[Federal Register Volume 89, Number 155 (Monday, August 12, 2024)]
[Notices]
[Pages 65685-65689]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-17843]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-100663; File No. SR-ISE-2024-34]


Self-Regulatory Organizations; Nasdaq ISE, LLC; Notice of Filing 
of Proposed Rule Change To Amend ISE Options 4, Section 3 To List and 
Trade Options on Units That Represent Interests in a Trust That Holds 
Ether (``Ether ETPs'')

August 6, 2024.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'' or ``Exchange Act''),\1\ and Rule 19b-4 thereunder,\2\ notice 
is hereby given that on July 22, 2024, Nasdaq ISE, LLC (``ISE'' 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 to [sic] amend Options 4, Section 3, Criteria for 
Underlying Securities.
    The text of the proposed rule change is available on the Exchange's 
website at https://listingcenter.nasdaq.com/rulebook/ise/rules, at the 
principal office of the Exchange, and at the Commission's Public 
Reference Room.

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 Options 4, Section 3, Criteria for 
Underlying Securities. Specifically, the Exchange proposes to amend 
Options 4, Section 3(h) to allow the Exchange to list and trade options 
on units that represent interests in a trust that hold ether (``Ether 
ETPs''), designating them as Exchange-Traded Fund Shares (``ETFs'') 
deemed appropriate for options trading on the Exchange. Options 4, 
Section 3(h) provides that, subject to certain other criteria set forth 
in that Rule, securities deemed appropriate for options trading include 
ETFs that represent certain types of interests,\3\ including interests 
in certain specific trusts that hold financial instruments, money 
market instruments, or precious metals (which are deemed 
commodities).\4\
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    \3\ Options 4, Section 3(h) provides that securities deemed 
appropriate for options trading shall include shares or other 
securities (``Exchange-Traded Fund Shares'' or ``ETFs'') that are 
traded on a national securities exchange and are defined as an 
``NMS'' stock under Rule 600 of Regulation NMS, and that meet 
certain criteria specified in Options 4, Section 3(h), including 
that they: . . . (iv) represent interests in the SPDR[supreg] Gold 
Trust, the iShares COMEX Gold Trust, the iShares Silver Trust, or 
the ETFS Gold Trust . . .''. In addition to the aforementioned 
requirements, Options 4, Section 3(h)(1) and (2) must be met to list 
options on ETFs.
    \4\ The Commission recently approved a rule change to list and 
trade shares of the Trust pursuant to Rule 5711(d) of The Nasdaq 
Stock Exchange LLC (``Commodity-Based Trust Shares''). See 
Securities Exchange Act Release No. 100224 (May 23, 2024), 89 FR 
46937 (May 30, 2024) (SR-NASDAQ-2023-045) (hereinafter ``SR-NASDAQ-
2023-045''). The Exchange represents it would not list options on a 
trust unless it satisfied all applicable criteria in Options 4, 
Section 3.
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    Ether ETPs are ether-backed commodity ETPs structured as trusts.\5\ 
Similar to any ETF currently deemed appropriate for options trading 
under Options 4, Section 3(h), the investment objective of an Ether ETP 
trust is to reflect generally the performance of the price of ether 
(before payment of the trust's expenses and liabilities), offering 
investors an opportunity to gain exposure to ether without the 
complexities of ether delivery. As is the case for ETFs currently 
deemed appropriate for options trading, a [sic] Ether ETP's shares 
represent units of fractional undivided beneficial interest in the 
trust, the assets of which consist principally of ether and are 
designed to track ether or the performance of the price of ether and 
offer access to the ether market.\6\ Ether ETPs provide investors with 
cost-efficient alternatives that allow a level of participation in the 
ether market through the securities market. The primary substantive 
difference between Ether ETPS and ETFs currently deemed appropriate for

[[Page 65686]]

options trading are that ETFs may hold securities, certain financial 
instruments, and specified precious metals (which are commodities), 
while Ether ETPS hold ether (which is also deemed a commodity).
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    \5\ Pursuant to Options 4, Section 3(a), the Exchange would only 
have authority to list and trade ETFs that are trading as NMS 
stocks.
    \6\ The trust may include minimal cash.
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    The Exchange's initial listing standards for ETFs on which options 
may be listed and traded on the Exchange will apply to the Ether ETPS. 
The Exchange expects Ether ETPS to satisfy the initial listing 
standards as set forth in Options 4, Section 3(a) and Options 4, 
Section 3(h). Pursuant to Options 4, Section 3(a), a security (which 
includes an ETF) on which options may be listed and traded on the 
Exchange must be a security registered (with the Commission) and be an 
NMS stock (as defined in Rule 600 of Regulation NMS under the Act), and 
the security shall be characterized by a substantial number of 
outstanding shares that are widely held and actively traded.\7\ Options 
4, Section 3(h)(1) requires that ETFs must either meet the criteria and 
guidelines set forth in Options 4, Section 3(a) and (b) \8\ or the ETFs 
are available for creation or redemption each business day from or 
through the issuing trust, investment company, commodity pool or other 
entity in cash or in kind at a price related to net asset value, and 
the issuer is obligated to issue ETFs 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 issuer, subject to the 
condition that the person obligated to deposit the investment assets 
has undertaken to deliver them 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 the ETFs, all as 
described in the ETFs' prospectus or the Exchange-Traded Fund Shares 
must be based on international or global indexes, or portfolios that 
include non-U.S. securities, and meet other criteria. The Exchange 
expects that Ether ETPS would satisfy Options 4, Section 3(h)(1)(ii).
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    \7\ The Exchange represents it would not list options on a [sic] 
Ether ETP unless it satisfied the criteria in Options 4, Section 
3(a), the proposed listing criteria, and any other applicable 
listing criteria.
    \8\ Options 4, Section 3(h)(1) provides criteria and guidelines 
when evaluating potential underlying securities for the listing of 
options.
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    Options on Ether ETPS will also be subject to the Exchange's 
continued listing standards for options on ETFs set forth in Options 4, 
Section 4(g) for ETFs deemed appropriate for options trading pursuant 
to Options 4, Section 3(h). Specifically, options approved for trading 
pursuant to Options 4, Section 3(h) 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 such ETFs if the ETFs are delisted from trading as provided in 
subparagraph (b)(5) of Options 4, Section 4 \9\ or the ETFs are halted 
or suspended from trading on their primary market.\10\ Additionally, 
options on ETFs may be subject to the suspension of opening 
transactions in any series of options of the class covering ETFs in any 
of the following circumstances:
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    \9\ Options 4, Section 4(b)(5) provides, if an underlying 
security is approved for options listing and trading under the 
provisions of Options 4, Section 3(c), the trading volume of the 
Original Security (as therein defined) prior to but not after the 
commencement of trading in the Restructure Security (as therein 
defined), including `when-issued' trading, may be taken into account 
in determining whether the trading volume requirement of (3) of this 
paragraph (b) is satisfied. Options 4, Section 4(b)(3) provides, 
``The trading volume (in all markets in which the underlying 
security is traded) has been less than 1,800,000 shares in the 
preceding twelve (12) months.''
    \10\ See Options 4, Section 4(g).

    (1) in the case of options covering Exchange-Traded Fund Shares 
approved pursuant to Options 4, Section 3(h)(A)(i), in accordance 
with the terms of subparagraphs (b)(1), (2), (3) and (4) of Options 
4, Section 4; \11\
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    \11\ Options 4, Section 4(b)(5)(1) through (4) provides, if: (1) 
there are fewer than 6,300,000 shares of the underlying security 
held by persons other than those who are required to report their 
security holdings under Section 16(a) of the Act, (2) there are 
fewer than 1,600 holders of the underlying security, (3) the trading 
volume (in all markets in which the underlying security is traded) 
has been less than 1,800,000 shares in the preceding twelve (12) 
months, or (4) the underlying security ceases to be an `NMS stock' 
as defined in Rule 600 of Regulation NMS under the Exchange Act.
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    (2) in the case of options covering Fund Shares approved 
pursuant to Options 4, Section 3(h)(A)(ii),\12\ following the 
initial twelve-month period beginning upon the commencement of 
trading in the Exchange-Traded Fund Shares on a national securities 
exchange and are defined as an ``NMS stock'' under Rule 600 of 
Regulation NMS, there were fewer than 50 record and/or beneficial 
holders of such Exchange-Traded Fund Shares for 30 or more 
consecutive trading days;
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    \12\ Options 4, Section 3(h)(ii) refers to Currency Trust 
Shares.
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    (3) the value of the index or portfolio of securities or non-
U.S. currency, portfolio of commodities including commodity futures 
contracts, options on commodity futures contracts, swaps, forward 
contracts, options on physical commodities and/or Financial 
Instruments and Money Market Instruments, on which the Exchange-
Traded Fund Shares are based is no longer calculated or available; 
or
    (4) such other event occurs or condition exists that in the 
opinion of the Exchange makes further dealing in such options on the 
Exchange inadvisable.

    Options on a [sic] Ether ETP would be physically settled contracts 
with American-style exercise.\13\ Consistent with current Options 4, 
Section 5, 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 each Ether ETP \14\ and may also 
list series of options on a [sic] Ether ETP for trading on a weekly 
\15\ or quarterly \16\ basis. The Exchange may also list long-term 
equity option series (``LEAPS'') that expire from twelve to thirty-nine 
months from the time they are listed.\17\
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    \13\ See Options 4, Section 2, Rights and Obligations of Holders 
and Writers, which provides that the rights and obligations of 
holders and writers shall be as set forth in the Rules of the 
Clearing Corporation. See also The Options Clearing Corporation 
(``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/occ_rules.pdf.
    \14\ See Options 4, Section 5(b). At the commencement of trading 
on the Exchange of a particular class of options, the Exchange will 
open a minimum of one (1) series of options in that class. The 
exercise price of that series will be fixed at a price per share, 
relative to the underlying stock price in the primary market at 
about the time that class of options is first opened for trading on 
the Exchange. The monthly expirations are subject to certain listing 
criteria for underlying securities described within Options 4, 
Section 5. 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 Options 
4, Section 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. The opening 
of a new series of options shall not affect the series of options of 
the same class previously opened. 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 the business day of expiration, or, in the 
case of an option contract expiring on a day that is not a business 
day, on the second business day prior to expiration.
    \15\ See Supplementary .03 to Options 4, Section 5.
    \16\ See Supplementary .04 to Options 4, Section 5.
    \17\ See Options 4, Section 8.
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    Pursuant to Options 4, Section 5(d), which governs strike prices of 
series of options on ETFs, the interval between strike prices of series 
of options on

[[Page 65687]]

Ether ETPS approved for options trading pursuant to Section 3(h) of 
Options 4 will be $1 or greater when the strike price is $200 or less 
and $5 or greater when the strike price is greater than $200.\18\ 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\ Pursuant to Options 3, Section 3, where the price of a 
series of a Ether ETP options 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\ Any and all new series of Ether ETP 
options that the Exchange lists will be consistent and comply with the 
expirations, strike prices, and minimum increments set forth in Options 
4, Section 5 and Options 3, Section 3, as applicable.
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    \18\ See Options 5, Section 5(d). The interval between strike 
prices of series of options on Exchange-Traded Fund Shares approved 
for options trading pursuant to Section 3(h) of this Options 4 may 
also 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. See also Options 4, Section 
5(h). The Exchange notes that for options listed pursuant to the 
Short Term Option Series Program, the Quarterly Options Series 
Program, and the Monthly Options Series Program, Supplementary 
Material .03, .04 and .08 to Options 4, Section 5 specifically sets 
forth intervals between strike prices on Short Term Option Series, 
Quarterly Options Series, and Monthly Options Series, respectively.
    \19\ See Supplementary Material .03(e) to Options 4, Section 5.
    \20\ Id.
    \21\ See Supplementary Material .01 to Options 4, Section 5.
    \22\ See Supplementary Material .05 to Options 4, Section 5.
    \23\ See Supplementary Material .02 to Options 4, Section 5.
    \24\ See Supplementary Material .06 to Options 4, Section 5.
    \25\ If options on a [sic] Ether ETP 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 Supplementary Material .01 to Options 
3, Section 3 (which describes the requirements for the Penny 
Interval Program).
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    Ether ETP options will trade in the same manner as options on other 
ETFs on the Exchange. Exchange Rules that currently apply to the 
listing and trading of all options on ETFs on the Exchange, including, 
for example, Rules that govern listing criteria, expirations, exercise 
prices, minimum increments, position and exercise limits, margin 
requirements, customer accounts and trading halt procedures will apply 
to the listing and trading of Ether ETPS on the Exchange in the same 
manner as they apply to other options on all other ETFs that are listed 
and traded on the Exchange, including the precious-metal backed 
commodity ETFs already deemed appropriate for options trading on the 
Exchange pursuant to pursuant to Options 4, Section 3(h)(iv).
    Position and exercise limits for options on ETFs, including options 
on Ether ETPS, are determined pursuant to Options 9, Sections 13 and 
15, respectively. Position and exercise limits for ETFs 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, re-capitalizations, etc.) on the same side of the market.\26\ 
Further, Options 6C, Section 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 the Ether ETP 
options.
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    \26\ As Ether ETPs do not currently trade, options on Ether ETPs 
would be subject to the 25,000 option contract limit.
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    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 Ether ETPS, and that it 
has the necessary systems capacity to support the new option series. 
The Exchange believes that its existing surveillance and reporting 
safeguards are designed to deter and detect possible manipulative 
behavior which might potentially arise from listing and trading options 
on ETFs, including precious metal-commodity backed ETF options, as 
proposed. Also, the Exchange may obtain information from CME Group 
Inc.'s designated contract markets that are members of the Intermarket 
Surveillance Group related to any financial instrument that is based, 
in whole or in part, upon an interest in or performance of ether, as 
applicable.
    The Exchange has also analyzed its capacity and represents that it 
believes the Exchange and the Options Price Reporting Authority or 
``OPRA'' have the necessary systems capacity to handle the additional 
traffic associated with the listing of new series that may result from 
the introduction of options on Ether ETPS up to the number of 
expirations currently permissible under the Exchange Rules. Because the 
proposal is limited to ETFs on a single commodity, the Exchange 
believes any additional traffic that may be generated from the 
introduction of Ether ETP options will be manageable.
    The Exchange believes that offering options on Ether ETPS will 
benefit investors by providing them with an additional, relatively 
lower cost investing tool to gain exposure to the price of ether and 
hedging vehicle to meet their investment needs in connection with 
ether-related products and positions. The Exchange expects investors 
will transact in options on Ether ETPS in the unregulated over-the-
counter (``OTC'') options market (if the Commission approves Ether ETPS 
for exchange-trading),\27\ but may prefer to trade such options in a 
listed environment to receive the benefits of trading listing options, 
including (1) enhanced efficiency in initiating and closing out 
position [sic]; (2) increased market transparency; and (3) heightened 
contra-party creditworthiness due to the role of OCC as issuer and 
guarantor of all listed options. The Exchange believes that listing 
Ether ETP options may cause investors to bring this liquidity to the 
Exchange, would increase market transparency and enhance the process of 
price discovery conducted on the Exchange through increased order flow. 
The ETFs that hold financial instruments, money market instruments, or 
precious metal commodities on which the Exchange may already list and 
trade options are trusts structured in substantially the same manner as 
Ether ETPS and

[[Page 65688]]

essentially offer the same objectives and benefits to investors, just 
with respect to different assets. The Exchange notes that it has not 
identified any issues with the continued listing and trading of any ETF 
options, including ETFS that hold commodities (i.e., precious metals) 
that it currently lists and trades on the Exchange.
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    \27\ The Exchange understands from customers that investors have 
historically transacted in options on units in the OTC options 
market if such options were not available for trading in a listed 
environment.
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2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\28\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\29\ in particular, in that it is designed to 
prevent fraudulent and manipulative acts and practices, to promote just 
and equitable principles of trade, to foster cooperation and 
coordination with persons engaged in regulating, clearing, settling, 
processing information with respect to, and facilitating transactions 
in securities, to remove impediments to and perfect the mechanism of a 
free and open market and a national market system, and, in general, to 
protect investors and the public interest. Additionally, the Exchange 
believes the proposed rule change is consistent with the Section 
6(b)(5) \30\ requirement that the rules of an exchange not be designed 
to permit unfair discrimination between customers, issuers, brokers, or 
dealers.
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    \28\ 15 U.S.C. 78f(b).
    \29\ 15 U.S.C. 78f(b)(5).
    \30\ 15 U.S.C. 78(f)(b)(5).
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    In particular, the Exchange believes that the proposal to list and 
trade options on Ether 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 Ether ETPS 
will provide investors with a greater opportunity to realize the 
benefits of utilizing options on a [sic] ether-based ETP, including 
cost efficiencies and increased hedging strategies. The Exchange 
believes that offering Ether ETP options will benefit investors by 
providing them with a relatively lower-cost risk management tool, which 
will allow them to manage their positions and associated risk in their 
portfolios more easily in connection with exposure to the price of 
ether and with ether-related products and positions. Additionally, the 
Exchange's offering of Ether ETP options will provide investors with 
the ability to transact in such options in a listed market environment 
as opposed to in the unregulated OTC options market, which would 
increase market transparency and enhance the process of price discovery 
conducted on the Exchange through increased order flow to the benefit 
of all investors. The Exchange also notes that it already lists options 
on other commodity-based ETFs,\31\ which, as described above, are 
trusts structured in substantially the same manner as Ether ETPS and 
essentially offer the same objectives and benefits to investors, just 
with respect to a different commodity (i.e., ether rather than precious 
metals) and for which the Exchange has not identified any issues with 
the continued listing and trading of commodity-backed ETF options it 
currently lists for trading.
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    \31\ See Options 4, Section 3(h)(iv).
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    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 Ether 
ETPS 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 commodities already deemed 
appropriate for options trading on the Exchange. Ether ETP options will 
trade in the same manner as any other ETF options--the same Exchange 
Rules that currently govern the listing and trading of all ETF options, 
including permissible expirations, strike prices and minimum 
increments, and applicable position and exercise limits and margin 
requirements, will govern the listing and trading of options on Ether 
ETPS in the same manner.
    The Exchange represents that it has the necessary systems capacity 
to support the new ETF option series. 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 ETF options, including Ether ETP options.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act.
    The Exchange does not believe that the 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 Ether ETPS 
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, Ether ETP options 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 Ether ETPS. Also, 
and as stated above, the Exchange already lists options on other 
commodity-based ETFs.\32\
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    \32\ See Options 4, Section 3(h)(iv).
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    The Exchange does not believe that the proposal to list and trade 
options on Ether ETPS 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 the advent of Ether ETP options trading on 
the Exchange may make the Exchange a more attractive marketplace to 
market participants at other exchanges, 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 Ether 
ETPS. Additionally, the Exchange notes that listing and trading Ether 
ETP options 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. 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 Ether ETP options 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 ether prices and 
ether-related products and positions on a listed options exchange.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were either solicited or received.

[[Page 65689]]

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-ISE-2024-34 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-ISE-2024-34. 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-ISE-2024-34 and should be 
submitted on or before September 3, 2024.
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    \33\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\33\
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-17843 Filed 8-9-24; 8:45 am]
BILLING CODE 8011-01-P