Notice2025-06503
Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Rules To Allow the Exchange To List Options on the iShares Ethereum Trust, the Fidelity Ethereum Fund, the Bitwise Ethereum ETF, the Grayscale Ethereum Trust, and the Grayscale Ethereum Mini Trust
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 17, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 73 (Thursday, April 17, 2025)</title>
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[Federal Register Volume 90, Number 73 (Thursday, April 17, 2025)]
[Notices]
[Pages 16418-16420]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-06503]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-102825; File No. SR-Phlx-2025-18]
Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing
and Immediate Effectiveness of a Proposed Rule Change To Amend Its
Rules To Allow the Exchange To List Options on the iShares Ethereum
Trust, the Fidelity Ethereum Fund, the Bitwise Ethereum ETF, the
Grayscale Ethereum Trust, and the Grayscale Ethereum Mini Trust
April 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
April 10, 2025, Nasdaq PHLX LLC (``Phlx'' or ``Exchange'') filed with
the Securities and Exchange Commission (``Commission'') the proposed
rule change as described in Items I and II below, which Items have been
prepared by the Exchange. The Exchange filed the proposal as a ``non-
controversial'' proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-4(f)(6) thereunder.\4\ 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.
\3\ 15 U.S.C. 78s(b)(3)(A)(iii).
\4\ 17 CFR 240.19b-4(f)(6).
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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 Options 9, Section 13, Position
Limits, for options on the iShares Ethereum Trust, the Fidelity
Ethereum Fund, the Bitwise Ethereum ETF, the Grayscale Ethereum Trust,
and the Grayscale Ethereum Mini Trust, (collectively ``Ether Trusts'').
Additionally, the Exchange proposes to amend Options 8, Section 34,
FLEX Trading, to except FLEX Options on these ether trusts from trading
as a FLEX option contract.
The text of the proposed rule change is available on the Exchange's
website at <a href="https://listingcenter.nasdaq.com/rulebook/phlx/rulefilings">https://listingcenter.nasdaq.com/rulebook/phlx/rulefilings</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 Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend Options 9, Section 13, Position
Limits, for options on the iShares Ethereum Trust, the Fidelity
Ethereum Fund, the Bitwise Ethereum ETF, the Grayscale Ethereum Trust,
and the Grayscale Ethereum Mini Trust, (collectively
[[Page 16419]]
``Ether Trusts''). Additionally, the Exchange proposes to amend Options
8, Section 34, FLEX Trading, to except FLEX Options on these Ether
Trusts from trading as a FLEX option contract.
Options 9, Section 13
Recently, Nasdaq ISE, LLC (``ISE'') received approval to list
options on iShares Ethereum Trust, Cboe Exchange, Inc. (``Cboe'')
received approval to list options on the Fidelity Ethereum Fund, and
NYSE American LLC (``NYSE American'') received approval to list options
on the Bitwise Ethereum ETF, the Grayscale Ethereum Trust, and the
Grayscale Ethereum Mini Trust (collectively, ``Ether Trusts'').\5\ ISE
filed a rule change to list and trade options on the Fidelity Ethereum
Fund, the Bitwise Ethereum ETF, the Grayscale Ethereum Trust, and the
Grayscale Ethereum Mini Trust.\6\
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\5\ See Securities Exchange Act Release Nos. 102798 (April 9,
2025) (SR-ISE-2024-35) (not yet noticed); 102797 (April 9, 2025)
(SR-Cboe 2024-036) (not yet published); 102799 (April 9, 2025), (not
yet published) (SR-NYSEAMER-2024-45).
\6\ See SR-ISE-2024-11[sic] (not yet noticed).
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Phlx's Options 4 Rules were amended by the ISE rule changes to list
options on the Ether Trusts, as those Rules are incorporated by
reference to Phlx's Options 4 Rules, so ISE has the ability to list the
options on the Ether Trusts. The Ether Approval Orders stated that the
position and exercise limits for each of the Ether Trusts shall be
25,000 contracts. At this time, the Exchange proposes to amend Phlx
Option 9, Section 13 to note that options on each Ether Trust shall
have position and exercise limits of 25,000 contracts to mirror the
Ether Approval Orders.\7\ Phlx Options 9, Section 15(a) provides that
the exercise limits shall be determined in the manner described in
Options 9, Section 13, therefore the exercise limits would also be
25,000 contracts for each of the Ether Trusts.
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\7\ The Exchange notes that the exercise limit for an equity
option is the same as the position limit established in Options 9,
Section 13 for that equity options. See Options 9, Section 15.
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Options 8, Section 34
Today, all options series listed on Phlx may trade as a FLEX Order
on Phlx's trading floor.\8\ At this time, the Exchange proposes to note
within Options 8, Section 34(a) that it will not authorize for trading
a FLEX Option on each of the Ether Trusts. The Exchange proposes this
amendment in light of the position and exercise limits of 25,000
contracts that were set for each Ether Trust in the Ether Approval
Orders. The Exchange proposes this amendment in light of the position
and exercise limits of 25,000 contracts that were set for each Ether
Trust in the Ether Approval Order. Permitting trading a FLEX Option on
each Ether Trust would otherwise establish different position and
exercise limits than those set by the Ether Approval Order.
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\8\ Phlx Options 8, Section 34 rule text was previously amended
by two rule changes which are effective, but not yet operative. See
Securities Exchange Act Release Nos. 97658 (June 7, 2023), 88 FR
38562 (June 13, 2023) (SR-Phlx-2023-22); and 100321 (June 12, 2024),
89 FR 51580 (June 18, 2024) (SR-Phlx-2024-24).
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2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\9\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\10\ in particular, in that it is designed 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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\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(5).
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The Exchange's proposal to amend Options 9, Section 13, Position
Limits, to provide that the position limits (and exercise limits) for
each of the Ether Trusts shall be 25,000 contracts is consistent with
the Act as it will conform Phlx's options position limits (and exercise
limits) with ISE's options position and exercise limits for the Ether
Trusts in order that there would be the same position and exercise
limits on Phlx and ISE.\11\ Phlx Options 9, Section 15(a) provides that
the exercise limits shall be determined in the manner described in
Options 9, Section 13, therefore the exercise limits would also be
25,000 contracts and also consistent with ISE's options position and
exercise limits for the Ether Trusts.
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\11\ The Exchange believes that other exchanges will adopt
position and exercise limits of 25,000 contracts for each of the
Ether Trusts. All Nasdaq affiliated markets are filing to adopt a
25,000 contract position and exercise limit for options on the Ether
Trusts.
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The Exchange's proposal to amend Options 8, Section 34 to note that
it will not authorize for trading a FLEX Option on each of the Ether
Trusts is consistent with the spirit of the Ether Approval Orders that
limited the position and exercise limits for the Ether Trusts to 25,000
contracts. The proposal will protect investors and the general public
because without this prohibition, trading a FLEX Option on the Ether
Trusts, would otherwise establish different position and exercise
limits than those set by the Ether Approval Orders.
B. Self-Regulatory Organization's Statement on Burden on Competition
The proposed rule change does not impose any burden on competition
that is not necessary or appropriate in furtherance of the purposes of
the Act.
Amending Options 9, Section 13 to provide that the position and
exercise limits for options on each of the Ether Trusts shall be 25,000
contracts does not impose an undue burden on competition as the
position and exercise limits will apply to all trading for options on
the Ether Trusts trading on the Exchange as well as those trading on
other exchanges that file a similar proposal.\12\
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\12\ All Nasdaq affiliated markets are filing to adopt a 25,000
contract position and exercise limit for options on the Ether
Trusts.
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The Exchange's proposal to note that it will not authorize for
trading a FLEX Option on any of the Ether Trusts does not impose an
undue burden on competition as no Phlx member will be able to transact
a FLEX Option on any of Ether Trusts.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A) of the Act \13\ and Rule 19b-4(f)(6) thereunder.\14\
Because the foregoing proposed rule change does not: (i) significantly
affect the protection of investors or the public interest; (ii) impose
any significant burden on competition; and (iii) become operative for
30 days from the date on which it was filed, or such shorter time as
the Commission may designate, it has become effective pursuant to
Section 19(b)(3)(A)(iii) of the Act \15\ and Rule 19b-4(f)(6) \16\
thereunder.
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\13\ 15 U.S.C. 78s(b)(3)(A)(iii).
\14\ 17 CFR 240.19b-4(f)(6).
\15\ 15 U.S.C. 78s(b)(3)(A)(iii).
\16\ 17 CFR 240.19b-4(f)(6).
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A proposed rule change filed under Rule 19b-4(f)(6) \17\ under the
Act does not normally become operative prior to 30 days after the date
of the filing. However, pursuant to Rule 19b-4(f)(6)(iii),\18\ the
Commission may designate a shorter time if such action is consistent
with the protection of investors and the public interest. The Exchange
has requested that the
[[Page 16420]]
Commission waive the 30-day operative delay so that the proposal may
become operative immediately upon filing. The Commission previously
approved the listing of options on iShares Ethereum Trust, the Fidelity
Ethereum Fund, the Bitwise Ethereum ETF, the Grayscale Ethereum Trust,
and the Grayscale Ethereum Mini Trust.\19\ As noted above, Phlx's
Options 4 Rules were amended by an ISE rule change \20\ as those Rules
are incorporated by reference to ISE's Options 4 Rules, so Phlx has the
ability to list the options on the Ether Trusts. This proposal
establishes position and exercise limits for options on the Ether
Trusts. The Commission believes that waiver of the operative delay
could benefit investors by assuring that trading in Ether Trust options
are subject to the same position and exercise limits in place on other
exchanges. Therefore, the Commission believes that waiver of the 30-day
operative delay is consistent with the protection of investors and the
public interest. Accordingly, the Commission hereby waives the 30-day
operative delay and designates the proposed rule change as operative
upon filing.\21\
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\17\ 17 CFR 240.19b-4(f)(6).
\18\ 17 CFR 240.19b-4(f)(6)(iii).
\19\ See Securities Exchange Act Release No. 102797 (April 9,
2025), (SR-Cboe-2024-036) (Notice of Filing of Amendment No. 1 and
Order Granting Accelerated Approval of a Proposed Rule Change, as
Modified by Amendment No. 1, to Permit the Listing and Trading of
Options on Shares of the Fidelity Ethereum Fund) See also Securities
Exchange Act Release No. 102798 (April 9, 2025), (SR-ISE-2024-35)
(Notice of Filing of Amendment No. 1 and Order Granting Accelerated
Approval of a Proposed Rule Change, as Modified by Amendment No. 1,
to Permit the Listing and Trading of Options on the iShares Ethereum
Trust). See also Securities Exchange Act Release No. 102799 (April
9, 2025), (SR-NYSEAMER-2024-45) (Notice of Filing of Amendment No. 2
and Order Granting Accelerated Approval of a Proposed Rule Change,
as Modified by Amendment No. 2, to Amend Exchange Rule 915 To Permit
the Listing and Trading of Options on the Bitwise Ethereum ETF, the
Grayscale Ethereum Trust, and the Grayscale Ethereum Mini Trust).
\20\ See SR-ISE-2025-11.
\21\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission will institute proceedings to
determine whether the proposed rule change should be approved or
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#81f3f4ede4ace2eeecece4eff5f2c1f2e4e2afe6eef7"><span class="__cf_email__" data-cfemail="81f3f4ede4ace2eeecece4eff5f2c1f2e4e2afe6eef7">[email protected]</span></a>. Please include
file number SR-Phlx-2025-18 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-Phlx-2025-18. 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-Phlx-2025-18 and should be
submitted on or before May 8, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\22\
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\22\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-06503 Filed 4-16-25; 8:45 am]
BILLING CODE 8011-01-P
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