Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing of Proposed Rule Change to List and Trade Nasdaq Bitcoin Index Options

<NOTICE> SECURITIES AND EXCHANGE COMMISSION <DEPDOC>[Release No. 34-104038; File No. SR-Phlx-2025-50]</DEPDOC> <SUBJECT>Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing of Proposed Rule Change to List and Trade Nasdaq Bitcoin Index Options</SUBJECT> <DATE>September 24, 2025.</DATE> Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”), <SU>1</SU> <FTREF/> and Rule 19b-4 thereunder, <SU>2</SU> <FTREF/> notice is hereby given that on September 23, 2025, Nasdaq PHLX LLC (“Phlx” or “Exchange”) filed with the Securities and Exchange Commission (“SEC” or “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. <FTNT> <SU>1</SU>  15 U.S.C. 78s(b)(1). </FTNT> <FTNT> <SU>2</SU>  17 CFR 240.19b-4. </FTNT> <HD SOURCE="HD1">I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change</HD> The Exchange proposes to list and trade Nasdaq Bitcoin Index Options, a new index that reflects the price of Bitcoin. The text of the proposed rule change is available on the Exchange's website at <E T="03">https://listingcenter.nasdaq.com/rulebook/phlx/rulefilings,</E> and at the principal office of the Exchange. <HD SOURCE="HD1">II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change</HD> 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. <HD SOURCE="HD2">A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change</HD> <HD SOURCE="HD3">1. Purpose</HD> The Exchange proposes to introduce a new index options product, Nasdaq Bitcoin Index Options. This index would enable retail and institutional investors to obtain a precise price for Bitcoin. Nasdaq Bitcoin Index Options, as proposed, shall have a ticker symbol “XBTX” and will be based on the underlying index, CME CF Bitcoin Real Time Index (“BRTI”)  <SU>3</SU> <FTREF/> divided by a factor of one hundred (100). The Exchange shall utilize a separate methodology to calculate the final settlement price. The final settlement price shall be the “BRRNY—NOS “Nasdaq Options Settlement” which is calculated on the expiration date by observing transactions during a one-hour window from 15.00 to 16.00 New York Time, separated into twelve partitions of five minutes, each with a resulting a volume-weighted median (“VWM”), which index value is expressed as the arithmetic mean of the twelve (12) VWMs, resulting in the CME CF Cryptocurrency Reference Rate—New York Variant (“BRRNY”)  <SU>4</SU> <FTREF/> which is then divided by a factor of one hundred (100). The purpose of utilizing the BRRNY divided by a factor of one hundred (100), known as the BRRNY—NOS, as the final settlement price is to provide a replicable, manipulation-resistant and representative Bitcoin benchmark that synchronizes with the traditional U.S. options market close timeframe. <FTNT> <SU>3</SU>  The BRTI is a real time price benchmark and is regulated by the UK Financial Conduct Authority, a regulator of financial services firms, under EU BMR. The European Regulation on indices used as benchmarks in financial instruments and financial contracts or to measure the performance of investment funds is the EU BMR. Today, the BRRNY—U.S. Dollar trading pair is the benchmark index for the following exchange-listed ETF products comprising $58 billion of assets as of July 18, 2024: iShares Bitcoin Trust (IBIT), Grayscale Bitcoin Trust (GBTC), Fidelity Wise Origin Bitcoin Fund (FBTC), ARK 21Shares Bitcoin ETF (ARKB), Bitwise Bitcoin ETF Trust (BUTB), VanEck Bitcoin Trust (HODL), Coinshares Valkyrie Bitcoin Fund (BRRR), Invesco Galaxy Bitcoin ETF (BTCO), Franklin Bitcoin ETF (EZBC). (See <E T="03">https://etfdb.com/index/cme-cf-benchmarks-Bitcoin-reference-rate-new-york-variant</E> ). </FTNT> <FTNT> <SU>4</SU>  Today, CME CF Bitcoin Futures contracts are settled using the BRRNY. </FTNT> Options on this new index will be cash-settled, with a European-style exercise. <HD SOURCE="HD1">Background</HD> The BRTI  <SU>5</SU> <FTREF/> is a once a second benchmark index price for Bitcoin that aggregates order data from Bitcoin-USD markets operated by major cryptocurrency exchanges that conform to the CME CF Constituent Exchange Criteria. <SU>6</SU> <FTREF/> The BRTI is calculated every second of every day, using the Relevant Order Books  <SU>7</SU> <FTREF/> of all Constituent Exchanges, <SU>8</SU> <FTREF/> thereby aggregating the notional value of Bitcoin across major Bitcoin spot platforms. <FTNT> <SU>5</SU>  In 2016, CME Group and Crypto Facilities Ltd. launched the BRTI index. <E T="03">See https://www.cmegroup.com/education/courses/introduction-to-Bitcoin/introduction-to-Bitcoin-reference-rate.html.</E> </FTNT> <FTNT> <SU>6</SU>  “Constituent Exchange” is defined at proposed Options 4D, Section 2(a)(5) to mean the cryptocurrency trading venues approved by the CME CF Cryptocurrency Pricing Products Oversight Committee to serve as pricing source for the calculation of the BRTI and BRRNY. </FTNT> <FTNT> <SU>7</SU>  CF Benchmark's Methodology Guide defines “Relevant Order Books” as the universe of the currently unmatched limit orders to buy or sell a unit of the cryptocurrency base asset versus the quote asset on a Constituent Exchange in the Relevant Pair, aggregated by price, that is reported through its Automatic Programming Interface (“API”) to the CF Benchmarks. The Relevant Pair for the Nasdaq Bitcoin Index Options shall mean Bitcoin versus the U.S. Dollar. To assure that the BRTI and the BRRNY reflects global cryptocurrency trading activity in a representative and unbiased manner, a geographically diverse set of spot trading venues is included within the current framework. </FTNT> <FTNT> <SU>8</SU>  Constituent Exchanges are cryptocurrency trading venues approved by the CME CF Cryptocurrency Pricing Products Oversight Committee to serve as pricing source for the calculation of a BRTI and the BRRNY, collectively known as the CME CF Cryptocurrency Pricing Products. The Exchange defines “CME CF Cryptocurrency Pricing Products Oversight Committee” or “Oversight Committee” at proposed Options 4D, Section 2(a)(4) to mean the committee established jointly by Crypto Facilities Ltd. or “CF” and Chicago Mercantile Exchange Inc. or “CME” to protect the integrity of the methodology and calculation process of the BRTI and the BRRNY and to address potential conflicts of interest. The role of the Oversight Committee is to provide an oversight function to review and provide challenge on all aspects of the methodology and calculation process and provide effective oversight of CF as the administrator of the BRTI and BRRNY. </FTNT> The BRTI is designed based on the IOSCO Principles for Financial Benchmarks. <SU>9</SU> <FTREF/> The administrator of the CF Benchmarks Index is CF Benchmarks Ltd. <FTNT> <SU>9</SU>   <E T="03">See https://www.iosco.org/library/pubdocs/pdf/IOSCOPD589.pdf.</E> </FTNT> A trading venue is eligible as a Constituent Exchange in any of the CME CF Cryptocurrency Pricing Products  <SU>10</SU> <FTREF/> if it offers a market that facilitates the spot trading of the relevant cryptocurrency base asset (Bitcoin) against the corresponding quote asset (U.S. Dollars), and makes trade data and order data available through an API with sufficient reliability, detail and timeliness. Furthermore, it must meet certain criteria established by the CME CF Cryptocurrency Pricing Products Oversight Committee. <SU>11</SU> <FTREF/> Should the average daily contribution of a Constituent Exchange fall below 3% for any CME CF Cryptocurrency Pricing Product, then the continued inclusion of the venue as a Constituent Exchange to the Relevant Pair shall be assessed by the CME CF Oversight Committee. <FTNT> <SU>10</SU>  CME CF Cryptocurrency Pricing Products includes the BRTI and the BRRNY. </FTNT> <FTNT> <SU>11</SU>  CF Benchmark's guidelines require that the venue's Relevant Pair spot trading volume for an index must meet the minimum thresholds for it to be admitted as a Constituent Exchange. The average daily volume the venue would have contributed during the observation window for the Reference Rate of the Relevant Pair must exceed 3% for two consecutive calendar quarters. The venue must have policies to ensure fair and transparent market conditions at all times and has processes in place to identify and impede illegal, unfair or manipulative trading practices. The venue must not impose undue barriers to entry or restrictions on market participants, and utilizing the venue does not expose market participants to undue credit risk, operational risk, legal risk or other risks. The venue must comply with applicable law and regulation, including, but not limited to capital markets regulations, money transmission regulations, client money custody regulations, know-your-client (“KYC”) regulations and anti-money laundering regulations. Finally, the venue must cooperate with inquiries and investigations of regulators and CF Benchmarks upon request and must execute data sharing agreements with CME Group Once admitted a constituent exchange must demonstrate that it continues to meet the aforementioned criteria. </FTNT> When calculated, the Relevant Order Book of each Consti ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 140k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━