Notice2026-07037
Self-Regulatory Organizations; Cboe Exchange, Inc.; Order Approving a Proposed Rule Change, as Modified by Amendment No. 1, To Exchange Rules 4.3 (Criteria for Underlying Securities) and 4.4 (Withdrawal of Approval of Underlying Securities) To Establish Listing Criteria and Withdrawal Standards for Options on Commodity-Based Trusts Holding Multiple Crypto Assets
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 13, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 91 Issue 70 (Monday, April 13, 2026)</title>
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[Federal Register Volume 91, Number 70 (Monday, April 13, 2026)]
[Notices]
[Pages 18960-18962]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-07037]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-105175; File No. SR-CBOE-2026-020]
Self-Regulatory Organizations; Cboe Exchange, Inc.; Order
Approving a Proposed Rule Change, as Modified by Amendment No. 1, To
Exchange Rules 4.3 (Criteria for Underlying Securities) and 4.4
(Withdrawal of Approval of Underlying Securities) To Establish Listing
Criteria and Withdrawal Standards for Options on Commodity-Based Trusts
Holding Multiple Crypto Assets
April 8, 2026.
I. Introduction
On February 23, 2026, Cboe Exchange, Inc. (``Cboe'' or ``the
Exchange'') 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 March 4,
[[Page 18961]]
2026.\3\ The Commission received no comments regarding the proposed
rule change. On April 1, 2026, the Exchange filed Amendment No. 1 to
the proposal, which amends and replaces the original proposal in its
entirety (``Amendment No. 1'').\4\ This order approves the proposed
rule change, as modified by Amendment No. 1.
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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. 104904 (Feb. 27,
2026), 91 FR 10640.
\4\ Amendment No. 1 corrects an erroneous proposed change to a
cross-reference in Exchange Rule 4.4, Interpretation and Policy .06,
but makes no substantive changes to the proposal. Because Amendment
No. 1 is technical in nature, it is not subject to notice and
comment.
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II. Description of the Proposed Rule Change, as Modified by Amendment
No. 1
Currently, Exchange Rule 4.3, Interpretation and Policy .06(a)(6)
allows the Exchange to list options on shares that represent interests
in a Commodity-Based Trust that meets the generic criteria of the U.S.
securities exchange that is the primary equities listing market for the
Commodity-Based Trust, except that the Commodity-Based Trust holds a
single crypto asset, as defined in Exchange Rule 4.3, Interpretation
and Policy .06(a)(6), 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'').\5\ The Exchange proposes to amend Exchange Rule 4.3,
Interpretation and Policy .06(a)(6) 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 proposed Exchange Rule 4.3, Interpretation and
Policy, 06(a)(6).\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 Units.\9\ Under the
Exchange's rules, shares of securities underlying listed options must
be NMS stocks.\10\ In addition, Exchange Rule 4.3, Interpretation and
Policy .06(b) requires the shares of a Unit to (1) meet the criteria
and guidelines in Exchange Rule 4.3 and Interpretation and Policy .01
thereunder,\11\ or (2) meet the criteria in Exchange Rule 4.3,
Interpretation and Policy .06(b)(2).\12\
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\5\ See Exchange Rule 4.3, Commentary .06(a)(6). Exchange Rule
4.3, Commentary .06(a)(6) 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.''
\6\ See Amendment No. 1 at 7.
\7\ See proposed Exchange Rule 4.3, Interpretation and Policy
.06(a)(6).
\8\ See proposed Exchange Rule 4.3, Interpretation and Policy
.06(a)(6). 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 Amendment No. 1 at 5.
\9\ See Amendment No. 1 at 9. The Exchange's rules define
``Unit'' and ``ETF'' (``Exchange-Traded Fund'') to mean a share or
other security traded on a national securities exchange and defined
as an NMS stock as set forth in Rule 4.3. See Exchange Rule 1.1. In
its proposal, the Exchange refers to Commodity-Based Trusts as ETFs
or Units. See Amendment No. 1.
\10\ See Exchange Rule 4.3(a)(1).
\11\ See Amendment No. 1 at 6. Exchange Rule 4.3(a) states that
securities underlying options that are approved for listing and
trading on the Exchange must meet the following criteria: (1) the
security must be duly registered and be an NMS stock; and (2) the
security shall be characterized by a substantial number of
outstanding shares which are widely held and actively traded.
Exchange Rule 4.3, Interpretation and Policy .01 states, in part,
that, absent exceptional circumstances, the following guidelines
with respect to issuers shall be met: (a) Guidelines applicable to
the issuer of the security are: (1) there are a minimum of 7,000,000
shares of the underlying security which are owned by persons other
than those required to report their stock holdings under Section
16(a) of the Exchange Act: (2) there are a minimum of 2,000 holders
of the underlying security; (3) the issuer is in compliance with any
applicable requirements of the Exchange Act. (b) Guidelines
applicable to the market for the security are: (1) 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; (2)) 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 Options Clearing
Corporation for listing and trading. For purposes of this
Interpretation .01(b)(2)(A), the market price of such underlying
security is measured by the closing price reported in the primary
market in which the underlying security is traded; however, (ii) the
requirements set forth in clause (i) will be waived during the three
days following an underlying security's initial public offering day
if the underlying security has a market capitalization of at least
$3 billion based on upon the offering price of its initial public
offering, in which case options on the underlying security 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.
\12\ Exchange Rule 4.3, Interpretation and Policy .06(b)(2)
states that the Units must be available for creation or redemption
each business day from or through the issuing trust, investment
company, commodity pools or other issuer in cash or in kind at a
price related to net asset value, and the issuing trust, investment
company, commodity pools or other issuer is obligated to issue Units
in a specified aggregate number even if some or all of the
investment assets and/or cash required to be deposited have not been
received by the, the issuing trust, investment company, commodity
pools or other issuer, subject to the condition that the person
obligated to deposit the investment assets has undertaken to deliver
the investment assets and/or cash as soon as possible and such
undertaking is secured by the delivery and maintenance of collateral
consisting of cash or cash equivalents satisfactory to the issuer of
Units which underlie the option as described in the Units'
prospectus.
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The continued listing criteria in proposed Exchange Rule 4.4,
Interpretation and Policy .06(c) 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.\13\
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\13\ See Amendment No. 1 at 10. For example, the Exchange states
that if a crypto asset has a market capitalization of $900 million
and traded at that market capitalization for 15 days in a 20-day
trading month, the crypto asset could lose a substantial amount of
its value (up to 88%) and still meet the criteria. See id.
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Options on Commodity-Based Trust shares also will be subject to the
continued listing standards in the Exchange's rules that are applicable
to
[[Page 18962]]
options on all Units.\14\ Under Exchange Rule 4.4, Interpretation and
Policy .06, shares of a Unit approved for options trading would not
meet the requirements for continued approval if the Units cease to be
an NMS stock or the Units are halted from trading on their primary
market. Further, Exchange Rule 4.4, Interpretation and Policy .06(d)
(renumbered as Exchange Rule 4.4, Interpretation and Policy .06(e))
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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\14\ See id.
\15\ See id. at 10-11.
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The Exchange states that the proposed options on Commodity-Based
Trust shares would trade in the same manner as other Unit options and
will be subject to the Exchange rules that currently apply to the
listing and trading of Unit options, including permissible expirations,
strike prices and minimum increments, applicable position and exercise
limits, and margin requirements.\16\ In addition, the Exchange
represents that it has the necessary systems capacity to support the
listing and trading of options on shares of qualifying Commodity-Based
Trusts.\17\
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\16\ See id. at 11.
\17\ See id.
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The Exchange states that it believes that its existing surveillance
and reporting safeguards are designed to deter and detect possible
manipulative behavior which might arise from listing and trading the
proposed options on Commodity-Based Trust shares, particularly in light
of the requirement that each crypto asset held by a Commodity-Based
Trust 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.\18\ In addition,
the Exchange states that it lists and trades options on Units that
would qualify for listing as an option on a Commodity-Based Trust under
proposed Exchange Rule 4.3, Interpretation and Policy .06(a)(6), and it
has not identified any issues with the listing and trading of options
on those Units.\19\
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\18\ See id.
\19\ See id.
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III. Discussion and Commission Findings
After careful review, the Commission finds that the proposed rule
change, as modified by Amendment No. 1, is consistent with the
requirements of the Act and the rules and regulations thereunder
applicable to a national securities exchange.\20\ Specifically, the
Commission finds that the proposed rule change, as modified by
Amendment No. 1, is consistent with Section 6(b)(5) of the Act,\21\
which requires, among other things, that the rules of a national
securities exchange be designed to prevent fraudulent and 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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\20\ 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).
\21\ 15 U.S.C. 78f(b)(5).
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The Exchange proposes to amend Exchange Rule 4.3, Interpretation
and Policy .06(a)(6) 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 a U.S. securities exchange that is the primary listing market for
the Commodity-Based Trust 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 proposals by Nasdaq ISE, LLC, NYSE
American LLC, and NYSE Arca, Inc., to establish listing standards for
options on shares of Commodity-Based Trusts that hold multiple crypto
assets.\22\
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\22\ See Securities Exchange Act Release Nos. 105072 (Mar. 24,
2026), 91 FR 14894 (Mar. 27, 2026); 105134 (Apr. 1, 2026); and
105133 (Apr. 1, 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 4.3, Interpretation and Policy .06(a)(6) 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 4.3, Interpretation and Policy
.06(a) are no longer satisfied.\23\
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\23\ See proposed Exchange Rule 4.4, Interpretation and Policy
.06(c).
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The Exchange states that it believes that its existing surveillance
and reporting safeguards are designed to deter and detect possible
manipulative behavior which might arise from listing and trading the
proposed options on Commodity-Based Trust shares.\24\ 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.\25\ 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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\24\ See Amendment No. 1 at 11.
\25\ See proposed Exchange Rule 4.3, Interpretation and Policy
.06(a)(6).
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IV. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\26\ that the proposed rule change (SR-CBOE-2026-020), as modified
by Amendment No. 1, is approved.
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\26\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\27\
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\27\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-07037 Filed 4-10-26; 8:45 am]
BILLING CODE 8011-01-P
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