20. Docket No(s).: MC2025–1060 and 

K2025–1059; Filing Title: USPS Request 

to Add Priority Mail Express, Priority 

Mail & USPS Ground Advantage 

Contract 1244 to the Competitive 

Product List and Notice of Filing 

Materials Under Seal; Filing Acceptance 

Date: January 6, 2025; Filing Authority: 

39 U.S.C. 3642, 39 CFR 3035.105, and 

39 CFR 3041.310; Public Representative: 

Christopher Mohr; Comments Due: 

January 15, 2025. 

21. Docket No(s).: MC2025–1061 and 

K2025–1060; Filing Title: USPS Request 

to Add Priority Mail & USPS Ground 

Advantage Contract 588 to the 

Competitive Product List and Notice of 

Filing Materials Under Seal; Filing 

Acceptance Date: January 6, 2025; Filing 

Authority: 39 U.S.C. 3642, 39 CFR 

3035.105, and 39 CFR 3041.310; Public 

Representative: Christopher Mohr; 

Comments Due: January 15, 2025. 

22. Docket No(s).: MC2025–1062 and 

K2025–1061; Filing Title: USPS Request 

to Add Priority Mail Express, Priority 

Mail & USPS Ground Advantage 

Contract 1245 to the Competitive 

Product List and Notice of Filing 

Materials Under Seal; Filing Acceptance 

Date: January 6, 2025; Filing Authority: 

39 U.S.C. 3642, 39 CFR 3035.105, and 

39 CFR 3041.310; Public Representative: 

Christopher Mohr; Comments Due: 

January 15, 2025. 

23. Docket No(s).: MC2025–1063 and 

K2025–1062; Filing Title: USPS Request 

to Add Priority Mail Express, Priority 

Mail & USPS Ground Advantage 

Contract 1246 to the Competitive 

Product List and Notice of Filing 

Materials Under Seal; Filing Acceptance 

Date: January 6, 2025; Filing Authority: 

39 U.S.C. 3642, 39 CFR 3035.105, and 

39 CFR 3041.310; Public Representative: 

Alain Brou; Comments Due: January 15, 

2025. 

24. Docket No(s).: MC2025–1064 and 

K2025–1063; Filing Title: USPS Request 

to Add Priority Mail Express, Priority 

Mail & USPS Ground Advantage 

Contract 1247 to the Competitive 

Product List and Notice of Filing 

Materials Under Seal; Filing Acceptance 

Date: January 6, 2025; Filing Authority: 

39 U.S.C. 3642, 39 CFR 3035.105, and 

39 CFR 3041.310; Public Representative: 

Alain Brou; Comments Due: January 15, 

2025. 

25. Docket No(s).: MC2025–1065 and 

K2025–1064; Filing Title: USPS Request 

to Add Priority Mail Express, Priority 

Mail & USPS Ground Advantage 

Contract 1248 to the Competitive 

Product List and Notice of Filing 

Materials Under Seal; Filing Acceptance 

Date: January 6, 2025; Filing Authority: 

39 U.S.C. 3642, 39 CFR 3035.105, and 

39 CFR 3041.310; Public Representative: 

Jana Slovinska; Comments Due: January 

15, 2025. 

26. Docket No(s).: MC2025–1066 and 

K2025–1065; Filing Title: USPS Request 

to Add Priority Mail Express, Priority 

Mail & USPS Ground Advantage 

Contract 1249 to the Competitive 

Product List and Notice of Filing 

Materials Under Seal; Filing Acceptance 

Date: January 6, 2025; Filing Authority: 

39 U.S.C. 3642, 39 CFR 3035.105, and 

39 CFR 3041.310; Public Representative: 

Jana Slovinska; Comments Due: January 

15, 2025. 

27. Docket No(s).: MC2025–1067 and 

K2025–1066; Filing Title: USPS Request 

to Add Priority Mail & USPS Ground 

Advantage Contract 589 to the 

Competitive Product List and Notice of 

Filing Materials Under Seal; Filing 

Acceptance Date: January 6, 2025; Filing 

Authority: 39 U.S.C. 3642, 39 CFR 

3035.105, and 39 CFR 3041.310; Public 

Representative: Jana Slovinska; 

Comments Due: January 15, 2025. 

III. Summary Proceeding(s) 

None. See Section II for public 

proceedings. 

This Notice will be published in the 

Federal Register. 

Erica A. Barker, 

Secretary. 

[FR Doc. 2025–00522 Filed 1–13–25; 8:45 am] 

BILLING CODE 7710–FW–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–102132; File No. SR-Phlx2024–72] 

Self-Regulatory Organizations; Nasdaq 

PHLX LLC; Notice of Filing of 

Proposed Rule Change To Permit 

FLEX Trading in the iShares Bitcoin 

Trust ETF 

January 7, 2025. 

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 December 

26, 2024, Nasdaq PHLX LLC (‘‘Phlx’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission (‘‘SEC’’ or 

‘‘Commission’’) a 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 amend 

Options 8, Section 34, FLEX Trading, to 

permit FLEX Trading in the iShares 

Bitcoin Trust ETF. 

The text of the proposed rule change 

is available on the Exchange’s website at 

https://listingcenter.nasdaq.com/ 

rulebook/phlx/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 8, Section 34, FLEX Trading, to 

permit iShares Bitcoin Trust ETF 

(‘‘IBIT’’) options to trade as both cashsettled and physically settled FLEX 

Equity Options as described herein. 

IBIT is an Exchange-Traded Fund 

(‘‘ETF’’) that holds bitcoin and is listed 

on The Nasdaq Stock Market LLC 

(‘‘Nasdaq’’).3 On September 20, 2024, 

Nasdaq ISE, LLC (‘‘ISE’’) received 

approval to list options on IBIT.4 The 


khammond on DSK9W7S144PROD with NOTICES
Federal Register / Vol. 90, No. 8 / Tuesday, January 14, 2025 / Notices 3267 

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 Approval Order’’). The 

Nasdaq Stock Market LLC (‘‘Nasdaq’’), Nasdaq Phlx 

LLC (‘‘Phlx’’), Nasdaq BX, Inc. (‘‘BX’’), GEMX 

Options 4, Section 3, and MRX Options 4, Section 

3 incorporate ISE Options 4, Section 3 by reference. 

Phlx Options 4 rules are incorporated by reference 

to ISE Options 4 rules. ISE began trading IBIT 

options on November 19, 2024. 

5Options on Fidelity Wise Origin Bitcoin Fund, 

ARK 21Shares Bitcoin ETF, Grayscale Bitcoin Trust 

(BTC), Grayscale Bitcoin Mini Trust BTC, and 

Bitwise Bitcoin ETF are also subject to a 25,000 

contract position and exercise limit. 

6Options 8, Section 34(a) also does not permit 

FLEX trading on options on Fidelity Wise Origin 

Bitcoin Fund, ARK 21Shares Bitcoin ETF, Grayscale 

Bitcoin Trust (BTC), Grayscale Bitcoin Mini Trust 

BTC, and Bitwise Bitcoin ETF. 

7Pursuant to Options 8, Section 32(g), a FLEX 

Option is as described in Options 8, Section 34. 

FLEX Options are not eligible for entry by a member 

for execution through FBMS. Phlx offers FLEX 

Options which are customized equity, index or 

currency options that allow investors to tailor 

contract terms for exchange-listed equity and index 

options on its trading floor. See Options 8, Section 

34. 

8See supra note 4, IBIT Approval Order, 89 FR 

78946. 

9See id. 

10See id. 

11See id. 

12See id. 

13See id. 

14Options 9, Section 13(g), Equity Option 

Position Limits, provides at subparagraph (i) that 

the position limit shall be 250,000 contracts for 

options: (a) on an underlying stock or ExchangeTraded Fund Share which had trading volume of 

at least 100,000,000 shares during the most recent 

six-month trading period; or (b) on an underlying 

stock or Exchange-Traded Fund Share which had 

trading volume of at least 75,000,000 shares during 

the most recent six-month trading period and has 

at least 300,000,000 shares currently outstanding. 

15The market capitalization was determined by 

multiplying a settlement price of ($54.02) by the 

number of shares outstanding (866,040,000). This 

figure was acquired as of November 26, 2024. See 

https://www.ishares.com/us/products/333011/ 

ishares-bitcoin-trust-etf. 

16This is the approximate price of bitcoin from 

4:00pm ET on November 25, 2024. 

17 GLD, SLV and BITO each hold one asset in 

trust similar to IBIT. 

18MBTX is based on 1/10th the value of the Cboe 

Bitcoin U.S. ETF Index. 

19See https://www.cboe.com/tradable_products/ 

bitcoin-etf-index-options?utm_source=mcae&utm_

medium=email&utm_campaign=bitcoin_eft_

options_launch. Cboe’s website provides a product 

comparison chart indicating that CBTX and MBTX 

are permitted to trade FLEX as compared to spot 

bitcoin ETF options. See https://cdn.cboe.com/ 

resources/membership/Cboe_Bitcoin_US_ETF_

Options_Comparative_Overview.pdf?_

gl=1*1xmm04c*_up*MQ..*_ga*MTc0MjU1NzU1Ni4

xNzM0NTU2NTky*_ga_5Q99WB9X71*MT

czNDU1NjU5MC4xLjAuMTczNDU1NjU5MC4

wLjAuMA. 

position and exercise limits for IBIT 

options are 25,000 contracts as stated in 

Options 9, Sections 13 and 15, the 

lowest limit available in options.5

Today, pursuant to Options 3A, Section 

3(a), IBIT options are not approved for 

FLEX trading.6 Today, FLEX Equity 

Options are physically delivered and 

have no position limits pursuant to 

Options 8, Section 34(e)(2).7 Therefore, 

the 25,000 contract position limit in 

Options 9, Section 13 and exercise limit 

in Options 9, Section 15 for IBIT options 

currently applies to non-FLEX IBIT 

options. 

At this time, the Exchange proposes to 

permit IBIT options to transact as FLEX 

Equity Options subject to a position and 

exercise limits of 25,000 contracts 

which would be aggregated with nonFLEX IBIT options position and exercise 

limits in Options 9, Sections 13 and 15. 

Per the Commission, ‘‘rules regarding 

position and exercise limits 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 positions.’’ 8 For this 

reason, the Commission requires that 

‘‘position and exercise limits must be 

sufficient to prevent investors from 

disrupting the market for the underlying 

security by acquiring and exercising a 

number of options contracts 

disproportionate to the deliverable 

supply and average trading volume of 

the underlying security.’’ 9 Based on its 

review of the data and analysis provided 

by ISE, the Commission concluded that 

the 25,000 contract position limit for 

non-FLEX IBIT options satisfied these 

objectives.10

As proposed, the Exchange will 

aggregate position (and exercise) limits 

for all IBIT options, thus limiting 

positions for options on all IBIT 

options—FLEX and non-FLEX—to 

25,000 contracts. This proposed 

aggregated limit effectively restricts a 

market participant from holding 

positions that could result in the receipt 

of more than 2,500,000 shares, 

aggregated for FLEX IBIT and non-FLEX 

IBIT (if that market participant 

exercised all its IBIT options). The 

Exchange believes that capping the 

aggregated position limit at 25,000 

contracts, the lowest limit available in 

options, would be sufficient to address 

concerns related to manipulation and 

the protection of investors. The 

Exchange notes that this number is 

conservative for IBIT and therefore 

appropriate given its liquidity. 

While ISE proposed an aggregated 

25,000 contract position limit for IBIT 

options in its rule proposal for IBIT 

options, it nonetheless believed that 

evidence existed to support a much 

higher position limit. Specifically, the 

Commission has considered and 

reviewed ISE’s analysis that the 

exercisable risk associated with a 

position limit of 25,000 contracts 

represented only 0.4% of the 

outstanding shares of IBIT.11 The 

Commission also has considered and 

reviewed the ISE’s statement that with 

a position limit of 25,000 contracts on 

the same side of the market and 

611,040,00 shares of IBIT outstanding, 

244 market participants would have to 

simultaneously exercise their positions 

to place IBIT under stress.12 Based on 

the Commission’s review of this 

information and analysis, the 

Commission concluded that the 

proposed position and exercise limits 

were designed to prevent investors from 

disrupting the market for the underlying 

security by acquiring and exercising a 

number of options contracts 

disproportionate to the deliverable 

supply and average trading volume of 

the underlying security, and 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.13 IBIT currently 

qualifies for a 250,000 contract position 

limit pursuant to the criteria in Options 

9, Section 13(g), which requires that, for 

the most recent six-month period, 

trading volume for the underlying 

security be at least 100,000,000 shares.14

As of November 26, 2024, the market 

capitalization for IBIT was 

$46,783,480,800 15 with an ADV, for the 

preceding three months prior to 

November 26, 2024, of 39,421,877 

shares. At a price of $94,830,16 that 

equates to a market capitalization of 

greater than $1.876 trillion US. 

Despite the addition of FLEX trading 

in IBIT options, the Exchange would 

continue to limit the number of IBIT 

options contracts traded on the 

exchange in an underlying security that 

an investor, acting alone or in concert 

with others directly or indirectly, may 

control and thereby mitigate potential 

manipulation. The Exchange believes 

that it is consistent with the Act to 

permit FLEX trading in IBIT given FLEX 

trading is permitted today in other ETFs 

overlying a commodity such as SPDR 

Gold Shares (‘‘GLD’’), iShares Silver 

Trust (‘‘SLV’’), and ProShares Bitcoin 

ETF (‘‘BITO’’).17 Additionally, FLEX 

trading is permitted today in Cboe 

Bitcoin U.S. ETF Index Options (CBTX) 

and the Cboe Mini Bitcoin U.S. ETF 

Index Options (MBTX),18 which is 

comprised of multiple bitcoin ETFS of 

which IBIT is the highest weighted ETF 

in the index composition at 20%.19

CBTX (and MBTX) are permitted to 

trade as FLEX Index Options with a 


khammond on DSK9W7S144PROD with NOTICES
3268 Federal Register / Vol. 90, No. 8 / Tuesday, January 14, 2025 / Notices 

20See Cboe Rule 8.32(a). See also Cboe Rule 

8.35(a)(7) that states that for purposes of 

determining compliance with the position limits 

under this Rule 8.35, if a FLEX Index Option has 

a multiplier of one, 100 contracts for that class 

equal one contract for a FLEX Index Option with 

a multiplier of 100 with the same underlying index. 

The Exchange notes that given the multiplier and 

notional value of CBTX, the index has a position 

and exercise limit that equates to 1,000,000 

contracts of in kind exposure to IBIT, which is more 

than 40 times greater than the exposure for options 

on IBIT at the current 25,000 contract position and 

exercise limit. 

21Cboe Rule 8.35(a)(3) provides that in no event 

shall the position limits for an industry-based FLEX 

Index Option class exceed one times the applicable 

number of Non-FLEX Index Option contracts 

(whether long or short) of the put class and the call 

class on the same side of the market, as determined 

on the basis of the position limits established 

pursuant to Rule 8.32 provided, however, the 

position limits for an industry-based FLEX Index 

Option class shall not exceed four times the 

applicable position limits established pursuant to 

Rule 8.32, instead of one times as provided above, 

for: (1) the Dow Jones Transportation Average or the 

DowJones Utility Average; or (2) an underlying 

industry-based index that is not a ‘‘narrow-based 

security index,’’ as defined under Section 

3(a)(55)(B) of the Exchange Act. See also Cboe Rule 

8.35(a)(4) that provides that in no event shall the 

position limits for a micro narrow-based FLEX 

Index Option class exceed one times the applicable 

number of Non-FLEX Index Option contracts 

(whether long or short) of the class on the same side 

of the market, as determined on the basis of the 

position limits established pursuant to Rule 8.33. 

22The term ‘‘European-style option’’ means an 

options contract that, subject to the provisions of 

Options 6B, Section 1 (relating to the cutoff time 

for exercise instructions) and to the Rules of the 

Clearing Corporation, can be exercised only on its 

expiration date. See Options 1, Section 1(a)(15). 

23The term ‘‘American-style option’’ means an 

options contract that, subject to the provisions of 

Options 6B, Section 1 (relating to the cutoff time 

for exercise instructions) and to the Rules of the 

Clearing Corporation, can be exercised on any 

business day prior to its expiration date and on its 

expiration date. Today, non-FLEX equity options 

settle American-style. See Options 1, Section 

1(a)(3). 

24Phlx FLEX trading occurs on Phlx’s trading 

floor, in an open outcry environment. Surveillance 

staff monitors FLEX trading in open outcry. 

25See IBIT Approval Order, 89 FR 78947. 

24,000 contract position limit 20 which 

limits are aggregated between FLEX and 

non-FLEX index options in CBTX and 

MBTX pursuant to Cboe Rule 8.35(a).21

Further, the Exchange believes that 

the share creation and redemption 

process unique to ETFs would mitigate 

any potential risk of manipulation in 

FLEX trading in IBIT options. The 

creation and redemption process is 

designed to ensure that an ETF’s price 

closely tracks the value of its underlying 

asset(s). For example, if a market 

participant exercised a long call 

position for 25,000 contracts and 

purchased 2,500,000 shares of IBIT and 

this purchase resulted in the value of 

IBIT shares to trade at a premium to the 

value of the (underlying) bitcoin held by 

IBIT, the Exchange believes that other 

market participants would attempt to 

arbitrage this price difference by selling 

short IBIT shares while concurrently 

purchasing bitcoin. Those market 

participants (arbitrageurs) would then 

deliver cash to IBIT and receive shares 

of IBIT, which would be used to close 

out any previously established short 

position in IBIT. Thus, this creation and 

redemptions process would 

significantly reduce the potential risk of 

price dislocation between the value of 

IBIT shares and the value of bitcoin 

holdings. The Exchange understands 

that FLEX Options on ETFs are 

currently traded in the over-the-counter 

(‘‘OTC’’) market by a variety of market 

participants, e.g., hedge funds, 

proprietary trading firms, and pension 

funds. The Exchange believes there is 

room for significant growth if a 

comparable FLEX product were 

introduced for trading on a regulated 

market. The Exchange expects that users 

of these OTC products would be among 

the primary users of FLEX IBIT options. 

The Exchange also believes that the 

trading of FLEX IBIT options would 

allow these same market participants to 

better manage the risk associated with 

the volatility of IBIT (the underlying 

ETF) positions given the enhanced 

liquidity that an exchange-traded 

product would bring. Additionally, the 

Exchange believes that FLEX IBIT 

options traded on the Exchange would 

have three important advantages over 

the contracts that are traded in the OTC 

market. First, as a result of greater 

fungibility, exchange-traded contracts 

should develop more liquidity because 

each FLEX contract can be closed with 

a liquidating transaction as compared to 

OTC FLEX contracts which must be 

held until expiration. Second, 

counterparty credit risk would be 

mitigated by the fact that the exchangetraded contracts are issued and 

guaranteed by The Options Clearing 

Corporation (‘‘OCC’’). Finally, the price 

discovery and dissemination provided 

by the Exchange and its member 

organizations would lead to more 

transparent markets. The Exchange 

believes that its ability to offer FLEX 

IBIT options would aid it in competing 

with the OTC market and at the same 

time expand the universe of products 

available to interested market 

participants. The Exchange believes that 

an exchange-traded alternative may 

provide a useful risk management and 

trading vehicle for market participants 

and their customers. Additionally, FLEX 

options serve two primary client types 

in the capital markets: (1) ETF and 

structured return issuers who seek 

European-style 22 options with bespoke 

strike and expirations, such that they 

can tailor their returns more precisely 

than they could with standard 

American-style options; 23 and (2) with 

respect to stock lending, certain 

investors (e.g. banks and hedge funds) 

may seek to align their contract 

durations for calls and puts, and thereby 

prefer European-style exercise, which 

can be exercised only on its expiration 

date, as compared to American-style, 

which can be exercised on any business 

day prior to its expiration date and on 

its expiration date. 

The Exchange has analyzed its 

capacity and represents that it and The 

Options Price Reporting Authority 

(‘‘OPRA’’) have the necessary systems 

capacity to handle the additional traffic 

associated with the listing of FLEX IBIT 

options. The Exchange believes any 

additional traffic that would be 

generated from the trading of FLEX IBIT 

options would be manageable. The 

Exchange believes member 

organizations will not have a capacity 

issue as a result of this proposed rule 

change. The Exchange also represents 

that it does not believe this proposed 

rule change will cause fragmentation of 

liquidity. The Exchange will monitor 

the trading volume associated with the 

additional options series listed as a 

result of this proposed rule change and 

the effect (if any) of these additional 

series on market fragmentation and on 

the capacity of the Exchange’s 

automated systems. The Exchange 

represents that the same surveillance 

procedures applicable to the Exchange’s 

other options products listed and traded 

on the Exchange, including non-FLEX 

IBIT options, will apply to FLEX IBIT 

options, and that it has the necessary 

systems capacity to support such 

options. FLEX options products (and 

their respective symbols) are integrated 

into the Exchange’s existing 

surveillance system architecture and are 

thus subject to the relevant surveillance 

processes.24 The Exchange’s market 

surveillance staff (including staff of the 

Financial Industry Regulatory Authority 

(‘‘FINRA’’) who perform surveillance 

and investigative work on behalf of the 

Exchange pursuant a regulatory services 

agreement) conducts surveillances with 

respect to IBIT (the underlying ETF) 

and, as appropriate, would review 

activity in IBIT when conducting 

surveillances for market abuse or 

manipulation in IBIT options.25 The 

Exchange does not believe that allowing 

FLEX IBIT options would render the 

marketplace for non-FLEX IBIT options, 

or equity options in general, more 

susceptible to manipulative practices. 


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Federal Register / Vol. 90, No. 8 / Tuesday, January 14, 2025 / Notices 3269 

26Section 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. 

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. 

27 15 U.S.C. 78f(b). 

28 15 U.S.C. 78f(b)(5). 

29 15 U.S.C. 78(f)(b)(5). 

The Exchange represents that its 

existing trading surveillances are 

adequate to monitor the trading in IBIT 

(as well as FLEX IBIT) on the Exchange. 

Additionally, the Exchange is a member 

of the Intermarket Surveillance Group 

(‘‘ISG’’) under the Intermarket 

Surveillance Group Agreement. ISG 

members work together to coordinate 

surveillance and investigative 

information sharing in the stock, 

options, and futures markets. For 

surveillance purposes, the Exchange 

would therefore have access to 

information regarding trading activity in 

the pertinent underlying securities. In 

addition, and as referenced above, the 

Exchange has a regulatory services 

agreement with FINRA, pursuant to 

which FINRA conducts certain 

surveillances on behalf of the Exchange. 

Further, pursuant to a multi-party 17d– 

2 joint plan, all options exchanges 

allocate regulatory responsibilities to 

FINRA to conduct certain optionsrelated market surveillances.26 The 

Exchange will implement any 

additional surveillance procedures it 

deems necessary to effectively monitor 

the trading of IBIT options. 

The proposed rule change is designed 

to allow investors seeking to trade 

options on IBIT to utilize FLEX IBIT 

options. The Exchange believes that 

offering innovative products flows to 

the benefit of the investing public. A 

robust and competitive market requires 

that exchanges respond to member’s 

evolving needs by constantly improving 

their offerings. Such efforts would be 

stymied if exchanges were prohibited 

from offering innovative products such 

as the proposed FLEX IBIT options. The 

Exchange believes that introducing 

FLEX IBIT options would further 

broaden the base of investors that use 

FLEX Options (and options on IBIT in 

general) to manage their trading and 

investment risk, including investors that 

currently trade in the OTC market for 

customized options. The proposed rule 

change is also designed to encourage 

market makers to shift liquidity from the 

OTC market on the Exchange, which, it 

believes, will enhance the process of 

price discovery conducted on the 

Exchange through increased order flow. 

Finally, as discussed herein, the 

Exchange does not believe that this 

proposed rule change raises any unique 

regulatory concerns because the 

proposal to aggregate FLEX and nonFLEX IBIT options at the (most 

conservative) 25,000 contract position 

limit, which currently applies solely to 

non-FLEX IBIT options, should provide 

an adequate safeguard. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,27 in general, and furthers the 

objectives of Section 6(b)(5) of the Act,28

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) 29 requirement that 

the rules of an exchange not be designed 

to permit unfair discrimination between 

customers, issuers, brokers, or dealers. 

Specifically, the Exchange believes that 

introducing FLEX IBIT options will 

increase order flow to the Exchange, 

increase the variety of options products 

available for trading, and provide a 

valuable tool for investors to manage 

risk. The proposed rule change is 

designed to allow investors seeking to 

trade options on IBIT to utilize FLEX 

IBIT options. 

The Exchange believes that the 

proposal to permit FLEX IBIT options 

would remove impediments to and 

perfect the mechanism of a free and 

open market. The Exchange believes 

that offering FLEX IBIT options will 

benefit investors by providing them 

with an additional, relatively lower cost 

investing tool to gain exposure to the 

price of bitcoin and provide a hedging 

vehicle to meet their investment needs 

in connection with a bitcoin-related 

product. Moreover, the proposal would 

broaden the base of investors that use 

FLEX Options to manage their trading 

and investment risk, including investors 

that currently trade in the OTC market 

for customized options. By trading a 

product in an exchange-traded 

environment (that is currently being 

used in the OTC market), the Exchange 

would be able to compete more 

effectively with the OTC market. The 

Exchange believes the proposed rule 

change is designed to prevent 

fraudulent and manipulative acts and 

practices in that it would lead to the 

migration of options currently trading in 

the OTC market to trading to the 

Exchange. Also, any migration to the 

Exchange from the OTC market would 

result in increased market transparency 

and enhance the process of price 

discovery conducted on the Exchange 

through increased order flow. The 

Exchange also believes that offering 

FLEX IBIT options may open up the 

market for options on IBIT to more retail 

investors. Additionally, offering FLEX 

would serve two primary client types in 

the capital markets by permitting ETF 

and structured return issuers to more 

precisely tailor their settlement style 

and allow other investors to align their 

contract durations for calls and puts, as 

well as settlement-style. 

Additionally, the Exchange believes 

the proposed rule change is designed to 

remove impediments to and to perfect 

the mechanism for a free and open 

market and a national market system, 

and, in general, to protect investors and 

the public interest in that it should 

create greater trading and hedging 

opportunities and flexibility. The 

proposed rule change should also result 

in enhanced efficiency in initiating and 

closing out positions and heightened 

contra-party creditworthiness due to the 

role of OCC as issuer and guarantor of 

FLEX IBIT options. Further, the 

proposed rule change would result in 

increased competition by permitting the 

Exchange to offer products that are 

currently used in the OTC market. 

The Exchange does not believe that 

this proposed rule change raises any 

unique regulatory concerns because the 

proposal to aggregate FLEX and nonFLEX IBIT options at the (most 

conservative) 25,000 contract limit 

should provide an adequate safeguard. 

The purpose of position limits is to 

address potential manipulative schemes 

and adverse market impacts 

surrounding the use of options, such as 

disrupting the market in the security 

underlying the options. The Exchange 

believes the proposal will benefit 

investors and public interest because 

the aggregated position limit for all 

options on IBIT (FLEX and non-FLEX) 

at 25,000 contracts, the lowest limit 

available in options, would address 


khammond on DSK9W7S144PROD with NOTICES
3270 Federal Register / Vol. 90, No. 8 / Tuesday, January 14, 2025 / Notices 

30See IBIT Approval Order, 89 FR 78947. 

31 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

concerns related to manipulation and 

protection of investors as this number is 

conservative for IBIT and therefore 

appropriate given its liquidity. 

The Exchange believes that offering 

innovative products flows to the benefit 

of the investing public. A robust and 

competitive market requires that 

exchanges respond to evolving needs in 

the market by constantly improving 

their offerings. Such efforts would be 

stymied if exchanges were prohibited 

from offering innovative products such 

as the proposed FLEX IBIT options. The 

Exchange does not believe that allowing 

FLEX IBIT options would render the 

marketplace for equity options more 

susceptible to manipulative practices. 

Finally, the Exchange represents that 

it has an adequate surveillance program 

in place to detect manipulative trading 

in FLEX IBIT options. Regarding the 

proposed FLEX IBIT options, the 

Exchange would use the same 

surveillance procedures currently 

utilized for FLEX Options listed on the 

Exchange (as well as for non-FLEX IBIT 

options). For surveillance purposes, the 

Exchange would have access to 

information regarding trading activity in 

IBIT (the underlying ETF).30 In light of 

surveillance measures related to both 

options and IBIT (the underlying ETF), 

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 

FLEX IBIT options. 

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 its 

proposed rule change will impose any 

burden on intra-market competition as 

all market participants would have the 

option of utilizing the FLEX IBIT 

options. The proposed rule change is 

designed to allow investors seeking 

option exposure to bitcoin to trade 

FLEX IBIT options. Moreover, the 

Exchange believes that the proposal to 

permit FLEX IBIT options would 

broaden the base of investors that use 

FLEX Options to manage their trading 

and investment risk, including investors 

that currently trade in the OTC market 

for customized options. 

The Exchange does not believe that its 

proposed rule change will impose any 

burden on intermarket competition as 

all market participants would have the 

option of utilizing the FLEX IBIT 

options. The Exchange notes that it 

operates in a highly competitive market 

in which market participants can 

readily direct order flow to competing 

venues. The proposed rule change 

would support that intermarket 

competition by allowing the Exchange 

to offer additional functionality to 

member organizations. The Exchange 

believes that the proposed FLEX IBIT 

options will increase the variety of 

options products available for trading in 

general and bitcoin-related products in 

particular and, as such, will provide a 

valuable tool for investors to manage 

risk. 

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 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period (i) 

as the Commission may designate up to 

90 days of such date if it finds such 

longer period to be appropriate and 

publishes its reasons for so finding or 

(ii) as to which the Exchange consents, 

the Commission shall: (a) by order 

approve or disapprove such proposed 

rule change, or (b) institute proceedings 

to determine whether the proposed rule 

change should be 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– 

Phlx–2024–72 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–Phlx–2024–72. 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–Phlx–2024–72 and should be 

submitted on or before February 4, 2025. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.31

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2025–00531 Filed 1–13–25; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–102133; File No. SR–NYSE– 

2024–87] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing and Immediate Effectiveness of 

a Proposed Rule Change To Amend Its 

Equities Price List 

January 7, 2025. 

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 December 

31, 2024, New York Stock Exchange 

LLC (‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Item I below, 


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