Notice2026-06568
Self-Regulatory Organizations; NYSE Arca, Inc.; Order Approving a Proposed Rule Change To Amend Exchange Rule 5.3-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
April 6, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 91 Issue 65 (Monday, April 6, 2026)</title>
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[Federal Register Volume 91, Number 65 (Monday, April 6, 2026)]
[Notices]
[Pages 17320-17322]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-06568]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-105134; File No. NYSEARCA-2026-17]
Self-Regulatory Organizations; NYSE Arca, Inc.; Order Approving a
Proposed Rule Change To Amend Exchange Rule 5.3-O
April 1, 2026.
I. Introduction
On February 6, 2026, NYSE Arca, Inc. (the ``Exchange'' or ``NYSE
Arca'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'' or ``Exchange Act'') \1\ and Rule 19b-4
thereunder,\2\ a proposed rule change to adopt listing criteria for
options on Commodity-Based Trusts that hold multiple crypto assets. The
proposed rule change was published for comment in the Federal Register
on February 19, 2026.\3\ The Commission received no comments regarding
the proposed rule change. This order approves the proposed rule change.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 104842 (Feb. 13,
2026), 91 FR 8037 (``Notice'').
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II. Description of the Proposed Rule Change
Currently, Exchange Rule 5.3-O(g)(x) allows the Exchange to list
options on shares that represent interests in a Commodity-Based Trust
that meets 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 Exchange Rule 5.3-O(g)(3), and provided that (A) the global
supply of the 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'').\4\ As described more fully in the Notice,\5\ the
Exchange proposes to amend Exchange Rule 5.3-O(g)(x) to allow the
Exchange to list and trade options on a Commodity-Based Trust that
holds multiple crypto assets. The proposal would allow the Exchange to
list and trade these options without additional approval from the
Commission.\6\ Under the proposal, each crypto asset that the
Commodity-Based Trust holds must meet the criteria in Exchange Rule
5.3-O(g)(3).\7\ Accordingly, each of the Commodity-Based Trust's crypto
assets must: (A) have an average daily market value of at least $700
million over the last 12 months; and (B) 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.\8\ The proposed Commodity-Based Trust
share options also must satisfy the Exchange's initial and continued
listing standards applicable to all options on exchange-traded funds
(``ETFs'').\9\ Exchange Rule 5.3-O(g) requires the shares of an ETF
underlying listed options to trade on a national securities exchange
and to be an ``NMS stock,'' as defined in Rule 600 of Regulation NMS
under the Exchange Act. In addition, Exchange Rule 5.3-O(g) requires
the shares of an ETF to meet the listing criteria in Exchange
[[Page 17321]]
Rule 5.3-O(g)(1)(A) \10\ or Exchange Rule 5.3-O(g)(1(B).\11\
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\4\ See Exchange Rule 5.3-O(g)(3). Exchange 5.3-O(g)(3) defines
the term ``crypto asset'' to mean ``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.''
\5\ See supra note 3.
\6\ See Notice, 91 FR 8040.
\7\ See proposed Exchange Rule 5.3-O(g)(3).
\8\ See proposed Exchange Rule 5.3-O(g)(3). The Exchange states
that the market value for each crypto asset that a Commodity-Based
Trust holds will be calculated by taking the total global supply of
the crypto asset multiplied by the token price of that asset. The
Exchange states that the total supply of a crypto asset includes all
crypto assets currently issued and does not include unissued crypto
assets. See Notice, 91 FR at 8038.
\9\ See Notice, 91 FR 8038. In its proposal, the Exchange refers
to Commodity-Based Trust Shares as ETFs. See id. at 8038, 8039. The
Exchange's rules use the term ``exchange-traded fund'' to refer to
several types of investment products, including Commodity-Based
Trusts. See Exchange Rule 5.3-O(g).
\10\ See Notice, 91 FR 8038. Exchange Rule 5.3-O(g)(1)(A)
requires an ETF to meet the criteria in Exchange Rule 5.3-O(a) and
(b). Exchange Rule 5.3-O(a) states, in part, that absent exceptional
circumstances, an underlying security will not be selected for
options trading unless: (1) there are a minimum of 7,000,000 shares
of the underlying security which shall be owned by persons other
than those required to report their stock holdings under Section
16(a) of the Securities Exchange Act of 1934; (2) there are a
minimum of 2,000 shareholders of the underlying security; (3)
trading volume (in all markets in which the underlying security is
traded) has been at least 2,400,000 shares in the preceding twelve
months. In considering for approval underlying securities that have
not been primarily traded on a national securities exchange or
designated as national market system securities for the one year
preceding such approval, the Exchange may take into account the
volume of trading in such security in the over-the-counter market as
reflected in the NASDAQ system. If the volume of trading in the
over-the-counter market meets the requirements specified above, then
the security may be deemed to have met the volume requirements set
forth in the agreements between the Exchange and the Clearing
Corporation; (4) (A) if the underlying security is a ``covered
security'' as defined under Section 18(b)(1)(A) of the Securities
Act of 1933 (i) the market price per share of the underlying
security has been at least $3.00 for the previous three consecutive
business days preceding the date on which the Exchange submits a
certificate to the Clearing Corporation for listing and trading, as
measured by the closing price reported in the primary market in
which the underlying security is traded; however, (ii) the
requirements set forth in (4)(A)(i) will be waived during the three
days following its initial public offering day for an underlying
security having a market capitalization of at least $3 billion based
upon the offering price of its initial public offering, and may be
listed and traded starting on or after the second business day
following the initial public offering day; (B) if the underlying
security is not a ``covered security,'' the market price per share
of the underlying security has been at least $7.50 for the majority
of business days during the three calendar months preceding the date
of selection, as measured by the lowest closing price reported in
any market in which the underlying security traded on each of the
subject days; (5) the issuer is in compliance with any applicable
requirements of the Securities Exchange Act of 1934. Exchange Rule
5.3-O(b) states that underlying securities must be registered and be
an ``NMS stock'' as defined in Rule 600 of Regulation NMS under the
Exchange Act.
\11\ Exchange Rule 5.3-O(g)(1)(B) states that the Exchange-
Traded Fund Shares must be 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. In addition, 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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The continued listing criteria in proposed Exchange Rule 5.4-
O(k)(3) will allow the Exchange to suspend opening transactions in
options on Commodity-Based Trust shares if any crypto asset held by the
Commodity-Based Trust (A) no longer has an average daily market value
of at least $700 million over the last 12 months, as determined by the
Exchange on a monthly basis; or (B) no longer 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. The Exchange states that requiring
the average daily market value criterion to be met on a monthly basis
is reasonable given that the Exchange believes that it is unlikely that
a crypto asset with an average daily market value of at least $700
million over the previous twelve months would fail to meet that
standard as a result of trading over a relatively short period of
time.\12\
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\12\ See Notice, 91 FR 8038-9. For example, the Exchange states
that a crypto asset with market capitalization of $500 million for
15 days in a 20-day trading month could lose up to 88% of its value
and continue to meet the criteria. See id. at 8039.
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Options on Commodity-Based Trust shares also will be subject to the
continued listing standards in Exchange Rule 5.4-O(k).\13\ Under
Exchange Rule 5.4-O(k), shares of an ETF approved for options trading
would not meet the requirements for continued approval if the shares
were delisted from trading as provided in Exchange Rule 5.4-O(b)(5)
because the underlying security was no longer an NMS stock, as defined
in Rule 600 of Regulation NMS under the Exchange Act, or trading in the
shares is halted or suspended from trading in their primary market.\14\
Further, Exchange Rule 5.4-O(k)(4) (renumbered as Exchange Rule 5.4-
O(k)(5)) would allow the Exchange to consider suspending opening
transactions in options on Commodity-Based Trust shares if the Exchange
believes that further dealing in the options on the Exchange is
inadvisable.\15\
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\13\ See id. at 8038.
\14\ See Exchange Rule 5.3-O(k).
\15\ See Notice, 91 FR at 8039.
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The Exchange states that the proposed options on Commodity-Based
Trust shares would trade in the same manner as other ETF options on the
Exchange and will be subject to Exchange rules that currently apply to
the listing and trading of ETF options, including Exchange rules
governing, for example, expirations, exercise prices, minimum
increments, position and exercise limits, margin requirements, customer
accounts, and trading halt procedures.\16\ The Exchange states that
position and exercise limits for options on Commodity-Based Trust
shares will be determined pursuant to Exchange Rules 6.8-O and 6.9-
O.\17\
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\16\ See id. at 8039.
\17\ See id.
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The Exchange represents that the same surveillance procedures
applicable to all ETF options currently listed and traded on the
Exchange will apply to the trading of options on Commodity-Based Trust
shares that are approved subject to proposed Exchange Rule 5.3-
O(g)(x).\18\ The Exchange states 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 Commodity-Based Trust shares that are approved
subject to proposed Exchange Rule 5.3-O(g)(x).\19\ The Exchange states
that it 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.\20\ In addition, the Exchange states that it
currently lists options that would qualify for listing as on option on
a Commodity-Based Trust under proposed Exchange Rule 5.3-O(g)(x).\21\
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\18\ See id.
\19\ See id.
\20\ See id.
\21\ See id. at 8040. The Exchange states that it currently
lists options on shares of the following funds: the iShares Bitcoin
Trust, the Fidelity Wise Origin Bitcoin Fund, the ARK21 Shares
Bitcoin ETF, the Grayscale Bitcoin Trust (BTC), the Grayscale
Bitcoin Mini Trust BTC, and the Bitwise Bitcoin ETF. See Notice, 91
FR at 8040, footnote 25.
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The Exchange states that it believes both the Exchange and the
Options Price Reporting Authority (``OPRA'') have the necessary systems
capacity to handle the additional traffic associated with the listing
of the proposed options on the Commodity-Based Trust shares.\22\
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\22\ See id. at 8040.
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III. Discussion and Commission Findings
After careful review, the Commission finds that the proposed rule
change is consistent with the requirements of the Act and the rules and
regulations thereunder applicable to a national securities
exchange.\23\ Specifically, the Commission finds that the proposed rule
change is consistent with Section 6(b)(5) of the Act,\24\ which
requires, among other things, that the rules of a national securities
exchange be designed to prevent fraudulent and
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manipulative acts and practices, to remove impediments to and perfect
the mechanism of a free and open market, and, in general, to protect
investors and the public interest.
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\23\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
\24\ 15 U.S.C. 78f(b)(5).
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The Exchange proposes to amend Exchange Rule 5.3-O(g)(x) to permit
the Exchange to list options on shares of a Commodity-Based Trust that
holds multiple crypto assets, provided that the Commodity-Based Trust
meets certain requirements, as described above. The proposal will allow
the Exchange to list options on shares of these Commodity-Based Trusts
without further approval from the Commission, thereby permitting the
Exchange to list these options soon after the Exchange lists the
underlying Commodity-Based Trust shares. Permitting the listing and
trading of these options on the Exchange will provide investors with an
additional vehicle for gaining and hedging exposure to the underlying
Commodity-Based Trust shares. The Commission recently approved a Nasdaq
ISE, LLC proposal to establish listing standards for options on shares
of Commodity-Based Trusts that hold multiple crypto assets.\25\
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\25\ See Securities Exchange Act Release No. 105072 (Mar. 24,
2026), 91 FR 14894 (Mar. 27, 2026).
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Options on shares of Commodity-Based Trusts that hold multiple
crypto assets will be subject to the same initial and continued listing
requirements for options on Commodity-Based Trusts that hold a single
crypto asset except that each crypto asset that a Commodity-Based Trust
holds must (A) have an average daily market value of at least $700
million over the last 12 months; and (B) 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. The requirements in proposed Exchange
Rule 5.3-O(g)(3) are designed to help ensure that each of the crypto
assets that a Commodity-Based Trust holds is sufficiently liquid that
the creation and redemption process for shares of the Commodity-Based
Trust will operate without disruption and that Commodity-Based Trust
shares will be available to options market makers and other market
participants that may use Commodity-Based Trust shares to hedge their
positions. The Exchange will consider suspending opening transactions
in Commodity-Based Trust share options if the requirements in proposed
Exchange Rule 5.3-O(g)(3) are no longer satisfied.\26\
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\26\ See proposed Exchange Rule 5.4-O(k)(3).
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The Exchange represents that the same surveillance procedures
applicable to ETF options currently listed and traded on the Exchange
will apply to the trading of options on Commodity-Based Trust
shares.\27\ The Exchange states that its existing surveillance and
reporting safeguards are designed to deter and detect possible
manipulative behavior that might arise from listing and trading options
on ETFs, including the listing of options on Commodity-Based Trust
shares.\28\ As discussed above, each crypto asset held by a 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.\29\
This requirement, in addition to the Exchange's existing surveillance
procedures, should assist the Exchange in investigating suspected
manipulations or other trading abuses in Commodity-Based Trust share
options.
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\27\ See Notice, 91 FR at 8039.
\28\ See id.
\29\ See proposed Exchange Rule 5.3-O(g)(3).
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IV. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\30\ that the proposed rule change (SR-NYSEARCA-2026-17) is
approved.
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\30\ 15 U.S.C. 78s(b)(2).
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For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\31\
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\31\ 17 CFR 200.30-3(a)(12).
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-06568 Filed 4-3-26; 8:45 am]
BILLING CODE 8011-01-P
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