Notice2025-04158
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Proposed Rule Change To Amend Rule 5.3-O To Permit 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
March 17, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 50 (Monday, March 17, 2025)</title>
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[Federal Register Volume 90, Number 50 (Monday, March 17, 2025)]
[Notices]
[Pages 12377-12381]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-04158]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-102577; File No. SR-NYSEARCA-2025-16)
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
of Proposed Rule Change To Amend Rule 5.3-O To Permit Options on
Commodity-Based Trust Shares
March 11, 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 February 24, 2025, NYSE Arca, Inc. (``NYSE Arca'' or the
``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 self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend Rule 5.3-O (Criteria for Underlying
Securities) to permit options on Commodity-Based Trust Shares. The
proposed rule change is available on the
[[Page 12378]]
Exchange's website at <a href="http://www.nyse.com">www.nyse.com</a>, at the principal office of the
Exchange, and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
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 those 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 parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The purpose of this filing is to amend Rule 5.3-O (Criteria for
Underlying Securities). Specifically, the Exchange proposes modify Rule
5.3-O(g), regarding the criteria for listing and trading options on
Exchange-Traded Fund Shares (``ETFs''), to allow options on units that
represent interests in a trust that is a Commodity-Based Trust.
The Exchange notes that this proposal is competitive as Nasdaq ISE,
LLC (``ISE'') has submitted a substantially identical rule change.\3\
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\3\ See Securities Exchange Act Release No. 102465 (February 20,
2025), 90 FR 10740 (February 26, 2025) (SR-ISE-2025-08) (Notice of
Filing of Proposed Rule Change to Amend Options 4, Section 3,
Criteria for Underlying Securities to permit options on Commodity-
Based Trust Shares).
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A Commodity-Based Trust is defined in Exchange Rule 8.201(c)(1),
The Nasdaq Stock Market LLC Rule 5711(d)(iv), and Cboe BZX Exchange,
Inc. 14.11(e)(4) as 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.
The Exchange proposes to amend its listing criteria at Rule 5.3-
O(g)(iv) to provide that
(g) Exchange-Traded Fund Shares. 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, and that . .
. or (iv) represent interests in a security (a) issued by a 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 (``Commodity-Based
Trust Share'').
The Exchange proposes to insert this proposed rule text and to
remove the now-unnecessary references to SPDR[supreg] Gold Trust, the
iShares COMEX Gold Trust, the iShares Silver Trust, the ETFS Silver
Trust, ETFS Gold Trust, the ETFS Palladium Trust, and the ETFS
Platinum, the iShares Bitcoin Trust, the Fidelity Wise Origin Bitcoin
Fund, the ARK21Shares Bitcoin ETF, the Grayscale Bitcoin Trust (BTC),
the Grayscale Bitcoin Mini Trust BTC, and the Bitwise Bitcoin ETF,
which are all Commodity-Based Trust Shares.\4\ As a result of this
amendment, the Exchange's listing criteria would allow any ETF approved
to list on the primary market as a Commodity-Based Trust Share to
qualify as an underlying for options traded on the Exchange, provided
other listing criteria have been met.\5\
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\4\ See proposed Rule 5.3-O(g)(iv). Consistent with this change,
the Exchange proposes to re-number the remaining sub-paragraph of
Rule 5.3-O(g)(v); to delete in its entirety Commentary .01 to Rule
5.3-O; and to delete the text in Commentary .02 to Rule 5.4-O and to
designate it as ``Reserved.''
\5\ The Exchange believes this proposal is consistent with the
OCC's recent amendment of ``Fund Share'' (which covers ETFs), as
defined in Article I of OCC's By-Laws (including the Interpretation
and Policy), to remove reference to specific precious metals
commodity-based ETFs as ``no longer relevant or necessary.'' See
Securities Exchange Act Release No. 102018 (December 20, 2024), 89
FR 106660 (December 30, 2024) (SR-OCC-2024-018). The impetus for
this rule change was the staff advisory issued by the Commodity
Futures Trading Commission (``CFTC'') that deemed it ``
`substantially likely' that spot commodity ETF shares would be held
to be securities'' which, in turn, resulted in the OCC's
determination that ``it no longer needs to seek product-by-product
exemptive relief from the CFTC to clear spot commodity-based ETF
products, including precious metals commodity-based ETFs.'' See id.,
89 FR, at 106661. See also CFTC Staff Advisory Relating to the
Clearing of Options on Spot Commodity Exchange Traded Funds (ETFs),
Letter No. 24-16 (Nov. 15, 2024), available at <a href="https://www.cftc.gov/csl/24-16/download">https://www.cftc.gov/csl/24-16/download</a>.
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The Exchange's initial listing standards in Rule 5.3-O will apply
to options on Commodity-Based Trust Shares. Rule 5.3-O requires that, a
security 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.\6\ Further, for an ETF to qualify for
options transactions pursuant to Rule 5.3-O(g), the ETF must either (1)
meet the criteria for underlying securities set forth in Rule 5.3-O(a)
\7\-(b),\8\ or (2) be available for creation and redemption each
business day as set forth in Rule 5.3-O(g)(1)(B).\9\
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\6\ See Rule 5.3-O(a) and (b).
\7\ The criteria and guidelines for a security to be considered
widely held and actively traded are set forth in Rule 5.3-O(a),
subject to exceptions.
\8\ See Rule 5.3-O(b) which states that the underlying
securities shall be registered and be an ``NMS Stock'' as defined in
Rule 600 of Regulation NMS under the Act.
\9\ Rule 5.3-O(g)(1)(B) requires that ETFs must 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 ETFs 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.
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Additionally, Commodity-Based Trust Shares will also be subject to
the Exchange's continued listing standards for options on ETFs,
including those set out in Rule 5.4-O(k). Moreover, Commodity-Based
Trust Shares will not be deemed to meet the requirements for continued
approval, and the Exchange will not open for trading any additional
series of option contracts covering Commodity-Based Trust Shares if
such security ceases to be an ``NMS stock'' as provided for in Rule
5.4-O(b)(5) or the Commodity-Based Trust Share is halted from trading
on its primary market.\10\ The Exchange notes that ETFs that hold
financial instruments, money market instruments, or precious metal
commodities on which the Exchange may already list and trade options
pursuant to Rule 5.3-O(g) are trusts structured in substantially the
same manner as options on a Commodity-Based Trust Share 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
[[Page 12379]]
continued listing and trading of any ETF options, including ETFs that
hold commodities (i.e., precious metals) that it currently lists and
trades on the Exchange.
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\10\ See Rule 5.4-O(k).
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Consistent with Rule 6.4-O, which governs the opening of options
series on a specific underlying security (including ETFs), the Exchange
will open at least one expiration month for options on a Commodity-
Based Fund Share \11\ at the commencement of trading on the Exchange
and may also list series of options on such Commodity-Based Fund Share
for trading on a weekly,\12\ monthly,\13\ or quarterly \14\ basis. The
Exchange may also list long-term equity option series (``LEAPS'') that
expire from twelve to thirty-nine months from the time they are
listed.\15\
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\11\ See Rule 6.4-O(d). The monthly expirations are subject to
certain listing criteria for underlying securities described within
Rule 5.3-O. 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
6.4-O(a), 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.
\12\ See Rule 6.4-O, Commentary .07.
\13\ See Rule 6.4-O, Commentary .09.
\14\ See Rule 6.4-O, Commentary .08.
\15\ See Rule 6.4-O(d).
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Pursuant to Rule 6.4-O, Commentary .05(a), which governs strike
prices of series of options on ETFs, the interval between strike prices
of series of options on a Commodity-Based Fund Share 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 6.72-O, where the price of
a series of options on a Commodity-Based Fund Share 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 options on a Commodity-Based Fund Share that the Exchange lists will
be consistent and comply with the expirations, strike prices, and
minimum increments set forth in Rules 6.4-O and 6.72-O, as applicable.
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\16\ The 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 6.4-O,
Commentary .07 through .09, specifically set forth intervals between
strike prices on Quarterly Options Series, Short Term Option Series,
and Monthly Options Series, respectively.
\17\ See Rule 6.4-O, Commentary .04.
\18\ See Rule 6.4-O, Commentary .13.
\19\ See Rule 6.4-O, Commentary .03.
\20\ See Rule 6.4-O, Commentary .10.
\21\ If options on a Commodity-Based Trust Share are eligible to
participate in the Penny Interval Program, the minimum increment of
$0.01 below $3.00 and $0.50 above $3.00 would apply. See Rule 6.4-
O(a)(3). See also Rule 6.72A-O (which describes the requirements for
the Penny Interval Program).
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Options on a Commodity-Based Trust Share will trade in the same
manner as options on other ETFs on the Exchange. The Exchange Rules
that currently apply to the listing and trading of all options on ETFs
on the Exchange, including, for example, Rules that govern listing
criteria, expirations, exercise prices, minimum increments, position
and exercise limits, margin requirements, customer accounts and trading
halt procedures would apply to the listing and trading of options on a
Commodity-Based Trust Share on the Exchange in the same manner as they
apply to other options on all other ETFs that are listed and traded on
the Exchange.
Position and exercise limits for options, including options on a
Commodity-Based Trust Share are determined pursuant to Rules 6.8-O and
6.9-O, respectively. Position and exercise limits for options on ETFs
vary according to the number of outstanding shares and the trading
volumes of the underlying security over the past six months, where the
largest in capitalization and the most frequently traded funds 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 funds 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.\22\ Further, the Exchange notes that Rule 4.16-O, which governs
margin requirements applicable to the trading of all options on the
Exchange, including options on ETFs, will also apply to the trading of
options on a Commodity-Based Trust Share.
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\22\ See Commentary .06(a)-(e) to Rule 6.8-O.
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The Exchange represents that the surveillance procedures applicable
to all other options on ETFs will apply to options on Commodity-Based
Trust Shares, and that it has the necessary systems capacity to support
the new option series. The Exchange's existing surveillance and
reporting safeguards are designed to deter and detect possible
manipulative behavior which might arise from listing and trading
options on ETFs, including options on Commodity-Based Trust Shares.
Also, the Exchange may obtain trading information via the Intermarket
Surveillance Group (``ISG'') \23\ from other exchanges who are members
of the ISG. In addition, the Exchange has a Regulatory Services
Agreement with the Financial Industry Regulatory Authority (``FINRA'').
Pursuant to a multi-party 17d-2 joint plan, all options exchanges
allocate regulatory responsibilities to FINRA to conduct certain
options-related market surveillances. Further, the Exchange will
implement any new surveillance procedures it deems necessary to
effectively monitor the trading of options on Commodity-Based Trust
Shares.
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\23\ A complete list of the current members of the ISG, is
available at <a href="http://www.isgportal.org">http://www.isgportal.org</a>.
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The Exchange has also analyzed its capacity and represents that it
believes the Exchange and the Options Price Reporting Authority
(``OPRA'') have the necessary systems capacity to handle the additional
traffic associated with the listing of new series of ETFs, including
options on a Commodity-Based Trust Share, up to the number of
expirations currently permissible under the Exchange Rules. The
Exchange believes any additional traffic generated from the trading of
options on Commodity-Based Trust Shares would be manageable. The
Exchange represents that Exchange members will not have a capacity
issue as a result of this proposed rule change.
Further, quotation and last sale information for Commodity-Based
Trust Shares is available via the Consolidated Tape Association
(``CTA'') high speed line. Quotation and last sale information for such
securities is also available from the exchange on which such securities
are listed. Quotation and last sale information for options on
Commodity-Based Trust Shares will be available via OPRA \24\ and major
market data vendors.
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\24\ Last sale reports and quotations are the core of the
information that OPRA disseminates. OPRA also disseminates certain
other types of information with respect to the trading of options on
the markets of the OPRA participants, such as the number of options
contracts traded, open interest and end of day summaries. OPRA also
disseminates certain kinds of administrative messages.
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The Exchange notes that the Commission has previously approved
generic listing standards pursuant to Rule 19b-4(e) of the Act \25\ for
ETFs
[[Page 12380]]
based on indexes that consist of stocks listed on U.S. exchanges \26\
In addition, the Commission has previously approved proposals for the
listing and trading of options on ETFs based on international indexes
as well as global indexes (e.g., based on non-U.S. and U.S. component
stocks).\27\ 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 SRO rules that govern their trading. The Exchange
believes that allowing the listing of options overlying Commodity-Based
Trust Shares that are listed pursuant to Commission approval on
equities exchanges and applying Rule 19b-4(e) \28\ should fulfill the
intended objective of that rule by allowing options on those Commodity-
Based Trust Shares that have satisfied the generic listing standards to
commence trading, without the need for the public comment period and
Commission approval. The proposed rule change has the potential to
significantly reduce the time 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, to the benefit of the investing
public. The failure of a particular Commodity-Based Trust Share to
comply with the generic listing standards under Rule 19b-4(e) \29\
would not, however, preclude the Exchange from submitting a separate
filing pursuant to Section 19(b)(2),\30\ requesting Commission approval
to list and trade options on a particular Commodity-Based Trust Share.
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\25\ 17 CFR 240.19b-4(e).
\26\ See Securities Exchange Act Release No. 54739 (November 9,
2006), 71 FR 66993 (November 17, 2006) (SR-AMEX-2006-78) (approval
order relating to generic listing standards for ETFs based on
international or global indexes).
\27\ See, e.g., Securities Exchange Act Release Nos. 56778
(November 9, 2007), 72 FR 65113 (November 19, 2007) (SR-AMEX-2007-
100) (approval order to list and trade options on iShares MSCI
Mexico Index Fund; and 55648 (April 19, 2007), 72 FR 20902 (April
26, 2007) (SR-AMEX-2007-09) (approval order to list and trade
options on Vanguard Emerging Markets ETF). See also Securities
Exchange Act Release Nos. 50189 (August 12, 2004), 69 FR 51723
(August 20, 2004) (SR-AMEX-2001-05) (approving the listing and
trading of certain Vanguard International Equity Index Funds); and
44700 (August 14, 2001), 66 FR 43927 (August 21, 2001) (SR-2001-34)
(approving the listing and trading of series of the iShares Trust
based on foreign stock indexes).
\28\ 17 CFR 240.19b-4(e).
\29\ Id.
\30\ 15 U.S.C. 78s(b)(2).
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2. Statutory Basis
The Exchange believes that its proposed rule change is consistent
with Section 6(b) of the Act,\31\ in general, and furthers the
objectives of Section 6(b)(5) of the Act \32\ in particular, in that it
is designed to promote just and equitable principles of trade, to
remove impediments to and perfect the mechanisms 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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\31\ 15 U.S.C. 78f(b).
\32\ 15 U.S.C. 78f(b)(5).
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The Exchange believes the proposal will remove impediments to and
perfect the mechanism of a free and open market and a national market
system because it would allow the Exchange to immediately list and
trade options on Commodity-Based Trust Shares, provided the initial
listing criteria has been met, without requiring additional approvals
from the Commission.\33\
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\33\ As noted herein, the Exchange believes this proposal is
consistent with the OCC's determination that, based on a staff
advisory from the CFTC, the ``it no longer needs to seek product-by-
product exemptive relief from the CFTC to clear spot commodity-based
ETF products.'' See supra note 5.
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Commodity-Based Trust Shares are securities approved for trading by
the Commission. The Exchange believes that allowing options on
qualifying Commodity-Based Trust Shares soon after the listing of such
underlying security in the primary market will benefit investors and
the public interest as it will afford market participants the
opportunity to hedge their positions in the underlying ETF in a timely
manner. Given the potential to reduce the time to market for options on
Commodity-Based Trust Shares, the proposed rule change will also reduce
the burdens on issuers and other market participants, while also
promoting competition among options exchanges to the benefit of the
investing public.
This proposal will enable the listing of options on Commodity-Based
Trust Shares in the same manner as all other securities listed and
traded on the Exchange. The Exchange notes that most ETFs are eligible
for options trading without the need for additional approvals, provided
the ETFs meet the initial listing criteria. Accordingly, the proposed
rule change would align the treatment of Commodity-Based Trust Shares
with other ETFs for purposes of options trading, which would add
internal consistency to Exchange rules. The Exchange believes that the
proposed rule change will facilitate the listing and trading of options
on additional ETFs that will enhance competition among market
participants, to the benefit of investors and the marketplace.
Like options on any other securities, options on Commodity-Based
Trust Shares will provide investors with the ability to hedge exposure
to the underlying security. The Exchange believes that offering options
on Commodity-Based Trust Shares 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 a
commodity. Additionally, the Exchange's offering of options on
Commodity-Based Trust Shares will provide investors with the ability to
transact in such options in a listed market environment as opposed to
in the unregulated OTC 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. As noted
herein, the Exchange already lists options on other commodity-based
ETFs,\34\ which are trusts structured in substantially the same manner
as Commodity-Based Trust Shares. The Exchange has not identified any
issues with the continued listing and trading of options on Commodity-
Based Trust Shares.
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\34\ See Rule 5.3-O(g)(iv), (v), (vii)-(ix) and Commentary .01.
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The Exchange also believes 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. Options on
Commodity-Based Trust Shares must satisfy the initial listing standards
and continued listing standards currently in the Exchange Rules
applicable to options on all ETFs, including ETFs that hold other
commodities already deemed appropriate for options trading on the
Exchange.\35\ Options on Commodity-Based Trust Shares will trade in the
same manner as any other ETF options--the same Exchange Rules that
currently govern the listing and trading of options, including
permissible expirations, strike prices, minimum increments, and margin
requirements, will govern the listing and trading of options on
Commodity-Based Trust Shares in the same manner.
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\35\ See id.
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The Exchange believes the proposed rule change will result in
increased competition as other exchanges will likely adopt an identical
rule to the one
[[Page 12381]]
proposed by the Exchange that would allow the listing and trading of
options on Commodity-Based Trust Shares that are approved for trading
on those other markets.\36\ Multiple listing of ETFs, options and other
securities and competition are some of the central features of the
national market system. The Exchange believes that the proposal would
encourage a more open market and national market system based on
competition and multiple listing.
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\36\ See supra note 3.
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The Exchange represents that it has the necessary systems capacity
to support the listing and trading of options on Commodity-Based Trust
Shares as the Exchange lists these products today, except that it
requires additional approvals prior to listing. 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 of options on Commodity-Based Trust Shares.
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. To the contrary, the
Exchange believes that the proposal is pro-competitive and is a
competitive response to the Exchange's inability to list options on
Commodity-Based Trust Shares without submitting a separate proposed
rule change. The Exchange believes the proposed rule change will result
in additional investment options and opportunities to achieve the
investment objectives of market participants seeking efficient trading
and hedging vehicles, to the benefit of investors, market participants,
and the marketplace in general. Competition is one of the principal
features of the national market system. The Exchange believes that this
proposal will expand competitive opportunities to list and trade
products on the Exchange as noted.
Intramarket Competition: The Exchange does not believe the proposal
will impose any burden on intra-market competition that is not
necessary or appropriate in furtherance of the purposes of the Act
because Commodity-Based Trust Shares, like any other ETF, would have to
satisfy the Exchange's initial listing standards to be eligible for
options trading. Additionally, the proposed rule change would apply to
all market participants in the same manner as options on Commodity-
Based Trust Shares will be equally available to all market participants
who wish to trade such options.
Intermarket Competition: The Exchange does not believe the proposal
will impose any burden on inter-market competition that is not
necessary or appropriate in furtherance of the purposes of the Act, as
nothing prevents the other options exchanges from proposing similar
rules to list and trade options on Commodity-Based Trust Shares. As
noted herein, ISE has submitted a proposal to adopt an identical rule
to allow ISE list and trade options on Commodity-Based Trust Shares
without submitting a separate proposed rule change.\37\
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\37\ See supra note 3.
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Furthermore, the Exchange notes that listing and trading options on
a Commodity-Based Trust Share 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 in a timely manner.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to 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 self-regulatory organization consents, the Commission will:
(A) by order approve or disapprove the 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
<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#1b696e777e36787476767e756f685b687e78357c746d"><span class="__cf_email__" data-cfemail="bccec9d0d991dfd3d1d1d9d2c8cffccfd9df92dbd3ca">[email protected]</span></a>. Please include
file number SR-NYSEARCA-2025-16 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-2025-16. 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-2025-16 and should
be submitted on or before April 7, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\38\
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\38\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-04158 Filed 3-14-25; 8:45 am]
BILLING CODE 8011-01-P
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</html>Indexed from Federal Register on March 17, 2025.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.