Notice2024-09217
Self-Regulatory Organizations; NYSE Arca, Inc.; Order Instituting Proceedings To Determine Whether To Approve or Disapprove a Proposed Rule Change To Amend Exchange Rule 5.3-O To Permit the Listing and Trading of Options on Commodity-Based Trust Shares
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
April 30, 2024
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 89 Issue 84 (Tuesday, April 30, 2024)</title>
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[Federal Register Volume 89, Number 84 (Tuesday, April 30, 2024)]
[Notices]
[Pages 34295-34298]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-09217]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-100023; File No. SR-NYSEARCA-2024-06]
Self-Regulatory Organizations; NYSE Arca, Inc.; Order Instituting
Proceedings To Determine Whether To Approve or Disapprove a Proposed
Rule Change To Amend Exchange Rule 5.3-O To Permit the Listing and
Trading of Options on Commodity-Based Trust Shares
April 24, 2024.
I. Introduction
On January 16, 2024, NYSE Arca, Inc. (``NYSE Arca'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to amend NYSE Arca Rule 5.3-O(g) to permit the
listing and trading of options on Commodity-Based Trust Shares.\3\ The
proposed rule change was published for comment in the Federal Register
on January 25, 2024.\4\ The Commission received comment letters
regarding the proposed rule change.\5\ On March 6, 2024, pursuant to
Section 19(b)(2) of the Act,\6\ the Commission designated a longer
period within which to approve the proposed rule change, disapprove the
proposed rule change, or institute proceedings to determine whether to
approve or disapprove the proposed rule change.\7\ This order
institutes proceedings pursuant to Section 19(b)(2)(B) of the Act \8\
to determine whether to approve or disapprove the proposed rule change.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See NYSE Arca Rule 8.201-E(c)(1).
\4\ See Securities Exchange Act Release No. 99398 (Jan. 19,
2024), 89 FR 5029 (``Notice'').
\5\ Comment letters can be accessed at <a href="https://www.sec.gov/comments/sr-nysearca-2024-06/srnysearca202406.htm">https://www.sec.gov/comments/sr-nysearca-2024-06/srnysearca202406.htm</a>.
\6\ 15 U.S.C. 78s(b)(2).
\7\ See Securities Exchange Act Release No. 99683 (Mar. 6,
2024), 89 FR 17888 (Mar. 12, 2024). The Commission designated April
24, 2024, as the date by which the Commission shall approve or
disapprove, or institute proceedings to determine whether to approve
or disapprove, the proposed rule change.
\8\ 15 U.S.C. 78s(b)(2)(B).
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II. Description of the Proposed Rule Change
As described in greater detail in the Notice,\9\ Exchange Rule 5.3-
O(g) deems appropriate for options trading certain Exchange-Traded Fund
Shares (``ETFs'') that are traded on a national securities exchange and
are defined as an ``NMS stock'' in Rule 600 of Regulation NMS.\10\ The
Exchange proposed to amend Exchange Rule 5.3-O(g) to expand the types
of ETFs that may be approved for options trading to include Commodity-
Based Trust Shares, as defined in Exchange Rule 8.201-E (``Commodity-
Based Trust Shares'').\11\ The Exchange stated that it would consider
listing and trading options on Commodity-Based Trust that (1) meet the
criteria for underlying securities set forth in Exchange Rule 5.3-O(a)
\12\-(b),\13\ or (2) are available for creation and redemption each
business day as set forth in Exchange Rule 5.3-O(g)(1)(B).\14\ The
Exchange stated that the current continued listing standards for
options on ETFs also will apply to options on Commodity-Based Trust
Shares.\15\ In addition, the Exchange stated that options on Commodity-
Based Trust Shares would be subject to the Exchange's rules and
procedures governing the trading of equity options, including margin
requirements and position and exercise limits.\16\
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\9\ See supra note 4.
\10\ 17 CFR 242.600. See Notice, 89 FR at 5029. The Exchange's
rules use the term ``exchange traded fund'' to refer to several
types of investment products. Exchange Rule 5.3-O(g) states that
``Securities deemed appropriate for options trading shall include
shares or other securities (``Exchange-Traded Fund Shares'' or
``Fund Shares'') that are traded on a national securities exchange
and are defined as an ``NMS stock'' in Rule 600(b)(55) of Regulation
NMS, and that (i) represent an interest in a registered investment
company organized as an open-end management investment company, a
unit investment trust or a similar entity which holds securities
and/or financial instruments, options on securities and indices,
equity caps, collars and floors, swap agreements, forward contracts,
repurchase agreements and reverse repurchase agreements (the
``Financial Instruments''), and money market instruments, including,
but not limited to, U.S. government securities and repurchase
agreements (the ``Money Market Instruments'') 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 (ii) represent interests in a trust or
similar entity that holds a specified non-U.S. currency 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 and pays the
beneficial owner interest and other distributions on the deposited
non-U.S. currency, if any, declared and paid by the trust; or (iii)
represent commodity pool interests principally engaged, directly or
indirectly, in holding and/or managing portfolios or baskets of
securities, commodity futures contracts, options on commodity
futures contracts, swaps, forward contracts and/or options on
physical commodities and/or non-U.S. currency (``Commodity Pool
Units''), or (iv) represent interests in the SPDR Gold Trust, or (v)
represent interests in the iShares COMEX Gold Trust, or (vi)
represent interests in the iShares Silver Trust, (vii) represents an
interest in a registered investment company (``Investment Company'')
organized as an open-end management investment company or similar
entity, that invests in a portfolio of securities selected by the
Investment Company's investment adviser consistent with the
Investment Company's investment objectives and policies, which is
issued in a specified aggregate minimum number in return for a
deposit of a specified portfolio of securities and/or a cash amount
with a value equal to the next determined net asset value (``NAV''),
and when aggregated in the same specified minimum number, may be
redeemed at a holder's request, which holder will be paid a
specified portfolio of securities and/or cash with a value equal to
the next determined NAV (``Managed Fund Share''), or, (viii)
represents interests in the ETFS Silver Trust or ETFS Gold Trust,
or, (ix) represents interests in the ETFS Palladium Trust or ETFS
Platinum Trust, provided. . . .'' In describing the proposal, for
purposes of this Order, the terms ``Exchange-Traded Fund'' and
``ETF'' have the meaning set forth in the Exchange's rules.
\11\ See Notice, 89 FR at 5030. The Exchange stated that the
term ''Commodity-Based Trust Shares'' means a security (a) that is
issued by a trust (``Trust'') that holds (1) a specified commodity
deposited with the Trust, or (2) a specified commodity and, in
addition to such specified commodity, cash; (b) that is issued by
such Trust in a specified aggregate minimum number in return for a
deposit of a quantity of the underlying commodity and/or cash; and
(c) that, when aggregated in the same specified minimum number, may
be redeemed at a holder's request by such Trust which will deliver
to the redeeming holder the quantity of the underlying commodity
and/or cash. See Notice, 89 FR at 5029, n.4, and NYSE Arca Rule
8.201-E(c)(1).
\12\ The Exchange stated that NYSE Arca Rule 5.3-O(a) sets forth
minimum requirements for a security underlying an option, including
that the underlying security have 7,000,000 shares, 2,000
shareholders, and trading volume of 2,400,000 shares over the
preceding 12 months The Exchange stated that the rule requires that
the market price per share of the underlying security be at least
$7.50 for the majority of business days during the three calendar
months preceding the date of selection of an option class. The
Exchange stated that tor underlying securities that are deemed
Covered Securities, as defined under Section 18(b)(1)(A) of the
Securities Act of 1933, the closing market price of the underlying
security must be at least $3.00 per share for the previous three
consecutive business days prior to the date of selection of an
option class. See Notice, 89 FR at 5030, n. 8.
\13\ The Exchange stated that NYSE Arca Rule 5.3-O(b) states
that the underlying securities will be registered and be an ``NMS
Stock'' as defined in Rule 600 of Regulation NMS under the Act. See
Notice, 89 FR at 5030, n. 9.
\14\ See Notice, 89 FR at 5030.
\15\ See Notice, 89 FR at 5030.
\16\ See Notice, 89 FR at 5031. The Exchange stated that
pursuant to NYSE Arca Rule 6.8-O, Commentary .05 and .06, Commodity-
Based Trust Shares would be subject to the same position limits
applicable to options on stocks and ETFs. In addition, the Exchange
stated that NYSE Arca Rule 6.9-O provides that exercise limits for
options on stocks and other securities, including Commodity-Based
Trust Shares, will be the same as the position limits applicable
under NYSE Arca Rule 6.8-O. See Notice, 89 FR at 5031, n. 14.
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Currently, the position limits for options on stocks and ETF shares
are 25,000 contracts, 50,000 contracts, 75,000 contracts, 200,000
contracts, or 250,000 contracts on the same side of the market based on
the six-month trading volume or the six-month trading volume and number
of outstanding shares of the underlying security.\17\ A position limit
of 25,000 contracts on the same side of the market applies to
[[Page 34296]]
options on securities that do not qualify for a higher limit.\18\ To be
eligible for the 50,000-contract limit, the most recent six-month
trading volume of the underlying security must have totaled at least
20,000,000 shares; or the most recent six-month trading volume of the
underlying security must have totaled at least 15,000,000 shares and
the underlying security must have at least 40,000,000 shares currently
outstanding.\19\ To be eligible for the 75,000-contract limit, the most
recent six-month trading volume of the underlying security must have
totaled at least 40,000,000 shares; or the most recent six-month
trading volume of the underlying security must have totaled at least
30,000,000 shares and the underlying security must have at least
120,000,000 shares currently outstanding.\20\ To be eligible for the
200,000-contract limit, the most recent six-month trading volume of the
underlying security must have totaled at least 80,000,000 shares; or
the most recent six-month trading volume of the underlying security
must have totaled at least 60,000,000 shares and the underlying
security must have at least 240,000,000 shares currently
outstanding.\21\ To be eligible for the 250,000-contract limit, the
most recent six-month trading volume of the underlying security must
have totaled at least 100,000,000 shares; or the most recent six-month
trading volume of the underlying security must have totaled at least
75,000,000 shares and the underlying security must have at least
300,000,000 shares currently outstanding.\22\
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\17\ See NYSE Arca Rule 6.8-O.
\18\ See NYSE Arca Rule 6.8-O, Commentary .06(c).
\19\ See NYSE Arca Rule 6.8-O, Commentary .06(b).
\20\ See NYSE Arca Rule 6.8-O, Commentary .06(a).
\21\ See NYSE Arca Rule 6.8-O, Commentary .06(d).
\22\ See NYSE Arca Rule 6.8-O, Commentary .06(e).
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The Exchange stated that options on Commodity-Based Trust Shares
would not be available for trading until The Options Clearing
Corporation (``OCC'') represented to the Exchange that OCC was fully
able to clear and settle such options.\23\ The Exchange further stated
that it had analyzed its capacity and it represented that both the
Exchange and the Options Price Reporting Authority LLC (``OPRA'') have
the necessary systems capacity to handle the additional traffic that
would be associated with the listing of options on Commodity-Based
Trust Shares.\24\
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\23\ See Notice, 89 FR at 5031.
\24\ See Notice, 89 FR at 5031.
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The Exchange stated that it believes that its surveillance
procedures are adequate to properly monitor the trading of options on
Commodity-Based Trust Shares in all trading sessions and to deter and
detect violations of the Exchange's rules.\25\ The Exchange stated that
it would utilize its existing surveillance procedures applicable to
options on ETFs (which the Exchange stated will include Commodity-Based
Trust Shares) to monitor such trading.\26\ In addition, the Exchange
stated that it would implement any new surveillance procedures it
deemed necessary to effectively monitor the trading of options on
Commodity-Based Trust Shares, including adequate comprehensive
surveillance sharing agreements (``CSSA'') with markets trading in non-
U.S. components, as applicable.\27\ The Exchange stated that it may
obtain trading information via the Intermarket Surveillance Group
(``ISG'') from other exchanges who are members or affiliates of the
ISG.\28\ The Exchange represented that these procedures would be
adequate to properly monitor Exchange trading of options on Commodity-
Based Trust Shares and to deter and detect violations of Exchange
rules.\29\
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\25\ See Notice, 89 FR at 5031.
\26\ See Notice, 89 FR at 5031.
\27\ See Notice, 89 FR at 5031. The Exchange stated that NYSE
Arca Rule 5.3-O(g)(2) provides the applicable CSSA requirements for
options on ETFs. See Notice, 89 FR at 5031, n. 17.
\28\ See Notice, 89 FR at 5031.
\29\ See Notice, 89 FR at 5031.
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The Exchange stated that in approving Commodity-Based Trust Shares
for equities exchange trading, the Commission thoroughly considered the
structure of the Commodity-Based Trust Shares, their usefulness to
investors and to the markets, and the exchange rules governing their
trading.\30\ The Exchange stated that amending Exchange Rule 5.3-O(g)
to allow the listing of options on Commodity-Based Trust Shares would
allow options on Commodity-Based Trust Shares that have satisfied the
generic listing standards to commence trading without the need for a
public comment period and Commission approval.\31\ The Exchange further
stated that the proposal has the potential to significantly reduce the
time frame and costs associated with bringing options on Commodity-
Based Trust Shares to market, thereby reducing the burden on issuers
and other market participants, while also promoting competition among
options exchanges.\32\
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\30\ See Notice, 89 FR at 5031.
\31\ See Notice, 89 FR at 5031.
\32\ See Notice, 89 FR at 5031.
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III. Summary of Comments Received
The Commission received comment letters regarding the proposal.\33\
One commenter stated that ``option trading should be automatic for any
NMS security that otherwise meets an exchange's quantitative listing
standards.'' \34\ Another commenter stated that although NYSE Arca Rule
5.3-O(g) permits options trading for entire classes of investment
products, such as open-end investment companies or unit investment
trusts, the listing of options on spot commodity-based exchange-traded
products is subject to review on a product-by-product basis.\35\
According to this commenter, this ``result[s] in a patchwork rule
wherein additional individual commodity-based ETPs are tacked on to
NYSE Arca Rule 5.3-O(g) and NYSE American Rule 915, rather than being
approved as a class.'' \36\ This commenter characterized this product-
by-product approach for commodity-based exchange-traded products
(``ETPs'') as expensive and time-consuming \37\ and urged the
Commission to ``update its outdated historical patchwork approach to
approval of options on spot commodity-based ETPs that are structured
identically to those spot commodity-ETPs for which the listing and
trading on a national securities exchange has been approved . . . and
permit national securities exchanges to update their rules to permit
the deemed approval of the listing and trading of such options.'' \38\
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\33\ See supra note 5.
\34\ Letter from James J. Angel, Associate Professor of Finance,
Georgetown University, to the Commission, dated March 10, 2024
(``Angel Letter'') at 6.
\35\ See Letter from Michael Sonnenshein, on behalf of Grayscale
Investments, LLC and GBTC investors, to Vanessa Countryman,
Secretary, Commission, dated February 28, 2024 (``Grayscale
Letter'') at 6.
\36\ Grayscale Letter at 6.
\37\ See Grayscale Letter at 5.
\38\ Grayscale Letter at 2.
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One commenter stated that options are an efficient risk management
tool that give investors the ability to take on or reduce risk.\39\ The
commenter further stated that because ``the price trajectories of the
spot- and futures-based bitcoin ETFs are virtually identical,'' options
on these securities should have the same regulatory treatment.\40\
Another commenter stated that options on spot bitcoin ETPs would
facilitate price discovery in the shares of the underlying ETP, improve
market efficiency, and help investors achieve desired investment
outcomes, such as
[[Page 34297]]
generating income, hedging, or reducing volatility.\41\ In addition,
the commenter stated that approving the listing and trading of options
on spot Bitcoin ETPs ``would further bring Bitcoin into the regulatory
perimeter by allowing additional regulated market participants such as
CFTC-regulated designated contract merchants and SEC-regulated broker-
dealers to trade the products.\42\
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\39\ See Angel Letter at 8.
\40\ Angel Letter at 4.
\41\ See Grayscale Letter at 3.
\42\ Grayscale Letter at 3.
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IV. Proceedings To Determine Whether To Approve or Disapprove SR-
NYSEARCA-2024-06 and Grounds for Disapproval Under Consideration
The Commission is instituting proceedings pursuant to Section
19(b)(2)(B) of the Act \43\ to determine whether the proposed rule
change should be approved or disapproved. Institution of proceedings is
appropriate at this time in view of the legal and policy issues raised
by the proposed rule change, as discussed below. Institution of
proceedings does not indicate that the Commission has reached any
conclusions with respect to any of the issues involved. Rather, as
described below, the Commission seeks and encourages interested persons
to provide comments on the proposed rule change.
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\43\ 15 U.S.C. 78s(b)(2)(B).
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Pursuant to Section 19(b)(2)(B) of the Act,\44\ the Commission is
providing notice of the grounds for disapproval under consideration.
The Commission is instituting proceedings to allow for additional
analysis of the proposed rule change's consistency with Section 6(b)(5)
of the Act,\45\ which requires, among other things, that the rules of a
national securities exchange be designed to prevent fraudulent and
manipulative acts and practices, to promote just and equitable
principles of trade, to remove impediments to and perfect the mechanism
of a free and open market and a national market system and, in general,
to protect investors and the public interest.
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\44\ 15 U.S.C. 78s(b)(2)(B).
\45\ 15 U.S.C. 78f(b)(5).
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Under the Commission's Rules of Practice, the ``burden to
demonstrate that a proposed rule change is consistent with the [Act]
and the rules and regulations issued thereunder . . . is on the self-
regulatory organization that proposed the rule change.'' \46\ The
description of a proposed rule change, its purpose and operation, its
effect, and a legal analysis of its consistency with applicable
requirements must all be sufficiently detailed and specific to support
an affirmative Commission finding,\47\ and any failure of a self-
regulatory organization to provide this information may result in the
Commission not having a sufficient basis to make an affirmative finding
that a proposed rule change is consistent with the Act and the
applicable rules and regulations.\48\
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\46\ Rule 700(b)(3), Commission Rules of Practice, 17 CFR
201.700(b)(3).
\47\ See id.
\48\ See id.
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To date, the Commission has only approved listing rules for options
on shares of spot commodity-based ETPs for specific ETPs, not classes
of ETPs.\49\ For example, Exchange Rule 5.3-O(g) currently permits the
listing of options on securities that represent interests in the SPDR
Gold Trust, the iShares COMEX Gold Trust, the iShares Silver Trust, the
ETFS Silver Trust, the ETFS Palladium Trust, or ETFS Platinum Trust.
The Exchange proposes to replace this product-by-product approach and
amend Exchange Rule 5.3-O(g) to permit the listing of options on
securities that represent interests in Commodity-Based Trust Shares, as
defined in Exchange Rule 8.201-E. The proposal would allow the Exchange
to list options on any Commodity-Based Trust Share without filing a
proposed rule change with the Commission.\50\ The Exchange stated that
the Commission previously has approved generic listing standards
pursuant to Rule 19b-4(e) under the Act \51\ that permit the listing of
options on ETFs based on indexes that consist of stocks listed on U.S.
exchanges.\52\ The Exchange stated that the Commission also previously
has approved generic listing standards that permit the listing of
options on ETFs based on international or global indexes.\53\ In
addition, in contrast to the product-by-product approval of options on
spot-commodity-based ETPs, Exchange Rule 5.3-O(g) provides for the
listing and trading of options on general groups of investment
products, including, among others, open-end investment companies or
unit investment trusts that may hold securities, certain financial
instruments, and money market instruments.
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\49\ See, e.g., Securities Exchange Act Release Nos. 94928 (May
17, 2022), 87 FR 31287 (May 23, 2022) (File No. SR-CBOE-2022-09)
(order approving a proposed rule change to list and trade options on
shares of the Goldman Sachs Physical Gold ETF); 61983 (Apr. 26,
2010), 75 FR 23314 (May 3, 2010) (File No. SR-ISE-2010-19) (order
approving a proposed rule change to list and trade options on shares
of the ETFS Palladium Trust and the ETFS Platinum Trust); 61483
(Feb. 3, 2010), 75 FR 6753 (Feb. 10, 2010) (File Nos. SR-SR-CBOE-
2010-007; SR-ISE-2009-106; SR-NYSEAmex-2009-86; and SR-NYSEArca-
2009-110) (approving proposals to list and trade options on shares
of the ETFS Gold Trust and the ETFS Silver Trust); 59055 (December
4, 2008), 73 FR 75148 (December 10, 2008) (File Nos. SR-Amex-2008-
68; SR-BSE-2008-51; SR-CBOE-2008-72; SR-ISE-2008-58; SR-NYSEArca-
2008-66; and SR-Phlx-2008-58) (order approving the listing and
trading of options on shares of the iShares COMEX Gold Trust and the
iShares Silver Trust); 57894 (May 30, 2008), 73 FR 32061 (June 5,
2008) (File Nos. SR-Amex-2008-15; SR-CBOE-2005-11; SR-ISE-2008-12;
SR-NYSEArca-2008-52; and SR-Phlx-2008-17) (order approving the
listing and trading of options on shares of the SPDR Gold Trust).
\50\ See Notice, 89 FR at 5030, 5032.
\51\ 17 CFR 240.19b-4(e).
\52\ See Notice, 89 FR at 5031, and Securities Exchange Act
Release No. 42787, 65 FR 33598 (May 24, 2000) (order approving File
No. SR-Amex-00-14).
\53\ See Securities Exchange Act Release No. 54379 (November 9,
2006), 71 FR 66993 (November 17, 2006) (order approving File No. SR-
AMEX-2006-78).
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Options on Commodity-Based Trusts could result in additional demand
for creations and redemptions of shares of the underlying Commodity-
Based Trust from options market makers seeking to hedge their
positions. These additional creations and redemptions could increase
demand for the underlying commodity. In addition, options market makers
could seek to hedge their positions by transacting in the underlying
commodity or using commodity derivatives. These additional demands for
the underlying commodity have the potential to result in limited
availability of the underlying commodity during times of market
volatility which, in turn, could affect the creation and redemption
process for Commodity-Based Shares. The spot markets for the underlying
commodities that Commodity-Based Trusts may hold could vary
significantly in terms of trading volumes, market concentration, market
participants, commercial realities, and delivery practices, among other
things. These dynamics raise questions as to whether, given the
potentially significant differences in the spot markets for the
underlying commodities, it is appropriate for the Commission to allow
the Exchange to list options on any Commodity-Based Trust Share without
filing a proposed rule change with the Commission, rather than
continuing to review such proposals on a product-by-product basis. A
product-specific approach would allow the Exchange to provide the
Commission with information regarding the market for the underlying
commodity that a trust holds and help to demonstrate that listing
options on Commodity-Based Trust Shares representing interests in that
trust would not result in adverse market impacts, such as a shortage in
the supply of the underlying commodity, which, among other things,
could affect the creation and redemption process for
[[Page 34298]]
the Commodity-Based Trust Shares. In addition, the proposal states that
options on Commodity-Based Trust Shares would be subject to the same
position limits applicable to options on stocks and ETFs.\54\
Instituting proceedings allows for comment on whether those position
limits are appropriate for options on Commodity-Based Trust Shares in
light of the significant differences between the underlying stock and
ETF markets versus the markets for physical commodities.
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\54\ See Notice, 89 FR at 5031, n. 14.
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V. Procedure: Request for Written Comments
The Commission requests that interested persons provide written
submissions of their data, views, and arguments with respect to the
issues identified above, as well as any other concerns they may have
with the proposal. In particular, the Commission invites the written
views of interested persons concerning whether the proposed rule change
is consistent with Section 6(b)(5), or any other provision of the Act,
or the rules and regulations thereunder. Although there do not appear
to be any issues relevant to approval or disapproval which would be
facilitated by an oral presentation of data, views, and arguments, the
Commission will consider, pursuant to Rule 19b-4 under the Act,\55\ any
request for an opportunity to make an oral presentation.\56\
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\55\ 17 CFR 240.19b-4.
\56\ Section 19(b)(2) of the Act, as amended by the Securities
Acts Amendments of 1975, Public Law 94-29 (June 4, 1975), grants to
the Commission flexibility to determine what type of proceeding--
either oral or notice and opportunity for written comments--is
appropriate for consideration of a particular proposal by a self-
regulatory organization. See Securities Acts Amendments of 1975,
Senate Comm. on Banking, Housing & Urban Affairs, S. Rep. No. 75,
94th Cong., 1st Sess. 30 (1975).
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Interested persons are invited to submit written data, views, and
arguments regarding whether the proposed rule change should be approved
or disapproved by May 21, 2024. Any person who wishes to file a
rebuttal to any other person's submission must file that rebuttal by
June 4, 2024. The Commission asks that commenters address the
sufficiency of the Exchange's statements in support of the proposal,
which are set forth in the Notice,\57\ in addition to any other
comments they may wish to submit about the proposed rule change. In
particular, the Commission seeks comment on the following questions and
asks commenters to submit data where appropriate to support their
views:
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\57\ See supra note 4.
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1. Whether, given the potentially significant differences in the
markets for the underlying commodities, the Exchange has provided
sufficient data and analysis to support a conclusion that it is not
necessary for the Commission to review and approve the listing and
trading of options on ETPs, including Commodity-Based Trust Shares, on
a product-by-product basis;
2. Whether options on Commodity-Based Trust Shares should be
subject to the same position and exercise limits as options on stock,
and whether the available supply in the markets for the commodity on
which the Commodity-Based Trust Shares are based is relevant in
determining the position and exercise limits for options on Commodity-
Based Trust Shares; and
3. Whether the listing of options on Commodity-Based Trust Shares
for certain commodities should be subject to scrutiny on a product-by-
product basis because of the potential differences in the underlying
spot markets, such as deliverable supply, trading volumes, and the
involvement of commercial or financial participants.
Comments may be submitted by any of the following methods:
Electronic Comments
<bullet> Use the Commission's internet comment form (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#2052554c450d434f4d4d454e5453605345430e474f56"><span class="__cf_email__" data-cfemail="e193948d84cc828e8c8c848f9592a1928482cf868e97">[email protected]</span></a>. Please include
File No. SR-NYSEARCA-2024-06 on the subject line.
Paper Comments
<bullet> 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-NYSEARCA-2024-06. 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 (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>). 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-NYSEARCA-2024-06 and should
be submitted by May 21, 2024. Rebuttal comments should be submitted by
June 4, 2024.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\58\
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\58\ 17 CFR 200.30-3(a)(57).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-09217 Filed 4-29-24; 8:45 am]
BILLING CODE 8011-01-P
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</html>Indexed from Federal Register on April 30, 2024.
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