NYSE Arca Rule 5.3-O Amendment - Multi-Asset Crypto Commodity Trust Options

Content

April 1, 2026.

I. Introduction

On February 6, 2026, NYSE Arca, Inc. (the “Exchange” or “NYSE Arca”) filed with the Securities and Exchange Commission (“Commission”),
pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act” or “Exchange Act”) (1) and Rule 19b-4 thereunder, (2) a proposed rule change to adopt listing criteria for options on Commodity-Based Trusts that hold multiple crypto assets. The
proposed rule change was published for comment in the
Federal Register
on February 19, 2026. (3) The Commission received no comments regarding the proposed rule change. This order approves the proposed rule change.

II. Description of the Proposed Rule Change

Currently, Exchange Rule 5.3-O(g)(x) allows the Exchange to list options on shares that represent interests in a Commodity-Based
Trust that meets the generic criteria of NYSE Arca Rule 8.201-E (Generic), except that the Commodity-Based Trust holds a single
crypto asset, as defined in Exchange Rule 5.3-O(g)(3), and provided that (A) the global supply of the crypto asset held by
the Commodity-Based Trust has an average daily market value of at least $700 million over the last 12 months; and (B) the
crypto asset held by the Commodity-Based Trust underlies a derivatives contract that trades on a market with which the Exchange
has a comprehensive surveillance sharing agreement, whether directly or through common membership in the Intermarket Surveillance
Group (“ISG”). (4) As described more fully in the Notice, (5) the Exchange proposes to amend Exchange Rule 5.3-O(g)(x) to allow the Exchange to list and trade options on a Commodity-Based
Trust that holds multiple crypto assets. The proposal would allow the Exchange to list and trade these options without additional
approval from the Commission. (6) Under the proposal, each crypto asset that the Commodity-Based Trust holds must meet the criteria in Exchange Rule 5.3-O(g)(3). (7) Accordingly, each of the Commodity-Based Trust's crypto assets must: (A) have an average daily market value of at least $700
million over the last 12 months; and (B) underlie a derivatives contract that trades on a market with which the Exchange has
a comprehensive surveillance sharing agreement, whether directly or through common membership in ISG. (8) The proposed Commodity-Based Trust share options also must satisfy the Exchange's initial and continued listing standards
applicable to all options on exchange-traded funds (“ETFs”). (9) Exchange Rule 5.3-O(g) requires the shares of an ETF underlying listed options to trade on a national securities exchange
and to be an “NMS stock,” as defined in Rule 600 of Regulation NMS under the Exchange Act. In addition, Exchange Rule 5.3-O(g)
requires the shares of an ETF to meet the listing criteria in Exchange

  Rule 5.3-O(g)(1)(A) [(10)]() or Exchange Rule 5.3-O(g)(1(B). [(11)]()

The continued listing criteria in proposed Exchange Rule 5.4-O(k)(3) will allow the Exchange to suspend opening transactions
in options on Commodity-Based Trust shares if any crypto asset held by the Commodity-Based Trust (A) no longer has an average
daily market value of at least $700 million over the last 12 months, as determined by the Exchange on a monthly basis; or
(B) no longer underlies a derivatives contract that trades on a market with which the Exchange has a comprehensive surveillance
sharing agreement, whether directly or through common membership in ISG. The Exchange states that requiring the average daily
market value criterion to be met on a monthly basis is reasonable given that the Exchange believes that it is unlikely that
a crypto asset with an average daily market value of at least $700 million over the previous twelve months would fail to meet
that standard as a result of trading over a relatively short period of time. (12)

Options on Commodity-Based Trust shares also will be subject to the continued listing standards in Exchange Rule 5.4-O(k). (13) Under Exchange Rule 5.4-O(k), shares of an ETF approved for options trading would not meet the requirements for continued
approval if the shares were delisted from trading as provided in Exchange Rule 5.4-O(b)(5) because the underlying security
was no longer an NMS stock, as defined in Rule 600 of Regulation NMS under the Exchange Act, or trading in the shares is halted
or suspended from trading in their primary market. (14) Further, Exchange Rule 5.4-O(k)(4) (renumbered as Exchange Rule 5.4-O(k)(5)) would allow the Exchange to consider suspending
opening transactions in options on Commodity-Based Trust shares if the Exchange believes that further dealing in the options
on the Exchange is inadvisable. (15)

The Exchange states that the proposed options on Commodity-Based Trust shares would trade in the same manner as other ETF
options on the Exchange and will be subject to Exchange rules that currently apply to the listing and trading of ETF options,
including Exchange rules governing, for example, expirations, exercise prices, minimum increments, position and exercise limits,
margin requirements, customer accounts, and trading halt procedures. (16) The Exchange states that position and exercise limits for options on Commodity-Based Trust shares will be determined pursuant
to Exchange Rules 6.8-O and 6.9-O. (17)

The Exchange represents that the same surveillance procedures applicable to all ETF options currently listed and traded on
the Exchange will apply to the trading of options on Commodity-Based Trust shares that are approved subject to proposed Exchange
Rule 5.3-O(g)(x). (18) The Exchange states 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 Commodity-Based Trust shares that are approved
subject to proposed Exchange Rule 5.3-O(g)(x). (19) The Exchange states that it may obtain information from designated contract markets that are members of the ISG related to
a financial instrument that is based, in whole or in part, upon an interest in or performance of a crypto asset, as applicable. (20) In addition, the Exchange states that it currently lists options that would qualify for listing as on option on a Commodity-Based
Trust under proposed Exchange Rule 5.3-O(g)(x). (21)

The Exchange states that it believes both the Exchange and the Options Price Reporting Authority (“OPRA”) have the necessary
systems capacity to handle the additional traffic associated with the listing of the proposed options on the Commodity-Based
Trust shares. (22)

III. Discussion and Commission Findings

After careful review, the Commission finds that the proposed rule change is consistent with the requirements of the Act and
the rules and regulations thereunder applicable to a national securities exchange. (23) Specifically, the Commission finds that the proposed rule change is consistent with Section 6(b)(5) of the Act, (24) which requires, among other things, that the rules of a national securities exchange be designed to prevent fraudulent and

  manipulative acts and practices, to remove impediments to and perfect the mechanism of a free and open market, and, in general,
  to protect investors and the public interest.

The Exchange proposes to amend Exchange Rule 5.3-O(g)(x) to permit the Exchange to list options on shares of a Commodity-Based
Trust that holds multiple crypto assets, provided that the Commodity-Based Trust meets certain requirements, as described
above. The proposal will allow the Exchange to list options on shares of these Commodity-Based Trusts without further approval
from the Commission, thereby permitting the Exchange to list these options soon after the Exchange lists the underlying Commodity-Based
Trust shares. Permitting the listing and trading of these options on the Exchange will provide investors with an additional
vehicle for gaining and hedging exposure to the underlying Commodity-Based Trust shares. The Commission recently approved
a Nasdaq ISE, LLC proposal to establish listing standards for options on shares of Commodity-Based Trusts that hold multiple
crypto assets. (25)

Options on shares of Commodity-Based Trusts that hold multiple crypto assets will be subject to the same initial and continued
listing requirements for options on Commodity-Based Trusts that hold a single crypto asset except that each crypto asset that
a Commodity-Based Trust holds must (A) have an average daily market value of at least $700 million over the last 12 months;
and (B) underlie a derivatives contract that trades on a market with which the Exchange has a comprehensive surveillance sharing
agreement, whether directly or through common membership in ISG. The requirements in proposed Exchange Rule 5.3-O(g)(3) are
designed to help ensure that each of the crypto assets that a Commodity-Based Trust holds is sufficiently liquid that the
creation and redemption process for shares of the Commodity-Based Trust will operate without disruption and that Commodity-Based
Trust shares will be available to options market makers and other market participants that may use Commodity-Based Trust shares
to hedge their positions. The Exchange will consider suspending opening transactions in Commodity-Based Trust share options
if the requirements in proposed Exchange Rule 5.3-O(g)(3) are no longer satisfied. (26)

The Exchange represents that the same surveillance procedures applicable to ETF options currently listed and traded on the
Exchange will apply to the trading of options on Commodity-Based Trust shares. (27) The Exchange states that its existing surveillance and reporting safeguards are designed to deter and detect possible manipulative
behavior that might arise from listing and trading options on ETFs, including the listing of options on Commodity-Based Trust
shares. (28) As discussed above, each crypto asset held by a Commodity-Based Trust must underlie a derivatives contract that trades on
a market with which the Exchange has a comprehensive surveillance sharing agreement, whether directly or through common membership
in ISG. (29) This requirement, in addition to the Exchange's existing surveillance procedures, should assist the Exchange in investigating
suspected manipulations or other trading abuses in Commodity-Based Trust share options.

IV. Conclusion

It is therefore ordered, pursuant to Section 19(b)(2) of the Act, (30) that the proposed rule change (SR-NYSEARCA-2026-17) is approved.

For the Commission, by the Division of Trading and Markets, pursuant to delegated authority. (31)

Sherry R. Haywood, Assistant Secretary. [FR Doc. 2026-06568 Filed 4-3-26; 8:45 am] BILLING CODE 8011-01-P

Footnotes

(1) 15 U.S.C. 78s(b)(1).

(2) 17 CFR 240.19b-4.

(3) See Securities Exchange Act Release No. 104842 (Feb. 13, 2026), 91 FR 8037 (“Notice”).

(4) See Exchange Rule 5.3-O(g)(3). Exchange 5.3-O(g)(3) defines the term “crypto asset” to mean “an asset that is generated, issued
and/or transferred using a blockchain or similar distributive ledger technology network, including but not limited to, assets
known as tokens,'digital assets,' virtual currencies,' andcoins' and that relies on cryptographic protocols.”

(5) See supra note 3.

(6) See Notice, 91 FR 8040.

(7) See proposed Exchange Rule 5.3-O(g)(3).

(8) See proposed Exchange Rule 5.3-O(g)(3). The Exchange states that the market value for each crypto asset that a Commodity-Based
Trust holds will be calculated by taking the total global supply of the crypto asset multiplied by the token price of that
asset. The Exchange states that the total supply of a crypto asset includes all crypto assets currently issued and does not
include unissued crypto assets. See Notice, 91 FR at 8038.

(9) See Notice, 91 FR 8038. In its proposal, the Exchange refers to Commodity-Based Trust Shares as ETFs. See id. at 8038, 8039. The Exchange's rules use the term “exchange-traded fund” to refer to several types of investment products,
including Commodity-Based Trusts. See Exchange Rule 5.3-O(g).

(10) See Notice, 91 FR 8038. Exchange Rule 5.3-O(g)(1)(A) requires an ETF to meet the criteria in Exchange Rule 5.3-O(a) and (b). Exchange
Rule 5.3-O(a) states, in part, that absent exceptional circumstances, an underlying security will not be selected for options
trading unless: (1) there are a minimum of 7,000,000 shares of the underlying security which shall be owned by persons other
than those required to report their stock holdings under Section 16(a) of the Securities Exchange Act of 1934; (2) there are
a minimum of 2,000 shareholders of the underlying security; (3) trading volume (in all markets in which the underlying security
is traded) has been at least 2,400,000 shares in the preceding twelve months. In considering for approval underlying securities
that have not been primarily traded on a national securities exchange or designated as national market system securities for
the one year preceding such approval, the Exchange may take into account the volume of trading in such security in the over-the-counter
market as reflected in the NASDAQ system. If the volume of trading in the over-the-counter market meets the requirements specified
above, then the security may be deemed to have met the volume requirements set forth in the agreements between the Exchange
and the Clearing Corporation; (4) (A) if the underlying security is a “covered security” as defined under Section 18(b)(1)(A)
of the Securities Act of 1933 (i) the market price per share of the underlying security has been at least $3.00 for the previous
three consecutive business days preceding the date on which the Exchange submits a certificate to the Clearing Corporation
for listing and trading, as measured by the closing price reported in the primary market in which the underlying security
is traded; however, (ii) the requirements set forth in (4)(A)(i) will be waived during the three days following its initial
public offering day for an underlying security having a market capitalization of at least $3 billion based upon the offering
price of its initial public offering, and may be listed and traded starting on or after the second business day following
the initial public offering day; (B) if the underlying security is not a “covered security,” the market price per share of
the underlying security has been at least $7.50 for the majority of business days during the three calendar months preceding
the date of selection, as measured by the lowest closing price reported in any market in which the underlying security traded
on each of the subject days; (5) the issuer is in compliance with any applicable requirements of the Securities Exchange Act
of 1934. Exchange Rule 5.3-O(b) states that underlying securities must be registered and be an “NMS stock” as defined in Rule
600 of Regulation NMS under the Exchange Act.

(11) Exchange Rule 5.3-O(g)(1)(B) states that the Exchange-Traded Fund Shares must be available for creation or redemption each
business day in cash or in kind from or through the issuing trust, investment company, commodity pool or other issuer at a
price related to the net asset value. In addition, the issuing trust, investment company, commodity pool, or other issuer
is obligated to issue Fund Shares in a specified aggregate number even though some or all of the investment assets needed
to be deposited have not been received by the issuing trust, investment company, commodity pool, or other issuer, provided
the authorized creation participant has undertaken to deliver the investment assets as soon as possible and such undertaking
has been secured by the delivery and maintenance of collateral consisting of cash or cash equivalents satisfactory to the
issuer of Fund Shares which underlie the option as described in the Fund Shares' prospectus.

(12) See Notice, 91 FR 8038-9. For example, the Exchange states that a crypto asset with market capitalization of $500 million for
15 days in a 20-day trading month could lose up to 88% of its value and continue to meet the criteria. See id. at 8039.

(13) See id. at 8038.

(14) See Exchange Rule 5.3-O(k).

(15) See Notice, 91 FR at 8039.

(16) See id. at 8039.

(17) See id.

(18) See id.

(19) See id.

(20) See id.

(21) See id. at 8040. The Exchange states that it currently lists options on shares of the following funds: the iShares Bitcoin Trust,
the Fidelity Wise Origin Bitcoin Fund, the ARK21 Shares Bitcoin ETF, the Grayscale Bitcoin Trust (BTC), the Grayscale Bitcoin
Mini Trust BTC, and the Bitwise Bitcoin ETF. See Notice, 91 FR at 8040, footnote 25.

(22) See id. at 8040.

(23) In approving this proposed rule change, the Commission has considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).

(24) 15 U.S.C. 78f(b)(5).

(25) See Securities Exchange Act Release No. 105072 (Mar. 24, 2026), 91 FR 14894 (Mar. 27, 2026).

(26) See proposed Exchange Rule 5.4-O(k)(3).

(27) See Notice, 91 FR at 8039.

(28) See id.

(29) See proposed Exchange Rule 5.3-O(g)(3).

(30) 15 U.S.C. 78s(b)(2).

(31) 17 CFR 200.30-3(a)(12).

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