The SEC is reviewing new regulations for Bitcoin options trading
The United States Securities and Exchange Commission (SEC) has launched another round of consultations on proposed rule changes regarding trading options on Bitcoin exchange-traded products (ETPs).
According to an April 24 filing, the securities regulator wants to better understand how the listing of Bitcoin (BTC) options affects the overall market, particularly during times of stress. Part of the review will assess whether the exchanges' current monitoring and enforcement mechanisms are adequate to handle the unique aspects of Bitcoin options.
Initial comments must be submitted within 21 days of the document being officially registered, with a final deadline of May 15, 2024. Likewise, rebuttal comments may be submitted until May 29, 2024.
Bitcoin options are financial instruments that give the buyer the right, but not the obligation, to buy or sell bitcoin at a certain price on a certain date. Options are typically used by traders who are aware of option prices and market movements. Like other investments, options trading carries risks that may not be suitable for all investors.
The Commission previously sought comments on the rule change and incorporated the comments it received into the filing. Most comments emphasized how options on Bitcoin ETPs can increase liquidity and improve market efficiency.
“Furthermore, the commenter stated that listing and trading options on a Bitcoin ETP would bring Bitcoin into the regulatory perimeter by allowing additional regulated market participants, such as CFTC-regulated designated contract traders and SEC-regulated broker-dealers. Trade the products. “
Several financial firms, including Nasdaq and Cboe, have submitted proposals to the SEC seeking permission to trade Bitcoin options. Nasdaq's application seeks to list and trade options on BlackRock's iShares Bitcoin Trust, while Cboe plans to trade options on various ETFs that hold Bitcoin.
Additionally, asset managers such as Bitwise and Grayscale are also seeking regulatory approval to list options on Bitcoin ETFs on New York Stock Exchange applications.
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