MIAX Proposes Options Listing Rules for Multi-Crypto Asset ETFs

Miami International Securities Exchange ("MIAX") proposed amendments to its listing and withdrawal rules to permit the listing and trading of options on Commodity-Based Trusts that hold multiple crypto assets.

The proposal mirrors recently approved rule changes by Nasdaq ISE to allow the listing of qualifying options without seeking additional SEC approvals on a case-by-case basis (see prior coverage).

The proposed amendment would expand current single-crypto-asset listing criteria to cover multi-asset Commodity-Based Trusts. Each underlying crypto asset held by the trust would be required to satisfy two conditions: (A) a total global supply with an average daily market value of at least $700 million over the preceding 12 months; and (B) the crypto asset must underlie a derivatives contract trading on a market with which MIAX has a comprehensive surveillance sharing agreement, directly or through common membership in the Intermarket Surveillance Group ("ISG"). Market value would be calculated by multiplying total global supply (excluding unissued assets) by the token price, using publicly available sources.

The proposal amendments also add continued listing standards specific to options on multi-crypto Commodity-Based Trusts. Market value criterion would be reviewed on a monthly basis, while the surveillance sharing agreement criterion would be monitored on a daily basis. MIAX justified monthly review of the market value standard by noting that a crypto asset with a $700 million average daily market value over 12 months is unlikely to fall below that threshold due to short-term trading activity. The Exchange retains discretion to delist options on any Commodity-Based Trust lacking sufficient liquidity or market demand.

Under the proposal, options on qualifying Commodity-Based Trusts would trade under the same rules governing all ETF options on MIAX, including rules on expirations, strike prices, minimum increments, position and exercise limits, and margin requirements. Position and exercise limits would be determined to be consistent with treatment of other ETF options listed on the exchange. MIAX represented that its existing surveillance infrastructure and systems capacity are sufficient to support the new option series.