Notice2025-22395
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change of Amendments to Rules 5.3-O and 5.4-O
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
December 10, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 235 (Wednesday, December 10, 2025)</title>
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[Federal Register Volume 90, Number 235 (Wednesday, December 10, 2025)]
[Notices]
[Pages 57230-57236]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-22395]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104320; File No. SR-NYSEARCA-2025-79]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change of Amendments to
Rules 5.3-O and 5.4-O
December 5, 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 November 21, 2025, NYSE Arca, Inc. (``NYSE Arca'' or the
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
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\1\ 15 U.S.C. 78a.
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amendments to Rule 5.3-O (Criteria for
Underlying Securities) and Rule 5.4-O (Withdrawal of Approval of
Underlying Securities) to facilitate listing options on Commodity-Based
Trust Shares. The proposed rule change is available on the Exchange's
website at <a href="http://www.nyse.com">www.nyse.com</a>, and at the principal office of the Exchange.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes amendments to Rule 5.3-O (Criteria for
Underlying Securities) and Rule 5.4-O (Withdrawal of Approval of
Underlying Securities) to facilitate listing options on Commodity-Based
Trust Shares.
The Exchange notes that this proposal is competitive as Nasdaq ISE,
LLC (``ISE'') has adopted a substantially identical rule change.\3\
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\3\ See Securities Exchange Act Release No. 102465 (Feb. 20,
2025), 90 FR 10740 (Feb. 26, 2025) (SR-ISE-2025-08) (Notice of
Filing of Proposed Rule Change to Amend Options 4, Section 3,
Criteria for Underlying Securities to permit options on Commodity-
Based Trust Shares). See also <a href="https://www.nasdaqtrader.com/MicroNews.aspx?id=OTA2025-48">https://www.nasdaqtrader.com/MicroNews.aspx?id=OTA2025-48</a>.
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Background
In February 24, 2025, the Exchange submitted a rule filing to amend
Rule
[[Page 57231]]
5.3-O to permit options on Commodity-Based Trust Shares. The proposed
rule change was published for comment in the Federal Register on March
17, 2025.\4\ On April 25, 2025, pursuant to Section 19(b)(2) of the
Act,\5\ the Commission designated a longer period within which to
approve the proposed rule change, disapprove the proposed rule change,
or institute proceedings to determine whether to disapprove the
proposed rule change.\6\ On June 12, 2025, the Commission instituted
proceedings under Section 19(b)(2)(B) of the Act \7\ to determine
whether to approve or disapprove the proposed rule change.\8\ The
Commission did not receive any comments on the proposed rule change.
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\4\ See Securities Exchange Act Release No. 102577 (Mar. 11,
2025), 90 FR 12377 (Mar. 17, 2025) (SR-NYSEArca-2025-16) (Notice of
Filing of Proposed Rule Change To Amend Rule 5.3-O To Permit Options
on Commodity-Based Trust Shares).
\5\ See 15 U.S.C. 78s(b)(2).
\6\ See Securities Exchange Act Release No. 102930 (Apr. 25,
2025), 90 FR 18718 (May 1, 2025) SR-NYSEArca-2025-16) (designating
June 15, 2025, as the date by which the Commission shall either
approve, disapprove, or institute proceedings to determine whether
to disapprove the proposed rule change).
\7\ See 15 U.S.C. 78s(b)(2)(B).
\8\ See Securities Exchange Act Release No. 103240, 90 FR 25687
(June 17, 2025) (NYSEArca-2025-16).
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In the original filing, the Exchange amended its listing criteria
in Rule 5.3-O(g)(iv) to allow options on units that represent interests
in a trust that is a Commodity-Based Trust and deleted references to
SPDR[supreg] Gold Trust, the iShares COMEX Gold Trust, the iShares
Silver Trust, the ETFS Silver Trust, ETFS Gold Trust, the ETFS
Palladium Trust, and the ETFS Platinum, the iShares Bitcoin Trust, the
Fidelity Wise Origin Bitcoin Fund, the ARK21Shares Bitcoin ETF, the
Grayscale Bitcoin Trust (BTC), the Grayscale Bitcoin Mini Trust BTC,
and the Bitwise Bitcoin ETF, which are all Commodity-Based Trust
Shares. As proposed, the Exchange's listing criteria would allow any
ETF approved to list on the primary market as a Commodity-Based Trust
Share to qualify as an underlying for options traded on the Exchange,
provided other listing criteria have been met. Consistent with this
change, the Exchange also proposed deleting in its entirety Commentary
.01 to Rule 5.3-O and deleting the text in Commentary .02 to Rule 5.4-O
and designating it as ``Reserved.''
Due to a lapse in appropriations, the Commission shutdown
operations as of October 1, 2025. On November 7, 2025, during the
ongoing shutdown, the Exchange submitted an amendment that would have
superseded the original filing in its entirety. The amendment would
have redefined a Commodity-Based Trust Share; required additional
qualifying criteria to list options on a Commodity-Based Trust Share;
defined crypto asset; and required that the crypto asset held by the
Commodity-Based Trust Share have a comprehensive surveillance sharing
agreement. The amendment, however, could not be processed or published
due to the pendency of the shutdown, which ended on November 12, 2025.
On November 12, 2025, the Exchange's original filing was deemed to have
been approved pursuant to Section 19(b)(2)(D) of the Act.\9\
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\9\ See 15 U.S.C. 78s(b)(2)(D).
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Proposed Rule Change
The Exchange proposes to adopt the rule text included in the
amendment to the original filing that could not be processed during the
government shutdown, and reinstate text that was previously deleted and
remove text that was added when the original filing was deemed
approved.
Specifically, the Exchange would delete the listing criteria added
to Rule 5.3-O(g) as subsection (iv) by the original filing.
The Exchange would also reinstate the following text deleted from
Rule 5.3-O(g) as subsection (iv):
the SPDR Gold Trust, or (v) represent interests in the iShares COMEX
Gold Trust, or (vi) represent interests in the iShares Silver Trust,
In addition, the Exchange would reinstate the following deleted
text as Rule 5.3-O(g) as subsection (viii) before ``provided that'':
or, (viii) represents interests in the ETFS Silver Trust or ETFS
Gold Trust, or, (ix) represents interests in the ETFS Palladium
Trust or ETFS Platinum Trust,
Commentary .01 to 5.30-O and Commentary .02 to Rule 5.4-O would
also be reinstated in their entirety.
The Exchange further proposes to amend Rule 5.3-O to adopt new
listing criteria in Rule 5.3-O(g)(x) to permit the listing and trading
of options on a Commodity-Based Trust Share that meet the generic
criteria of NYSE Arca Rule 8.201-E (Generic),\10\ except that the
Commodity-Based Trust holds a single crypto asset.\11\ The following
text would be added as proposed Rule 5.3-O(g)(x):
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\10\ NYSE Arca Rule 8.201-E (generic) permits the listing and
trading of certain qualifying exchange-traded products that
physically hold commodities like precious metals and digital asset
commodities on the Exchange. Pursuant to NYSE Arca Rule 8.201-E
(Generic), the term ``Commodity-Based Trust Shares'' means a
security that: (i) is issued by a trust, limited liability company,
partnership, or other similar entity (``Trust'') that, if
applicable, is operated by a registered commodity pool operator
pursuant to the Commodity Exchange Act, and is not registered as an
investment company pursuant to the Investment Company Act of 1940,
or series or class thereof; (ii) is designed to reflect the
performance of one or more reference assets or an index of reference
assets; (iii) in order to reflect the performance as provided in
(c)(1)(ii) above, is issued by a Trust that holds (A) one or more
commodities or commodity-based assets as defined in (c)(3) below,
and (B) in addition to such commodities or commodity-based assets,
may hold securities, cash, and cash equivalents; (iv) is issued by
such Trust in a specified aggregate minimum number in return for a
deposit of (A) a specified quantity of the underlying commodities,
commodity-based assets, securities, cash, and/or cash equivalents,
or (B) a cash amount with a value based on the next determined net
asset value per Trust share; and (v) 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 (A) the
specified quantity of the underlying commodities, commodity-based
assets, securities, cash, and/or cash equivalents, or (B) a cash
amount with a value based on the next determined net asset value per
Trust share.
\11\ For example, a multi-coin ETF would not be subject to Rule
5.3-O(g)(x). For purposes of this rule the term ``crypto asset''
means an asset that is generated, issued and/or transferred using a
blockchain or similar distributive ledger technology network,
including but not limited to, assets known as ``tokens,'' ``digital
assets,'' ``virtual currencies,'' and ``coins'' and that relies on
cryptographic protocols. See definition at proposed Rule 5.3-
O(g)(3).
or (x) represent interests in a Commodity-Based Trust that meet the
generic criteria of NYSE Arca Rule 8.201-E (Generic), except that
the Commodity-Based Trust holds a single crypto asset as defined in
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subparagraph (3) below,
The Exchange would add a new subparagraph (3) to Rule 5.3-O(g) that
states:
Additionally, with respect to a Commodity-Based Trust that meets
the requirements of Rule 5.3-O(g)(x), the following requirements are
satisfied: (A) the total global supply of the underlying crypto
asset held by the Commodity-Based Trust has an average daily market
value of at least $700 million over the last 12 months; and (B) the
crypto asset held by the Commodity-Based Trust underlies a
derivatives contract that trades on a market with which the Exchange
has a comprehensive surveillance sharing agreement, whether directly
or through common membership in the Intermarket Surveillance Group.
For purposes of this rule the term ``crypto asset'' means an asset
that is generated, issued and/or transferred using a blockchain or
similar distributive ledger technology network, including but not
limited to, assets known as ``tokens,'' ``digital assets,''
``virtual currencies,'' and ``coins'' and that relies on
cryptographic protocols.
The proposed additional criteria would require a Commodity-Based
Trust to: (1) meet the generic criteria of NYSE Arca Rule 8.201-E
(Generic) and hold only a single crypto asset; (2) meet the criteria
and guidelines set forth in
[[Page 57232]]
Rule 5.3-O(a) \12\ and (b),\13\ or Rule 5.3-O(g)(1)(B) \14\ and (3)
meet the requirements in Rule 5.3-O(g)(3) prior to listing options on
the Commodity-Based Trust.
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\12\ The criteria and guidelines for a security to be considered
widely held and actively traded are set forth in Rule 5.3-O(a),
subject to exceptions.
\13\ Rule 5.3-O(b) states that the underlying securities shall
be registered and be an ``NMS Stock'' as defined in Rule 600 of
Regulation NMS under the Act.
\14\ Rule 5.3-O(g)(1)(B) provides that the Exchange-Traded Fund
Shares are available for creation or redemption each business day in
cash or in kind from or through the issuing trust, investment
company, commodity pool or other issuer at a price related to the
net asset value, and the issuing trust, investment company,
commodity pool, or other issuer is obligated to issue Fund Shares in
a specified aggregate number even though some or all of the
investment assets needed to be deposited have not been received by
the issuing trust, investment company, commodity pool, or other
issuer, provided the authorized creation participant has undertaken
to deliver the investment assets as soon as possible and such
undertaking has been secured by the delivery and maintenance of
collateral consisting of cash or cash equivalents satisfactory to
the issuer of Fund Shares which underlie the option as described in
the Fund Shares' prospectus.
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As proposed, Rule 5.3-O(g)(3) requires a Commodity-Based Trust that
meets the requirements of Rule 5.3-O(g)(x) to also satisfy the
following requirements: (A) the total global supply of the underlying
crypto asset held by the Commodity-Based Trust has an average daily
market value of at least $700 million over the last 12 months; and (B)
the crypto asset held by the Commodity-Based Trust underlies a
derivatives contract that trades on a market with which the Exchange
has a comprehensive surveillance sharing agreement, whether directly or
through common membership in the Intermarket Surveillance Group
(``ISG'').
The Exchange defines a ``crypto asset'' in Rule 5.3-O(g)(3) to
mean, for purposes of this rule, an asset that is generated, issued
and/or transferred using a blockchain or similar distributive ledger
technology network, including but not limited to, assets known as
``tokens,'' ``digital assets,'' ``virtual currencies,'' and ``coins''
and that relies on cryptographic protocols.
The market value of the underlying crypto asset will be calculated
by taking the total global supply of the particular crypto asset
multiplied by the token price.\15\ Total supply of crypto assets
includes all crypto assets currently issued and does not include
unissued crypto assets.\16\
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\15\ The market supply information can be obtained from publicly
available sources such as <a href="http://coingecko.com">coingecko.com</a> or <a href="http://coinmarketcap.com">coinmarketcap.com</a>.
\16\ For example, if Bitcoin were the underlying crypto asset,
the Exchange would consider the total supply of all Bitcoin
currently issued instead of the maximum supply, which would be
currently issued as well as unminted Bitcoin. As of September 12,
2025, Bitcoin's total supply was 19,919,915 (the maximum supply was
21,000,000). See <a href="https://www.coingecko.com/en/coins/bitcoin">https://www.coingecko.com/en/coins/bitcoin</a>. The
Exchange would calculate market value by utilizing the total supply
number multiplied by the Bitcoin price on that day.
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Further, the Exchange has specified in proposed Rule 5.3-O(g)(3)
that the crypto asset held by the Commodity-Based Trust must underlie a
derivatives contract that trades on a market with which the Exchange
has a comprehensive surveillance sharing agreement, whether directly or
through common membership in ISG.\17\ The Exchange will be required to
ensure that this requirement is met prior to listing options on a
Commodity-Based Trust pursuant to proposed Rule 5.3-O(g)(x).
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\17\ For a list of the current members and affiliate members of
ISG, see <a href="https://isgportal.org/publicmembers">https://isgportal.org/publicmembers</a>.
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Pursuant to this proposed rule change, the proposed listing
criteria would permit a Commodity-Based Trust that is generically
listed pursuant to NYSE Arca Rule 8.201-E (Generic) and holds a single
crypto asset to qualify for the listing of options on that ETF,
provided Rule 5.3-O(g)(3) has also been met, as well as the listing
criteria in Rule 5.3-O(a) and (b), or Rule 5.3-O(g)(1)(B).
Similar to options on any ETF, an option on a Commodity-Based Trust
that meets the requirements of Rule 5.3-O(g)(x) would also be subject
to the Exchange's continued listing standards for options on ETFs set
forth in Rule 5.4-O(k). Pursuant to Rule 5.4-O(k), ETFs approved for
options trading pursuant to Rule 5.3-O(g) will not be deemed to meet
the requirements for continued approval, and the Exchange will not open
for trading any additional series of option contracts covering such
ETFs if the ETFs are delisted from trading as provided in Rule 5.4-
O(b)(6) \18\ or the ETFs are halted from trading on their primary
market.\19\ Additionally, options on Commodity-Based Trusts that are
approved subject to Rule 5.3-O(g)(x) may be subject to the suspension
of opening transactions in any series of options of the class covering
ETFs in any of the following circumstances: \20\
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\18\ Rule 5.4-O(b)(6) provides, if underlying security is
approved for options listing and trading under the provisions of
Rule 5.3-O(a), the trading volume of the Original Security (as
therein defined) prior to but not after the commencement of trading
in the Restructured Security (as therein defined), including ``when
issued'' trading, may be taken into account in determining whether
the trading volume requirement of (3) of this paragraph (b), as well
as the trading volume requirement of paragraph (e) of this Rule are
satisfied.
\19\ See Rule 5.4-O(k).
\20\ See id.
1. In the case of options covering Exchange-Traded Fund Shares
approved pursuant to Rule 5.3-O(g)(1)(A), in accordance with the
terms of paragraphs 1 through 5 of Rule 5.4-O(b); \21\
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\21\ Paragraphs 1 through 5 of Rule 5.4-O(b) provides, if: (1)
there are fewer than 6,300,000 shares of the underlying security
held by persons other than those who are required to report their
security holdings under Section 16(a) of the Exchange Act, (2) there
are fewer than 1,600 holders of the underlying security, (3) the
trading volume (in all markets in which the underlying security is
traded) has been less than 1,800,000 shares in the preceding twelve
months, or (4) the underlying security ceases to be an ``NMS stock''
as defined in Rule 600 of Regulation NMS under the Exchange Act.
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2. Following the initial twelve-month period beginning upon the
commencement of trading of the Exchange-Traded Fund Shares on a
national securities exchange and are defined as an ``NMS stock'' in
Rule 600(b)(55) of Regulation NMS, there are fewer than 50 record
and/or beneficial holders of such Exchange-Traded Fund Shares 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, options on physical commodities and/or Financial
Instruments and Money Market Instruments on which the Exchange-
Traded Fund Shares 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.
Consistent with Rule 6.4-O, which governs the opening of options
series on a specific underlying security (including ETFs), the Exchange
will open at least one expiration month for options on a Commodity-
Based Trusts \22\ at the commencement of trading on the Exchange and
may also list series of options on such Commodity-Based
[[Page 57233]]
Trusts for trading on a weekly,\23\ monthly,\24\ or quarterly \25\
basis. The Exchange may also list long-term equity option series
(``LEAPS'') that expire from twelve to thirty-nine months from the time
they are listed.\26\
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\22\ See Rule 6.4-O(d). The monthly expirations are subject to
certain listing criteria for underlying securities described within
Rule 5.3-O. Monthly listings expire the third Friday of the month.
The term ``expiration date'' (unless separately defined elsewhere in
the OCC By-Laws), when used in respect of an option contract
(subject to certain exceptions), means the third Friday of the
expiration month of such option contract, or if such Friday is a day
on which the exchange on which such option is listed is not open for
business, the preceding day on which such exchange is open for
business. See OCC By-Laws Article I, Section 1. Pursuant to Rule
6.4-O(a), additional series of options of the same class may be
opened for trading on the Exchange when the Exchange deems it
necessary to maintain an orderly market, to meet customer demand or
when the market price of the underlying stock moves more than five
strike prices from the initial exercise price or prices. New series
of options on an individual stock may be added until the beginning
of the month in which the options contract will expire. Due to
unusual market conditions, the Exchange, in its discretion, may add
a new series of options on an individual stock until the close of
trading on the business day prior to expiration.
\23\ See Rule 6.4-O, Commentary .07.
\24\ See Rule 6.4-O, Commentary .09.
\25\ See Rule 6.4-O, Commentary .08.
\26\ See Rule 6.4-O(d).
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Pursuant to Rule 6.4-O, Commentary .05(a), which governs strike
prices of series of options on ETFs, the interval between strike prices
of series of options on an ETF, including ETFs listed pursuant to this
proposed rule change, would be $1 or greater when the strike price is
$200 or less and $5 or greater where the strike price is over $200.\27\
Additionally, the Exchange may list series of options pursuant to the
$1 Strike Price Interval Program,\28\ the $0.50 Strike Program,\29\ the
$2.50 Strike Price Program,\30\ and the $5 Strike Program.\31\ Pursuant
to Rule 6.72-O, where the price of a series of options on an ETF 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.\32\ Any
and all new series of options on a Commodity-Based Trusts that are
approved pursuant to this proposed rule change would be subject to the
expirations, strike prices, and minimum increments set forth in Rules
6.4-O and 6.72-O, as applicable.
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\27\ The Exchange notes that for options listed pursuant to the
Short Term Option Series Program, the Monthly Options Series
Program, and the Quarterly Options Series Program, Rule 6.4-O,
Commentary .07 through .09, specifically set forth intervals between
strike prices on Quarterly Options Series, Short Term Option Series,
and Monthly Options Series, respectively.
\28\ See Rule 6.4-O, Commentary .04.
\29\ See Rule 6.4-O, Commentary .13.
\30\ See Rule 6.4-O, Commentary .03.
\31\ See Rule 6.4-O, Commentary .10.
\32\ If options on a Commodity-Based Trust are eligible to
participate in the Penny Interval Program, the minimum increment of
$0.01 below $3.00 and $0.50 above $3.00 would apply. See Rule 6.4-
O(a)(3). See also Rule 6.72A-O (which describes the requirements for
the Penny Interval Program).
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Options on Commodity-Based Trusts that are approved pursuant to
this proposed rule change would trade in the same manner as options on
other ETFs on the Exchange. The Exchange rules that currently apply to
the listing and trading of all options on ETFs on the Exchange,
including, for example, rules that govern listing criteria,
expirations, exercise prices, minimum increments, position and exercise
limits, margin requirements, customer accounts and trading halt
procedures would apply to the listing and trading of options on
Commodity-Based Trusts on the Exchange in the same manner as they apply
to other options on all other ETFs that are listed and traded on the
Exchange.
Position and exercise limits for options on Commodity-Based Trusts
that are approved pursuant to this proposed rule change would be
determined pursuant to Rules 6.8-O and 6.9-O, respectively. Position
and exercise limits for options on ETFs vary according to the number of
outstanding shares and the trading volumes of the underlying security
over the past six months, where the largest in capitalization and the
most frequently traded ETFs have position and exercise limit of 250,000
contracts (with adjustments for splits, re-capitalizations, etc.) on
the same side of the market; and smaller capitalization ETFs have
position and exercise limits of 200,000, 75,000, 50,000 or 25,000
contracts (with adjustments for splits, re-capitalizations, etc.) on
the same side of the market. Further, the Exchange notes that Rule
4.16-O, which governs margin requirements applicable to the trading of
all options on the Exchange, including options on ETFs, will also apply
to the trading of options on Commodity-Based Trusts listed pursuant to
this proposed rule change.
The Exchange represents that the surveillance procedures applicable
to all other options on other ETFs currently listed and traded on the
Exchange will apply to the trading on the Exchange of options on
Commodity-Based Trusts that are listed pursuant to this proposed rule
change. The Exchange represents that it has the necessary systems
capacity to support the new option series. The Exchange believes that
its existing surveillance and reporting safeguards are designed to
deter and detect possible manipulative behavior which might potentially
arise from listing and trading options on ETFs, including the listing
of options on Commodity-Based Trusts that are listed pursuant to this
proposed rule change.
Also, the Exchange may obtain information from 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 crypto asset, as applicable. The Exchange has specified in
proposed Rule 5.3-O(g)(3) that the crypto asset held by the Commodity-
Based Trust must underlie a derivatives contract that trades on a
market with which the Exchange has a comprehensive surveillance sharing
agreement, whether directly or through common membership in ISG.\33\
The Exchange will be required to ensure that this requirement is met
prior to listing options on a Commodity-Based Trust listed pursuant to
proposed Rule 5.3-O(g)(x).
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\33\ There are a number of futures contracts on digital asset
commodities that are listed and trading on the CME and Coinbase
Derivatives, both of which are ISG members. See <a href="https://www.cmegroup.com/markets/cryptocurrencies.html#products">https://www.cmegroup.com/markets/cryptocurrencies.html#products</a>. See also
<a href="https://www.coinbase.com/derivatives">https://www.coinbase.com/derivatives</a>.
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Additionally, the Exchange has also analyzed its capacity and
represents that it believes the Exchange and the Options Price
Reporting Authority (``OPRA'') have the necessary systems capacity to
handle the additional traffic associated with the listing of new series
of ETFs, including the trading of options on Commodity-Based Trusts
that are approved pursuant to this proposed rule change, up to the
number of expirations currently permissible under the Exchange rules.
Finally, today, the Exchange lists and trades options on ETFs that
would qualify for listing as an option on a Commodity-Based Trust under
proposed Rule 5.3-O(g)(x).\34\
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\34\ The following ETFs currently have options listed on them on
the Exchange: iShares Bitcoin Trust, the Fidelity Wise Origin
Bitcoin Fund, the ARK21Shares Bitcoin ETF, the Grayscale Bitcoin
Trust (BTC), the Grayscale Bitcoin Mini Trust BTC, and the Bitwise
Bitcoin ETF. The Exchange filed rule proposals and received the
appropriate regulatory notice or approval to list the aforementioned
options on the ETFs.
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2. Statutory Basis
The Exchange believes that its proposed rule change is consistent
with Section 6(b) of the Act,\35\ in general, and furthers the
objectives of Section 6(b)(5) of the Act \36\ in particular, in that it
is 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 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) \37\ requirement that the rules
of an exchange not be designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
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\35\ 15 U.S.C. 78f(b).
\36\ 15 U.S.C. 78f(b)(5).
\37\ 15 U.S.C. 78(f)(b)(5).
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In particular, the Exchange believes that its proposal to establish
new listing criteria in proposed Rule 5.3-O(g)(x) with respect to
options on Commodity-Based Trusts, without the need for
[[Page 57234]]
additional approvals, 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 it would allow the Exchange to
immediately list and trade qualifying options on Commodity-Based
Trusts, provided the initial listing criteria has been met, without any
additional approvals from the Commission.
Specifically, the Exchange's proposal to adopt Rule 5.3-O(g)(x) to
allow the listing and trading of options on units that represent
interests in Commodity-Based Trusts that meet the generic criteria of
NYSE Arca Rule 8.201-E (Generic),\38\ and hold a single crypto asset,
is consistent with the Act because it will permit the Exchange to offer
options on certain Commodity-Based Trusts soon after the listing of the
ETF on NYSE Arca, provided all listing criteria have been met. Listing
these options will avail market participants of the opportunity to
hedge their positions in the Commodity-Based Trusts in a timely manner,
thereby providing investors with the ability to hedge their exposure to
the underlying Commodity-Based Trust. Options on Commodity-Based Trusts
benefits investors, similar to the listing of any other option on an
ETF, by providing investors with a relatively lower-cost risk
management tool to manage their positions and associated risk in their
portfolios more easily in connection with exposure to the price of a
crypto asset. Additionally, listing options on Commodity-Based Trusts
provides investors with the ability to transact in such options on a
listed market as opposed to the OTC options market, which increases
market transparency and enhances the process of price discovery to the
benefit of all investors.
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\38\ See supra note 5.
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Also, this proposal would permit options on certain Commodity-Based
Trusts to be listed on the Exchange in the same manner as options on
ETFs that are subject to the current listing criteria in Rule 5.3-O(g).
The Exchange notes that the majority of ETFs are able to list and trade
options once the initial listing criteria have been met without the
need for additional approvals. The proposed rule change would allow
options on certain Commodity-Based Trusts to likewise list and trade
once the proposed listing criteria have been met without the need for
additional approvals.
As proposed, the Exchange would list options on a Commodity-Based
Trust that met the generic criteria of NYSE Arca Rule 8.201-E
(Generic), provided the Commodity-Based Trust held only a single crypto
asset. Further, these options on Commodity-Based Trusts would also be
required to satisfy the conditions in proposed Rule 5.3-O(g)(3).
Specifically, a Commodity-Based Trust that met the requirements of
proposed Rule 5.3-O(g)(x) would also have to satisfy the following
requirements in proposed Rule 5.3-O(g)(3): (A) the total global supply
of the underlying crypto asset held by the Commodity-Based Trust has an
average daily market value of at least $700 million over the last 12
months; and (B) the crypto asset held by the Commodity-Based Trust
underlies a derivatives contract that trades on a market with which the
Exchange has a comprehensive surveillance sharing agreement, whether
directly or through common membership in the ISG.
These requirements are consistent with the Act and the protection
of investors as they are designed to ensure that the underlying ETF has
sufficient liquidity prior to listing options, which will help to
prevent disruption to the underlying market. The Exchange believes that
market supply serves as a good measure of liquidity to prevent the
addition of options trading on the Commodity-Based Trust from
disrupting the market for the underlying security. Requiring the
underlying crypto asset to have a requisite amount of deliverable
supply, in addition to all the other criteria the ETF is required to
have under NYSE Arca Rule 8.201-E (Generic), helps to ensure adequate
liquidity prior to listing. Further, ensuring the crypto asset held by
the Commodity-Based Trust underlies a derivatives contract that trades
on a market with which the Exchange has a comprehensive surveillance
sharing agreement, whether directly or through common membership in the
ISG, will provide the Exchange with information to adequately surveil
options on qualifying Commodity-Based Trusts. Today, the Exchange has a
comprehensive surveillance sharing agreement in place with both the CME
and Coinbase Derivatives through its common membership in ISG. This
facilitates the sharing of information that is available to the CME and
Coinbase Derivatives through their surveillance of their respective
markets, including their surveillance of their respective digital asset
futures markets.
The Exchange also believes the proposed rule change will remove
impediments to and perfect the mechanism of a free and open market and
a national market system, because it is consistent with current
Exchange rules, previously filed with the Commission. Options on
qualifying Commodity-Based Trusts must satisfy the initial listing
standards and continued listing standards currently in the Exchange
rules, applicable to options on all ETFs, including ETFs that hold
other crypto assets already deemed appropriate for options trading on
the Exchange in addition to the proposed criteria. Options on
qualifying Commodity-Based Trusts would trade in the same manner as any
other ETF options--the same Exchange rules that currently govern the
listing and trading of all ETF options, including permissible
expirations, strike prices and minimum increments, and applicable
position and exercise limits and margin requirements, will govern the
listing and trading of options on qualifying Commodity-Based Trusts.
The Exchange represents that it has the necessary systems capacity
to support the listing and trading of options on qualifying Commodity-
Based Trusts. 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 on the
Exchange of these options on Commodity-Based Trust, particularly in
light of the additional requirement that the crypto asset held by the
Commodity-Based Trust underlies a derivatives contract that trades on a
market with which the Exchange has a comprehensive surveillance sharing
agreement, whether directly or through common membership in ISG.
Additionally, today, the Exchange lists and trades options on ETFs
that would qualify for listing as an option on a Commodity-Based Trust
under proposed Options 4, Section 3(h)(vi).\39\
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\39\ The following ETFs currently have options listed on them on
the Exchange: iShares Bitcoin Trust, the Fidelity Wise Origin
Bitcoin Fund, the ARK21Shares Bitcoin ETF, the Grayscale Bitcoin
Trust (BTC), the Grayscale Bitcoin Mini Trust BTC, and the Bitwise
Bitcoin ETF. The Exchange filed rule proposals and received the
appropriate regulatory notice or approval to list the aforementioned
options on the ETFs.
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Finally, the Exchange believes that the reinstatements and
deletions of rule text made to Rules 5.3-0 and 5.4-O as a result of the
government shutdown preventing the Exchange's amendment from being
processed and resulting in the original rule filing being deemed
approved would increase the clarity and transparency of the Exchange's
rules and remove impediments to and perfect the mechanism of a free and
open market by ensuring that persons subject to the Exchange's
jurisdiction, regulators, and the investing public could more easily
navigate and
[[Page 57235]]
understand the Exchange rules. The Exchange further believes that the
proposed amendments would not be inconsistent with the public interest
and the protection of investors because investors will not be harmed
and in fact would benefit from such increased transparency and clarity,
thereby reducing potential confusion.
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.
The Exchange does not believe that the proposal to amend the
listing criteria in Rule 5.3-O(g), with respect to ETFs, to adopt new
criteria to permit the listing and trading of options on certain
Commodity-Based Trusts that hold a single crypto asset and that were
listed pursuant to NYSE Arca Rule 8.201-E (Generic), without the need
for additional approvals, will impose any burden on intramarket
competition that is not necessary or appropriate in furtherance of the
purposes of the Act. Options on qualifying Commodity-Based Trusts would
need to satisfy the initial listing standards set forth in the Exchange
rules in the same manner as any other ETF before the Exchange could
list options on them. Additionally, options on qualifying Commodity-
Based Trusts will be equally available to all market participants who
wish to trade such options. The Exchange rules currently applicable to
the listing and trading of options on ETFs on the Exchange will apply
in the same manner to the listing and trading of all options on
qualifying Commodity-Based Trusts.
Additionally, the Exchange notes that listing and trading options
on qualifying Commodity-Based Trusts on the Exchange will subject such
options to transparent exchange-based rules as well as price discovery
and liquidity, as opposed to alternatively trading such options in the
OTC market. The Exchange believes that the proposed rule change may
relieve any burden on, or otherwise promote, competition as it is
designed to increase competition for order flow on the Exchange in a
manner that is beneficial to investors by providing them with a lower-
cost option to hedge their investment portfolios in a timely manner.
The Exchange does not believe that the proposal to adopt new
listing criteria in Rule 5.3-O(g) to permit the listing and trading of
certain options on a Commodity-Based Trust, without the need for
additional approvals, will impose any burden on intermarket competition
that is not necessary or appropriate in furtherance of the purposes of
the Act. Other options exchanges are free to amend their listing rules,
as applicable, to permit them to list and trade options on Commodity-
Based Trusts.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
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 \40\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\41\
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\40\ 15 U.S.C. 78s(b)(3)(A)(iii).
\41\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Commission is waiving this requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) \42\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\43\ the Commission
may designate a shorter time if such action is consistent with
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposed
rule change may become operative immediately upon filing. The
Commission believes that waiving 30-day operative delay is consistent
with the protection of investors and the public interest because the
proposal seeks to amend the Exchange's rules to be consistent with an
amendment filed by the Exchange during a government shutdown, and which
would have replaced the proposed rule change that did become effective
if the Commission could have received amendments during the pendency of
the government shutdown.\44\ The proposal also aligns the rule text
relating to Commodity-Based Trust Shares with the rule text of other
exchanges and does not introduce any novel regulatory issues.\45\
Accordingly, the Commission designates the proposed rule change to be
operative upon filing.\46\
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\42\ 17 CFR 240.19b-4(f)(6).
\43\ 17 CFR 240.19b-4(f)(6)(iii).
\44\ See supra Section II.A.1.
\45\ See e.g., Nasdaq ISE, LLC, Options Rules, Options 4,
Section 3(h); Cboe Exchange, Inc. Rule 4.3(a).
\46\ For purposes only of waiving the 30-day operative delay,
the Commission also has 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 shall institute proceedings to
determine whether the proposed rule 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#c4b6b1a8a1e9a7aba9a9a1aab0b784b7a1a7eaa3abb2"><span class="__cf_email__" data-cfemail="3b494e575e16585456565e554f487b485e58155c544d">[email protected]</span></a>. Please include
file number SR-NYSEARCA-2025-79 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-NYSEAMER-2025-64. 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 filing 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
[[Page 57236]]
publication submitted material that is obscene or subject to copyright
protection. All submissions should refer to file number SR-NYSEAMER-
2025-64 and should be submitted on or before December 31, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\47\
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\47\ 17 CFR 200.30-3(a)(12) and (59).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-22395 Filed 12-9-25; 8:45 am]
BILLING CODE 8011-01-P
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