Notice2025-06765
Self-Regulatory Organizations; Miami International Securities Exchange, LLC; Notice of Filing of a Proposed Rule Change To Amend Exchange Rule 402, Criteria for Underlying Securities, Exchange Rule 307, Position Limits, and Exchange Rule 309, Exercise Limits To Allow the Exchange To List and Trade Options on the VanEck Bitcoin 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 21, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
<html>
<head>
<title>Federal Register, Volume 90 Issue 75 (Monday, April 21, 2025)</title>
</head>
<body><pre>
[Federal Register Volume 90, Number 75 (Monday, April 21, 2025)]
[Notices]
[Pages 16722-16731]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-06765]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-102863; File No. SR-MIAX-2025-18]
Self-Regulatory Organizations; Miami International Securities
Exchange, LLC; Notice of Filing of a Proposed Rule Change To Amend
Exchange Rule 402, Criteria for Underlying Securities, Exchange Rule
307, Position Limits, and Exchange Rule 309, Exercise Limits To Allow
the Exchange To List and Trade Options on the VanEck Bitcoin Trust
April 15, 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 April 1, 2025, Miami International Securities Exchange, LLC
(``MIAX'' or ``Exchange'') filed with the Securities and Exchange
Commission (``Commission'') a proposed rule change as described in
Items I, II, and III below, which Items have been prepared by the
Exchange. The Commission is publishing this notice to solicit comments
on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
[[Page 16723]]
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend Exchange Rule 402, Criteria for
Underlying Securities, Exchange Rule 307, Position Limits, and Exchange
Rule 309, Exercise Limits, to list and trade options on the VanEck
Bitcoin Trust (the ``Trust'').
The text of the proposed rule change is available on the Exchange's
website at <a href="https://www.miaxglobal.com/markets/us-options/all-options-exchanges/rule-filings">https://www.miaxglobal.com/markets/us-options/all-options-exchanges/rule-filings</a>, at MIAX's principal office, 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 Exchange Rule 402, Criteria for
Underlying Securities, Exchange Rule 307, Position Limits, and Exchange
Rule 309, Exercise Limits,\3\ to allow the Exchange to list and trade
options on the Trust, designating it as appropriate for options trading
on the Exchange.\4\ This is a competitive filing based on a similar
proposal submitted by Cboe Exchange, Inc. (``Cboe''), which is
currently pending with the Securities and Exchange Commission (the
``Commission'').\5\
---------------------------------------------------------------------------
\3\ The Exchange notes that its affiliate options exchanges,
MIAX PEARL, LLC (``MIAX Pearl'') and MIAX Sapphire, LLC (``MIAX
Sapphire''), submitted (or will submit) substantively similar
proposals. The Exchange notes that all the rules of Chapter III of
MIAX, including Exchange Rules 307 and 309, are incorporated by
reference into the MIAX Pearl and MIAX Sapphire rulebooks. The
Exchange also notes that all of the rules of Chapter III of MIAX,
including Exchange Rules 307 and 309, and the rules of Chapter IV of
MIAX, including Exchange Rule 402, are incorporated by reference
into the MIAX Emerald, LLC (``MIAX Emerald'') rulebook.
\4\ See Securities Exchange Act Release No. 99306 (January 10,
2024), 89 FR 3008 (January 17, 2024) (SR-CboeBZX-2023-040) (Order
Granting Accelerated Approval of Proposed Rule Changes, as Modified
by Amendments Thereto, to List and Trade Bitcoin-Based Commodity-
Based Trust Shares and Trust Units) (``Bitcoin ETP Approval
Order'').
\5\ See Securities Exchange Act Release No. 102742 (March 28,
2025) (SR-CBOE-2025-017) (Self-Regulatory Organizations; Cboe
Exchange, Inc.; Notice of Filing of a Proposed Rule Change, as
Modified by Amendment No. 3, to Amend Rules 4.3, 4.20, and 8.30, to
Allow the Exchange to List and Trade Options on the VanEck Bitcoin
Trust)(``Cboe Proposal'').
---------------------------------------------------------------------------
Current Exchange Rule 402(i)(4) provides that, subject to certain
other criteria set forth in that Rule, securities deemed appropriate
for options trading include shares or other securities (``Exchange
Traded Fund Shares'' or ``ETFs'') that represent certain types of
interests,\6\ including interests in certain specific trusts that hold
financial instruments, money market instruments, precious metals (which
are deemed commodities).
---------------------------------------------------------------------------
\6\ See Exchange Rule 402(i), which permits options trading on
exchange-traded funds that: (1) represent interests in registered
investment companies (or series thereof) organized as open-end
management investment companies, unit investment trusts or similar
entities that hold portfolios of securities and/or financial
instruments (``Funds''), including, but not limited to, stock index
futures contracts, options on futures, 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'') comprising
or otherwise based on or representing investments in broad-based
indexes or portfolios of securities and/or Financial Instruments and
Money Market Instruments (or that hold securities in one or more
other registered investment companies that themselves hold such
portfolios of securities and/or Financial Instruments and Money
Market Instruments); (2) represent interests in a trust or similar
entity that holds a specified non-U.S. currency or currencies
deposited with the trust which when aggregated in some specified
minimum number may be surrendered to the trust or similar entity by
the beneficial owner to receive the specified non-U.S. currency or
currencies and pays the beneficial owner interest and other
distributions on the deposited non-U.S. currency or currencies, if
any, declared and paid by the trust (``Currency Trust Shares''); (3)
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
ETFs''); (4) are issued by the SPDR[supreg] Gold Trust, the iShares
COMEX Gold Trust, the iShares Silver Trust, the Aberdeen Standard
Silver ETF Trust, the Aberdeen Standard Physical Gold Trust, the
Aberdeen Standard Palladium ETF Trust, the Aberdeen Standard
Platinum ETF Trust, the Goldman Sachs Physical Gold ETF, the Sprott
Physical Gold Trust, the iShares Bitcoin Trust, the Grayscale
Bitcoin Trust, the Grayscale Bitcoin Mini Trust, the Bitwise Bitcoin
ETF, the Fidelity Wise Origin Bitcoin Fund, or the ARK 21 Shares
Bitcoin ETF; or (5) represent an interest in a registered investment
company (``Investment Company'') organized as an open-end management
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''); provided that all
of the conditions listed in (5)(i) and 5(ii) are met.
---------------------------------------------------------------------------
The Trust is a Bitcoin-backed commodity ETF structured as a trust.
Similar to any ETF currently deemed appropriate for options trading
under Exchange Rule 402(i)(4), the investment objective of the Trust is
for its shares to reflect the performance of Bitcoin (less the expenses
of the Trust's operations), offering investors an opportunity to gain
exposure to Bitcoin without the complexities of Bitcoin delivery. As is
the case for ETFs currently deemed appropriate for options trading, the
Trust's shares represent units of fractional undivided beneficial
interest in the trust, the assets of which consist principally of
Bitcoin and are designed to track Bitcoin or the performance of the
price of Bitcoin and offer access to the Bitcoin market.\7\ The Trust
provides investors with cost-efficient alternatives that allow a level
of participation in the Bitcoin market through the securities market.
---------------------------------------------------------------------------
\7\ The Trust may include minimal cash and cash equivalents
(i.e., short-term instruments with maturities of less than three
months).
---------------------------------------------------------------------------
The Exchange believes the Trust satisfies the Exchange's initial
listing standards for ETFs on which the Exchange may list options.
Specifically, the Trust satisfies the initial listing standards set
forth in Exchange Rule 402(a), as is the case for other ETFs on which
the Exchange lists options (including trusts that hold commodities).
Exchange Rule 402(i)(5)(i) requires that the ETFs must either (1) meet
the criteria and standards set forth in Exchange Rule 402(a) or
402(b),\8\ 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 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
[[Page 16724]]
and maintenance of collateral consisting of cash or cash equivalents
satisfactory to the issuer, as provided in the respective prospectus.
The Trust satisfies Exchange Rule 402(i)(5)(i), as it is subject to
this creation and redemption process.
---------------------------------------------------------------------------
\8\ Subparagraphs (a) and (b) of Exchange Rule 402 provide for
guidelines to be used by the Exchange when evaluating potential
underlying securities for Exchange option transactions.
---------------------------------------------------------------------------
While not required by the Rules for purposes of options listings,
the Exchange believes the Trust satisfies the criteria and guidelines
set forth Exchange Rule 402(b). Pursuant to Rule 402(a), a security
(which includes an ETF) on which options may be listed and traded on
the Exchange must be 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.\9\ The Trust is an NMS Stock as
defined in Rule 600 of Regulation NMS under the Act.\10\ The Exchange
believes the VanEck Bitcoin Trust is characterized by a substantial
number of outstanding shares that are widely held and actively traded.
---------------------------------------------------------------------------
\9\ The criteria and guidelines for a security to be considered
widely held and actively traded are set forth in Exchange Rule
402(b), subject to exceptions.
\10\ An ``NMS stock'' means any NMS security other than an
option, and an ``NMS security'' means any security or class of
securities for which transaction reports are collected, processed,
and made available pursuant to an effective transaction reporting
plan (or an effective national market system plan for reporting
transaction in listed options). See 17 CFR 242.600(b)(64)
(definition of ``NMS security'') and (65) (definition of ``NMS
stock'').
---------------------------------------------------------------------------
As of March 5, 2025, based on the data presented in the Cboe
Proposal, the Trust had the following number of shares outstanding:
------------------------------------------------------------------------
Shares
Bitcoin fund outstanding
------------------------------------------------------------------------
VanEck Bitcoin Trust................................... 49,900,000
------------------------------------------------------------------------
The Trust had significantly more than 7,000,000 shares outstanding
(approximately 7 times that amount), 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 402(b)(1). The
Exchange believes this demonstrates that the Trust is characterized by
a substantial number of outstanding shares.
Further, the below table presented in the Cboe Proposal contains
information regarding the number of beneficial holders of the Trust as
of the specified dates:
------------------------------------------------------------------------
Beneficial
Bitcoin fund holders Date
------------------------------------------------------------------------
VanEck Bitcoin Trust.......................... 32,469 1/31/25
------------------------------------------------------------------------
As this table shows, the Trust has significantly more than 2,000
beneficial holders (approximately 16 times more), which is the minimum
number of holders the Exchange generally requires for corporate stock
in order to list options on that stock pursuant to Exchange Rule
402(b)(2). Therefore, the Exchange believes the shares of the Trust are
widely held.
The Exchange also believes the shares of the Trust are actively
traded. As of March 5, 2025, based on the data presented in the Cboe
Proposal, the total trading volume (by shares) for the trust for the
six-month period of September 5, 2024, through March 5, 2025, and the
approximate average daily volume (``ADV'') (in shares and notional)
over the 30-day period of September 5, 2024, through March 5, 2025, for
the Trust was as follows:
----------------------------------------------------------------------------------------------------------------
6-month trading 30-day ADV 30-day ADV
Bitcoin fund volume (shares) (shares) (notional $)
----------------------------------------------------------------------------------------------------------------
VanEck Bitcoin Trust................................ 133,275,448 794,677 39,163,513.72
----------------------------------------------------------------------------------------------------------------
As demonstrated above, as of March 5, 2025, based on the data
presented in the Cboe Proposal, the six-month trading volume for the
Trust as of that date was substantially higher than 2,400,000 shares
(approximately 55 times that amount), which is the minimum 12-month
volume the Exchange generally requires for an underlying security in
order to list options on that security as set forth in Exchange Rule
402(b)(4). The Exchange believes this data demonstrates the Trust is
characterized as having shares that are actively traded.
Options on the Trust will be subject to the Exchange's continued
listing standards set forth in Exchange Rule 403(g), for ETFs deemed
appropriate for options trading pursuant to Exchange Rule 402(i).
Specifically, Exchange Rule 403(g) provides that ETFs that were
initially approved for options trading pursuant to Exchange Rule 402(i)
shall be deemed not to meet the requirements for continued approval,
and the Exchange shall not open for trading any additional series of
option contracts of the class covering that such ETFs, if the ETFs
cease to be an NMS stock or the ETFs, are delisted from trading
pursuant to Exchange Rule 403(b)(4), are halted or suspended from
trading in their primary market. Additionally, options on ETFs may be
subject to the suspension of opening transactions in any of the
following circumstances: (1) in the case of options covering ETFs
approved for trading under Exchange Rule 402(i)(5)(i)(A), in accordance
with the terms of paragraphs (b)(1), (2), and (3) of Exchange Rule 403;
(2) in the case of options covering ETFs approved for trading under
Exchange Rule 402(i)(5)(i)(B)(as is the case for the Trust), following
the initial twelve-month period beginning upon the commencement of
trading in the ETFs on a national securities exchange and are defined
as an NMS stock, there are fewer than 50 record and/or beneficial
holders of such ETFs 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 ETFs 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.
Options on the Trust will be physically settled contracts with
American-style exercise.\11\ Consistent with current Exchange Rule 404,
which governs the opening of options series on a specific underlying
security (including ETFs), the Exchange will open at least
[[Page 16725]]
one expiration month for options on the Trust \12\ at the commencement
of trading on the Exchange and may also list series of options on the
Trust for trading on a weekly,\13\ monthly,\14\ or quarterly \15\
basis. The Exchange may also list long-term equity option series
(``LEAPS'') that expire from 12 to 39 months from the time they are
listed.\16\
---------------------------------------------------------------------------
\11\ See Exchange Rule 401, which provides that the rights and
obligations of holders and writers are set forth in the Rules of the
Options Clearing Corporation (``OCC''); see also OCC Rules, Chapters
VIII (which governs exercise and assignment) and Chapter IX (which
governs the discharge of delivery and payment obligations arising
out of the exercise of physically settled stock option contracts).
\12\ See Exchange Rule 404(b). The monthly expirations are
subject to certain listing criteria for underlying securities
described within Exchange Rule 404 and its Interpretations and
Policies. 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 Exchange Rule 404(c),
additional series of options of the same class may be opened for
trading on the Exchange when the Exchange deems it necessary to
maintain an orderly market, to meet customer demand or when the
market price of the underlying stock moves more than five strike
prices from the initial exercise price or prices. Pursuant to
Exchange Rule 404(e), 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.
\13\ See Exchange Rule 404, Interpretations and Policies .02.
\14\ See Exchange Rule 404, Interpretations and Policies .13.
\15\ See Exchange Rule 404, Interpretations and Policies .03.
\16\ See Exchange Rule 406.
---------------------------------------------------------------------------
Pursuant to Exchange Rule 404, Interpretations and Policies .06,
which governs strike prices of series of options on ETFs, the interval
between strike prices of series of options on ETFs approved for options
trading pursuant to Exchange Rule 402(i) shall be fixed at a price per
share which is reasonably close to the price per share at which the
underlying security is traded in the primary market at or about the
same time such series of options is first open for trading on the
Exchange, or at such intervals as may have been established on another
options exchange prior to the initiation of trading on the Exchange.
With respect to the Short Term Options Series or Weekly Program, during
the month prior to expiration of an option class that is selected for
the Short Term Option Series Program, the strike price intervals for
the related non-Short Term Option (``Related non-Short Term Option'')
shall be the same as the strike price intervals for the Short Term
Option.\17\ Specifically, the Exchange may open for trading Short Term
Option Series at strike price intervals of (i) $0.50 or greater where
the strike price is less than $100, and $1 or greater where the strike
price is between $100 and $150 for all option classes that participate
in the Short Term Options Series Program; (ii) $0.50 for option classes
that trade in one dollar increments and are in the Short Term Option
Series Program; or (iii) $2.50 or greater where the strike price is
above $150.\18\ Additionally, the Exchange may list series of options
pursuant to the $1 Strike Price Interval Program,\19\ the $0.50 Strike
Program,\20\ and the $2.50 Strike Price Program.\21\ Pursuant to
Exchange Rule 510, where the price of a series of options for a Bitcoin
Fund 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 \22\
consistent with the minimum increments for options on other ETFs listed
on the Exchange. Any and all new series of Trust options that the
Exchange lists will be consistent and comply with the expirations,
strike prices, and minimum increments set forth in Rules 404 and 510,
as applicable.
---------------------------------------------------------------------------
\17\ See Exchange Rule 404, Interpretations and Policies .02(e).
\18\ Id.
\19\ See Exchange Rule 404, Interpretation and Policy .01.
\20\ See Exchange Rule 404, Interpretation and Policy .04.
\21\ See Exchange Rule 404(f).
\22\ See Exchange Rule 510.
---------------------------------------------------------------------------
Trust options will trade in the same manner as any other ETF
options on the Exchange. The Exchange Rules that currently apply to the
listing and trading of all ETFs options on the Exchange, including, for
example, Exchange Rules that govern listing criteria, expirations,
exercise prices, minimum increments, margin requirements, customer
accounts and trading halt procedures will apply to the listing and
trading of the Trust options 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, including the precious-metal backed commodity ETFs
already deemed appropriate for options trading on the Exchange pursuant
to current Exchange Rule 402(i)(4).
The Exchange also proposes to amend Exchange Rules 307 and 309.
Specifically, the Exchange proposes to amend Interpretations and
Policies .01 to Exchange Rule 307 to provide a position limit of 25,000
same side option contracts for Trust option. Additionally, pursuant to
the proposed change to Interpretations and Policies .01 to Exchange
Rule 309, the exercise limits for options on the Trust will be
equivalent to this proposed position limit.
In considering the appropriate position and exercise limits for the
Trust options, the Exchange reviewed the data presented by Cboe in its
proposal. The Exchange determined these proposed position and exercise
limits considering, among other things, the approximate six-month ADV
and outstanding shares of the Trust (which as discussed above
demonstrate that the Trust is widely held and actively traded and thus
justify these conservatively proposed position limits), based on the
data presented on the Cboe Proposal, along with market capitalization
(as of March 5, 2025):
----------------------------------------------------------------------------------------------------------------
Six-month ADV Market
Underlying bitcoin fund (shares) Outstanding shares capitalization ($)
----------------------------------------------------------------------------------------------------------------
VanEck Bitcoin Trust................................ 1,074,802 49,900,000 1,271,859,416
----------------------------------------------------------------------------------------------------------------
[[Page 16726]]
The Exchange then compared the number of outstanding shares of the
Trust to those of other ETFs. The following table presented in the Cboe
Proposal provides the approximate average position (and exercise limit)
of ETF options with similar outstanding shares (as of March 5, 2025),
compared to the proposed position and exercise limit for the Trust
options:
------------------------------------------------------------------------
Average limit
of other ETF Proposed limit
Underlying bitcoin fund options (contracts)
(contracts)
------------------------------------------------------------------------
VanEck Bitcoin Trust.................. \23\ 225,000 25,000
------------------------------------------------------------------------
The Exhange considered current position and exercise limits of
options on ETFs with outstanding shares comparable to those of the
Trust, with the proposed limit significantly lower (between two and ten
times lower) than the average limits of the options on the other ETFs.
As discussed above, the Trust is actively held and widely traded (all
statistics as of March 5, 2025) because it: (1) had significantly more
than 7,000,000 shares outstanding, which is the minimum number of
shares of a corporate stock that the Exchange generally requires to
list options on that stock pursuant to Exchange Rule 402(b)(1); (2) had
significantly more than 2,000 beneficial holders, which is the minimum
number of holders the Exchange generally requires for corporate stock
in order to list options on that stock pursuant to Exchange Rule
402(b)(2); and (3) had a six-month trading volume substantially higher
than 2,400,000 shares, which is the minimum 12-month volume the
Exchange generally requires for a security in order to list options on
that security as set forth in Exchange Rule 402(b)(4).
---------------------------------------------------------------------------
\23\ Over 90% of the ETFs used for comparison have a limit of at
least 200,000, and more than 75% have a limit of 250,000.
---------------------------------------------------------------------------
With respect to outstanding shares, if a market participant held
the maximum number of positions possible pursuant to the proposed
position and exercise limits, the equivalent shares represented by the
proposed position/exercise limit would represent the following
approximate percentage of current outstanding shares:
----------------------------------------------------------------------------------------------------------------
Proposed position/
Underlying bitcoin fund exercise limit (in Outstanding shares Percentage of
equivalent shares) outstanding shares
----------------------------------------------------------------------------------------------------------------
VanEck Bitcoin Trust................................ 2,500,000 49,900,000 5.01
----------------------------------------------------------------------------------------------------------------
As this table presented in the Cboe Proposal demonstrates, if a
market participant held the maximum permissible options positions in
Trust options and exercised all of them at the same time, that market
participant would control a small percentage of the outstanding shares
of the Trust.
Exchange Rule 307(d) provides two methods of qualifying for a
position limit tier above 25,000 option contracts. The first method is
based on six-month trading volume in the underlying security, and the
second method is based on slightly lower six-month trading volume and
number of shares outstanding in the underlying security. An underlying
stock or ETF that qualifies for method two based on trading volume and
number of shares outstanding would be required to have the minimum
number of outstanding shares as shown in middle column of the table
below.
The table, presented in the Cboe Proposal, which provides the
equivalent shares of the position limits applicable to equity options,
including ETFs, further represents the percentages of the minimum
number of outstanding shares that an underlying stock or ETF must have
to qualify for that position limit (under the second method described
above), all of which are higher than the percentages for the Trust.
------------------------------------------------------------------------
Minimum Percentage of
Position/exercise limit (in outstanding outstanding
equivalent shares) shares shares
------------------------------------------------------------------------
2,500,000......................... \24\ 6,300,000 40.0
5,000,000......................... 40,000,000 12.5
7,500,000......................... 120,000,000 6.3
20,000,000........................ 240,000,000 8.3
25,000,000........................ 300,000,000 8.3
------------------------------------------------------------------------
The equivalent shares represented by the proposed position and exercise
limits for the Trust as a percentage of outstanding shares of the Trust
is significantly lower than the percentage for the lowest possible
position limit for equity options of 25,000 (under 6% compared to 40%)
and is lower than that percentage for each current position limit
bucket.\25\
---------------------------------------------------------------------------
\24\ This is the minimum number of outstanding shares an
underlying security must have for the Exchange to continue to list
options on that security, so this would be the smallest number of
outstanding shares permissible for any corporate option that would
have a position limit of 25,000 contract. See Exchange Rule
403(b)(1). This rule applies to corporate stock options but not ETF
options, which currently have no requirement regarding outstanding
shares of the underlying ETF for the Exchange to continue listing
options on that ETF. Therefore, there may be ETF options trading for
which the 25,000 contract position limits represents an even larger
percentage of outstanding shares of the underlying ETF than set
forth above.
\25\ As these percentages are based on the minimum number of
outstanding shares an underlying security must have to qualify for
the applicable position limit, these are the highest possible
percentages that would apply to any option subject to that position
and exercise limit.
---------------------------------------------------------------------------
Further, the proposed position and exercise limits for the Trust
option are significantly below the limits that would otherwise apply
pursuant to current Exchange Rule 307. These position and exercise
limits are the lowest position and exercise limits available in the
options industry, are extremely conservative and more than appropriate
given the market capitalization, average daily volume, and high number
of outstanding shares of the Trust.
[[Page 16727]]
All of the above information demonstrates that the proposed
position and exercise limits for the Trust options are more than
reasonable and appropriate. The trading volume, ADV, and outstanding
shares of the Trust demonstrate that the Trust is actively traded and
widely held, and proposed position and exercise limits are well below
those of other ETFs with similar market characteristics. The proposed
position and exercise limits are the lowest position and exercise
limits available for equity options in the industry, are extremely
conservative, and are more than appropriate given the Trust's market
capitalization, ADV, and high number of outstanding shares.
Today, the Exchange has an adequate surveillance program in place
for options. The Exchange intends to apply those same program
procedures to options on the Trust that it applies to the Exchange's
other options products.\26\ The Exchange's market surveillance staff
would have access to the surveillances conducted by its affiliate
exchanges, MIAX Pearl and MIAX Sapphire, with respect to the Trust and
would review activity in the underlying Trust when conducting
surveillances for market abuse or manipulation in the options on the
Trust. Additionally, the Exchange is a member of the Intermarket
Surveillance Group (``ISG'') under the ISG Agreement. ISG members work
together to coordinate surveillance and investigative information
sharing in the stock, options, and futures markets. In addition to
obtaining information from the Exchange's affiliates, the Exchange
would be able to obtain information regarding trading of shares of the
Trust from Cboe and other markets through ISG.
---------------------------------------------------------------------------
\26\ The surveillance program includes surveillance patterns for
price and volume movements as well as patterns for potential
manipulation (e.g., spoofing and marking the close).
---------------------------------------------------------------------------
In addition, the Exchange has a Regulatory Services Agreement with
the Financial Industry Regulatory Authority (``FINRA'') for certain
market surveillance, investigation and examinations functions. Pursuant
to a multi-party 17d-2 joint plan, all options exchanges allocate
amongst themselves and FINRA responsibilities to conduct certain
options-related market surveillance that are common to rules of all
options exchanges.\27\
---------------------------------------------------------------------------
\27\ Section 19(g)(1) of the Act, among other things, requires
every self-regulatory organization (``SRO'') registered as a
national securities exchange or national securities association to
comply with the Act, the rules and regulations thereunder, and the
SRO's own rules, and, absent reasonable justification or excuse,
enforce compliance by its members and persons associated with its
members. See 15 U.S.C. 78q(d)(1) and 17 CFR 240.17d-2. Section
17(d)(1) of the Act allows the Commission to relieve an SRO of
certain responsibilities with respect to members of the SRO who are
also members of another SRO (``common members''). Specifically,
Section 17(d)(1) allows the Commission to relieve an SRO of its
responsibilities to: (i) receive regulatory reports from such
members; (ii) examine such members for compliance with the Act and
the rules and regulations thereunder, and the rules of the SRO; or
(iii) carry out other specified regulatory responsibilities with
respect to such members.
---------------------------------------------------------------------------
The underlying shares of spot bitcoin exchange-traded products
(``ETPs''), including the Trust, are also subject to safeguards related
to addressing market abuse and manipulation. As the Commission stated
in its order approving proposals of several exchanges to list and trade
shares of spot bitcoin-based ETPs:
Each Exchange has a comprehensive surveillance-sharing agreement
with the CME via their common membership in the Intermarket
Surveillance Group. This facilitates the sharing of information that
is available to the CME through its surveillance of its markets,
including its surveillance of the CME bitcoin futures market.\28\
---------------------------------------------------------------------------
\28\ See Bitcoin ETP Approval Order, 89 FR at 3009.
The Exchange states that, given the consistently high correlation
between the CME Bitcoin futures market and the spot bitcoin market, as
confirmed by the Commission through robust correlation analysis, the
Commission was able to conclude that such surveillance sharing
agreements could reasonably be ``expected to assist in surveilling for
fraudulent and manipulative acts and practices in the specific context
of the [Bitcoin ETPs].'' \29\
---------------------------------------------------------------------------
\29\ See Bitcoin ETP Approval Order, 89 FR at 3010-11.
---------------------------------------------------------------------------
In light of surveillance measures related to both options and
futures as well as the Trust,\30\ the Exchange believes that existing
surveillance procedures are designed to deter and detect possible
manipulative behavior which might potentially arise from listing and
trading the proposed options on the Trust. Further, the Exchange will
implement any new surveillance procedures it deems necessary to
effectively monitor the trading of options on the Trust.
---------------------------------------------------------------------------
\30\ See supra note 4.
---------------------------------------------------------------------------
The Exchange has also analyzed its capacity and represents that it
believes the Exchange and Options Price Reporting Authority (``OPRA'')
have the necessary systems capacity to handle the additional traffic
associated with the listing of new series that may result from the
introduction of options on Trust up to the number of expirations
currently permissible under the Rules. The Exchange believes any
additional traffic that may be generated from the introduction of the
Trust options will be manageable.
The Exchange believes that offering options on the Trust will
benefit investors by providing them with an additional, relatively
lower cost investing tool to gain exposure to the price of Bitcoin and
hedging vehicle to meet their investment needs in connection with
Bitcoin-related products and positions. The Exchange expects investors
will transact in options on the Trust in the unregulated over-the-
counter (``OTC'') options market,\31\ but may prefer to trade such
options in a listed environment to receive the benefits of trading
listing options, including (1) enhanced efficiency in initiating and
closing out positions; (2) increased market transparency; and (3)
heightened contra-party creditworthiness due to the role of OCC as
issuer and guarantor of all listed options. The Exchange believes that
listing the Trust options may cause investors to bring this liquidity
to the Exchange, would increase market transparency and enhance the
process of price discovery conducted on the Exchange through increased
order flow. The ETFs 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 Trust and essentially offer the same objectives
and benefits to investors, just with respect to different assets. The
Exchange notes that it has not identified any issues with the continued
listing and trading of any options on ETFs, including ETFs that hold
commodities (i.e., precious metals) that it currently lists and trades
on the Exchange.
---------------------------------------------------------------------------
\31\ The Exchange understands from customers that investors have
historically transacted in options on ETFs in the OTC options market
if such options were not available for trading in a listed
environment.
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the Act and the rules and regulations thereunder applicable to the
Exchange and, in particular, the requirements of Section 6(b) of the
Act.\32\ Specifically, the Exchange believes the proposed rule change
is consistent with the Section 6(b)(5) \33\ requirements that the rules
of an exchange be designed to prevent fraudulent and manipulative acts
and practices, to promote just and equitable principles of trade, to
foster cooperation and coordination with persons engaged
[[Page 16728]]
in regulating, clearing, settling, processing information with respect
to, and facilitating transactions in securities, to remove impediments
to and perfect the mechanism of a free and open market and a national
market system, and, in general, to protect investors and the public
interest. Additionally, the Exchange believes the proposed rule change
is consistent with the Section 6(b)(5) \34\ requirement that the rules
of an exchange not be designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
---------------------------------------------------------------------------
\32\ 15 U.S.C. 78f(b).
\33\ 15 U.S.C. 78f(b)(5).
\34\ Id.
---------------------------------------------------------------------------
In particular, the Exchange believes that the proposal to list and
trade options on the Trust will remove impediments to and perfect the
mechanism of a free and open market and a national market system and,
in general, protect investors because offering options on the Trust
will provide investors with a greater opportunity to realize the
benefits of utilizing options on the Trust, including cost efficiencies
and increased hedging strategies. The Exchange believes that offering
options on the Trust will benefit investors by providing them with a
relatively lower-cost risk management tool, which will allow them to
manage their positions and associated risks in their portfolios more
easily in connection with to the price of Bitcoin and with Bitcoin-
related products and positions. Additionally, the Exchange's offering
of Trust options will provide investors with the ability to transact in
such options in a listed market environment as opposed to in the
unregulated OTC options market, which would increase market
transparency and enhance the process of price discovery conducted on
the Exchange through increased order flow to the benefit of all
investors. The Exchange also notes that it already lists options on
other commodity-based ETFs,\35\ which, as described above, are trusts
structured in substantially the same manner as the Trust and
essentially offer the same objectives and benefits to investors, and
for which the Exchange has not identified any issues with the continued
listing and trading of commodity-based ETF options it currently lists
for trading.\36\
---------------------------------------------------------------------------
\35\ See Exchange Rule 402(i)(4).
\36\ See Securities Exchange Act No. 101717 (November 22, 2024)
89 FR 94828 (November 29, 2024) (SR-MIAX-2024-43) (Notice of Filing
and Immediate Effectiveness of a Proposed Rule Change To Amend
Exchange Rule 402, Criteria for Underlying Securities, Exchange Rule
307, Position Limits, and Exchange Rule 309, Exercise Limits To
Allow the Exchange To List and Trade Options on the Fidelity Wise
Origin Bitcoin Fund (the ``Fidelity Fund'') and the ARK 21Shares
Bitcoin ETF (the ``ARK 21 Fund'')).
---------------------------------------------------------------------------
The Exchange also believes the proposal to permit options on the
Trust 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.\37\
Options on the Trust 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.
Additionally, as demonstrated above, the Trust is characterized by a
substantial number of shares that are widely held and actively traded.
Further, the Trust options will trade in the same manner as any other
options on ETFs--the same Exchange Rules that currently govern the
listing and trading of options on ETFs, including permissible
expirations, strike prices and minimum increments, and applicable
margin requirements, will govern the listing and trading of options on
the Trust in the same manner.
---------------------------------------------------------------------------
\37\ See Id.
---------------------------------------------------------------------------
The Exchange believes the proposed position and exercise limits are
designed to prevent fraudulent and manipulative acts and practices and
promote just and equitable principles of trade, as they are designed to
address potential manipulative schemes and adverse market impacts
surrounding the use of options, such as disrupting the market in the
security underlying the options. The proposed position and exercise
limits for options for the Trust is 25,000 contracts, which is
currently the lowest limit applicable to any equity options (including
ETF options). The Exchange believes the proposed position and exercise
limits are extremely conservative for the Trust option given the
trading volume and outstanding shares for each. The information above
demonstrates that the average position and exercise limits of options
on ETFs with comparable outstanding shares and trading volume to those
of the Trust is significantly higher than the proposed position and
exercise limits for the Trust options. Therefore, the proposed position
and exercise limits for the Trust options are conservative relative to
options on ETFs with comparable market characteristics.
Further, given that the issuer of the Trust may create and redeem
shares that represent an interest in Bitcoin, the Exchange believes it
is relevant to compare the size of a position limit to the market
capitalization of the Bitcoin market. As of March 5, 2025, the global
supply of Bitcoin was 19,832,309, and the price of one Bitcoin was
approximately $90,608.57,\38\ which equates to a market capitalization
of approximately $1.797 trillion. Consider the proposed position and
exercise limit of 25,000 option contracts for the Trust options. A
position and exercise limit of 25,000 same side contracts effectively
restricts a market participant from holding positions that could result
in the receipt of no more than 2,500,000 of the Trust shares, as
applicable (if that market participant exercised all of its options).
The following table, as presented in the Cboe Proposal, shows the share
price of the Trust on March 5, 2025, the value of 2,500,000 shares of
the Trust at that price, and the approximate percentage of that value
of the size of the Bitcoin market:
---------------------------------------------------------------------------
\38\ See <a href="http://Blockchain.com">Blockchain.com</a> [verbar] Charts--Total Circulating
Bitcoin.
----------------------------------------------------------------------------------------------------------------
Value of
March 5, 2025 2,500,000 shares Percentage of
Bitcoin fund share price ($) of bitcoin fund bitcoin market
($)
----------------------------------------------------------------------------------------------------------------
VanEck Bitcoin Trust................................ 25.60 64,000,000 0.0035
----------------------------------------------------------------------------------------------------------------
Therefore, if a market participant with the maximum 25,000 same
side contracts in Trust options exercised all positions at one time,
such an event would have no practical impact on the Bitcoin market.
The Exchange also believes the proposed limits are appropriate
given position limits for Bitcoin futures. For example, the Chicago
Mercantile Exchange (``CME'') imposes a position limit of 2,000 futures
(for the initial spot
[[Page 16729]]
month) on its Bitcoin futures contract.\39\ On March 5, 2025, CME Mar
25 Bitcoin Futures settled at $90,935. A position of 2,000 CME Bitcoin
futures, therefore, would have a notional value of $909,350,000. The
following table, as presented in the Cboe Proposal, shows the share
price of the Trust on March 5, 2025, and the approximate number of
option contracts that equates to that notional value:
---------------------------------------------------------------------------
\39\ See CME Rulebook Chapter 350 (description of CME Bitcoin
Futures) and Chapter 5, Position Limit, Position Accountability and
Reportable Level Table in the Interpretations & Special Notices.
Each CME Bitcoin futures contract is valued at five Bitcoins as
defined by the CME CF Bitcoin Reference Rate (``BRR''). See CME Rule
35001.
------------------------------------------------------------------------
March 5, Number of
Bitcoin fund 2025 share option
price ($) contracts
------------------------------------------------------------------------
VanEck Bitcoin Trust.......................... 25.60 355,214
------------------------------------------------------------------------
The approximate number of option contracts for the Trust that equate to
the notional value of CME Bitcoin futures is significantly higher than
the proposed limit of 25,000 options contract for the Trust option. The
fact that many options ultimately expire out-of-the-money and thus are
not exercised for shares of the underlying, while the delta of a
Bitcoin Future is 1, further demonstrates how conservative the proposed
limits of 25,000 options contracts are for the Trust options.
The Exchange notes, unlike options contracts, CME position limits
are calculated on a net futures-equivalent basis by contract and
include contracts that aggregate into one or more base contracts
according to an aggregation ratio(s).\40\ Therefore, if a portfolio
includes positions in options on futures, CME would aggregate those
positions into the underlying futures contracts in accordance with a
table published by CME on a delta equivalent value for the relevant
spot month, subsequent spot month, single month and all month position
limits.\41\ If a position exceeds position limits because of an option
assignment, CME permits market participants to liquidate the excess
position within one business day without being considered in violation
of its rules. Additionally, if at the close of trading, a position that
includes options exceeds position limits for futures contracts, when
evaluated using the delta factors as of that day's close of trading but
does not exceed the limits when evaluated using the previous day's
delta factors, then the position shall not constitute a position limit
violation. Considering CME's position limits on futures for Bitcoin,
the Exchange believes that that the proposed same side position limits
are more than appropriate for the Trust options.
---------------------------------------------------------------------------
\40\ See CME Rulebook Chapter 5, Position Limit, Position
Accountability and Reportable Level Table in the Interpretations &
Special Notices. Each CME Bitcoin futures contract is valued at five
Bitcoins as defined by the CME CF Bitcoin Reference Rate (``BRR'').
See CME Rule 35001.
\41\ Id.
---------------------------------------------------------------------------
The Exchange believes the proposed position and exercise limits in
this proposal will have no material impact to the supply of Bitcoin.
For example, consider again the proposed position limit of 25,000
option contracts for the Trust options. As noted above, a position
limit of 25,000 same side contracts effectively restricts a market
participant from holding positions that could result in the receipt of
no more than 2,500,000 shares of the applicable Trust (if that market
participant exercised all its options). As of March 5, 2025, the Trust
had the number of shares outstanding set forth in the table below. The
table below, as presented in the Cboe Proposal, also sets forth the
approximate number of market participants that could hold the maximum
of 25,000 same side positions in the Trust that would equate to the
number of shares outstanding of the Trust:
------------------------------------------------------------------------
Number of
market
Shares participants
Bitcoin fund outstanding with 25,000
same side
positions
------------------------------------------------------------------------
VanEck Bitcoin Trust.................. 49,900,000 20
------------------------------------------------------------------------
This means if 20 market participants had 25,000 same side positions
in Trust options, each of them would have to simultaneously exercise
all of those options to create a scenario that may put the underlying
security under stress. The Exchange believes it is highly unlikely for
either such event to occur; however, even if either such event did
occur, the Exchange would not expect the Trust to be under stress
because such an event would merely induce the creation of more shares
through the trust's creation and redemption process.
As of March 5, 2025, the global supply of Bitcoin was approximately
19,832,309.\42\ Based on the $25.60 price of Trust share on March 5,
2025, a market participant could have redeemed one Bitcoin for
approximately 3,539 Trust shares. Another 70,194,417,201 Trust shares
could be created before the supply of Bitcoin was exhausted. As a
result, 28,078 market participants would have to simultaneously
exercise 25,000 same side positions in Trust options to receive shares
of the Trust holding the entire global supply of Bitcoin. Unlike the
Trust, the number of shares that corporations may issue is limited.
However, like corporations, which authorize additional shares,
repurchase shares, or split their shares, the Trust may create, redeem,
or split shares in response to demand. While the supply of Bitcoin is
limited to 21,000,000, it is believed that it will take more than 100
years to fully mine the remaining Bitcoin. The supply of Bitcoin is
larger than the available supply of most securities.\43\ Given the
significant unlikelihood of any of these events ever occurring, the
Exchange does not believe options on the Trust should be subject to
position and exercise limits even lower than those proposed (which are
already equal to the lowest available limit for equity options in the
industry) to protect the supply of Bitcoin.\44\
---------------------------------------------------------------------------
\42\ See <a href="http://Blockchain.com">Blockchain.com</a> [verbar] Charts--Total Circulating
Bitcoin (which also shows the price of one Bitcoin equal to
$90,608.57).
\43\ The market capitalization of Bitcoin would rank in the top
10 among securities. See <a href="https://companiesmarketcap.com/usa/largest-companies-in-the-usa-by-market-cap/">https://companiesmarketcap.com/usa/largest-companies-in-the-usa-by-market-cap/</a>.
\44\ This would be even more unlikely with respect to the Trust
for which the Exchange proposes lower position limits.
---------------------------------------------------------------------------
The Exchange believes the available supply of Bitcoin is not
relevant to the determination of position and exercise limits for
options overlying the Trust. Position and exercise limits are not a
tool that should be used to address a potential limited supply of the
underlying of an underlying. Position
[[Page 16730]]
and exercise limits do not limit the total number of options that may
be held, but rather they limit the number of positions a single
customer may hold or exercise at one time.\45\ ``Since the inception of
standardized options trading, the options exchanges have had rules
imposing limits on the aggregate number of options contracts that a
member or customer could hold or exercise.'' \46\ Position and exercise
limit rules are intended ``to prevent the establishment of options
positions that can be used or might create incentives to manipulate or
disrupt the underlying market so as to benefit the options position. In
particular, position and exercise limits are designed to minimize the
potential for mini-manipulations and for corners or squeezes of the
underlying market. In addition, such limits serve to reduce the
possibility for disruption of the options market itself, especially in
illiquid options classes.'' \47\
---------------------------------------------------------------------------
\45\ For example, suppose an option has a position limit of
25,000 option contracts and there are a total of 10 investors
trading that option. If all 10 investors max out their positions,
that would result in 250,000 option contracts outstanding at that
time. However, suppose 10 more investors decide to begin trading
that option and also max out their positions. This would result in
500,000 option contracts outstanding at that time. An increase in
the number of investors could cause an increase in outstanding
options even if position limits remain unchanged.
\46\ See Securities Exchange Act Release No. 39489 (December 24,
1997), 63 FR 276 (January 5, 1998) (SR-CBOE-1997-11).
\47\ Id.
---------------------------------------------------------------------------
The Exchange notes that a Registration Statement on Form S-1 was
filed with the Commission for the Trust, each of which described the
supply of Bitcoin as being limited to 21,000,000 (of which
approximately 90% had already been mined), and that the limit would be
reached around the year 2140.\48\ The Registration Statement permits an
unlimited number of shares of the applicable the Trust to be created.
Further, the Commission approved proposed rule changes that permitted
the listing and trading of shares of the Trust, which approval did not
comment on the sufficient supply of Bitcoin or address whether there
was a risk that permitting an unlimited number of shares for the Trust
would impact the supply of Bitcoin.\49\ Therefore, the Exchange
believes the Commission had ample time and opportunity to consider
whether the supply of Bitcoin was sufficient to permit the creation of
unlimited the Trust shares, and does not believe considering this
supply with respect to the establishment of position and exercise
limits is appropriate given its lack of relevance to the purpose of
position and exercise limits. However, given the significant size of
the Bitcoin supply, the proposed positions limits are more than
sufficient to protect investors and the market.
---------------------------------------------------------------------------
\48\ See Amendment No. 8 to Form S-1 Registration Statement No.
333-251808, filed January 9, 2024.
\49\ See Bitcoin ETP Approval Order.
---------------------------------------------------------------------------
Based on the above information demonstrating, among other things,
that the Trust is characterized by a substantial number of outstanding
shares that are actively traded and widely held, the Exchange believes
the proposed position and exercise limits are extremely conservative
compared to those of ETF options with similar market characteristics.
The proposed position and exercise limits reasonably and appropriately
balance the liquidity provisioning in the market against the prevention
of manipulation. The Exchange believes these proposed limits are
effectively designed to prevent an individual customer or entity from
establishing options positions that could be used to manipulate the
market of the underlying as well as the Bitcoin market.\50\
---------------------------------------------------------------------------
\50\ See Securities Exchange Act Release No. 39489 (December 24,
1997), 63 FR 276 (January 5, 1998) (SR-CBOE-1997-11).
---------------------------------------------------------------------------
The Exchange represents that it has the necessary systems capacity
to support the Trust options. As discussed above, the Exchange believes
that its existing surveillance and reporting safeguards are designed to
deter and detect possible manipulative behavior which might arise from
listing and trading options on ETFs, including the Trust options.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. In this regard and as
indicated above, the Exchange notes that the rule change is being
proposed as a competitive response to the filing submitted by Cboe.\51\
---------------------------------------------------------------------------
\51\ See supra note 5.
---------------------------------------------------------------------------
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The Exchange does not
believe that the proposed rule change will impose any burden on
intramarket competition that is not necessary or appropriate in
furtherance of the purposes of the Act as the Trust will be equally
available to all market participants who wish to trade such options and
will trade generally in the same manner as other options. The Exchange
Rules that currently apply to the listing and trading of all options on
ETFs on the Exchange, including, for example, Rules that govern listing
criteria, expirations, exercise prices, minimum increments, margin
requirements, customer accounts, and trading halt procedures will apply
to the listing and trading of the Trust options 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. Also, and as stated above, the
Exchange already lists options on other commodity-based securities.\52\
Further, the Trust would need to satisfy the maintenance listing
standards set forth in the Exchange Rules in the same manner as any
other ETFs for the Exchange to continue listing options on them.
---------------------------------------------------------------------------
\52\ See Exchange Rule 402(i)(4).
---------------------------------------------------------------------------
The Exchange does not believe that the proposal to list and trade
options on the Trust will impose any burden on intermarket competition
that is not necessary or appropriate in furtherance of the purposes of
the Act. To the extent that the advent of the Trust options trading on
the Exchange may make the Exchange a more attractive marketplace to
market participants at other exchanges, such market participants are
free to elect to become market participants on the Exchange.
Additionally, other options exchanges are free to amend their listing
rules, as applicable, to permit them to list and trade options on the
Trust. The Exchange notes that listing and trading the Trust options on
the Exchange will subject such options to transparent exchange-based
rules as well as price discovery and liquidity, as opposed to
alternatively trading such options in the OTC market.
The Exchange believes that the proposed rule change may relieve any
burden on, or otherwise promote, competition, as it is designed to
increase competition for order flow on the Exchange in a manner that is
beneficial to investors by providing them with a lower- cost option to
hedge their investment portfolios. The Exchange notes that it operates
in a highly competitive market in which market participants can readily
direct order flow to competing venues that offer similar products.
Ultimately, the Exchange believes that offering the Trust options for
trading on the Exchange will promote competition by providing investors
with an additional, relatively low-cost means to hedge their portfolios
and meet their investment needs in connection with Bitcoin prices and
Bitcoin-related products and positions on a listed options exchange.
[[Page 16731]]
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
Written comments were neither solicited nor received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period up to 90 days (i) as the
Commission may designate if it finds such longer period to be
appropriate and publishes its reasons for so finding or (ii) as to
which the Exchange consents, the Commission will:
A. by order approve or disapprove such proposed rule change, or
B. institute proceedings to determine whether the proposed rule
change should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
<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#e092958c85cd838f8d8d858e9493a0938583ce878f96"><span class="__cf_email__" data-cfemail="c3b1b6afa6eea0acaeaea6adb7b083b0a6a0eda4acb5">[email protected]</span></a>. Please include
file number SR-MIAX-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-MIAX-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-MIAX-2025-18 and should be
submitted on or before May 12, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\53\
---------------------------------------------------------------------------
\53\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-06765 Filed 4-18-25; 8:45 am]
BILLING CODE 8011-01-P
</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body>
</html>Indexed from Federal Register on April 21, 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.