[Federal Register Volume 91, Number 42 (Wednesday, March 4, 2026)]
[Notices]
[Pages 10640-10643]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2026-04226]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104904; File No. SR-CBOE-2026-020]
Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of
Filing of a Proposed Rule Change to Rules 4.3 (Criteria for Underlying
Securities) and 4.4 (Withdrawal of Approval of Underlying Securities)
To Establish Listing Criteria and Withdrawal Standards for Options on
Commodity-Based Trusts Holding Multiple Crypto Assets
February 27, 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 February 23, 2026, Cboe Exchange, Inc. (the ``Exchange'' or ``Cboe
Options'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II,
and III 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
Cboe Exchange, Inc. (``Cboe'' or the ``Exchange'') is filing with
the Securities and Exchange Commission (``Commission'' or ``SEC'') a
proposed rule change to Rules 4.3 (Criteria for Underlying Securities)
and 4.4 (Withdrawal of Approval of Underlying Securities) to establish
listing criteria and withdrawal standards for options on Commodity-
Based Trusts holding multiple crypto assets. The text of the proposed
rule change is provided in Exhibit 5.
The text of the proposed rule change is also available on the
Commission's website (https://www.sec.gov/rules/sro.shtml), the
Exchange's website (https://www.cboe.com/us/options/regulation/rule_filings/bzx/), and at the principal office of the Exchange.
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 Rules 4.3 (Criteria for Underlying
Securities) and 4.4 (Withdrawal of Approval of Underlying Securities)
to establish listing criteria and withdrawal standards for options on
Commodity-Based Trusts holding single or multiple crypto assets.
On November 14, 2025, the Exchange's proposal to permit certain
options on exchange-traded funds (``ETFs'') \3\ that represent
interests in a Commodity-Based Trust that meet certain generic listing
requirements was deemed approved.\4\ Currently, Rule 4.3,
Interpretation and Policy .06(a)(6) allows the Exchange to list and
trade options on ETFs 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.
Specifically, the Commodity-Based Trust must satisfy the following: (i)
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 (ii) 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'').
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\3\ See Exchange Rule 1.1 (Definitions) for ``Unit'' and
``ETF.''
\4\ See Securities Exchange Act No. 104210 (November 18, 2025)
90 FR 52727 (November 21, 2025) (SR-CBOE-2025-014) (Notice of Deemed
Approval of Various Proposed Rule Changes).
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Now, the Exchange proposes to amend Rule 4.3, Interpretation and
Policy .06(a)(6) 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,
Rule 4.3, Interpretation and Policy .06(a)(6) would provide that
securities deemed appropriate for options trading include Units that:
represent interests in a Commodity-Based Trust that (A) meets the
generic criteria of the U.S. securities exchange that is the primary
equities listing market for the Commodity-Based Trust and (B) holds
a single crypto asset or multiple crypto assets that meet the
following requirements: (i) 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 (ii) 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 subparagraph (6), 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
[[Page 10641]]
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.\5\ The total supply of a crypto asset includes all crypto
assets currently issued and does not include unissued crypto assets.\6\
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\5\ The market supply information can be obtained from publicly
available sources such as coingecko.com or coinmarketcap.com.
\6\ 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 February 4,
2026, Bitcoin's total supply was 19,984,462 (the maximum supply is
21,000,000). See https://www.coingecko.com/en/coins/bitcoin. 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 amendment, the proposed listing criteria would
permit a Commodity-Based Trust that is generically listed on a primary
equities listing market and holds multiple crypto assets to qualify for
the listing of options on that ETF, provided Rule 4.3, Interpretation
and Policy .06(a)(6) has also been met, as well as the listing criteria
in Rule 4.3, Interpretation and Policy (a)(1) and (2) or Rule 4.3,
Interpretation and Policy .06(b)(2).
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.\7\ Specifically, the Exchange believes the proposed rule change is
consistent with the Section 6(b)(5) \8\ 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) \9\ requirement that the rules of
an exchange not be designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
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\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(5).
\9\ Id.
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In particular, the Exchange believes that its proposal to permit
Commodity-Based Trusts that hold multiple crypto assets to be listed
and traded without the need for additional approvals will enhance
operational efficiency, 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 have been met, without
any additional approvals from the Commission.
Specifically, the Exchange's proposal to amend Rule 4.3,
Interpretation and Policy .06(a)(6) to allow the listing and trading of
options on Units that represent interests in Commodity-Based Trusts
that are generically listed on a primary equities listing market 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 certain Commodity-Based Trusts soon after the listing of the
Unit, provided all listing criteria 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
benefit investors, similar to the listing of any other option on Unit
[sic], 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.
Also, this proposal would permit options on certain Commodity-Based
Trusts to be listed on the Exchange in the same manner as options on
Units that are subject to the current listing criteria in Rule 4.3,
Interpretation and Policy .06(a). The Exchange notes that the majority
of Units 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 the Exchange to likewise list options
on certain Commodity-Based Trusts that meet the proposed listing
criteria without the need for additional approvals.
As proposed, the Exchange would list options on a Commodity-Based
Trust that is generically listed on a primary equities listing market,
provided the Commodity-Based Trust holds multiple crypto assets.
Further, each crypto asset held by the Commodity-Based Trust would also
be required to satisfy the conditions in proposed Rule 4.3,
Interpretation and Policy .06(a)(6)(B), which requires that (i) the
total global supply of each underlying crypto asset held by the
Commodity-Based Trust must have an average daily market value of at
least $700 million over the last 12 months; and (ii) each crypto asset
held by the Commodity-Based Trust must underlie a derivatives contract
that trades on a market with which the Exchange has a comprehensive
surveillance sharing agreement, whether directly or through common
membership in the ISG.
These requirements are consistent with the Act and the protection
of investors as they provide that each crypto asset held by the
underlying Unit has sufficient liquidity prior to listing options,
which will serve to prevent disruption in 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 hold multiple crypto assets. Requiring each underlying
crypto asset to have a requisite amount of deliverable supply, in
addition to all the other criteria the Unit is required to have under
the applicable primary equities listing market, should provide adequate
liquidity prior to listing. Further, providing 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 the ISG, will provide the Exchange with information to
adequately surveil options on qualifying Commodity-Based Trusts. Today,
the Exchange has a comprehensive surveillance sharing agreement in
place with both the Chicago Mercantile Exchange (``CME'') and Coinbase
Derivatives through its common membership in ISG. This facilitates the
sharing of information that is available
[[Page 10642]]
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 Units, including Units that hold
other crypto assets already deemed appropriate for options trading on
the Exchange, together with the proposed criteria.
Further, the proposal adopts new subparagraph (c) to Rule 4.4,
Interpretation and Policy .06, which will require each crypto asset
held by a Commodity-Based Trust to continue to meet the requirement of
Rule 4.3, Interpretation and Policy .06(a)(6)(B)(i) on a monthly basis
and for the criteria in Rule 4.3, Interpretation and Policy
.06(a)(6)(B)(ii) 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 4.3,
Interpretation and Policy .06(a)(6) 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 Rule 4.3, Interpretation and Policy
.06(a)(6)(B)(i) to be met on a monthly basis is consistent with the Act
and the protection of investors because 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 [sic] of trading over a relatively
short period of time. For 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 Rule 4.3, Interpretation and Policy
.06(a)(6) would continue to be subject to Rule 4.4, Interpretation and
Policy .06(e) as re-lettered, which states that the Exchange may
consider suspending open [sic] 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 Unit options--the same Exchange Rules that
currently govern the listing and trading of all Unit 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 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 Units that
would qualify for listing as an option on a Commodity-Based Trust under
proposed Rule 4.3, Interpretation and Policy .06(a)(6), and it has not
identified any issues with the listing and trading of options on those
Units.
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 proposal to amend the listing criteria in Rule 4.3,
Interpretation and Policy .06 with respect to Units, to adopt new
criteria to permit the listing and trading of options on certain
Commodity-Based Trusts that are generically listed on a primary
equities 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. All Trading
Permit Holders (``TPHs'') will be able to trade options on qualifying
Commodity-Based Trusts that hold multiple crypto assets in the same
manner. Further, the proposed rules would apply in an equal manner to
options on qualifying Commodity-Based Trusts that contain multiple
crypto assets. 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 amend the
listing criteria at Rule 4.3, Interpretation and Policy .06(a)(6), with
respect to Units, to adopt new criteria to permit the listing and
trading of options on certain Commodity-Based Trusts that are
generically listed on a primary equities 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
listing rules, as applicable, 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.
[[Page 10643]]
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
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-CBOE-2026-020 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-CBOE-2026-020. 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 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-CBOE-2026-020 and should be submitted on
or before March 25, 2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\10\
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\10\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-04226 Filed 3-3-26; 8:45 am]
BILLING CODE 8011-01-P