Notice2024-27013
Self-Regulatory Organizations; Cboe Exchange, Inc.; Order Instituting Proceedings To Determine Whether To Approve or Disapprove a Proposed Rule Change To List and Trade Options on Ethereum Exchange-Traded Funds
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
November 20, 2024
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 89 Issue 224 (Wednesday, November 20, 2024)</title>
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[Federal Register Volume 89, Number 224 (Wednesday, November 20, 2024)]
[Notices]
[Pages 91811-91815]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-27013]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-101631; File No. SR-CBOE-2024-036]
Self-Regulatory Organizations; Cboe Exchange, Inc.; Order
Instituting Proceedings To Determine Whether To Approve or Disapprove a
Proposed Rule Change To List and Trade Options on Ethereum Exchange-
Traded Funds
November 14, 2024.
I. Introduction
On August 19, 2024, Cboe Exchange, Inc. (``Exchange'') filed with
the Securities and Exchange Commission (``Commission''), pursuant to
Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act'' or
``Exchange Act'') \1\ and Rule 19b-4 thereunder,\2\ a proposed rule
change to allow the listing and trading of options on Units \3\ that
represent interests in the Fidelity Ethereum Fund (the ``Fidelity
Fund''), the 21Shares Core Ethereum ETF (the ``21Shares Fund''), the
Invesco Galaxy Ethereum ETF (the ``Invesco Fund''), the Franklin
Ethereum ETF (the ``Franklin Fund''), the VanEck Ethereum Trust (the
``VanEck Fund''), the Grayscale Ethereum Trust (the ``Grayscale
Fund''), the Grayscale Mini Ethereum Trust (the ``Grayscale Mini
Fund''), the Bitwise Ethereum ETF (the ``Bitwise Fund''), and the
iShares Ethereum Trust ETF (the ``iShares Fund'' and, collectively, the
``Ethereum Funds'').\4\ The proposed rule change was published for
comment in the Federal Register on September 4, 2024.\5\ The Commission
has received no comments regarding the proposal.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ Cboe Rule 1.1 defines a ``Unit'' (which may also be referred
to as an exchange-traded fund (``ETF'')) as a share or other
security traded on a national securities exchange and defined as an
NMS stock as set forth in Rule 4.3.
\4\ The Commission approved proposals by several exchanges to
list and trade shares of trusts that hold Ether, including the
Ethereum Funds. See Securities Exchange Act Release Nos. 100224 (May
23, 2024), 89 FR 46937 (May 30, 2024); and 100541 (July 17, 2024),
89 FR 59786 (July 23, 2024).
\5\ See Securities Exchange Act Release No. 100862 (Aug. 28,
2024), 89 FR 72146 (``Notice'').
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On October 11, 2024, pursuant to Section 19(b)(2) of the Exchange
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 disapprove the
proposed rule change.\7\ This order institutes proceedings under
Section 19(b)(2)(B) of the Act \8\ to determine whether to approve or
disapprove the proposed rule change.
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\6\ 15 U.S.C. 78s(b)(2).
\7\ See Securities Exchange Act Release No. 101321 (Oct. 11,
2024), 89 FR 83723 (Oct. 17, 2024) (designating December 3, 2024, as
the date by which the Commission shall either approve, disapprove,
or institute proceedings to determine whether to 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 more fully in the Notice,\9\ the Exchange proposes to
amend Exchange Rule 4.3, Interpretation and Policy .06(a)(4) to allow
the Exchange to list and trade options on Units of the Ethereum Funds.
The Exchange states that current Exchange Rule 4.3, Interpretation and
Policy .06(a) provides that, subject to certain other criteria set
forth in that Rule, securities deemed appropriate for options trading
include Units that represent certain types of interests, including
interests in certain specific trusts that hold financial instruments,
money market instruments, or precious metals (which are deemed
commodities).\10\
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\9\ See supra note 5.
\10\ See Notice, 89 FR at 72146-7.
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The Exchange states that the Ethereum Funds are Ethereum-backed
commodity ETFs structured as trusts, and that, similar to any Unit
currently deemed appropriate for options trading under Exchange Rule
4.3, Interpretation and Policy .06, the investment objective of each
Ethereum Fund trust 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.\11\ The Exchange states that, as is
the case for Units currently deemed appropriate for options trading, an
Ethereum 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.\12\ The Exchange states that the Ethereum Funds provide
investors with cost-efficient alternatives that allow a level of
participation in the Ethereum market through the securities market, and
that the primary substantive difference between Ethereum Funds and
Units currently deemed appropriate for options trading are that Units
may hold securities, certain financial instruments, and specified
precious metals (which are deemed commodities), while Ethereum Funds
hold Ethereum (which is also deemed a commodity).\13\
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\11\ See id. at 72147.
\12\ The Exchange states that the trusts may include minimal
cash. See id. at note 5.
\13\ See Notice, 89 FR at 72147.
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The Exchange states that it believes that the Ethereum Funds
satisfy the Exchange's initial listing standards in Exchange Rule 4.3,
Interpretation and Policy .06(b) that Units must either (1) meet the
criteria and standards set forth in Rule 4.3, Interpretation and Policy
.01(a), or (2) be available for creation or redemption each business
day from or through the issuer in cash or in kind at a price related to
net asset value, and the issuer must be obligated to issue Units in a
specified aggregate number even if some or all of the investment assets
required to be deposited have not been received by the issuer, subject
to the condition that the person obligated to deposit the investments
has undertaken to deliver the investment assets as soon as possible and
such undertaking is secured by the delivery and maintenance of
collateral consisting of cash or cash equivalents satisfactory to the
issuer, as provided in the respective prospectus.\14\ The Exchange
states that the Ethereum Funds satisfy Exchange Rule 4.3,
Interpretation and Policy .06(b)(2), as they are all subject to this
creation and redemption process.\15\
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\14\ See id.
\15\ See id.
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The Exchange further states that, while not required by the
Exchange's Rules for purposes of options listings, the majority of the
Ethereum Funds satisfy the criteria and guidelines set forth in
Exchange Rule 4.3, Interpretation and Policy .01.\16\ The Exchange
states that, pursuant to Exchange Rule 4.3(a), a security (which
includes a Unit) on which options may be listed and traded on the
Exchange must be duly registered (with the Commission) and be an NMS
stock (as defined in Rule 600 of Regulation NMS under the Act), and be
characterized by a substantial number of outstanding shares that are
widely held and actively traded.\17\ The Exchange states that each of
the Ethereum Funds is an NMS Stock, as defined in Rule 600 of
Regulation
[[Page 91812]]
NMS under the Act, and that each Ethereum Fund is characterized by a
substantial number of outstanding shares that are widely held and
actively traded.\18\
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\16\ See id.
\17\ The Exchange states that the criteria and guidelines for a
security to be considered widely held and actively traded are set
forth in Exchange Rule 4.3, Interpretation and Policy .01, subject
to exceptions. See id. at note 7.
\18\ See Notice, 89 FR at 72147.
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The Exchange states that, as of August 7, 2024, the Ethereum Funds
had the following number of shares outstanding: \19\
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\19\ See id.
------------------------------------------------------------------------
Shares
Ethereum fund outstanding
------------------------------------------------------------------------
Fidelity Fund........................................ 10,850,000
21Shares Fund........................................ 760,000
Invesco Fund......................................... 468,000
Franklin Fund........................................ 1,500,000
VanEck Fund.......................................... 1,725,000
Grayscale Fund....................................... 228,468,500
Grayscale Mini Fund.................................. 380,898,500
Bitwise Fund......................................... 12,370,000
iShares Fund......................................... 37,200,000
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The Exchange states that, despite the fact that these Ethereum
Funds were in only their third week of trading (they began trading on
July 23, 2024), five of these funds already have 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 Exchange Rule 4.3, Interpretation and Policy
.01(a)(1).\20\ However, the Exchange states that shares outstanding
(i.e., free float),\21\ while commonly used to determine investable
capacities of corporate stocks, has little utility with respect to ETFs
due to the market structure of ETFs.\22\ The Exchange states that
proofing of ETF baskets, in addition to the efficiency of creation/
redemption mechanisms, decouple concepts of ``floating'' ETF shares
against the impacts of ETF liquidity to the liquidity of ETF
constituents.\23\ The Exchange states that although ETF market makers
may often limit the amount of floating ETF shares, primary market
mechanisms enable virtually limitless capacity to create and redeem ETF
shares on a daily basis.\24\ The Exchange states that, as evidenced
during their brief time in market, the gross value of daily shares
created or redeemed for each Ethereum Fund approximates its assets
under management (``AUM'') as of July 24, 2024, which were as follows:
\25\
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\20\ See id.
\21\ The Exchange states that all outstanding ETF shares are
considered free float because there are no restricted ETF shares or
shares held by insiders, as is the case with respect to corporate
stocks. See id. at note 9.
\22\ See id.
\23\ See Notice, 89 FR at 72147.
\24\ The Exchange states that this is the primary reasoning for
why the Exchange may list options on ETFs as long as they are
subject to the creation and redemption process and generally do not
need to satisfy the criteria set forth in Interpretation and Policy
.01. See id. note 10.
\25\ See Notice, 89 FR at 72148.
------------------------------------------------------------------------
Ethereum Fund AUM
------------------------------------------------------------------------
Fidelity Fund........................................ 9,481,360
21Shares Fund........................................ 148,080,600
Invesco Fund......................................... 37,197,280
Franklin Fund........................................ 19,301,340
VanEck Fund.......................................... 9,013,556
Grayscale Fund....................................... 8,040,436,000
Grayscale Mini Fund.................................. 1,043,203,000
Bitwise Fund......................................... 230,788,700
iShares Fund......................................... 287,328,200
------------------------------------------------------------------------
The Exchange states that this demonstrates that each Ethereum Fund
is characterized by a substantial number of outstanding shares.\26\ The
Exchange further states that, given how recently Ethereum Funds began
trading, the Exchange does not have access to the number of beneficial
holders of Ethereum Funds at this time. \27\ However, the Exchange
states that, given the significant trading volumes of the Ethereum
Funds, it is reasonable to expect that shares of all of the Ethereum
Funds are characterized by a substantial number of outstanding shares
that are widely held.\28\ The Exchange also believes each Ethereum Fund
is characterized by a substantial number of outstanding shares that are
actively traded.\29\ The Exchange states that, as of August 7, 2024,
the total trading volume (by shares and notional) for each fund since
they began trading on July 23, 2024, and the average daily volume
(``ADV'') over the five-day period of August 2 through August 7, 2024,
for each Ethereum Fund was as follows: \30\
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\26\ See id.
\27\ See id.
\28\ See id.
\29\ See id.
\30\ See id.
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Trading volume Trading volume
Ethereum Fund (shares) (notional $) ADV (shares)
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Fidelity Fund.................................... 32,751,647 1,023,590,893.88 1,279,085.00
21Shares Fund.................................... 2,995,673 46,584,597.69 183,032.80
Invesco Fund..................................... 2,398,977 75,800,517.49 116,423.80
Franklin Fund.................................... 3,726,018 89,987,417.90 114,194.60
VanEck Fund...................................... 5,557,411 247,424,935.45 288,519.00
Grayscale Fund................................... 221,839,519 5,934,238,584.03 7,429,260.00
Grayscale Mini Fund.............................. 387,753,619 1,117,121,565.01 24,800,550.00
Bitwise Fund..................................... 27,454,355 638,820,845.28 806,202.19
iShares Fund..................................... 124,839,230 2,896,601,784.35 6,720,303.00
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The Exchange states that the trading volume for each except one
Ethereum Fund is higher (and several significantly higher) than
2,400,000 shares (and that one is only 1,023 shares below that number),
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 Exchange Rule 4.3, Interpretation and Policy .01.\31\ Additionally,
the Exchange states that from July 23 (the first day the Ethereum Funds
began trading) through August 7, 2024, the ADV for each Ethereum Fund
is in the top 25% of all ETFs that are currently trading.\32\ The
Exchange states that this data demonstrates each Ethereum Fund is
characterized by a substantial number of outstanding shares that are
actively traded.\33\
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\31\ See id.
\32\ See id.
\33\ See id.
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The Exchange states that options on Ethereum Funds will be subject
to the Exchange's continued listing standards in Exchange Rule 4.4,
Interpretation and Policy .06 for Units deemed appropriate for options
trading pursuant to Exchange Rule 4.3, Interpretation and Policy
.06.\34\ The Exchange states that Exchange Rule 4.4, Interpretation and
Policy .06 provides that Units that were initially approved for options
trading pursuant to Exchange Rule 4.3, Interpretation and Policy .06
shall be deemed not to meet the requirements for continued approval,
and the Exchange
[[Page 91813]]
shall not open for trading any additional series of option contracts of
the class covering such Unit, if the Units cease to be an NMS stock or
the Units are halted from trading in their primary market.\35\
Additionally, the Exchange states that options on Units may be subject
to the suspension of opening transactions in any of the following
circumstances: (1) in the case of options covering Units approved for
trading under Exchange Rule 4.3, Interpretation and Policy .06(b)(1),
in accordance with the terms of paragraphs (a), (b), and (c) of
Exchange Rule 4.4, Interpretation and Policy .01; (2) in the case of
options covering Units approved for trading under Exchange Rule 4.3,
Interpretation and Policy .06(b)(2) (as is the case for the Ethereum
Funds), following the initial twelve-month period beginning upon the
commencement of trading in the Units on a national securities exchange,
there are fewer than 50 record and/or beneficial holders of such Units
for 30 or more consecutive trading days; (3) the value of the index or
portfolio of securities, non-U.S. currency, or 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 and money market instruments
on which the Units are based is no longer calculated or available; or
(4) such other event shall occur or condition exist that in the opinion
of the Exchange makes further dealing in such options on the Exchange
inadvisable.\36\
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\34\ See id.
\35\ See id.
\36\ See id.
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The Exchange states that options on each Ethereum Fund will be
physically settled contracts with American-style exercise.\37\ As
described more fully in the Notice, the Exchange states that Ethereum
Fund options will trade in the same manner as any other Unit options on
the Exchange.\38\ The Exchange states that Exchange Rules that
currently apply to the listing and trading of all Unit options on the
Exchange, including, for example, Exchange Rules that govern listing
criteria, expiration and exercise prices, minimum increments, position
and exercise limits, margin requirements, customer accounts and trading
halt procedures will apply to the listing and trading of Ethereum Funds
on the Exchange in the same manner as they apply to other options on
all other Units that are listed and traded on the Exchange, including
the precious-metal backed commodity Units already deemed appropriate
for options trading on the Exchange pursuant to current Exchange Rule
4.3, Interpretation and Policy .06(a)(4).\39\
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\37\ See id.
\38\ See id. at 72149.
\39\ See id.
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The Exchange states that position and exercise limits for options
on Units, including options on Ethereum Funds, will be determined
pursuant to Exchange Rules 8.30 and 8.42, respectively.\40\ The
Exchange states that position and exercise limits for Unit options vary
according to the number of outstanding shares and the trading volumes
of the underlying Unit over the past six months, where the largest in
capitalization and the most frequently traded Units have an option
position and exercise limit of 250,000 contracts (with adjustments for
splits, re-capitalizations, etc.) on the same side of the market; and
smaller capitalization Units have position and exercise limits of
200,000, 75,000, 50,000 or 25,000 contracts (with adjustments for
splits, re-capitalizations, etc.) on the same side of the market.\41\
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\40\ See id.
\41\ See id.
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The Exchange represents that the same surveillance procedures
applicable to all other options on Units currently listed and traded on
the Exchange will apply to options on Ethereum Funds, and that it has
the necessary systems capacity to support the new option series.\42\
The Exchange states that its existing surveillance and reporting
safeguards are designed to deter and detect possible manipulative
behavior which might potentially arise from listing and trading Unit
options.\43\ The Exchange further states that it may obtain information
from CME Group Inc.'s designated contract markets that are members of
the Intermarket Surveillance Group related to any financial instrument
that is based, in whole or in part, upon an interest in or performance
of Ethereum, as applicable.\44\ The Exchange states that it has
analyzed its capacity and believes that the Exchange and the Options
Price Reporting Authority 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 Ethereum Funds up to the
number of expirations currently permissible under the Exchange's
Rules.\45\ The Exchange states that because the proposal is limited to
Units on a single commodity, any additional traffic that may be
generated from the introduction of Ethereum Fund options will be
manageable.\46\
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\42\ See id.
\43\ See id.
\44\ See id.
\45\ See id.
\46\ See id.
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The Exchange states that offering options on Ethereum Funds will
benefit investors by providing them with an additional, relatively
lower cost investing tool to gain exposure to the price of Ethereum and
a hedging vehicle to meet their investment needs in connection with
Ethereum-related products and positions.\47\ The Exchange states that
it expects investors will transact in options on Ethereum Funds in the
unregulated over-the-counter (``OTC'') options market, 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 position; (2) increased market transparency;
and (3) heightened contra party creditworthiness due to the role of OCC
as issuer and guarantor of all listed options.\48\ The Exchange states
that listing Ethereum Fund options may cause investors to bring this
liquidity to the Exchange, which would increase market transparency and
enhance the process of price discovery conducted on the Exchange
through increased order flow.\49\ The Exchange states that Units 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 Ethereum
Funds and essentially offer the same objectives and benefits to
investors, just with respect to different assets.\50\ The Exchange
states that it has not identified any issues with the continued listing
and trading of any Unit options, including Units that hold commodities
(i.e., precious metals) that it currently lists and trades on the
Exchange.\51\
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\47\ See id.
\48\ See id.
\49\ See id.
\50\ See id.
\51\ See id. at 72150.
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The Exchange states that 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)(5) of the
Act.\52\ The Exchange states that the proposal to list and trade
options on Ethereum Funds 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 Ethereum
Funds will provide investors with an
[[Page 91814]]
opportunity to realize the benefits of utilizing options on a Ethereum
Fund, including cost efficiencies and increased hedging strategies.\53\
The Exchange further states that offering Ethereum Fund options will
benefit investors by providing them with a relatively lower-cost risk
management tool, which will allow them to manage their positions and
associated risk in their portfolios more easily in connection with
exposure to the price of Ethereum and with Ethereum-related products
and positions.\54\ Additionally, the Exchange states that its offering
of Ethereum 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.\55\ The Exchange states that it already lists options on
other commodity-based Units, which are trusts structured in
substantially the same manner as Ethereum Funds and essentially offer
the same objectives and benefits to investors, just with respect to a
different commodity (i.e., Ethereum rather than precious metals), and
for which the Exchange has not identified any issues with their
continued listing and trading.\56\ The Exchange states that the
proposed rule change will remove impediments to and perfect the
mechanism of a free and open market and a national market system,
because it is consistent with current Exchange Rules previously filed
with the Commission.\57\ The Exchange states that options on Ethereum
Funds satisfy the initial listing standards and continued listing
standards currently in the Exchange Rules applicable to options on all
Units, including Units that hold other commodities already deemed
appropriate for options trading on the Exchange.\58\ In addition, the
Exchange states that each Ethereum Fund is characterized by a
substantial number of shares that are widely held and actively
traded.\59\ In addition, the Exchange states that Ethereum Fund options
will trade in the same manner as any other Unit options--the same
Exchange Rules that currently govern the listing and trading of all
Unit options, including permissible expirations, strike prices and
minimum increments, and applicable position and exercise limits and
margin requirements, will govern the listing and trading of options on
Ethereum Funds in the same manner.\60\
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\52\ 15 U.S.C. 78f(b)(5). See Notice, 89 FR at 72150.
\53\ See id.
\54\ See id.
\55\ See id.
\56\ See id.
\57\ See id.
\58\ See id.
\59\ See id.
\60\ See id.
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The Exchange states that the proposed position and exercise limits
for the Ethereum Fund options are consistent with the Exchange Act,
will remove impediments to and perfect the mechanism of a free and open
market and a national market system, and, in general, protect investors
and the public interest, because 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.\61\ The Exchange states that the proposed position and
exercise limits are the same limits that apply to other ETF options,
including other commodity ETF options.\62\ The Exchange states that the
proposed position and exercise limits balance the liquidity
provisioning in the market against the prevention of manipulation, as
they currently do for other equity options (including commodity ETF
options).\63\ The Exchange further states that the available supply in
the markets of Ethereum is not relevant when establishing position
limits for options on the Ethereum Funds, as what is held by an ETF has
historically not been a relevant factor considered by the Commission
when it has considered rule filings to list options on ETFs, including
commodity ETFs.\64\ The Exchange states that when the Commission
previously approved rules to list options on other commodity ETFs, the
Commission did not require consideration of whether the available
supply of those commodities should be considered when the Exchange
established those position limits.\65\ The Exchange states that
position limits in the Exchange's Rules at that time were the same as
they are today as set forth in Exchange Rule 8.30 (and as proposed to
be applicable to options on the Ethereum Funds).\66\
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\61\ See id.
\62\ See id.
\63\ See id.
\64\ See id.
\65\ See id.
\66\ See id.
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III. Proceedings To Determine Whether To Approve or Disapprove SR-CBOE-
2024-036 and Grounds for Disapproval Under Consideration
The Commission is instituting proceedings pursuant to Section
19(b)(2)(B) of the Act \67\ to determine whether the proposed rule
change should be approved or disapproved. Institution of such
proceedings is appropriate at this time in view of the legal and policy
issues raised by the proposed rule change. 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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\67\ 15 U.S.C. 78s(b)(2)(B).
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Pursuant to Section 19(b)(2)(B) of the Act,\68\ 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,\69\ 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 protect 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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\68\ Id.
\69\ 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 Exchange
Act and the rules and regulations issued thereunder . . . is on the
self-regulatory organization that proposed the rule change.'' \70\ 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,\71\ 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.\72\ The Commission is instituting
proceedings to allow for additional consideration and comment on the
issues raised herein, including as to whether the proposal is
consistent with the Act. In particular, the Commission asks commenters
to address whether the proposal includes sufficient data and analysis
to support a conclusion that the proposal is consistent with the
[[Page 91815]]
requirements of Section 6(b)(5) of the Act.
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\70\ 17 CFR 201.700(b)(3).
\71\ See id.
\72\ See id.
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IV. Procedure: Request for Written Comments
The Commission requests that interested persons provide written
submissions of their views, data, 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 proposal is
consistent with Section 6(b)(5) or any other provision of the Act, and
the rules and regulations thereunder. Although there do not appear to
be any issues relevant to approval or disapproval that would be
facilitated by an oral presentation of views, data, and arguments, the
Commission will consider, pursuant to Rule 19b-4, any request for an
opportunity to make an oral presentation.\73\
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\73\ Section 19(b)(2) of the Act, as amended by the Securities
Acts Amendments of 1975, Public Law 94-29 (June 4, 1975), grants 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 December 11, 2024. Any person who wishes to file a
rebuttal to any other person's submission must file that rebuttal by
December 26, 2024.
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#f381869f96de909c9e9e969d8780b3809690dd949c85"><span class="__cf_email__" data-cfemail="0a787f666f27696567676f647e794a796f69246d657c">[email protected]</span></a>. Please include
file number SR-CBOE-2024-036 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-CBOE-2024-036. 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-CBOE-2024-036 and should be
submitted on or before December 11, 2024. Rebuttal comments should be
submitted by December 26, 2024.
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\74\ 17 CFR 200.30-3(a)(57).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\74\
Vanessa A. Countryman,
Secretary.
[FR Doc. 2024-27013 Filed 11-19-24; 8:45 am]
BILLING CODE 8011-01-P
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</html>Indexed from Federal Register on November 20, 2024.
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