Notice2026-11484
Self-Regulatory Organizations; MEMX LLC; Notice of Filing of a Proposed Rule Change To Amend Rules 19.3 and 19.4 To Establish Listing Criteria and Withdrawal Standards for Options on Commodity-Based Trusts That Hold 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
June 9, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 91 Issue 110 (Tuesday, June 9, 2026)</title>
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[Federal Register Volume 91, Number 110 (Tuesday, June 9, 2026)]
[Notices]
[Pages 34867-34872]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-11484]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-105616; File No. SR-MEMX-2026-13]
Self-Regulatory Organizations; MEMX LLC; Notice of Filing of a
Proposed Rule Change To Amend Rules 19.3 and 19.4 To Establish Listing
Criteria and Withdrawal Standards for Options on Commodity-Based Trusts
That Hold Multiple Crypto Assets
June 4, 2026.
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 May 21, 2026, MEMX LLC (``MEMX'' or ``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 Exchange. 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. 78s(b)(1).
\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 is filing with the Commission a proposed rule change
to amend Rule 19.3, Criteria for Underlying Securities, and Rule 19.4,
Withdrawal of Approval of Underlying Securities, to establish listing
criteria and withdrawal standards for options on Commodity-Based Trusts
that hold multiple crypto assets. The text of the proposed rule change
is provided in Exhibit 5 and is available on the Exchange's website at
<a href="https://info.memxtrading.com/regulation/rules-and-filings/">https://info.memxtrading.com/regulation/rules-and-filings/</a>.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend Rule 19.3, Criteria for Underlying
Securities, and Rule 19.4, Withdrawal of Approval of Underlying
Securities, to establish listing criteria and withdrawal standard for
options on Commodity-Based Trusts that hold multiple crypto assets.\3\
Specifically, the Exchange proposes to amend the criteria for listing
options on Fund Shares \4\ at Rule 19.3(i) and withdrawal criteria at
Rule 19.4. This a competitive filing substantively identical to a
proposal submitted by another options exchange that has recently been
deemed approved by the Commission.\5\
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\3\ The Exchange notes that the rules of Chapter 19, including
Rules 19.3 and 19.5, are incorporated by reference into the rulebook
of its affiliate Exchange, MX2, LLC.
\4\ ``Fund Shares'' are defined in Rule 19.3(i).
\5\ See Securities Exchange Act Release No. 105072 (March 24,
2026) 91 FR 14894 (March 27, 2026) (SR-ISE-2025-30) (Self-Regulatory
Organizations; Nasdaq ISE, LLC; Order Approving a Proposed Rule
Change, as Modified by Amendment Nos. 1 and 2, Regarding the
Adoption of Listing Criteria for Options on Commodity-Based Trusts
That Hold Multiple Crypto Assets).
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[[Page 34868]]
On January 7, 2026, the Exchange filed a proposal to permit certain
options on Fund Shares that represent interests in a Commodity-Based
Trust that meet certain generic listing requirements.\6\ Currently,
Rule 19.3(i)(v) \7\ allows the Exchange to list and trade options on
Fund Shares that represent interests in a Commodity-Based Trust that
(A) meets the generic criteria of the U.S. exchange that is the primary
equities listing market for the Commodity-Based Trust, and (B) holds a
single crypto asset that meets certain requirements.
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\6\ See Securities Exchange Release No. 104592 (January 13,
2026), 91 FR 2244 (January 16, 2016) (SR-MEMX-2026-01) (Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To
Amend Rule 19.3 To Permit the Listing and Trading of Options on
Commodity-Based Trust Shares).
\7\ In connection with this filing, the Exchange is proposing to
renumber the list of securities deemed appropriate for trading under
19.3(i) using lowercase roman numerals i-v, as opposed to the
numbers 1-5 in an effort to avoid confusion when referencing
sections of this rule and otherwise maintain consistency with the
numbering throughout the Exchange's rulebook. Additionally, it is
proposing to renumber the criteria required under 19.3(i)(v)
(formerly 19.3(i)(5), as numbers (1) and (2), which were previously
numbered (i) and (ii).
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On September 17, 2025, the Commission approved proposals by The
Nasdaq Stock Market LLC, Cboe BZX Exchange, Inc. and NYSE Arca, Inc.,
to Adopt Generic Listing Standards for Commodity-Based Trusts.\8\ In
the approval order, the Commission noted that each of the exchanges
proposed to adopt substantially identical ``generic'' listing standards
for Commodity-Based Trusts. Those generic listing standards define the
term shares of a ``Commodity-Based Trust'' as a security \9\ that:
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\8\ See Securities Exchange Act Release No. 103995 (Sept. 17,
2025), 90 FR 45414 (Sept. 22, 2025) (Self-Regulatory Organizations;
The Nasdaq Stock Market LLC; Cboe BZX Exchange, Inc.; NYSE Arca,
Inc.; Order Granting Accelerated Approval of Proposed Rule Changes,
as Modified by Amendments Thereto, To Adopt Generic Listing
Standards for Commodity-Based Trust Shares)(SR-NASDAQ-2025-056; SR-
CboeBZX-2025-104; SR-NYSEARCA-2025-54) (``Generic Listing Standards
for Commodity-Based Trust Shares Approval''). The Exchange believes
that it is appropriate to rely on the generic listing standards
outlined by the primary listing market due to the potential
proliferation of new primary listing markets and the Commission's
acknowledgment that the definition of shares of a Commodity-Based
Trust across those primary listing markets is substantially
identical.
\9\ Shares of the applicable Commodity-Based Trust trade as
equity securities. See Securities Exchange Act Release No. 50603
(Oct. 28, 2004), 69 FR 64614, 64619 (Nov. 5, 2004) (SR-NYSE-2004-22)
(approving the listing and trading of street TRACKS Gold Shares)
(``Spot Gold Approval Order'') and ETP Request for Comments, infra
note 20, at 34731. See also Nasdaq Rule 5711(d)(ii); proposed BZX
Rule 14.11(e)(4)(B); proposed NYSE Arca Rule 8.201-E(b) (Generic)
(stating that Commodity-Based Trust Shares are included within the
definition of a ``security'' as such term is used in the Exchanges'
rules and are subject to the Exchanges' existing rules governing the
trading of equity securities).
(1) 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 (``CEA''), and is not
registered as an investment company pursuant to the Investment
Company Act of 1940, or series or class thereof;
(2) is designed to reflect the performance of one or more
reference assets or an index of reference assets;
(3) in order to reflect the performance, is issued by a Trust
that holds (a) one or more commodities or commodity-based assets,
and (b) in addition to such commodities or commodity-based assets,
may hold securities, cash, and cash equivalents;
(4) 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
(5) 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.
Specifically, the Commodity-Based Trust must satisfy the following:
(1) 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 (2) 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'').
At this time, the Exchange proposed to amend Rule 19.3(i)(v) to
permit the listing and trading of options on a Commodity-Based Trust
that holds multiple crypto assets in addition to a Commodity-Based
Trust that holds a single crypto asset. As amended, Exchange Rule
19.3(i)(v) would state:
(v) 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 or multiple crypto
assets that meets the following requirements: (1) the total global
supply of each underlying crypto asset(s) held by the Commodity-Based
Trust has an average daily market value of at least $700 million over
the last 12 months; and (2) each 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 number (v) in 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.
With the addition of multiple crypto assets, the criteria would
require each underlying crypto asset to meet the total global supply
figure and to underlie a derivative contract that trades on a market
with which the Exchange has a comprehensive surveillance sharing
agreement. The market value for each underlying crypto asset held by a
Commodity-Based Trust will be calculated by taking the total global
supply of the particular crypto asset multiplied by the token price of
that asset.\10\ The total supply of a crypto asset includes all crypto
assets currently issued and does not include unissued crypto
assets.\11\
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\10\ 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>.
\11\ 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 March 10, 2026
Bitcoin's total supply was 20,000,406 (the maximum supply is
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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As a result of this filing, the proposed listing criteria would
permit a Commodity-Based Trust that is generically listed on the
applicable primary listing market and holds multiple crypto assets to
qualify for the listing of options on that ETF, provided Exchange Rule
19.3(i)(v), as amended in the relevant part, has also been met, as well
as the listing criteria in Exchange Rule 19.3(a) and (b), or Exchange
Rule 19.3(i)(1)(B). Similar to options on any ETF, an option on a
Commodity-Based Trust that meets the requirements of Exchange Rule
19.3(i)(v) would also be subject to the Exchange's continued listing
standards for options on ETFs set
[[Page 34869]]
forth in Exchange Rule 19.4(g). Currently, pursuant to Exchange Rule
19.4(g), ETFs approved for options trading pursuant to Exchange Rule
19.3 will not be deemed to meet the requirements for continued
approval, and the Exchange shall not open for trading any additional
series of option contracts of the class covering that such ETFs, if the
ETFs are delisted from trading pursuant to Exchange Rule
19.4(b)(4),\12\ or are halted or suspended from trading in their
primary market.\13\ With respect to options on Commodity-Based Trusts
that are approved subject to Exchange Rule 19.3(i)(v), the Exchange
proposes to amend Exchange Rule 19.4(g) to adopt a new subparagraph (3)
which states, ``In the case of options covering Fund Shares approved
pursuant to Exchange Rule 19.3(i)(v), if the criteria in Exchange Rule
19.3(i)(v)(1) are no longer satisfied, as determined by the Exchange on
a monthly basis, or if the criteria in Exchange Rule 19.3(i)(v)(2) are
no longer satisfied.'' \14\ This proposed new criteria would require
ETFs that are listed pursuant to Exchange Rule 19.3(i)(v) to continue
to meet the requirements of Exchange Rule 19.3(i)(v)(1) and (2).
Additionally, this proposed new criteria, which would also be added to
Exchange Rule 19.4(g)(1), would require ETFs that are listed pursuant
to Exchange Rule 19.3(i)(1)(A) \15\ to continue to meet the
requirements of Exchange Rule 19.4 subparagraphs (b)(1), (2), (3) and
(4) of Exchange Rule 19.4. The Exchange is proposing that the criteria
in Exchange Rule 19.3(i)(v)(1) be met on a monthly basis while the
criteria in Exchange Rule 19.3(i)(v)(2) be met on a daily basis. The
Exchange believes that requiring the criteria in Exchange Rule
19.3(i)(v)(1) 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 resulting of
trading over a relatively short period of time. By way of example, 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. Similarly, a crypto asset with a market
capitalization of $500 million for 15 days in a 20- day trading month,
would have to achieve a market capitalization of $1.3 billion (a 160%
increase) in the last 5 days to meet the criteria. Given the
unlikelihood that there would be a huge movement over a month's period
of time and considering the work that would be required to calculate
the criteria on a daily basis as compared to each month, the Exchange
believes that the proposed continued listing obligation for the average
daily market value criteria is sufficient. Further, options on
Commodity-Based Trusts that are approved subject to Exchange Rule
19.3(i)(v) would continue to be subject to Exchange Rule 19.4(g)(5), as
renumbered, which states that the Exchange may consider suspending open
transactions in options on Fund Shares if, ``such other event occurs or
condition exists that in the opinion of the Exchange makes further
dealing in such options on MEMX Options inadvisable.'' The Exchange may
determine at any point to delist an option on a Commodity-Based Trust
that may not have sufficient liquidity or market demand.
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\12\ Exchange Rule 19.4(b)(4) provides the Exchange will not
open for trading any additional series of options on shares of an
ETF if the ETF is no longer an NMS stock as defined in Rule 600 of
Reg NMS under the Act.
\13\ See Exchange Rule 19.4(g).
\14\ The Exchange proposes to renumber the remaining paragraphs
in Rule 19.4(g).
\15\ The Exchange notes that it is amending incorrect references
in Rules 19.4(g)(1) and 19.4(g)(2) from 19.3(i)(4)(A) and
19.3(i)(4)(B) (provisions which do not exist in the Exchange's
rulebook) to 19.3(i)(1)(A) and 19.3(i)(1)(B), respectively.
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Consistent with current Rule 19.5, which governs the opening of
options series on a specific underlying security (including ETFs), the
Exchange will open at least one expiration month and one series of
options on a Commodity-Based Fund Share \16\ at the commencement of
trading on the Exchange and may also list series of options on a
Commodity-Based Fund Share for trading on a weekly,\17\ monthly,\18\ or
quarterly basis.\19\ The Exchange may also list long-term options
series that expire from 12 to 39 months from the time they are
listed.\20\
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\16\ See Rule 19.5(b) and (e). The monthly expirations are
subject to certain listing criteria for underlying securities
described within Rule 19.3. 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 19.5(c), additional series of options of the same class may
be opened for trading on the Exchange when the Exchange deems it
necessary to maintain an orderly market, to meet customer demand or
when the market price of the underlying stock moves more than five
strike prices from the initial exercise price or prices. 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.
\17\ See Rule 19.5, Interpretation and Policy .05.
\18\ See Rule 19.5, Interpretation and Policy .08.
\19\ See Rule 19.5, Interpretation and Policy .04.
\20\ See Rule 19.7.
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Pursuant to Rule 19.5, Interpretation and Policy .01, which governs
strike prices of series of options on Fund Shares, the interval of
strike prices for series of options on Commodity-Based Fund Shares may
be $1 or greater where the strike price is $200 or less or $5 or
greater where the strike price is over $200.\21\ Additionally, the
Exchange may list series of options pursuant to the $1 Strike Price
Interval Program,\22\ the $0.50 Strike Program,\23\ the $2.50 Strike
Price Program,\24\ and the $5 Strike Program.\25\ Pursuant to Rule
21.5, where the price of a series of a Commodity-Based Fund Share
option 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.\26\ Any and all new series of Commodity-Based Fund Share options
that the Exchange lists will be consistent and comply with the
expirations, strike prices, and minimum increments set forth in Rules
19.5 and 21.5, as applicable.
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\21\ The Exchange notes that for options listed pursuant to the
Short Term Option Series Program, Rule 19.5, Interpretation and
Policy .08 sets forth intervals between strike prices on Short Term
Option Series.
\22\ See Rule 19.5, Interpretations and Policies .01 and .02.
\23\ See Rule 19.5, Interpretation and Policy .06.
\24\ See Rule 19.5, Interpretation and Policy .03.
\25\ See Rule 19.5(d)(5).
\26\ If options on a Commodity-Based Trust are eligible to
participate in the Penny Interval Program, the minimum increment
will be $0.01 for series with a price below $3.00 and $0.05 for
series with a price at or above $3.00. See Rule 21.5(d) (which
describes the requirements for the Penny Interval Program).
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Options on Commodity-Based Trusts that may be listed pursuant to
proposed Rule 19.3(i)(v) will 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 Fund Share options 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 will apply to the listing and trading of options on
Commodity-Based Trusts that are approved subject to Rule 19.3(i)(v) in
the same manner.
Position and exercise limits for options, including options on
[[Page 34870]]
Commodity-Based Trust Shares, are determined pursuant to Rules 18.7 and
18.9, 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 funds have an
option 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 funds 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.\27\ Further, the Exchange notes that Rule 28.3, 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 proposed Rule
19.3(i)(v).
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\27\ See Exchange Rules 18.7 and 18.9.
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The Exchange represents it has an adequate surveillance program in
place for options and intends to apply those same program procedures to
options on Commodity-Based Trusts that may be listed pursuant to
proposed Rule 19.3(i)(v) that it applies to the Exchange's other
options products.\28\ The Exchange believes that existing surveillance
procedures are designed to deter and detect possible manipulative
behavior which might potentially arise from listing and trading the
proposed options on Commodity-Based Trusts. Additionally, the Exchange
is a member of the Intermarket Surveillance Group (``ISG'') under the
Intermarket Surveillance Group Agreement. ISG members work together to
coordinate surveillance and investigative information sharing in the
stock, options, and futures markets. In addition, the Exchange has a
Regulatory Services Agreement with the Financial Industry Regulatory
Authority (``FINRA'') for certain market surveillance, investigation
and examinations functions. Pursuant to a multi-party 17d-2 joint plan,
all options exchanges allocate amongst themselves and FINRA
responsibilities to conduct certain options-related market surveillance
that are common to rules of all options exchanges.\29\ Further, the
Exchange will implement any new surveillance procedures it deems
necessary to effectively monitor the trading of options on Commodity-
Based Trusts pursuant to proposed Rule 19.3(i)(v).
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\28\ The surveillance program includes surveillance patterns for
price and volume movements as well as patterns for potential
manipulation (e.g., spoofing and marking the close).
\29\ Section 19(g)(1) of the Act, among other things, requires
every self-regulatory organization (``SRO'') registered as a
national securities exchange or national securities association to
comply with the Act, the rules and regulations thereunder, and the
SRO's own rules, and, absent reasonable justification or excuse,
enforce compliance by its members and persons associated with its
members. See 15 U.S.C. 78q(d)(1) and 17 CFR 240.17d-2. Section
17(d)(1) of the Act allows the Commission to relieve an SRO of
certain responsibilities with respect to members of the SRO who are
also members of another SRO (``common members''). Specifically,
Section 17(d)(1) allows the Commission to relieve an SRO of its
responsibilities to: (i) receive regulatory reports from such
members; (ii) examine such members for compliance with the Act and
the rules and regulations thereunder, and the rules of the SRO; or
(iii) carry out other specified regulatory responsibilities with
respect to such members.
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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 options on ETFs,
including on Commodity-Based Trusts pursuant to proposed Rule
19.3(i)(v), up to the number of expirations currently permissible under
the Rules. The Exchange believes any additional traffic generated from
the trading of options on Commodity-Based Trusts listed pursuant to
proposed Rule 19.3(i)(v) would be manageable. The Exchange represents
that Exchange members will not have a capacity issue as a result of
this proposed rule change.
Further, quotation and last sale information for Commodity-Based
Trusts listed pursuant to proposed Rule 19.3(i)(v) is available via the
Consolidated Tape Association (``CTA'') high speed line. Quotation and
last sale information for such securities is also available from the
exchange on which such securities are listed. Quotation and last sale
information for options on Commodity-Based Trusts listed pursuant to
proposed Rule 19.3(i)(v) will be available via OPRA \30\ and major
market data vendors. Finally, the Exchange currently lists options on
Fund Shares that would qualify for listing as an option a Commodity-
Based Trust pursuant to proposed Rule 19.3(i)(v),\31\ and it has not
identified any issues with the listing of options on those ETFs.
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\30\ Last sale reports and quotations are the core of the
information that OPRA disseminates. OPRA also disseminates certain
other types of information with respect to the trading of options on
the markets of the OPRA participants, such as the number of options
contracts traded, open interest and end of day summaries. OPRA also
disseminates certain kinds of administrative messages.
\31\ The following Fund Shares currently have options listed on
them on the Exchange: the Fidelity Wise Origin Bitcoin Fund, the ARK
21Shares Bitcoin ETF, the iShares Bitcoin Trust, the Fidelity
Ethereum Fund; the Grayscale Bitcoin Trust, the Grayscale Bitcoin
Mini Trust, the Bitwise Bitcoin ETF, the Bitwise Ethereum ETF, the
Grayscale Ethereum Trust, the Grayscale Ethereum Mini Trust, and the
iShares Ethereum Trust.
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2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the Act and the rules and regulations thereunder applicable to the
Exchange and, in particular, the requirements of Section 6(b) of the
Act.\32\ Specifically, the Exchange believes the proposed rule change
is consistent with the Section 6(b)(5) \33\ requirements that the rules
of an exchange be designed to prevent fraudulent and manipulative acts
and practices, to promote just and equitable principles of trade, to
foster cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
facilitating transactions in securities, to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general, to protect investors and the public interest.
Additionally, the Exchange believes the proposed rule change is
consistent with the Section 6(b)(5) \34\ requirement that the rules of
an exchange not be designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
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\32\ 15 U.S.C. 78f(b).
\33\ 15 U.S.C. 78f(b)(5).
\34\ Id.
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In particular, the Exchange believes that its proposal to permit
Commodity-Based Trust Shares that hold multiple crypto assets to be
listed and traded without the need for 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 Exchange Rule
19.3(i)(v) to allow the listing and trading of options on units that
represent interests in Commodity-Based Trusts that meet the generic
listing standards for Commodity-Based Trust Shares of the applicable
primary listing market,\35\ and hold multiple crypto assets in addition
to single crypto assets, is consistent with the Act because it will
permit the Exchange to offer options on Commodity-Based Trusts soon
after the
[[Page 34871]]
listing of the ETF on the primary listing market, provided that all the
generic listing standards for that Commodity-Based Trust on that
primary listing market 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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\35\ See supra note 8.
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Also, this proposal would permit options on Commodity-Based Trusts
to be listed on the Exchange in the same manner as all other securities
that are subject to the current listing criteria in Exchange Rule
19.3(i). 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 options once the initial listing criteria on the primary
listing market have been met without the need for additional approvals.
As proposed, the Exchange would list options in a Commodity-Based Trust
that met the generic criteria of the applicable primary listing market,
provided the Commodity-Based Trust held multiple crypto assets.
Further, each crypto asset held by the Commodity-Based Trust would also
be required to satisfy the conditions in proposed Exchange Rule
19.3(i)(v), which requires that (1) the total global supply of each
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 (2) each crypto asset held by the 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 the ISG.
These requirements are consistent with the Act and the protection
of investors as they should ensure that each crypto asset held by the
underlying ETF has sufficient liquidity prior to listing options, which
will serve to prevent disruption to the underlying market. The Exchange
believes that market supply serves as a good measure of liquidity to
permit options trading in options on Commodity-Based Trusts that holds
multiple crypto assets. Requiring each 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 the applicable primary
listing market rules, should ensure adequate liquidity prior to
listing. Further, ensuring each 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 surveillance
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 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 Trust.
Further, the proposal adopts new subparagraph (3) to Rule 19.4(g)
which will require each crypto asset held by a Commodity-Based Trust to
continue to meet the requirement of Exchange Rule 19.3(i)(v)(1) on a
monthly basis and for the criteria in Exchange Rule 19.3(i)(v)(2) to be
met on a continuous basis. Accordingly, each crypto asset held by a
Commodity-Based Trust must continue to have a total global supply with
an average daily market value of at least $700 million over the last 12
months, and also must continue to 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 the ISG. The Exchange believes that this continued
listing standard, in addition to requirements of Rule 19.3(i) would
protect investors and the public interest by ensuring that the crypto
assets held by the Commodity-Based Trust continue to remain liquid. The
Exchange believes that requiring the criteria in Exchange Rule
19.3(i)(v)(1) on a monthly basis is consistent with the Act and the
protection of investors 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 resulting of trading over a relatively short period
of time. Given the unlikelihood that there would be a huge movement
over a month's period of time and considering the work that would be
required to calculate the criteria on a daily basis as compared to each
month, the Exchange believes that the proposed continued listing
obligation for the average daily market value criteria is sufficient.
Further, options on Commodity-Based Trusts that are approved subject to
Exchange Rule 19.3(i)(v) would continue to be subject to exchange Rule
19.4(g)(5), as renumbered, which states that the Exchange may consider
suspending open transactions in options on an ETF if, ``such other
event occurs or condition exists that in the opinion of the Exchange
makes further dealing in such options on the Exchange inadvisable.''
The Exchange may determine at any point to delist an option on a
Commodity-Based Trust that may not have sufficient liquidity or market
demand.
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
[[Page 34872]]
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 of
these options on Commodity-Based Trust, particularly in light of the
additional requirement that each 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.
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 19.3(i)(v),\36\ and it has not identified any issues with
the listing and trading of options on those ETFs.
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\36\ See supra note 31.
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. In this regard and as
indicated above, the Exchange notes that the rule change is being
proposed as a competitive response to the filing submitted by ISE.\37\
The Exchange does not believe that the proposal to amend the listing
criteria at Exchange Rule 19.3(i)(v), with respect to ETFs, to adopt
new criteria to permit the listing and trading of options on certain
Commodity-Based Trusts that hold multiple crypto assets and that were
listed pursuant to the generic listing standards for Commodity-Based
Trust Shares of the applicable primary listing market, 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.
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\37\ See supra note 5.
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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 at Exchange Rule 19.3(i)(v) to permit the listing and
trading of certain options on certain Commodity-Based Trusts that hold
multiple crypto assets and that were listed pursuant to the generic
listing standards for Commodity-Based Trust Shares of the applicable
primary listing market, 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 applicable rules to permit them to
list and trade options on Commodity-Based Trusts that hold multiple
crypto assets.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
The Exchange neither solicited nor received comments on the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period up to 90 days (i) as the
Commission may designate if it finds such longer period to be
appropriate and publishes its reasons for so finding or (ii) as to
which the Exchange consents, the Commission will: (A) by order approve
or disapprove such proposed rule change, or (B) institute proceedings
to determine whether the proposed rule change should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
<bullet> Use the Commission's internet comment form (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#394b4c555c145a5654545c574d4a794a5c5a175e564f"><span class="__cf_email__" data-cfemail="6614130a034b05090b0b030812152615030548010910">[email protected]</span></a>. Please include
file number SR-MEMX-2026-13 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-MEMX-2026-13. 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 publication submitted material
that is obscene or subject to copyright protection. All submissions
should refer to file number SR-MEMX-2026-13 and should be submitted on
or before June 30, 2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\38\
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\38\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-11484 Filed 6-8-26; 8:45 am]
BILLING CODE 8011-01-P
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</html>Indexed from Federal Register on June 9, 2026.
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