Notice2025-11430
Self-Regulatory Organizations; Miami International Securities Exchange, LLC; MIAX PEARL, LLC; MIAX Sapphire, LLC; Order Instituting Proceedings To Determine Whether To Approve or Disapprove Proposed Rule Changes, as Modified by Partial Amendments Thereto, To Amend Rule 402, Criteria for Underlying Securities, To List and Trade 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
June 23, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 118 (Monday, June 23, 2025)</title>
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[Federal Register Volume 90, Number 118 (Monday, June 23, 2025)]
[Notices]
[Pages 26634-26637]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-11430]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-103283; File Nos. SR-MIAX-2025-07; SR-PEARL-2025-08;
SR-SAPPHIRE-2025-12]
Self-Regulatory Organizations; Miami International Securities
Exchange, LLC; MIAX PEARL, LLC; MIAX Sapphire, LLC; Order Instituting
Proceedings To Determine Whether To Approve or Disapprove Proposed Rule
Changes, as Modified by Partial Amendments Thereto, To Amend Rule 402,
Criteria for Underlying Securities, To List and Trade Options on
Commodity-Based Trust Shares
June 17, 2025.
I. Introduction
On March 5, 2025, Miami International Securities Exchange, LLC
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(``MIAX''), MIAX PEARL, LLC (``MIAX Pearl''), and MIAX Sapphire, LLC
(``MIAX Sapphire'') (each an ``Exchange''; collectively, the
``Exchanges'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\
proposed rule changes to amend Rule 402, Criteria for Underlying
Securities, of their respective rulebooks to list and trade options on
units that represent interests in a trust that is a Commodity-Based
Trust.\3\ On March 11, 2025, MIAX, MIAX Pearl and MIAX Sapphire each
filed Partial Amendment No. 1 to their respective proposed rule
changes.\4\ On March 12, 2025, MIAX Pearl and MIAX Sapphire each filed
Partial Amendment No. 2 to their respective proposed rule changes.\5\
The proposed rule changes, as modified by the applicable Partial
Amendments, were published for comment in the Federal Register on March
19, 2025.\6\ The Commission has not received any comments on the
proposed rule changes, as modified by the applicable Partial
Amendments.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See, infra, note 11 and accompanying text.
\4\ Partial Amendment No. 1 made technical changes to each
Exchange's proposed rule change and corrected marking errors in each
Exchange's proposed changes to its rule text.
\5\ Partial Amendment No. 2 (with Partial Amendment No. 1,
collectively ``Partial Amendments'') to MIAX Pearl and MIAX
Sapphire's proposals, each as modified by its respective Partial
Amendment No. 1, corrected marking errors in each Exchange's
proposed changes to its rule text.
\6\ See Securities Exchange Act Release Nos. 102658 (Mar. 13,
2025), 90 FR 12870 (SR-MIAX-2025-07) (``MIAX Notice''); 102659 (Mar.
13, 2025), 90 FR 12876 (SR-PEARL-2025-08) (``MIAX Pearl Notice'');
102660 (Mar. 13, 2025), 90 FR 12859 (SR-SAPPHIRE-2025-12) (``MIAX
Sapphire Notice'') (collectively, ``Notices'').
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On April 25, 2025, pursuant to Section 19(b)(2) of the Act,\7\ the
Commission designated a longer period within which to approve the
proposed rule changes, disapprove the proposed rule changes, or
institute proceedings to determine whether to disapprove the proposed
rule changes, as modified by the applicable Partial Amendments.\8\ This
order institutes proceedings under Section 19(b)(2)(B) of the Act \9\
to determine whether to approve or disapprove the proposed rule
changes, as modified by the applicable Partial Amendments.
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\7\ 15 U.S.C. 78s(b)(2).
\8\ See Securities Exchange Act Release Nos. 102928, 90 FR 18717
(May 1, 2025) (SR-SAPPHIRE-2025-12); 102929, 90 FR 18718 (May 1,
2025) (SR-PEARL-2025-08); 102932, 90 FR 18715 (May 1, 2025) (SR-
MIAX-2025-07) (each designating June 17, 2025, as the date by which
the Commission shall either approve, disapprove, or institute
proceedings to determine whether to disapprove the proposed rule
changes, as modified by the applicable Partial Amendments).
\9\ 15 U.S.C. 78s(b)(2)(B).
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II. Description of the Proposed Rule Changes, as Modified by Partial
Amendments Thereto
As described more fully in the Notices, the Exchanges propose to
amend Rule 402, Criteria for Underlying Securities, of their respective
rulebooks to allow the listing and trading of options on units that
represent interests in a trust that is a Commodity-Based Trust.\10\
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\10\ See, e.g., MIAX Notice, supra note 6. See also id. at
12871, n.4 (stating, ``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 the rules of Chapter IV of MIAX,
including Exchange Rule 402, are incorporated by reference into the
MIAX Emerald, LLC (`MIAX Emerald') rulebook.'').
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Specifically, each Exchange proposes to remove references in Rule
402(i) to 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, and the
ARK 21 Shares Bitcoin ETF, which are all Commodity-Based Trust Shares,
and update the provision to state that securities deemed appropriate
for options trading shall include shares or other securities
(``Exchange-Traded Fund Shares'') that ``represent interests in (a) a
security 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').'' \11\
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\11\ See, e.g., proposed MIAX Rule 402(i)(4).
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As a result of these proposed rule changes, as modified by the
applicable Partial Amendments, each Exchange's listing criteria would
permit any Exchange-Traded Fund Shares (``ETFs'') that are approved to
list on a primary equities 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, without any additional approvals
from the Commission. Each Exchange states that offering options on
Commodity-Based Trust Shares provides investors with the ability to
hedge exposure to the underlying security similar to options on any
other securities.\12\ Additionally, each Exchange states that options
on a Commodity-Based Trust Share provide investors with the ability to
transact in such options in a listed market environment, 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.\13\
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\12\ See, e.g., MIAX Notice, supra note 6, at 12874.
\13\ See, e.g., id.
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Each Exchange states that options on a Commodity-Based Trust Share
will trade in the same manner as options on other ETFs on the
Exchange.\14\ The Exchanges' rules that currently apply to the listing
and trading of all options on ETFs on each Exchange, including, for
example, rules that govern listing criteria,\15\ including continued
listing standards,\16\ expirations,\17\ exercise/strike prices,\18\
minimum increments,\19\
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position and exercise limits,\20\ margin requirements,\21\ customer
accounts,\22\ and trading halt procedures \23\ would apply to the
listing and trading of options on a Commodity-Based Trust Share on each
Exchange in the same manner as they apply to other options on all other
ETFs that are listed and traded on the Exchange.
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\14\ See, e.g., id. See also, e.g., MIAX Rule 402(i)(5)(i)
(regarding certain criteria and guidelines for ETFs).
\15\ See, e.g., MIAX Notice, supra note 6, at 12871. See also,
e.g., MIAX Rule 402(a), (i).
\16\ See, e.g., MIAX Notice, supra note 6, at 12871-72. Each
Exchange states that the options approved for trading pursuant to
Rule 402(i) will not be deemed to meet the requirements for
continued approval, and each Exchange shall not open for trading any
additional series of option contracts of the class covering such
ETFs, if the ETFs are delisted from trading as provided in
subparagraph (b)(4) of Rule 403 or the ETFs are halted or suspended
from trading on their primary market. See, e.g., id. at 12871.
Additionally, options on ETFs may be subject to the suspension of
opening transactions in any series of options of the class covering
ETFs in certain other circumstances pursuant to Exchange rules. See,
e.g., id. at 12871-72.
\17\ See, e.g., id. at 12872. Each Exchange states that it would
open at least one expiration month for options on a Commodity-Based
Trust Share and may also list series of options on a Commodity-Based
Trust Share for trading on a weekly, monthly, or quarterly basis.
See, e.g., id. Each Exchange states that it may also list long-term
equity option series (``LEAPS'') that expire from twelve to thirty-
nine months from the time they are listed. See, e.g., id.
\18\ See, e.g., MIAX Notice, supra note 6, at 12872. See also,
e.g., MIAX Rule 404(b) (relating to exercise price of options upon
commencement of trading of a particular class of options on the
Exchange); MIAX Rule 404, Interpretations and Policies .06 (relating
to strike prices of series of options on ETFs).
\19\ See, e.g., MIAX Notice, supra note 6, at 12872. See also,
e.g., MIAX Rule 510.
\20\ See, e.g., MIAX Notice, supra note 6, at 12872. Each
Exchange states that position and exercise limits for options on a
Commodity-Based Trust Share would be determined pursuant to MIAX
Rules 307 and 309, respectively, and that position and exercise
limits for ETF options vary according to the number of outstanding
shares and the trading volumes of the underlying ETF over the past
six months. Id.
\21\ See, e.g., id. See also MIAX Rule 1502, which governs
margin requirements applicable to trading on MIAX and its affiliates
MIAX Pearl and MIAX Sapphire. See MIAX Pearl Notice, supra note 6,
at 12878; MIAX Sapphire Notice, supra note 6, at 12861.
\22\ See, e.g., MIAX Notice, supra note 6, at 12872.
\23\ See, e.g., id.
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In addition, each Exchange states that the same surveillance
procedures applicable to all other options on other ETFs currently
listed and traded on the Exchange will apply to options on a Commodity-
Based Trust Share, and that it and the Options Price Reporting
Authority have the necessary systems capacity to support the new option
series.\24\ Each Exchange represents that it is a member of the
Intermarket Surveillance Group (``ISG'') and that ISG members work
together to coordinate surveillance and investigative information
sharing in the stock, options, and futures markets.\25\ Also, each
Exchange states that it may obtain information from CME Group Inc.'s
designated contract markets that are members of the ISG related to a
financial instrument that is based, in whole or in part, upon an
interest in or performance of a commodity, as applicable.\26\ Each
Exchange states that it has a Regulatory Services Agreement with the
Financial Industry Regulatory Authority.\27\ Further, each Exchange
states that it has not identified any issues with the continued listing
and trading of any ETF options, including ETFs that hold commodities
(e.g., precious metals, cryptocurrencies) that it currently lists and
trades on the Exchange.\28\
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\24\ See, e.g., id. at 12872-73.
\25\ See, e.g., id. at 12873.
\26\ See, e.g., id.
\27\ See, e.g., id.
\28\ See, e.g., MIAX Notice, supra note 6, at 12872.
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III. Proceedings To Determine Whether To Approve or Disapprove SR-MIAX-
2025-07, SR-PEARL-2025-08, SR-SAPPHIRE-2025-12 and Grounds for
Disapproval Under Consideration
The Commission is instituting proceedings pursuant to Section
19(b)(2)(B) of the Act \29\ to determine whether the proposed rule
changes, as modified by the applicable Partial Amendments, should be
approved or disapproved. Institution of such proceedings is appropriate
at this time in view of the legal and policy issues raised by the
proposed rule changes, as modified by the applicable Partial
Amendments. Institution of proceedings does not indicate that the
Commission has reached any conclusions with respect to any of the
issues involved. Rather, as described below, the Commission seeks and
encourages interested persons to provide comments on the proposed rule
changes, as modified by the applicable Partial Amendments.
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\29\ 15 U.S.C. 78s(b)(2)(B).
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Pursuant to Section 19(b)(2)(B) of the Act,\30\ the Commission is
providing notice of the grounds for disapproval under consideration.
The Commission is instituting proceedings to allow for additional
analysis of the proposals' consistency with Section 6(b)(5) of the
Act,\31\ which requires, among other things, that the rules of a
national securities exchange be designed to prevent fraudulent and
manipulative acts and practices, to promote just and equitable
principles of trade, to remove impediments to and protect the mechanism
of a free and open market and a national market system, and, in
general, to protect investors and the public interest.
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\30\ See id.
\31\ 15 U.S.C. 78f(b)(5).
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Under the Commission's Rules of Practice, the ``burden to
demonstrate that a proposed rule change is consistent with the [Act]
and the rules and regulations issued thereunder . . . is on the self-
regulatory organization that proposed the rule change.'' \32\ The
description of a proposed rule change, its purpose and operation, its
effect, and a legal analysis of its consistency with applicable
requirements must all be sufficiently detailed and specific to support
an affirmative Commission finding,\33\ and any failure of a self-
regulatory organization to provide this information may result in the
Commission not having a sufficient basis to make an affirmative finding
that a proposed rule change is consistent with the Act and the
applicable rules and regulations.\34\ The Commission is instituting
proceedings to allow for additional consideration and comment on the
issues raised herein, including as to whether the proposals, as
modified by the applicable Partial Amendments, are consistent with the
Act. In particular, the Commission asks commenters to address the
potential market impacts of allowing the listing and trading of options
on Commodity-Based Trust Shares.
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\32\ 17 CFR 201.700(b)(3).
\33\ See id.
\34\ See id.
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IV. Procedure: Request for Written Comments
The Commission requests that interested persons provide written
submissions of their views, data, and arguments with respect to the
issues identified above, as well as any other concerns they may have
with the proposals, as modified by the applicable Partial Amendments.
In particular, the Commission invites the written views of interested
persons concerning whether the proposals, as modified by the applicable
Partial Amendments, are consistent with Section 6(b)(5) or any other
provision of the Act, and the rules and regulations thereunder.
Although there do not appear to be any issues relevant to approval or
disapproval that would be facilitated by an oral presentation of views,
data, and arguments, the Commission will consider, pursuant to Rule
19b-4 under the Act,\35\ any request for an opportunity to make an oral
presentation.\36\
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\35\ 17 CFR 240.19b-4.
\36\ Section 19(b)(2) of the Act, as amended by the Securities
Acts Amendments of 1975, Public Law 94-29 (June 4, 1975), grants the
Commission flexibility to determine what type of proceeding--either
oral or notice and opportunity for written comments--is appropriate
for consideration of a particular proposal by a self-regulatory
organization. See Securities Acts Amendments of 1975, Senate Comm.
on Banking, Housing & Urban Affairs, S. Rep. No. 75, 94th Cong., 1st
Sess. 30 (1975).
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Interested persons are invited to submit written data, views, and
arguments regarding whether the proposed rule changes, as modified by
the applicable Partial Amendments, should be approved or disapproved by
July 14, 2025. Any person who wishes to file a rebuttal to any other
person's submission must file that rebuttal by July 28, 2025.
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
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<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#1b696e777e36787476767e756f685b687e78357c746d"><span class="__cf_email__" data-cfemail="0371766f662e606c6e6e666d7770437066602d646c75">[email protected]</span></a>. Please include
file numbers SR-MIAX-2025-07, SR-PEARL-2025-08, and SR-SAPPHIRE-2025-12
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 numbers SR-MIAX-2025-07, SR-PEARL-
2025-08, and SR-SAPPHIRE-2025-12. These file numbers 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 changes that are filed with the
Commission, and all written communications relating to the proposed
rule changes 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 filings also will be available for inspection and
copying at the principal office of the Exchanges. 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 submitte material
that is obscene or subject to copyright protection. All submissions
should refer to file numbers SR-MIAX-2025-07, SR-PEARL-2025-08, and SR-
SAPPHIRE-2025-12 and should be submitted on or before July 14, 2025.
Rebuttal comments should be submitted by July 28, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\37\
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\37\ 17 CFR 200.30-3(a)(57).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-11430 Filed 6-20-25; 8:45 am]
BILLING CODE 8011-01-P
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