9560 Federal Register / Vol. 90, No. 29 / Thursday, February 13, 2025 / Notices 

6 17 CFR 200.30–3(a)(31). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 100224 

(May 23, 2024), 89 FR 46937 (May 30, 2024) (SR– 

NYSEArca–2023–70; SR–NYSEArca–2024–31; SR– 

NASDAQ–2023–045; SR–CboeBZX–2023–069; SR– 

CboeBZX–2023–070; SR–CboeBZX–2023–087; SR– 

CboeBZX–2023–095; and SRCboeBZX–2024–018) 

(Order Granting Accelerated Approval of Proposed 

Rule Changes, as Modified by Amendments 

Thereto, to List and Trade Shares of Ether-Based 

Exchange-Traded Products) (‘‘Ethereum ETP 

Approval Order’’). 

4See Rule 19.3(i) which permits options trading 

on Fund Shares that (1) represent interests in 

registered investment companies (or series thereof) 

organized as open-end management investment 

companies, unit investment trusts or similar 

entities, and that hold portfolios of securities 

comprising or otherwise based on or representing 

investments in indexes or portfolios of securities (or 

that hold securities in one or more other registered 

investment companies that themselves hold such 

portfolios of securities) (‘‘Funds ’’) and/or financial 

instruments including, but not limited to, stock 

index futures contracts, options on futures, options 

on securities and indexes, equity caps, collars and 

floors, swap agreements, forward contracts, 

repurchase agreements and reverse repurchase 

agreements (the ‘‘Financial Instruments’’), and 

money market instruments, including, but not 

limited to, U.S. government securities and 

repurchase agreements (the ‘‘Money Market 

Instruments’’) constituting or otherwise based on or 

representing an investment in an index or portfolio 

of securities and/or Financial Instruments and 

Money Market Instruments, or (2) represent 

commodity pool interests principally engaged, 

directly or indirectly, in holding and/or managing 

portfolios or baskets of securities, commodity 

futures contracts, options on commodity futures 

contracts, swaps, forward 477 contracts and/or 

options on physical commodities and/or non-U.S. 

currency (‘‘Commodity Pool ETFs’’) or (3) represent 

interests in a trust or similar entity that holds a 

specified non-U.S. currency or currencies deposited 

with the trust or similar entity when aggregated in 

some specified minimum number may be 

surrendered to the trust by the beneficial owner to 

receive the specified non-U.S. currency or 

currencies and pays the beneficial owner interest 

and other distributions on the deposited non-U.S. 

currency or currencies, if any, declared and paid by 

the trust (‘‘Currency Trust Shares’’), or (4) represent 

interests in the SPDR Gold Trust or are issued by 

the iShares COMEX Gold Trust or iShares Silver 

Trust. 

5The trust may include minimal cash. 

6Rule 19.3(a) and (b) sets forth the criteria an 

underlying security must meet for the Exchange to 

be able to list options on the underlying. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.6

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2025–02555 Filed 2–12–25; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–102373; File No. SR– 

CboeBZX–2025–008] 

Self-Regulatory Organizations; Cboe 

BZX Exchange, Inc.; Notice of Filing of 

a Proposed Rule Change, as Modified 

by Amendment No. 1, To List Options 

on the Fidelity Ethereum Fund 

February 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 January 

24, 2025, Cboe BZX Exchange, Inc. 

(‘‘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. On February 

3, 2025, the Exchange submitted 

Amendment No. 1 to the proposed rule 

change. The Commission is publishing 

this notice to solicit comments on the 

proposed rule change, as amended, from 

interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to list options 

on the Fidelity Ethereum Fund. The text 

of the proposed rule change is provided 

in Exhibit 5. 

The text of the proposed rule change 

is also available on the Exchange’s 

website (http://markets.cboe.com/us/ 

equities/regulation/rule_filings/bzx/), at 

the Exchange’s Office of the Secretary, 

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 

Rule 19.3 regarding the criteria for 

underlying securities. Specifically, the 

Exchange proposes to amend Rule 

19.3(i)(4) to allow the Exchange to list 

and trade options on shares or other 

securities (‘‘Fund Shares’’) that are 

principally traded on a national 

securities exchange and are defined as 

an ‘‘NMS stock’’ under Rule 600 of 

Regulation NMS and that represent 

interests in the Fidelity Ethereum Fund 

(the ‘‘Fidelity Fund’’).3 Current Rule 

19.3(i) provides that, subject to certain 

other criteria set forth in that Rule, 

securities deemed appropriate for 

options trading include Fund Shares 

that represent certain types of interests,4

including interests in certain specific 

trusts that hold financial instruments, 

money market instruments, or precious 

metals (which are deemed 

commodities). 

The Fidelity Fund is an Ethereumbacked commodity ETF structured as a 

trust. Similar to any Fund Share 

currently deemed appropriate for 

options trading under Rule 19.3(i), the 

investment objective of the Fidelity 

Fund is for its shares to reflect the 

performance of Ethereum (less the 

expenses of the trust’s operations), 

offering investors an opportunity to gain 

exposure to Ethereum without the 

complexities of Ethereum delivery. As is 

the case for Fund Shares currently 

deemed appropriate for options trading, 

the Fidelity Fund’s shares represent 

units of fractional undivided beneficial 

interest in the trust, the assets of which 

consist principally of Ethereum and are 

designed to track Ethereum or the 

performance of the price of Ethereum 

and offer access to the Ethereum 

market.5 The Fidelity Fund provides 

investors with cost-efficient alternatives 

that allow a level of participation in the 

Ethereum market through the securities 

market. The primary substantive 

difference between the Fidelity Fund 

and Fund Shares currently deemed 

appropriate for options trading are that 

Fund Shares may hold securities, 

certain financial instruments, specified 

precious metals (which are deemed 

commodities), and Bitcoin (which is 

also deemed a commodity), while the 

Fidelity Fund holds Ethereum (which is 

also deemed a commodity). 

The Exchange believes the Fidelity 

Fund satisfies the Exchange’s initial 

listing standards for Fund Shares on 

which the Exchange may list options. 

Specifically, the Fidelity Fund satisfies 

the initial listing standards set forth in 

Rule 19.3(i), as is the case for other 

Fund Shares on which the Exchange 

lists options (including trusts that hold 

commodities). Rule 19.3(i)(1) requires 

that Fund Shares either (1) meet the 

criteria and standards set forth in Rule 

19.3(a) and (b),6 or (2) are available for 

creation or redemption each business 

day in cash or in kind from the 

investment company, commodity pool 

or other entity at a price related to net 


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7The criteria and guidelines for a security to be 

considered widely held and actively traded are set 

forth in Rule 19.3(b), subject to exceptions. 

8An ‘‘NMS stock’’ means any NMS security other 

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

security or class of securities for which transaction 

reports are collected, processed, and made available 

pursuant to an effective transaction reporting plan 

(or an effective national market system plan for 

reporting transaction in listed options). See 17 CFR 

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

(65) (definition of ‘‘NMS stock’’). 9The Exchange continues to believe assets under 

management (‘‘AUM’’), rather than shares 

outstanding and number of holders, is a better 

measure of investable capacity of ETFs and a more 

appropriate figure for determining position and 

exercise limits of ETFs and looks forward to further 

discussions with the Commission staff on this topic. 

10See Rule 19.2, which provides that the rights 

and obligations of holders and writers are set forth 

in the Rules of the Options Clearing Corporation 

(‘‘OCC’’); and Equity Options Product 

Specifications January 3, 2024), available at Equity 

Options Specifications (cboe.com); see also OCC 

Rules, Chapters VIII (which governs exercise and 

assignment) and Chapter IX (which governs the 

discharge of delivery and payment obligations 

arising out of the exercise of physically settled stock 

option contracts). 

asset value, and the investment 

company, commodity pool or other 

entity is obligated to provide that Fund 

Shares may be created even if some or 

all of the securities and/or cash required 

to be deposited have not been received 

by the Fund, the unit investment trust 

or the management investment 

company, provided the authorized 

creation participant has undertaken to 

deliver the securities and/or cash as 

soon as possible and such undertaking 

is secured by the delivery and 

maintenance of collateral consisting of 

cash or cash equivalents satisfactory to 

the Fund, all as described in the Fund’s 

or unit trust’s prospectus. The Fidelity 

Fund satisfies Rule 19.3(i)(1)(B) as each 

is subject to this creation and 

redemption process. 

While not required by the Rules for 

purposes of options listings, the 

Exchange believes the Fidelity Fund 

satisfies the criteria and guidelines set 

forth in Rule 19.3(a) and (b). Pursuant 

to Rule 19.3(a), a security (which 

includes a Fund Share) on which 

options may be listed and traded on the 

Exchange must be registered with the 

Securities and Exchange Commission 

(‘‘Commission’’) and be an NMS stock 

(as defined in Rule 600 of Regulation 

NMS under the Securities Exchange Act 

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

be characterized by a substantial 

number of outstanding shares that are 

widely held and actively traded.7 The 

Fidelity Fund is an NMS Stock as 

defined in Rule 600 of Regulation NMS 

under the Act.8 The Exchange believes 

the Fidelity Fund is characterized by a 

substantial number of outstanding 

shares that are widely held and actively 

traded. 

As of December 23, 2024, the Fidelity 

Fund had 41,700,000 shares 

outstanding, which is nearly six times 

more than the minimum number of 

shares of a corporate stock (i.e., 

7,000,000 shares) that the Exchange 

generally requires to list options on that 

stock pursuant to Rule 19.3(b)(1). The 

Exchange believes this demonstrates 

that the Fidelity Fund is characterized 

by a substantial number of outstanding 

shares. 

Further, as of November 26, 2024, 

there were 38,170 beneficial holders of 

shares of the Fidelity Fund, which is 

significantly more than 2,000 beneficial 

holders (approximately 19 times more), 

which is the minimum number of 

holders the Exchange generally requires 

for corporate stock in order to list 

options on that stock pursuant to Rule 

19.3(b). Therefore, the Exchange 

believes the shares of the Fidelity Fund 

are widely held.9

The Exchange also believes the shares 

of the Fidelity Fund are actively traded. 

As of December 23, 2024, the total 

trading volume (by shares) and the 

approximate average daily volume 

(‘‘ADV’’) (in shares and notional) from 

July 23, 2024 (the date on which shares 

of the Fidelity Fund began trading) to 

December 23, 2024 for the Fidelity Fund 

was as follows: 

Trading volume 

(shares) 

ADV 

(shares) 

ADV 

(notional $) 

115,589,047 1,070,269 33,864,193 

As demonstrated above, despite the 

fact that the Fidelity Fund has been 

trading for approximately five months 

as of December 23, 2024, its total trading 

volume as of that date was substantially 

higher than 2,400,000 shares (more than 

48 times that amount), which is the 

minimum 12-month volume the 

Exchange generally requires for a 

corporate stock in order to list options 

on that security as set forth in Rule 

19.3(b). Additionally, as of December 

23, 2024, the trading volume for the 

Fidelity Fund was in the top 5% of all 

ETFs that are currently trading. The 

Exchange believes this data 

demonstrates the Fidelity Fund is 

characterized as having shares that are 

actively traded. 

Options on the Fidelity Fund will be 

subject to the Exchange’s continued 

listing standards set forth in Rule 19.4(g) 

for Fund Shares deemed appropriate for 

options trading pursuant to Rule 19.3(i). 

Specifically, 19.4(g) provides that Fund 

Shares that were initially approved for 

options trading pursuant to Rule 19.3 

will not be deemed to meet the 

requirements for continued approval, 

and the Exchange shall not open for 

trading any additional series of option 

contracts of the class covering such 

Fund Shares if the security ceases to be 

an NMS stock (see Rule 19.4(b)(4)). 

Additionally, the Exchange will not 

open for trading any additional series of 

option contracts of the class covering 

Fund Shares in any of the following 

circumstances: (1) in the case of options 

covering Fund Shares approved for 

trading under Rule 19.3(i)(4)(A), in 

accordance with the terms of Rule 

19.4(b)(1), (2) and (3); (2) in the case of 

options covering Fund Shares approved 

pursuant to Rule 19.3(i)(4)(B), following 

the initial 12-month period beginning 

upon the commencement of trading in 

the Fund Shares on a national securities 

exchange and are defined as NMS stock 

under Rule 600 of Regulation NMS, 

there were fewer than 50 record and/or 

beneficial holders of such Fund Shares 

for 30 consecutive days; (3) the value of 

the index, non-U.S. currency, portfolio 

of commodities including commodity 

futures contracts, options on commodity 

futures contracts, swaps, forward 

contracts and/or options on physical 

commodities and/or Financial 

Instruments or Money Market 

Instruments, or portfolio of securities on 

which the Fund Shares are based is no 

longer calculated or available; or (4) 

such other event occurs or condition 

exists that in the opinion of the 

Exchange makes further dealing in such 

options on the Exchange inadvisable. 

Options on the Fidelity Fund will be 

physically settled contracts with 

American-style exercise.10 Consistent 

with current Rule 19.6, which governs 

the opening of options series on a 

specific underlying security (including 

Fund Shares), the Exchange will open at 

least one expiration month for options 


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11See Rule 19.6(b). The monthly expirations are 

subject to certain listing criteria for underlying 

securities described within Rule 19.3. Monthly 

listings expire the third Friday of the month. The 

term ‘‘expiration date’’ (unless separately defined 

elsewhere in the OCC By-Laws), when used in 

respect of an option contract (subject to certain 

exceptions), means the third Friday of the 

expiration month of such option contract, or if such 

Friday is a day on which the exchange on which 

such option is listed is not open for business, the 

preceding day on which such exchange is open for 

business. See OCC By-Laws Article I, Section 1. 

Pursuant to Rule 19.6(c), additional series of 

options of the same class may be opened for trading 

on the Exchange when the Exchange deems it 

necessary to maintain an orderly market, to meet 

customer demand or when the market price of the 

underlying stock moves more than five strike prices 

from the initial exercise price or prices. New series 

of options on an individual stock may be added 

until the beginning of the month in which the 

options contract will expire. Due to unusual market 

conditions, the Exchange, in its discretion, may add 

a new series of options on an individual stock until 

the close of trading on the business day prior to 

expiration. 

12See Rule 19.6, Interpretation and Policy .05. 

13See Rule 19.6, Interpretation and Policy .08. 

14See Rule 19.6, Interpretation and Policy .04. 

15See Rule 19.8. 

16The Exchange notes that for options listed 

pursuant to the Short Term Option Series Program, 

the Monthly Options Series Program, and the 

Quarterly Options Series Program, Rule 19.6, 

Interpretations and Policies .05, .08, and .04 

specifically sets forth intervals between strike 

prices on Quarterly Options Series, Short Term 

Option Series, and Monthly Options Series, 

respectively. 

17See Rule 19.6, Interpretation and Policy .02. 

18See Rule 19.6, Interpretation and Policy .06. 

19See Rule 19.6, Interpretation and Policy .03. 

20See Rule 19.6(d)(5). 

21 If options on a Bitcoin Fund are eligible to 

participate in the Penny Interval Program, the 

minimum increment will be $0.01 for series with 

a price below $3.00 and $0.05 for series with a price 

at or above $3.00. See 21.5(d) (which describes the 

requirements for the Penny Interval Program). 

22Rule 18.7(a)(1) provides that no Options 

Member shall make, for any account in which it has 

any interest or for the account of any Customer, an 

opening transaction on any exchange if the Options 

Member has reason to believe that as a result of 

such transaction the Options Member or its 

Customer would, acting alone or in concert with 

others, directly or indirectly, exceed the applicable 

position limit fixed by Cboe Exchange, Inc. (‘‘Cboe 

Options’’). Cboe Options currently has a nearly 

identical rule filing pending with the Commission 

to amend Cboe Options Rule 8.30, Interpretation 

and Policy .10 (and Cboe Options Rule 8.42) to 

establish a position and exercise limit for Fidelity 

Fund options of 25,000. See Securities Exchange 

Act Release No. 100862 (August 28, 2024), 89 FR 

72146 (September 4, 2024) (SR–CBOE–2024–036) 

(‘‘Cboe Fidelity Fund Proposal’’). If the Commission 

approves the Cboe Fidelity Fund Proposal, the 

position and exercise limits in that filing would 

then apply to the Exchange. 

23The position limits for those ETF options for 

which the underlying ETFs had similar outstanding 

shares were all 50,000 or above, and nearly half of 

them had position limits of 200,000 or 250,000 

contracts. 

on the Fidelity Fund 11 at the 

commencement of trading on the 

Exchange and may also list series of 

options on the Fidelity Fund for trading 

on a weekly,12 monthly,13 or quarterly 14

basis. The Exchange may also list longterm equity option series (‘‘LEAPS’’) 

that expire from 12 to 39 months from 

the time they are listed.15

Pursuant to Rule 19.6, Interpretation 

and Policy .01, which governs strike 

prices of series of options on Fund 

Shares, the interval of strikes prices for 

series of options on the Fidelity Fund 

will be $1 or greater when the strike 

price is $200 or less and $5 or greater 

where the strike price is over $200.16

Additionally, the Exchange may list 

series of options pursuant to the $1 

Strike Price Interval Program,17 the 

$0.50 Strike Program,18 the $2.50 Strike 

Price Program,19 and the $5 Strike 

Program.20 Pursuant to Rule 21.5, where 

the price of a series of a Fidelity Fund 

option is less than $3.00, the minimum 

increment will be $0.05, and where the 

price is $3.00 or higher, the minimum 

increment will be $0.10.21 Any and all 

new series of Fidelity Fund options that 

the Exchange lists will be consistent and 

comply with the expirations, strike 

prices, and minimum increments set 

forth in Rules 19.6 and 21.5, as 

applicable. 

Pursuant to Rules 18.7 and 18.9, the 

position and exercise limits, 

respectively, for Fidelity Fund options 

will be 25,000 same side option 

contracts.22

The Exchange believes these proposed 

position and exercise limits are 

reasonable and appropriate considering, 

among other things, the ADV (since 

trading of the Fidelity Fund began on 

July 23, 2024) and outstanding shares of 

the Fidelity Fund (which as discussed 

above demonstrate that the Fidelity 

Fund is widely held and actively traded 

and thus justify these conservatively 

proposed position limits), as set forth 

below, along with market capitalization 

(as of December 23, 2024): 

ADV 

(shares) Outstanding shares Market capitalization ($) 

1,070,269 41,700,000 1,433,229,000 

The Exchange then compared the 

number of outstanding shares of the 

Fidelity Fund to those of other ETFs. 

The approximate average position (and 

exercise limit) of ETF options with 

similar outstanding shares (as of 

December 31, 2024) was approximately 

102,703 contracts, which is significantly 

higher (approximately 4 times) than the 

proposed position and exercise limit of 

25,000 contracts for Fidelity Fund 

options.23 As discussed above, shares of 

the Fidelity Fund are actively held and 

widely traded: (1) the Fidelity Fund (as 

of December 23, 2024) had significantly 

more than 7,000,000 shares outstanding, 

which is the minimum number of shares 

of a corporate stock that the Exchange 

generally requires to list options on that 

stock pursuant to Rule 19.3(b)(1); (2) the 

Fidelity Fund (as of November 26, 2024) 

had significantly more than 2,000 

beneficial holders, which is the 

minimum number of holders the 

Exchange generally requires for 

corporate stock in order to list options 

on that stock pursuant to Rule 

19.3(b)(2); and (3) the Fidelity Fund had 

a trading volume in the approximately 

five-month time period since it began 

trading substantially higher than 

2,400,000 shares, which is the minimum 

12-month volume the Exchange 

generally requires for a security in order 

to list options on that security as set 

forth in Rule 19.3(b)(4). 

With respect to outstanding shares, if 

a market participant held the maximum 

number of positions possible pursuant 

to the proposed position and exercise 

limits, the equivalent shares represented 

by the proposed position/exercise limit 

would represent approximately 6.0% of 

the 41,700,000 current outstanding 

shares of the Fidelity Fund. Therefore, 

if a market participant held the 

maximum permissible options positions 

in Fidelity Fund options and exercised 

all of them at the same time, that market 

participant would control a small 

percentage of the outstanding shares of 

the Fidelity Fund. 

Cboe Options Rule 8.30, 

Interpretation and Policy .02 (which 

governs position limits on the Exchange 

pursuant to Rule 18.7), provides two 

methods of qualifying for a position 

limit tier above 25,000 option contracts. 

The first method is based on six-month 

trading volume in the underlying 

security, and the second method is 

based on slightly lower six-month 

trading volume and number of shares 


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24As these percentages are based on the 

minimum number of outstanding shares an 

underlying security must have to qualify for the 

applicable position limit, these are the highest 

possible percentages that would apply to any option 

subject to that position and exercise limit. 6,300,000 

is the minimum number of outstanding shares an 

underlying security must have for the Exchange to 

continue to list options on that security, so this 

would be the smallest number of outstanding shares 

permissible for any corporate option that would 

have a position limit of 25,000 contract. See Rule 

19.4(b)(1). This rule applies to corporate stock 

options but not ETF options, which currently have 

no requirement regarding outstanding shares of the 

underlying ETF for the Exchange to continue listing 

options on that ETF. Therefore, there may be ETF 

options trading for which the 25,000 contract 

position limits represents an even larger percentage 

of outstanding shares of the underlying ETF than 

set forth above. 

25See Securities Exchange Act Release No. 

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

24, 2024) (SR–CBOE–2024–035) (‘‘Bitcoin ETF 

Option Approval’’); see also Cboe Options Rules 

8.30, Interpretation and Policy .10 and 8.42 (which 

applies to the Exchange pursuant to Rule 18.7 and 

18.9). 

26The surveillance program includes surveillance 

patterns for price and volume movements as well 

as patterns for potential manipulation (e.g., 

spoofing and marking the close). 

27Section 19(g)(1) of the Act, among other things, 

requires every self-regulatory organization (‘‘SRO’’) 

registered as a national securities exchange or 

national securities association to comply with the 

Act, the rules and regulations thereunder, and the 

SRO’s own rules, and, absent reasonable 

justification or excuse, enforce compliance by its 

members and persons associated with its members. 

See 15 U.S.C. 78q(d)(1) and 17 CFR 240.17d–2. 

Section 17(d)(1) of the Act allows the Commission 

to relieve an SRO of certain responsibilities with 

respect to members of the SRO who are also 

members of another SRO (‘‘common members’’). 

Specifically, Section 17(d)(1) allows the 

Commission to relieve an SRO of its responsibilities 

to: (i) receive regulatory reports from such 

members; (ii) examine such members for 

compliance with the Act and the rules and 

regulations thereunder, and the rules of the SRO; 

or (iii) carry out other specified regulatory 

responsibilities with respect to such members. 

outstanding in the underlying security. 

An underlying stock or ETF that 

qualifies for method two based on 

trading volume and number of shares 

outstanding would be required to have 

the minimum number of outstanding 

shares as shown in middle column of 

the table below. 

The table, which provides the 

equivalent shares of the position limits 

applicable to equity options, including 

ETFs, further represents the percentages 

of the minimum number of outstanding 

shares that an underlying stock or ETF 

must have to qualify for that position 

limit (under the second method 

described above). 

Position/exercise limit 

(in equivalent shares) 

Minimum 

outstanding shares 

Percentage of 

outstanding shares 

(%) 

2,500,000 6,300,000 40.0 

5,000,000 40,000,000 12.5 

7,500,000 120,000,000 6.3 

20,000,000 240,000,000 8.3 

25,000,000 300,000,000 8.3 

The equivalent shares represented by 

the proposed position and exercise 

limits for the Fidelity Fund as a 

percentage of outstanding shares of the 

Fidelity Fund is significantly lower than 

the percentage for the lowest possible 

position limit for equity options of 

25,000, which is the position limit the 

Exchange is proposing for Fidelity Fund 

options.24

Further, the proposed position and 

exercise limit for Fidelity Fund options 

is equal to the lowest position and 

exercise limits available in the options 

industry for equity options, are 

extremely conservative and more than 

appropriate given the market 

capitalization, average daily volume, 

and high number of outstanding shares 

of the Fidelity Fund. The proposed 

position and exercise limit for the 

Fidelity Fund is also equal to the 

position and exercise limits for ETFs 

that hold Bitcoin, as recently approved 

by the Commission.25

All of the above information 

demonstrates that the proposed position 

and exercise limits for Fidelity Fund 

options are more than reasonable and 

appropriate. The trading volume, ADV, 

and outstanding shares of the Fidelity 

Fund demonstrate that its shares are 

actively traded and widely held, and 

proposed position and exercise limit is 

well below those of options on other 

ETFs with similar market 

characteristics. The proposed position 

and exercise limit would be the lowest 

position and exercise limit available for 

equity options in the industry, are 

extremely conservative, and are more 

than appropriate given the Fidelity 

Fund’s market capitalization, ADV, and 

high number of outstanding shares. 

Fidelity Fund options will trade in 

the same manner as any other Fund 

Share options on the Exchange. The 

Exchange Rules that currently apply to 

the listing and trading of all Fund Share 

options on the Exchange, including, for 

example, Rules that govern listing 

criteria, expirations, exercise prices, 

minimum increments, margin 

requirements, customer accounts, and 

trading halt procedures will apply to the 

listing and trading of Fidelity Fund 

options on the Exchange in the same 

manner as they apply to other options 

on all other Fund Shares that are listed 

and traded on the Exchange, including 

the precious-metal backed commodity 

Fund Shares already deemed 

appropriate for options trading on the 

Exchange pursuant to current Rule 

19.3(i). 

Today, the Exchange has an adequate 

surveillance program in place for 

options. The Exchange intends to apply 

those same program procedures to 

options on the Fidelity Fund that it 

applies to the Exchange’s other options 

products.26 The Exchange’s market 

surveillance staff would have access to 

the surveillances conducted by the 

Exchange with respect to the Fidelity 

Fund and would review activity in the 

Fidelity Fund when conducting 

surveillances for market abuse or 

manipulation in the options on the 

Fidelity Fund. Additionally, the 

Exchange is a member of the 

Intermarket Surveillance Group (‘‘ISG’’) 

under the Intermarket Surveillance 

Group Agreement. ISG members work 

together to coordinate surveillance and 

investigative information sharing in the 

stock, options, and futures markets. In 

addition to obtaining information from 

the Exchange’s equities, the Exchange 

would be able to obtain information 

regarding trading of shares of the 

Fidelity Fund through ISG. 

In addition, the Exchange has a 

Regulatory Services Agreement with the 

Financial Industry Regulatory Authority 

(‘‘FINRA’’) for certain market 

surveillance, investigation and 

examinations functions. Pursuant to a 

multi-party 17d–2 joint plan, all options 

exchanges allocate amongst themselves 

and FINRA responsibilities to conduct 

certain options-related market 

surveillance that are common to rules of 

all options exchanges.27 The underlying 

shares of spot Ethereum exchangetraded products (‘‘ETPs’’), including the 

Fidelity Fund, are also subject to 

safeguards related to addressing market 

abuse and manipulation. As the 


ddrumheller on DSK120RN23PROD with NOTICES1
9564 Federal Register / Vol. 90, No. 29 / Thursday, February 13, 2025 / Notices 

28See Ethereum ETP Approval Order, 89 FR at 

46938. 

29See Ethereum ETP Approval Order, 89 FR at 

46939. 

30See Amendment No. 2 to SR–CboeBZX–2023– 

095, Proposed Rule Change To List and Trade 

Shares of the Fidelity Ethereum Fund Under BZX 

Rule 14.11(e)(4), Commodity-Based Trust Shares 

(filed May 21, 2024); see also Ethereum ETP 

Approval Order. 

31The Exchange understands from customers that 

investors have historically transacted in options on 

Units in the OTC options market if such options 

were not available for trading in a listed 

environment. 

32 15 U.S.C. 78f(b). 

33 15 U.S.C. 78f(b)(5). 

34 Id. 

35See Rule 19.3(i)(4). 

Commission stated in its order 

approving proposals of several 

exchanges to list and trade shares of 

spot Ethereum-based ETPs, ‘‘[e]ach 

Exchange has a comprehensive 

surveillance-sharing agreement with the 

[Chicago Mercantile Exchange (‘‘CME’’)] 

via their common membership in the 

Intermarket Surveillance Group. This 

facilitates the sharing of information 

that is available to the CME through its 

surveillance of its markets, including its 

surveillance of the CME bitcoin futures 

market.’’ 28 The Exchange states that, 

given the consistently high correlation 

between the CME Ethereum futures 

market and the spot Ethereum market, 

as confirmed by the Commission 

through robust correlation analysis, the 

Commission was able to conclude that 

such surveillance sharing agreements 

could reasonably be ‘‘expected to assist 

in surveilling for fraudulent and 

manipulative acts and practices in the 

specific context of the [Ethereum 

ETPs].’’ 29 In light of surveillance 

measures related to both options and 

futures as well as the Fidelity Fund,30

the Exchange believes that existing 

surveillance procedures are designed to 

deter and detect possible manipulative 

behavior which might potentially arise 

from listing and trading the proposed 

options on the Fidelity Fund. Further, 

the Exchange will implement any new 

surveillance procedures it deems 

necessary to effectively monitor the 

trading of options on the Fidelity Fund. 

The Exchange has also analyzed its 

capacity and represents that it believes 

the Exchange and OPRA have the 

necessary systems capacity to handle 

the additional traffic associated with the 

listing of new series that may result 

from the introduction of options on the 

Fidelity Fund up to the number of 

expirations currently permissible under 

the Rules. Because the proposal is 

limited to one class, the Exchange 

believes any additional traffic that may 

be generated from the introduction of 

Fidelity Fund options will be 

manageable. 

The Exchange believes that offering 

options on the Fidelity Fund will 

benefit investors by providing them 

with an additional, relatively lower cost 

investing tool to gain exposure to the 

price of Ethereum and hedging vehicle 

to meet their investment needs in 

connection with Ethereum-related 

products and positions. The Exchange 

expects investors will transact in 

options on the Fidelity Fund in the 

unregulated over-the-counter (‘‘OTC’’) 

options market,31 but may prefer to 

trade such options in a listed 

environment to receive the benefits of 

trading listed options, including (1) 

enhanced efficiency in initiating and 

closing out positions; (2) increased 

market transparency; and (3) heightened 

contra-party creditworthiness due to the 

role of OCC as issuer and guarantor of 

all listed options. The Exchange 

believes that listing Fidelity Fund 

options may cause investors to bring 

this liquidity to the Exchange, would 

increase market transparency and 

enhance the process of price discovery 

conducted on the Exchange through 

increased order flow. The Fund Shares 

that hold financial instruments, money 

market instruments, or precious metal 

commodities on which the Exchange 

may already list and trade options are 

trusts structured in substantially the 

same manner as the Fidelity Fund and 

essentially offer the same objectives and 

benefits to investors, just with respect to 

different assets. The Exchange notes that 

it has not identified any issues with the 

continued listing and trading of any 

Fund Share options, including Fund 

Shares that hold commodities (i.e., 

precious metals) that it currently lists 

and trades on the Exchange. The 

Exchange notes that quotation and last 

sale information for shares of the 

Fidelity Fund are available from the 

CTA high-speed lines, as well as from 

the Exchange’s equities market (on 

which the shares are primarily listed). 

Quotation and last sale information for 

options on the Fidelity Fund will be 

available from OPRA and market data 

vendors. 

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with the Act 

and the rules and regulations 

thereunder applicable to the Exchange 

and, in particular, the requirements of 

Section 6(b) of the Act.32 Specifically, 

the Exchange believes the proposed rule 

change is consistent with the Section 

6(b)(5) 33 requirements that the rules of 

an exchange be designed to prevent 

fraudulent and manipulative acts and 

practices, to promote just and equitable 

principles of trade, to foster cooperation 

and coordination with persons engaged 

in regulating, clearing, settling, 

processing information with respect to, 

and facilitating transactions in 

securities, to remove impediments to 

and perfect the mechanism of a free and 

open market and a national market 

system, and, in general, to protect 

investors and the public interest. 

Additionally, the Exchange believes the 

proposed rule change is consistent with 

the Section 6(b)(5) 34 requirement that 

the rules of an exchange not be designed 

to permit unfair discrimination between 

customers, issuers, brokers, or dealers. 

In particular, the Exchange believes 

that the proposal to list and trade 

options on the Fidelity Fund will 

remove impediments to and perfect the 

mechanism of a free and open market 

and a national market system and, in 

general, protect investors because 

offering options on the Fidelity Fund 

will provide investors with an 

opportunity to realize the benefits of 

utilizing options on the Fidelity Fund, 

including cost efficiencies and 

increased hedging strategies. The 

Exchange believes that offering Fidelity 

Fund options will benefit investors by 

providing them with a relatively lowercost risk management tool, which will 

allow them to manage their positions 

and associated risk in their portfolios 

more easily in connection with 

exposure to the price of Ethereum and 

with Ethereum-related products and 

positions. Additionally, the Exchange’s 

offering of Fidelity Fund options will 

provide investors with the ability to 

transact in such options in a listed 

market environment as opposed to in 

the unregulated OTC options market, 

which would increase market 

transparency and enhance the process of 

price discovery conducted on the 

Exchange through increased order flow 

to the benefit of all investors. The 

Exchange also notes that it already lists 

(or has the authority to list) options on 

other commodity-based Fund Shares,35

which, as described above, are trusts 

structured in substantially the same 

manner as the Fidelity Fund and 

essentially offer the same objectives and 

benefits to investors, just with respect to 

a different commodity (i.e., Ethereum 

rather than Bitcoin or precious metals) 

and for which the Exchange has not 

identified any issues with the continued 

listing and trading of commodity-backed 

Fund Share options it currently lists for 

trading. 

The Exchange also believes the 

proposed rule change will remove 


ddrumheller on DSK120RN23PROD with NOTICES1
Federal Register / Vol. 90, No. 29 / Thursday, February 13, 2025 / Notices 9565 

36See Cboe Options Rule 8.30. 

37See Ethereum Price (ETH), Market Cap, Price 

Today & Chart History—Blockworks. 

38See CME Rulebook Chapter 349 (description of 

CME Ether Futures) and Chapter 5, Position Limit, 

Position Accountability and Reportable Level Table 

in the Interpretations & Special Notices. Each CME 

Ethereum futures contract is valued at 50 Ethereum 

as defined by the CME CF Ether Reference Rate 

(‘‘BRR’’). See CME Rule 35001. 

39The notional value of the futures is calculated 

as follows: 8,000 futures × 50 (the futures 

multiplier) × $3,418 (the price of one future) = 

$1,367,200,000. The number of option contracts 

that equates to that notional value is calculated as 

follows: $1,367,200,000/notional value of one 

option contract ($34.37 (share price of Fidelity 

Fund) × 100 (option multiplier)) = 397,789 option 

contracts. 

40See CME Rulebook Chapter 5, Position Limit, 

Position Accountability and Reportable Level Table 

in the Interpretations & Special Notices. 

41 Id. 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system, because 

it is consistent with current Exchange 

Rules previously filed with the 

Commission. Options on the Fidelity 

Fund satisfy the initial listing standards 

and continued listing standards 

currently in the Exchange Rules 

applicable to options on all Fund 

Shares, including Fund Shares that hold 

other commodities already deemed 

appropriate for options trading on the 

Exchange. Additionally, as 

demonstrated above, the Fidelity Fund 

is characterized by a substantial number 

of shares that are widely held and 

actively traded. Fidelity Fund options 

will trade in the same manner as any 

other Fund Share options—the same 

Exchange Rules that currently govern 

the listing and trading of all Fund Share 

options, including permissible 

expirations, strike prices and minimum 

increments, and applicable margin 

requirements, will govern the listing 

and trading of options on the Fidelity 

Fund in the same manner. 

The Exchange believes the proposed 

position and exercise limits are 

designed to prevent fraudulent and 

manipulative acts and practices and 

promote just and equitable principles of 

trade, as they are designed 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 proposed position and 

exercise limits in this are 25,000 

contracts, which is currently the lowest 

limit applicable to any equity options 

(including ETF options) and the 

position and exercise limits that apply 

to comparable ETFs that hold Bitcoin.36

The Exchange believes the proposed 

position and exercise limits are 

extremely conservative for Fidelity 

Fund options given the trading volume 

and outstanding shares for the Fidelity 

Fund. The information above 

demonstrates that the average position 

and exercise limits of options on ETFs 

with comparable outstanding shares and 

trading volume to those of the Fidelity 

Fund are significantly higher than the 

proposed position and exercise limits 

for Fidelity Fund options. Therefore, the 

proposed position and exercise limits 

for Fidelity Fund options are 

conservative relative to options on ETFs 

with comparable market characteristics. 

Further, given that the issuer of the 

Fidelity Fund may create and redeem 

shares that represent an interest in 

Ethereum, the Exchange believes it is 

relevant to compare the size of a 

position limit to the market 

capitalization of the Ethereum market. 

As of December 23, 2024, the global 

supply of Ethereum was approximately 

120,000,000 coins, and the price of one 

Ethereum coin was approximately 

$3,494.25,37 which equates to a market 

capitalization of approximately $419.31 

billion. Consider the proposed position 

and exercise limit of 25,000 option 

contracts for the Fidelity Fund option. 

A position and exercise limit of 25,000 

same side contracts effectively restricts 

a market participant from holding 

positions that could result in the receipt 

of no more than 2,500,000 of Fidelity 

Fund shares (if that market participant 

exercised all its options). Using a share 

price of $34.37 on December 23, 2024, 

the value of 2,500,000 shares of the 

Fidelity Fund at that price is 

$85,925,000, and the approximate 

percentage of that value of the size of 

the Ethereum market is 0.02%. 

Therefore, if a market participant with 

the maximum 25,000 same side 

contracts in Fidelity Fund options 

exercised all positions at one time, such 

an event would have no practical 

impact on the Ethereum market. 

The Exchange also believes the 

proposed position and exercise limits 

are appropriate given position limits for 

Ethereum futures. For example, the 

Chicago Mercantile Exchange (‘‘CME’’) 

imposes a position limit of 8,000 futures 

(for the initial spot month) on its 

Ethereum futures contract.38 On 

December 23, 2024, CME Dec 24 

Ethereum Futures settled at 

approximately $3,418.00. A position of 

8,000 CME Ethereum futures, therefore, 

would have a notional value of 

$1,367,200,000. A position of 

approximately 397,789 option contracts 

would equate to that notional value.39

This approximate number of option 

contracts for the Fidelity Fund that 

equate to the notional value of CME 

Ethereum futures is significantly higher 

than the proposed limit of 25,000 

options contract for the Fidelity Fund 

option. The fact that many options 

ultimately expire out-of-the-money and 

thus are not exercised for shares of the 

underlying, while the delta of a 

Ethereum Future is 1, further 

demonstrates how conservative the 

proposed limit of 25,000 options 

contracts are for the Fidelity Fund 

options. 

The Exchange notes, unlike options 

contracts, CME position limits are 

calculated on a net futures-equivalent 

basis by contract and include contracts 

that aggregate into one or more base 

contracts according to an aggregation 

ratio(s).40 Therefore, if a portfolio 

includes positions in options on futures, 

CME would aggregate those positions 

into the underlying futures contracts in 

accordance with a table published by 

CME on a delta equivalent value for the 

relevant spot month, subsequent spot 

month, single month and all month 

position limits.41 If a position exceeds 

position limits because of an option 

assignment, CME permits market 

participants to liquidate the excess 

position within one business day 

without being considered in violation of 

its rules. Additionally, if at the close of 

trading, a position that includes options 

exceeds position limits for futures 

contracts, when evaluated using the 

delta factors as of that day’s close of 

trading but does not exceed the limits 

when evaluated using the previous 

day’s delta factors, then the position 

shall not constitute a position limit 

violation. Considering CME’s position 

limits on futures for Ethereum, the 

Exchange believes that that the 

proposed same side position limits are 

more than appropriate for Fidelity Fund 

options. 

The Exchange believes the proposed 

position and exercise limits will have 

no material impact to the supply of 

Ethereum. For example, consider again 

the proposed position limit of 25,000 

option contracts for the Fidelity Fund 

option. As noted above, a position limit 

of 25,000 same side contracts effectively 

restricts a market participant from 

holding positions that could result in 

the receipt of no more than 2,500,000 

shares of the Fidelity Fund (if that 

market participant exercised all its 

options). As of December 23, 2024, the 

Fidelity Fund had 41,700,000 shares 

outstanding. This means that the 

approximate number of market 

participants that could hold the 

maximum of 25,000 same side positions 

in the Fidelity Fund that would equate 


ddrumheller on DSK120RN23PROD with NOTICES1
9566 Federal Register / Vol. 90, No. 29 / Thursday, February 13, 2025 / Notices 

42See Ethereum Price (ETH), Market Cap, Price 

Today & Chart History—Blockworks. 

43See Ethereum Price (ETH), Market Cap, Price 

Today & Chart History—Blockworks; see also 

Amendment No. 5 to Form S–1 Registration 

Statement No. 333–278249, Fidelity Fund, filed July 

17, 2024, at 17 (noting that approximately 1,700 

Ethereum are issued per day, subject to various 

factors); and Amendment No. 3 to Form S–1 

Registration Statement No. 333–257474, ARK 21 

Fund, filed May 10, 2024, at 15–16 (noting that 

approximately 1,700 Ethereum are issued per day, 

subject to various factors). 

44The market capitalization of Ethereum would 

rank in the top 25 among securities. See https://

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

45The Exchange is unaware of any proposed rule 

change related to position and exercise limits for 

any equity option (including commodity ETF 

options) for which the Commission required 

consideration of whether the available supply of an 

underlying (whether it be a corporate stock or an 

ETF) or the contents of an ETF (commodity or 

otherwise) should be considered when an exchange 

proposed to establish those limits, other than 

recently with respect to ETFs that hold Bitcoin. See, 

e.g., Securities Exchange Act Release No. 57894 

(May 30, 2008), 73 FR 32061 (June 5, 2008) (SR– 

CBOE–2005–11) (approval order in which the 

Commission stated that the ‘‘listing and trading of 

Gold Trust Options will be subject to the exchanges’ 

rules pertaining to position and exercise limits and 

margin’’); compare to Bitcoin ETF Option Approval. 

The Exchange notes when the Commission 

approved the filing to list options on an ETF 

holding gold, filing, the position limits in Cboe 

Options Rule 8.30 were the same as they are today. 

For reference, the current position and exercise 

limits for options on SPDR Gold Shares ETF 

(‘‘GLD’’) and options on iShares Silver Trust 

(‘‘SLV’’) are 250,000 contracts, or 10 times that 

proposed position and exercise limit for the Fidelity 

Fund options. 

46For example, suppose an option has a position 

limit of 25,000 option contracts and there are a total 

of 10 investors trading that option. If all 10 

investors max out their positions, that would result 

in 250,000 option contracts outstanding at that 

time. However, suppose 10 more investors decide 

to begin trading that option and also max out their 

positions. This would result in 500,000 option 

contracts outstanding at that time. An increase in 

the number of investors could cause an increase in 

outstanding options even if position limits remain 

unchanged. 

47See Securities Exchange Act Release No. 39489 

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

(SR–CBOE–1997–11). 

48See id. 

49See Amendment No. 5 to Form S–1 Registration 

Statement No. 333–278249, Fidelity Fund, filed July 

17, 2024, at 17. 

50See Ethereum ETP Approval Order. 

51See Securities Exchange Act Release No. 39489 

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

(SR–CBOE–1997–11). 

to the number of shares outstanding of 

that Fund is 16. 

This means if 16 market participants 

had 25,000 same side positions in 

Fidelity Fund options, each of them 

would have to simultaneously exercise 

all of those options to create a scenario 

that may put the underlying security 

under stress. The Exchange believes it is 

highly unlikely for such an event to 

occur; however, even if either such 

event did occur, the Exchange would 

not expect the Fidelity Fund to be under 

stress because such an event would 

merely induce the creation of more 

shares through the trust’s creation and 

redemption process. 

As of December 23, 2024, the global 

supply of Ethereum was approximately 

120,000,000, and the price of one 

Ethereum coin was approximately 

$3,418.00,42 which equates to a market 

capitalization of approximately $419.31 

billion. Based on the $34.37 price of a 

Fidelity Fund share on December 23, 

2024, a market participant could have 

redeemed one Ethereum for 

approximately 99 Fidelity Fund shares. 

Another 11,880,000,000 Fidelity Fund 

shares could be created before the thencirculating global supply of Ethereum 

was exhausted. As a result, 4,752 market 

participants would have to 

simultaneously exercise 25,000 same 

side positions in Fidelity Fund options 

to receive shares of the Fidelity Fund 

holding the entire global supply of 

Ethereum. Unlike the Fidelity Fund, the 

number of shares that corporations may 

issue is limited. However, like 

corporations, which authorize 

additional shares, repurchase shares, or 

split their shares, the Fidelity Fund may 

create, redeem, or split shares in 

response to demand. Additionally, the 

supply of Ethereum is unlimited.43 The 

current supply of Ethereum is larger 

than the available supply of most 

securities.44 Given the significant 

unlikelihood of any of these events ever 

occurring, the Exchange does not 

believe options on the Fidelity Fund 

should be subject to position and 

exercise limits even lower than those 

proposed (which are already equal to 

the lowest available limit for equity 

options in the industry) to protect the 

supply of Ethereum. 

The Exchange believes the available 

supply of Ethereum is not relevant to 

the determination of position and 

exercise limits for options overlying the 

Fidelity Fund.45 Position and exercise 

limits are not a tool that should be used 

to address a potential limited supply of 

the underlying of the instrument 

underlying the option (in this case, the 

Ethereum being held within the Fidelity 

Fund). Position and exercise limits do 

not limit the total number of options 

that may be held, but rather they limit 

the number of positions a single 

customer may hold or exercise at one 

time.46 ‘‘Since the inception of 

standardized options trading, the 

options exchanges have had rules 

imposing limits on the aggregate 

number of options contracts that a 

member or customer could hold or 

exercise.’’ 47 Position and exercise limit 

rules are intended ‘‘to prevent the 

establishment of options positions that 

can be used or might create incentives 

to manipulate or disrupt the underlying 

market so as to benefit the options 

position. In particular, position and 

exercise limits are designed to minimize 

the potential for mini-manipulations 

and for corners or squeezes of the 

underlying market. In addition, such 

limits serve to reduce the possibility for 

disruption of the options market itself, 

especially in illiquid options classes.’’ 48

The Exchange notes that a 

Registration Statement on Form S–1 was 

filed with the Commission for the 

Fidelity Fund, which described the 

supply of Ethereum and the potential 

limits to that supply.49 The Registration 

Statement permits an unlimited number 

of shares of the Fidelity Fund to be 

created. Further, the Commission 

approved the listing and trading of 

shares of the Fidelity Fund, which 

approval did not comment on the 

sufficient supply of Ethereum or address 

whether there was a risk that permitting 

an unlimited number of shares for the 

Fidelity Fund would impact the supply 

of Ethereum.50 Therefore, the Exchange 

believes the Commission had ample 

time and opportunity to consider 

whether the supply of Ethereum was 

sufficient to permit the creation of 

unlimited Fidelity Fund shares, and 

does not believe considering this supply 

with respect to the establishment of 

position and exercise limits is 

appropriate given its lack of relevance to 

the purpose of position and exercise 

limits. However, given the significant 

size of the Ethereum supply, the 

proposed positions limit is more than 

sufficient to protect investors and the 

market. 

Based on the above information 

demonstrating, among other things, that 

the Fidelity Fund is characterized by a 

substantial number of outstanding 

shares that are actively traded and 

widely held, the Exchange believes the 

proposed position and exercise limits 

are extremely conservative compared to 

those of ETF options with similar 

market characteristics. The proposed 

position and exercise limits reasonably 

and appropriately balance the liquidity 

provisioning in the market against the 

prevention of manipulation. The 

Exchange believes these proposed limits 

are effectively designed to prevent an 

individual customer or entity from 

establishing options positions that could 

be used to manipulate the market of the 

underlying as well as the Ethereum 

market.51

The Exchange represents that it has 

the necessary systems capacity to 

support the new Fidelity Fund options. 


ddrumheller on DSK120RN23PROD with NOTICES1
Federal Register / Vol. 90, No. 29 / Thursday, February 13, 2025 / Notices 9567 

52See Rule 19.3(i)(4). 

53As noted above, at least one other options 

exchange has already proposed to amend its rules 

to list and trade options on the Fidelity Fund. See 

Cboe Fidelity Fund Proposal. 54 17 CFR 200.30–3(a)(12). 

As discussed above, the Exchange 

believes that its existing surveillance 

and reporting safeguards are designed to 

deter and detect possible manipulative 

behavior which might arise from listing 

and trading Fund Share options, 

including Fidelity Fund 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 the 

proposed rule change will impose any 

burden on intramarket competition that 

is not necessary or appropriate in 

furtherance of the purposes of the Act 

as options on the Fidelity Fund will be 

equally available to all market 

participants who wish to trade such 

options and will trade generally in the 

same manner as other options. The 

Exchange Rules that currently apply to 

the listing and trading of all Fund Share 

options on the Exchange, including, for 

example, Rules that govern listing 

criteria, expirations, exercise prices, 

minimum increments, margin 

requirements, customer accounts, and 

trading halt procedures will apply to the 

listing and trading of Fidelity Fund 

options on the Exchange in the same 

manner as they apply to other options 

on all other Fund Shares that are listed 

and traded on the Exchange. Also, and 

as stated above, the Commission has 

approved the trading of options on other 

commodity-based Fund Shares.52

Further, the Fidelity Fund would need 

to satisfy the maintenance listing 

standards set forth in the Exchange 

Rules in the same manner as any other 

Fund Share for the Exchange to 

continue listing options on them. 

The Exchange does not believe that 

the proposal to list and trade options on 

the Fidelity Fund will impose any 

burden on intermarket competition that 

is not necessary or appropriate in 

furtherance of the purposes of the Act. 

To the extent that the advent of Fidelity 

Fund options trading on the Exchange 

may make the Exchange a more 

attractive marketplace to market 

participants at other exchanges, such 

market participants are free to elect to 

become market participants on the 

Exchange. Additionally, other options 

exchanges are free to amend their listing 

rules, as applicable, to permit them to 

list and trade options on the Fidelity 

Fund.53 The Exchange notes that listing 

and trading Fidelity Fund options on 

the Exchange will subject such options 

to transparent exchange-based rules as 

well as price discovery and liquidity, as 

opposed to alternatively trading such 

options in the OTC market. 

The Exchange believes that the 

proposed rule change may relieve any 

burden on, or otherwise promote, 

competition, as it is designed to increase 

competition for order flow on the 

Exchange in a manner that is beneficial 

to investors by providing them with a 

lower-cost option to hedge their 

investment portfolios. The Exchange 

notes that it operates in a highly 

competitive market in which market 

participants can readily direct order 

flow to competing venues that offer 

similar products. Ultimately, the 

Exchange believes that offering Fidelity 

Fund options for trading on the 

Exchange will promote competition by 

providing investors with an additional, 

relatively low-cost means to hedge their 

portfolios and meet their investment 

needs in connection with Ethereum 

prices and Ethereum-related products 

and positions on a listed options 

exchange. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

The Exchange neither solicited nor 

received written comments on the 

proposed rule change. 

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 

up to 90 days (i) as the Commission may 

designate 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 

will: 

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– 

CboeBZX–2025–008 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–CboeBZX–2025–008. 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–CboeBZX–2025–008 and should be 

submitted on or before March 6, 2025. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.54

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2025–02556 Filed 2–12–25; 8:45 am] 

BILLING CODE 8011–01–P 


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