[Federal Register Volume 89, Number 41 (Thursday, February 29, 2024)]
[Notices]
[Pages 14911-14915]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-04169]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-99593; File No. SR-NYSEAMER-2024-10]


Self-Regulatory Organizations; NYSE American LLC; Notice of 
Filing of Proposed Change, as Modified by Amendment No. 2 To Amend Rule 
915 To Permit the Listing and Trading of Options on the Bitwise Bitcoin 
ETF, the Grayscale Bitcoin Trust, and Any Trust That Holds Bitcoin

February 23, 2024.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given 
that, on February 9, 2024, NYSE American LLC (``NYSE American'' or the 
``Exchange'') filed with the Securities and Exchange Commission (the 
``Commission'') the proposed rule change, which filing was partially 
amended by Amendment No. 2 thereto on February 15, 2024, as described 
in Items I, II, and III below, which Items have been prepared by the 
self-regulatory organization.\4\ The Commission is publishing this 
notice to solicit comments on the proposed rule change, as modified by 
Amendment No. 2, from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
    \4\ The Exchange filed Amendment No. 1 on February 15, 2024 to 
add specificity regarding how the options on Bitcoin ETPs are 
settled. On February 15, 2024, the Exchange withdrew Amendment No. 1 
and filed Amendment No. 2 to correct a pagination error.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend Rule 915 to permit the listing and 
trading of options on the Bitwise Bitcoin ETF, the Grayscale Bitcoin 
Trust (BTC), and any trust that holds bitcoin. The proposed rule change 
is available on the Exchange's website at www.nyse.com, at the 
principal office of the Exchange, and at the Commission's Public 
Reference Room.

[[Page 14912]]

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 to amend Rule 915 (Criteria for Underlying 
Securities), Commentary .10, to allow the Exchange to list and trade 
options on the Bitwise Bitcoin ETF (``BITC''), the Grayscale Bitcoin 
Trust (BTC) (``GBTC''), and any trust that holds only bitcoin and cash 
(collectively, ``Bitcoin ETPs'').\5\ The Exchange notes that other 
options exchanges have filed similar rule proposals that are currently 
pending with the Commission to allow the listing and trading of options 
on trusts that hold bitcoin.\6\
---------------------------------------------------------------------------

    \5\ See proposed Commentary .10 to Rule 915. The Commission 
recently approved rule changes to list and trade shares of 
``Bitcoin-Based Commodity-Based Trust Shares'' pursuant to Rule 
8.201-E(c)(1) (Commodity-Based Trust Shares), including the Bitwise 
Bitcoin ETF, the Grayscale Bitcoin Trust (BTC). See Securities 
Exchange Act Release No. 99306 (January 10, 2024) (Order Granting 
Accelerated Approval of Proposed Rule Changes, as Modified by 
Amendments Thereto, to List and Trade Bitcoin-Based Commodity-Based 
Trust Shares and Trust Units), 89 FR 3008 (January 17, 2024) (SR-
NYSEARCA-2023-44; SR-NYSEARCA-2021-90).
    \6\ See, e.g., Securities Exchange Act Release No. 99396 
(January 19, 2024), 89 FR 5047 (January 24, 2024) (SR-ISE-2024-03) 
(proposal to amend, on an accelerated basis, Nasdaq ISE's initial 
listing rule to allow the listing and trading of options on the 
iShares Bitcoin Trust on Nasdaq ISE); and Securities Exchange Act 
Release No. 99397 (January 12, 2024), 89 FR 5079 (January 19, 2024) 
(SR-MIAX-2024-03) (proposal to amend, on an accelerated basis, 
MIAX's initial listing rule to allow the listing and trading of 
options on ETFs that represent interests in a trust that holds 
bitcoin, designating them as ETFs deemed appropriate for options 
trading on MIAX). See also Securities Exchange Act Release No. 99398 
(January 19, 2024), 89 FR 5029 (January 25, 2024) (SR-NYSEARCA-2024-
06) (proposal to amend, on an accelerated basis, NYSE Arca's initial 
listing rule to allow the listing and trading of options on 
Commodity-Based Trust Shares, which generic listing standard would, 
if approved, permit options on Commodity ETFs backed by bitcoin). 
Pursuant to the Exchange's Rules, the Exchange would only have 
authority to list and trade options on ETFs if the underlying 
securities are trading as NMS stocks.
---------------------------------------------------------------------------

    Commentary .06 to Rule 915 (hereinafter ``Commentary .06'') 
provides that, subject to certain other criteria set forth in Rule 915, 
securities deemed appropriate for options trading include ETFs that 
represent certain types of interests,\7\ including interests in certain 
specific trusts that hold financial instruments, money market 
instruments, or precious metals (which are deemed commodities).
---------------------------------------------------------------------------

    \7\ See Commentary .06, which permits options trading on ETFs 
that are traded on a national securities exchange and are defined as 
an ``NMS stock'' in Rule 600(b)(55) of Regulation NMS, that 
represent interests in registered investment companies (or series 
thereof) organized as open-end management investment companies, unit 
investment trusts or similar entities that hold portfolios of 
securities and/or financial instruments including, but not limited 
to, stock index futures contracts, options on futures, options on 
securities and indexes, equity caps, collars and floors, swap 
agreements, forward contracts, repurchase agreements and reverse 
purchase agreements (the ``Financial Instruments''), and money 
market instruments, including, but not limited to, U.S. government 
securities and repurchase agreements (the ``Money Market 
Instruments'') comprising or otherwise based on or representing 
investments in indexes or portfolios of securities and/or Financial 
Instruments and Money Market Instruments (or that hold securities in 
one or more other registered investment companies that themselves 
hold such portfolios of securities and/or Financial Instruments and 
Money Market Instruments); interests in a trust or similar entity 
that holds a specified non-U.S. currency deposited with the trust or 
similar entity when aggregated in some specified minimum number may 
be surrendered to the trust by the beneficial owner to receive the 
specified non-U.S. currency and pays the beneficial owner interest 
and other distributions on deposited non-U.S. currency, if any, 
declared and paid by the trust (``Currency Trust Shares''); 
commodity pool interests principally engaged, directly or 
indirectly, in holding and/or managing portfolios or baskets of 
securities, commodity futures contracts, options on commodity 
futures contracts, swaps, forward contracts and/or options on 
physical commodities and/or non-U.S. currency (``Commodity Pool 
Units''); or represents an interest in a registered investment 
company (``Investment Company'') organized as an open-end management 
investment company or similar entity, that invests in a portfolio of 
securities selected by the Investment Company's investment adviser 
consistent with the Investment Company's investment objectives and 
policies, which is issued in a specified aggregate minimum number in 
return for a deposit of a specified portfolio of securities and/or a 
cash amount with a value equal to the next determined net asset 
value (``NAV''), and when aggregated in the same specified minimum 
number, may be redeemed at a holder's request, which holder will be 
paid a specified portfolio of securities and/or cash with a value 
equal to the next determined NAV (``Managed Fund Share''); provided 
that all of the conditions listed in Rules 915 and 916 are met.
---------------------------------------------------------------------------

    Bitcoin ETPs, including the Bitwise Bitcoin ETF (``BITC'') and the 
Grayscale Bitcoin Trust (``GBTC''), are bitcoin-backed commodity ETPs 
structured as trusts.\8\ Similar to any ETFs currently deemed 
appropriate for options trading under Rule 915, the investment 
objective of a Bitcoin ETP trust is for its shares to reflect the 
performance of bitcoin (less the expenses of the trust's operations), 
offering investors an opportunity to gain exposure to bitcoin without 
the complexities of bitcoin delivery. As is the case for ETFs currently 
deemed appropriate for options trading, a Bitcoin ETP's shares 
represent units of fractional undivided beneficial interest in the 
trust, the assets of which consist principally of bitcoin and are 
designed to track bitcoin or the performance of the price of bitcoin 
and offer access to the bitcoin market.\9\
---------------------------------------------------------------------------

    \8\ See supra note 4 (regarding order approving rule changes to 
list and trade shares of ``Bitcoin-Based Commodity-Based Trust 
Shares'' pursuant to Rule 8.201-E(c)(1) (Commodity-Based Trust 
Shares), including BITC and GBTC. For a complete description of the 
BITC and the GBTC, see SR-NYSEARCA-2023-44 and SR-NYSEARCA-2021-90, 
respectively.
    \9\ The trust may include minimal cash. See e.g., Securities 
Exchange Act Release No. 99306 (January 8, 2024), 89 FR 2297, 2298 
(January 12, 2024) (SR-NYSEARCA-2023-44) (providing that, for BITC, 
the ``only assets will be bitcoin and cash'').
---------------------------------------------------------------------------

    Bitcoin ETPs provide investors with cost efficient alternatives 
that allow a level of participation in the bitcoin market through the 
securities market. The primary substantive difference between Bitcoin 
ETPs and ETFs currently deemed appropriate for options trading are that 
ETFs may hold securities, certain financial instruments, and specified 
precious metals (which are commodities), while Bitcoin ETPs hold 
bitcoin (which is also deemed a commodity).\10\ The Exchange believes 
that offering options on Bitcoin ETPs, including to BITC and GBTC, will 
benefit investors by providing them with an additional, relatively 
lower cost investing tool to gain exposure to spot Bitcoin as well as a 
hedging vehicle to meet their investment needs in connection with 
Bitcoin products and positions.
---------------------------------------------------------------------------

    \10\ Similar to other commodity ETFs in which options may be 
listed on the Exchange pursuant to Rule 915, Commentary .10 (e.g., 
SPDR Gold Trust, the iShares COMEX Gold Trust, the iShares Silver 
Trust, the ETFS Gold Trust, the ETFS Silver Trust, the ETFS 
Palladium Trust, or the ETFS Platinum Trust), both GBTC and BITC are 
trusts that essentially offer analogous objectives and benefits to 
investors.
---------------------------------------------------------------------------

    Bitcoin ETPs will trade in the same manner as options on other ETFs 
(including commodities ETFs) on the Exchange.\11\ In particular, and as 
detailed below, Exchange rules that 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

[[Page 14913]]

requirements, customer accounts and trading halt procedures, will 
likewise apply to the listing and trading of options on Bitcoin ETPs on 
the Exchange.
---------------------------------------------------------------------------

    \11\ As with any ETF that trades on the Exchange, the Exchange 
would not list and trade options on Bitcoin ETPs, including the 
Bitwise Bitcoin ETF and the Grayscale Bitcoin Trust (BTC), unless 
such instruments satisfied all applicable criteria in Rules 915 and 
916, as applicable.
---------------------------------------------------------------------------

    The Exchange's initial listing standards for ETFs on which options 
may be listed and traded on the Exchange will apply to Bitcoin ETPs. 
The Exchange expects Bitcoin ETPs to satisfy the initial listing 
standards as set forth in Rule 915(a) (generally) and Commentary .06 
(which applies to ETFs specifically). Pursuant to Rule 915(a), a 
security (which includes ETFs) on which options may be listed and 
traded on the Exchange must be duly registered (with the Commission) 
and be an NMS stock (as defined in Rule 600 of Regulation NMS under the 
Act,) and be characterized by a substantial number of outstanding 
shares that are widely held and actively traded. In addition, 
Commentary .06 requires that ETFs must either (1) meet the criteria and 
standards set forth in Commentary .01 to Rule 915,\12\ or (2) the ETFs 
are available for creation and redemption each business day as set 
forth in Commentary .06(a)(ii).
---------------------------------------------------------------------------

    \12\ See Commentary .01 to Rule 915, which sets forth minimum 
requirements for the underlying security which include, but are not 
limited to, 7,000,000 underlying shares, 2,000 shareholders, and 
trading volume of 2,400,000 shares over the preceding twelve months. 
Additionally, the rule requires that the market price per share of 
the underlying security must be at least $7.50 for the majority of 
business days during the three calendar months preceding the date of 
selection of an option class. For underlying securities that are 
deemed Covered Securities, as defined under Section 18(b)(1)(A) of 
the Securities Act of 1933, the closing market price of the 
underlying security must be at least $3.00 per share for the 
previous three consecutive business days prior to the date of 
selection of an option class.
---------------------------------------------------------------------------

    Options on Bitcoin ETPs will also be subject to the Exchange's 
continued listing standards set forth in Commentary .07 to Rule 916 
which provides that options on ETFs may be subject to the suspension of 
opening transactions as follows: (1) the ETFs no longer meets the terms 
of Commentary .01 to Rule 916; (2) following the initial twelve-month 
period beginning upon the commencement of trading of the ETFs, there 
are fewer than 50 record and/or beneficial holders of the ETFs for 30 
or more consecutive trading days; (3) the value of the underlying 
commodity is no longer calculated or available; or (4) such other event 
occurs or condition exists that in the opinion of the Exchange makes 
further dealing on the Exchange inadvisable. Additionally, ETFs will be 
deemed to not meet the requirements for continued approval, and the 
Exchange will not open for trading any additional series of option 
contracts covering the ETF if such security ceases to be an ``NMS 
stock'' as provided for Commentary .01(5) to Rule 915 or the ETF is 
halted from trading on its primary market.\13\
---------------------------------------------------------------------------

    \13\ See Commentary .07 to Rule 916. For avoidance of doubt and 
consistent with this proposal, the Exchange proposes to amend Rule 
916 to include in Bitcoin in ETPs in the list of ETFs subject to the 
continued listing standards. See proposed Commentary .11 to Rule 916 
(proving that ``[f]or purposes of Commentary .07 of this Rule 916, 
shares of the SPDR[supreg] Gold Trust (symbol: GLD), iShares COMEX 
Gold Trust (symbol: IAU), the iShares Silver Trust (symbol: SLV), 
and the ETFS Silver Trust (symbol: SIVR), the ETFS Gold Trust 
(symbol: SGOL), the ETFS Palladium Trust (symbol: PALL), the ETFS 
Platinum Trust (symbol: PPLT), the Bitwise Bitcoin ETF (symbol: 
BITC), the Grayscale Bitcoin Trust (BTC) (symbol: GBTC), and any 
trust that holds bitcoin, are deemed to be ``Exchange-Traded Fund 
Shares'') (emphasis added).
---------------------------------------------------------------------------

    Options on Bitcoin ETPs listed pursuant to proposed Commentary .10 
to Rule 915 would be physically \14\ settled contracts with American-
style exercise \15\ and would be included within the definition of 
securities as such terms are used in the Exchange's rules and, as such, 
would be subject to Exchange rules and procedures that currently govern 
the trading of securities on the Exchange, including Exchange rules 
governing the trading of equity options. Furthermore, the Exchange's 
rules pertaining to position and exercise limits or margin shall apply 
to options on Bitcoin ETPs.
---------------------------------------------------------------------------

    \14\ See Amendment No 2.
    \15\ See Rule 902 (Rights and Obligations of Holders and 
Writers), which provides that the rights and obligations of holders 
and writers of option contracts of any class of options dealt in on 
the Exchange shall be as set forth in the Rules of the Clearing 
Corporation. See also OCC Rules, Chapter VIII, which governs 
exercise and assignment, and Chapter IX, which governs the discharge 
of delivery and payment obligations arising out of the exercise of 
physically settled stock option contracts. OCC Rules can be located 
at: https://www.theocc.com/getmedia/9d3854cd-b782-450f-bcf7-33169b0576ce/occrules.pdf.
---------------------------------------------------------------------------

    Specifically, consistent with Rule 903, 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 
Bitcoin ETPs and may also list series of options on Bitcoin ETPs for 
trading on a weekly \16\ or quarterly \17\ basis. The Exchange may also 
list long-term equity option series (``LEAPS'') \18\ that expire from 
twelve to thirty-nine months from the time they are listed.
---------------------------------------------------------------------------

    \16\ See Rule 903(h).
    \17\ See Rule 903, Commentary .09.
    \18\ See Rule 903, Commentary .03.
---------------------------------------------------------------------------

    Pursuant to Rule 903, Commentary .05(a), which governs strike 
prices of series of options on ETFs, the interval between strike prices 
of series of options on ETFs approved for options trading (per 
Commentary .06) will be fixed at a price per share which is reasonably 
close to the price per share at which the underlying security is traded 
in the primary market at or about the same time such series of options 
is first open for trading on the Exchange, or at such intervals as may 
have been established on another options exchange prior to the 
initiation of trading on the Exchange. With respect to the Short Term 
Options Series or Weekly Program, during the month prior to expiration 
of an option class that is selected for the Short Term Option Series 
Program, the strike price intervals for the related non-Short Term 
Option (``Related non-Short Term Option'') shall be the same as the 
strike price intervals for the Short Term Option.\19\ Specifically, the 
Exchange may open for trading Short Term Option Series at strike price 
intervals of (i) $0.50 or greater where the strike price is less than 
$100, and $1 or greater where the strike price is between $100 and $150 
for all option classes that participate in the Short Term Options 
Series Program; (ii) $0.50 for option classes that trade in one dollar 
increments and are in the Short Term Option Series Program; or (iii) 
$2.50 or greater where the strike price is above $150.\20\ 
Additionally, the Exchange may list series of options pursuant to the 
$1 Strike Price Interval Program,\21\ the $0.50 Strike Program,\22\ the 
$2.50 Strike Price Program,\23\ and the $5 Strike Program.\24\ Rule 
960NY governs the minimum increment for bids and offers for both equity 
and index options. Pursuant to Rule 960NY, where the price of a series 
of options in Bitcoin ETPs 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 \25\ consistent with the minimum increments for 
options on other ETFs listed on the Exchange. Any and all new series of 
options on Bitcoin ETPs that the Exchange lists will be consistent and 
comply with the expirations, strike prices, and minimum increments set 
forth in Rules 915, 903, and 970NY, as applicable.
---------------------------------------------------------------------------

    \19\ See Rule 903, Commentary .10(d).
    \20\ Id.
    \21\ See Rule 903, Commentary .06.
    \22\ See Rule 903, Commentary .13.
    \23\ See Rule 903, Commentary .07(a).
    \24\ See Rule 903, Commentary .12.
    \25\ Options that are eligible to participate in the Penny 
Interval Program have a minimum increment of $0.01 below $3.00 and 
$0.50 above $3.00. See Rule 970NY(a)(3).
---------------------------------------------------------------------------

    Position and exercise limits for options on ETFs, including options 
on Bitcoin ETPs, are determined pursuant to Rules 904 and 905, 
respectively. Position and exercise limits for ETFs

[[Page 14914]]

options vary according to the number of outstanding shares and the 
trading volumes of the underlying ETF over the past six months, where 
the largest in capitalization and the most frequently traded ETFs 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 ETFs have position and exercise 
limits of 200,000, 75,000, 50,000 or 25,000 contracts (with adjustments 
for splits, recapitalizations, etc.) on the same side of the market. 
Further, Rule 462, 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 Bitcoin ETP options.
* * * * *
    The Exchange notes that options on Bitcoin ETPs would not be 
available for trading until The Options Clearing Corporation (``OCC'') 
represents to the Exchange that it is fully able to clear and settle 
such options. The Exchange has also analyzed its capacity and 
represents that it and The Options Price Reporting Authority (``OPRA'') 
have the necessary systems capacity to handle the additional traffic 
associated with the listing of options on Bitcoin ETPs. The Exchange 
believes any additional traffic that would be generated from the 
trading of options on Bitcoin ETPs would be manageable. The Exchange 
represents that Exchange members will not have a capacity issue as a 
result of this proposed rule change.
    The Exchange represents that the same surveillance procedures 
applicable to all other options on other ETFs currently listed and 
traded on the Exchange will apply to options on Bitcoin ETPs. The 
Exchange's existing surveillance and reporting safeguards are designed 
to deter and detect possible manipulative behavior which might arise 
from listing and trading options on ETFs, including the options on 
Bitcoin ETPs. The Exchange believes that its surveillance procedures 
are adequate to properly monitor the trading of options on Bitcoin ETPs 
in all trading sessions and to deter and detect violations of Exchange 
rules. In addition, the Exchange will implement any new surveillance 
procedures it deems necessary to effectively monitor the trading of 
options on Bitcoin ETPs. Also, the Exchange may obtain trading 
information via the Intermarket Surveillance Group (``ISG'') from other 
exchanges who are members of the ISG, or from other exchanges with 
which the Exchange has entered into a comprehensive surveillance 
sharing agreement (``CSSA''). The Exchange will enter into new CSSAs 
with other exchanges as necessary to effectively monitor the trading of 
options on Bitcoin ETPs. The Exchange represents that these procedures 
will be adequate to properly monitor Exchange trading of options on 
Bitcoin ETPs and to deter and detect violations of Exchange rules.
    Finally, quotation and last sale information for ETFs 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 Bitcoin ETPs will be 
available via OPRA and major market data vendors.
2. Statutory Basis
    The Exchange believes that its proposed rule change is consistent 
with Section 6(b) of the Act \26\ in general and furthers the 
objectives of Section 6(b)(5) of the Act \27\ in particular, in that it 
is designed to promote just and equitable principles of trade, to 
remove impediments to and perfect the mechanisms of a free and open 
market and a national market system.
---------------------------------------------------------------------------

    \26\ 15 U.S.C. 78f(b).
    \27\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    In particular, the Exchange believes that the proposal to list and 
trade options on Bitcoin ETPs 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 offering options on Bitcoin 
ETPs will provide investors with a greater opportunity to realize the 
benefits of utilizing options on an ETF based on spot bitcoin, 
including cost efficiencies and increased hedging strategies. The 
Exchange believes that offering options on a competitively priced ETF 
based on spot bitcoin will benefit investors by providing them with an 
additional, relatively lower cost risk management tool allowing them to 
manage, more easily, their positions, and associated risks, in their 
portfolios in connection with exposure to spot bitcoin. Today, the 
Exchange lists options on other commodity ETFs structured as a trust, 
which essentially offer analogous objectives and benefits to investors, 
and for which the Exchange has not identified any issues with the 
continued listing and trading of options on those ETFs.
    The Exchange also believes the proposal to permit options on 
Bitcoin ETPs will remove impediments to and perfect the mechanism of a 
free and open market and a national market system, because options on 
Bitcoin ETPs will comply with current Exchange rules as discussed 
herein. Specifically, options on Bitcoin ETPs must satisfy the initial 
listing standards and continued listing standards currently in the 
Exchange rules, applicable to options on all ETFs, including options on 
other commodity ETFs already deemed appropriate for options trading on 
the Exchange pursuant to Rule 915, Commentary .10. Further, Exchange 
rules that currently govern the listing and trading of options on ETFs, 
including permissible expirations, strike prices, minimum increments, 
position and exercise limits, and margin requirements, will govern the 
listing and trading of options on Bitcoin ETPs.
    The Exchange represents that it has the necessary systems capacity 
to support any additional traffic that may be generated by the trading 
of options on Bitcoin ETPs. In addition, the Exchange represents that 
its existing surveillance procedures are adequate to properly monitor 
the trading of options on Bitcoin ETPs in all trading sessions and to 
deter and detect violations of Exchange rules. The Exchange further 
represents that it will implement new surveillance procedures, as 
necessary, to effectively monitor the trading of options on Bitcoin 
ETPs. Finally, the Commission has previously approved the listing and 
trading of options on other commodity ETFs structured as a trust, such 
as SPDR Gold Trust,\28\ the iShares COMEX Gold Trust,\29\ the iShares 
Silver Trust,\30\ the ETFS Gold Trust,\31\ and the ETFS Silver 
Trust.\32\
---------------------------------------------------------------------------

    \28\ See Securities Exchange Act Release No. 57897 (May 30, 
2008), 73 FR 32061 (June 5, 2008) (SR-Amex-2008-15; SR-CBOE-2005-11; 
SR-ISE-2008-12; SR-NYSEArca-2008-52; and SR-Phlx-2008-17) (Order 
Granting Approval of a Proposed Rule Change, as Modified, and Notice 
of Filing and Order Granting Accelerated Approval of Proposed Rule 
Changes, as Modified, Relating to Listing and Trading Options on the 
SPDR Gold Trust).
    \29\ See Securities Exchange Act Release No. 59055 (December 4, 
2008), 73 FR 75148 (December 10, 2008) (SR-Amex-2008-68; SR-BSE-
2008-51; SR-CBOE-2008-72; SR-ISE-2008-58; SR-NYSEArca-2008-66; and 
SR-Phlx-2008-58) (Notice of Filing and Order Granting Accelerated 
Approval of Proposed Rule Changes Relating to the Listing and 
Trading Options on Shares of the iShares COMEX Gold Trust and the 
iShares Silver Trust).
    \30\ Id.
    \31\ See Securities Exchange Act Release No. 61483 (February 3, 
2010), 75 FR 6753 (February 10, 2010) (SR-CBOE-2010-007; SR-ISE-
2009-106; SR-NYSEAmex-2009-86; and SR-NYSEArca-2009-110) (Order 
Granting Approval of Proposed Rule Changes and Notice of Filing and 
Order Granting Accelerated Approval of a Proposed Rule Change 
Relating to Listing and Trading Options on the ETFS Gold Trust and 
the ETFS Silver Trust).
    \32\ Id.

---------------------------------------------------------------------------

[[Page 14915]]

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.
    Intramarket Competition: The Exchange does not believe that the 
proposed rule change will impose any burden on intramarket competition 
that is not necessary or appropriate in furtherance of the purposes of 
the Act as options on Bitcoin ETPs will be subject to initial listing 
standards and continued listing standards the same as other options on 
ETFs listed on the Exchange. Further, options on Bitcoin ETPs will be 
subject to Exchange rules that currently govern the listing and trading 
of options on ETFs, including permissible expirations, strike prices, 
minimum increments, position and exercise limits, and margin 
requirements. Moreover, options on Bitcoin ETPs will be equally 
available to all market participants who wish to trade such options. 
Finally, and as stated above, the Exchange already lists options on 
other commodity ETFs structured as a trust.
    Intermarket Competition: The Exchange does not believe the proposal 
will impose any burden on intermarket competition that is not necessary 
or appropriate in furtherance of the purposes of the Act. To the extent 
that permitting options on Bitcoin ETPs to trade on the Exchange may 
make the Exchange a more attractive marketplace to market participants, 
such market participants are free to elect to become market 
participants on the Exchange. Additionally, other options exchanges are 
free to amend their listing rules, as applicable, to permit them to 
list and trade options on Bitcoin ETPs. 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. The 
Exchange notes that it operates in a highly competitive market in which 
market participants can readily direct order flow to competing venues 
that offer similar products. Ultimately, the Exchange believes that 
offering options on Bitcoin ETPs for trading on the Exchange will 
promote competition by providing investors with an additional, 
relatively low-cost means to hedge their portfolios and meet their 
investment needs in connection with spot bitcoin prices and bitcoin 
related products and positions.

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

    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 self-regulatory organization consents, the Commission will:
    (A) by order approve or disapprove the 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

     Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
file number SR-NYSEAMER-2024-10 on the subject line.

Paper Comments

     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-2024-10. 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 (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for website viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE, 
Washington, DC 20549, on official business days between the hours of 10 
a.m. and 3 p.m. Copies of the filing also 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-NYSEAMER-2024-10 and should 
be submitted on or before March 21, 2024.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\33\
---------------------------------------------------------------------------

    \33\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-04169 Filed 2-28-24; 8:45 am]
BILLING CODE 8011-01-P