- Cboe has submitted a 19b-4 filing to be allowed to list and trade options on spot Ethereum ETFs.
- The proposal follows high demand for Ethereum ETFs.
- NYSE American has made a similar proposal though it is yet to receive SEC approval.
The Cboe BZX Exchange has officially submitted a 19b-4 filing to the US Securities and Exchange Commission (SEC), seeking approval to list and trade options on spot Ethereum exchange-traded funds (ETFs).
This move signifies a pivotal step for Cboe towards expanding investor access to Ethereum, mirroring the growing demand within the cryptocurrency market.
Cboe seeks to expand its investment tools
Cboe’s proposal aims to broaden the spectrum of investment tools available to market participants. By allowing options trading on Ethereum ETFs, investors would gain an accessible means to engage with Ethereum’s price movements.
The 19b-4 filing includes funds such as those managed by Bitwise and Grayscale, notably the Grayscale Ethereum Trust and Grayscale Ethereum Mini Trust, which hold Ethereum as their primary asset.
The exchange posits that these options will serve not only as another avenue for investors to gain exposure to Ethereum but also as a crucial hedging instrument against the inherent volatility of the cryptocurrency market.
Notably, Cboe’s filling follows on the heels of a similar proposal by NYSE American, which has yet to receive SEC approval, with the regulator citing concerns over market manipulation, investor protection, and ensuring a fair trading environment.
The SEC’s hesitance is rooted in Section 6(b)(5) of the Securities Exchange Act of 1934, which emphasizes the protection of investors and the maintenance of fair and orderly markets.
Despite these challenges, Cboe’s proposal is framed as a competitive response to NYSE’s initiative, suggesting a potential market eagerness to see these financial products come to fruition.
Cboe’s approach in the filing underscores that Ethereum ETF options would be governed by the same stringent rules as other fund share options on its platform, including listing requirements, margin rules, and trading halts. This regulatory alignment aims to reassure the SEC of the proposal’s adherence to existing frameworks, similar to those applied to Bitcoin ETF options, which were approved under similar regulatory scrutiny.