Securities and Exchange Commission
- [Release No. 34-106577; File No. SR-CboeBZX-2026-065]
I. Introduction
On August 10, 2026, Cboe BZX Exchange, Inc. (the “Exchange” or “BZX”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) [1] and Rule 19b-4 thereunder,[2] a proposed rule change to list and trade shares (“Shares”) of the 3x Gold ETF, 3x Silver ETF, 3x Bitcoin ETF, 3x Ether ETF, 3x Crude Oil ETF, and 3x Natural Gas ETF (each, a “Fund” and collectively the “Funds”), each a series of the VS Trust (“Trust”), under BZX Rule 14.11(e)(4) (Commodity-Based Trust Shares).[3] The proposed rule change (“Proposal”) was published for comment in the Federal Register on August 19, 2026.[4] This order approves the Proposal.[5]
II. Description of the Proposal
As described in more detail in the Notice,[6] the Exchange proposes to list and trade the Shares of each of the Funds under BZX Rule 14.11(e)(4), which governs the listing and trading of Commodity-Based Trust Shares on the Exchange. According to the Exchange, each Fund seeks daily investment results, before fees and expenses, that correspond to three times (3x) the daily performance of each of the following: gold, silver, bitcoin, ether, light sweet crude oil, and natural gas (for each Fund, the “Reference Commodity”), as measured by the daily changes in the price of a specified portfolio of first- and second-month futures contracts on the Reference Commodity (for each Fund, a “Benchmark”).[7] Each Fund will pursue its investment objectives by investing in futures contracts that comprise its Benchmark (“Benchmark Futures Contracts”),[8] together with cash and cash equivalents that will serve as collateral or margin for a Fund's investments.[9] To the extent that Benchmark Futures Contracts become unavailable for investment (for example, due to price limits, accountability levels, increased margin levels, exchange position limits, margin requirements, futures commission merchant (“FCM”)-imposed position limits, or FCM risk mitigation requirements), each Fund may invest in: (i) futures contracts on its Reference Commodity that settle beyond the ( printed page 64208) second month; (ii) ETFs (“Benchmark-Linked ETFs”) that provide exposure to its Reference Commodity; (iii) ETPs (“Benchmark-Linked ETPs”) that provide exposure to its Reference Commodity; and (iv) exchange-listed options on its Benchmark-Linked ETFs, Benchmark-Linked ETPs, or Benchmark Futures Contracts.[10]
The Exchange states that it is submitting the Proposal because each Fund will seek daily results, before fees and expenses, equal to three times (3x) the daily performance of its Benchmark; however, the Funds and the Shares will meet all of the other requirements under the generic listing standards for Commodity-Based Trust Shares set forth in BZX Rule 14.11(e)(4).[11]
III. Discussion and Commission Findings
After careful review, the Commission finds that the Proposal is consistent with the Act and rules and regulations thereunder applicable to a national securities exchange.[12] In particular, the Commission finds that the Proposal is consistent with Section 6(b)(5) of the Act,[13] which requires, among other things, that the Exchange's rules be designed to “prevent fraudulent and manipulative acts and practices” and, “in general, to protect investors and the public interest;” and with Section 11A(a)(1)(C)(iii) of the Act,[14] which sets forth Congress' finding that it is in the public interest and appropriate for the protection of investors and the maintenance of fair and orderly markets to assure the availability to brokers, dealers, and investors of information with respect to quotations for and transactions in securities.
A. Exchange Act Section 6(b)(5)
The Commission finds that the Proposal is consistent with the Section 6(b)(5) requirement that the Exchange's rules be designed to prevent fraudulent and manipulative acts and practices. The Exchange represents that the Funds will meet all the requirements set forth in BZX Rule 14.11(e)(4) except that each Fund will seek to provide daily investment returns that correspond to three times (3x) the daily performance of its Benchmark.[15] The Commission has previously found that the requirements set forth in BZX Rule 14.11(e)(4) for the generic listing of Commodity-Based Trust Shares are consistent with the Act.[16] Here, the Reference Commodities that underlie the Funds' holdings meet the eligibility criteria set forth in BZX Rule 14.11(e)(4)(D).[17] Furthermore, ETPs that are not Commodity-Based Trust Shares that provide leveraged exposure to each of the Reference Commodities currently list and trade on national securities exchanges.[18] As the Commission stated in the Generics Approval Order, consistently applying listing standards across products with economic exposures to the same underlying commodities levels the playing field between issuers, which should promote competition and would more readily afford investors greater investment options.[19]
The Commission also finds that the Proposal is consistent with the Section 6(b)(5) requirement that the Exchange's rules be designed to protect investors and the public interest because existing rules and standards of conduct would apply to recommending and advising investments in the Shares. When broker-dealers recommend ETPs to retail customers, Regulation Best Interest (“Reg BI”) would apply.[20] Reg BI requires broker-dealers to, among other things, exercise reasonable diligence, care, and skill when making a recommendation to a retail customer to: (1) understand potential risks, rewards, and costs associated with the recommendation and have a reasonable basis to believe that the recommendation could be in the best interest of at least some retail customers; and (2) have a reasonable basis to believe the recommendation is in the best interest of a particular retail customer based on that retail customer's investment profile.[21] In addition, ( printed page 64209) investment advisers have a fiduciary duty under the Investment Advisers Act of 1940 comprised of a duty of care and a duty of loyalty. These obligations require the adviser to act in the best interest of its client and not subordinate its client's interest to its own.[22] Moreover, FINRA requires increased sales practice and customer margin requirements for FINRA members applicable to inverse, leveraged, and inverse leveraged securities.[23] Exchange members that carry customer accounts are required to follow the FINRA guidance set forth in these notices.[24]
B. Exchange Act Section 11A(a)(1)(C)(iii)
The Proposal sets forth aspects of the Funds, including the availability of pricing information, transparency of portfolio holdings, and types of surveillance procedures, that are consistent with other ETPs that the Commission has approved.[25] This includes commitments regarding: for example, the availability on the Trust's website of certain information related to the Funds, including each Fund's net asset value per Share; the dissemination of information relating to the underlying Reference Commodities, indices, or the intraday indicative value, made widely available on at least a 15-second delayed basis; the Exchange's surveillance procedures and ability to obtain information regarding trading in the Shares; the conditions under which the Exchange would implement trading halts and suspensions; and the requirements of registered market makers in the Shares.[26]
Apart from each Fund seeking daily results, before fees and expenses, equal to three times (3x) the daily performance of its Benchmark, the Shares must meet all the requirements for initial and continued listing under BZX Rule 14.11(e)(4). The Shares will be subject to the rules and procedures of the Exchange that currently govern the trading of equity securities on the Exchange.[27] All statements and representations contained in the Proposal regarding, among others things, the description of the Benchmarks and the Funds' holdings, limitations on the Benchmarks and the Funds' holdings, and the applicability of the Exchange's listing rules specified in the Proposal, will constitute continued listing requirements.[28] Moreover, the Trust must notify the Exchange of any failure by a Fund to comply with the continued listing requirements.[29] Pursuant to obligations under Section 19(g)(1) of the Act,[30] the Exchange will surveil for compliance with the continued listing requirements; and if a Fund is not in compliance with the applicable listing requirements, the Exchange will commence delisting procedures.[31]
The Commission therefore finds that the Proposal is reasonably designed to promote fair disclosure of information that may be necessary to price the Shares appropriately, to prevent trading when a reasonable degree of transparency cannot be assured, to safeguard material non-public information relating to each Fund's portfolio, and to ensure fair and orderly markets for the Shares.
IV. Conclusion
This approval order is based on all of the Exchange's representations and descriptions in the Proposal, which the Commission has evaluated as discussed above.[32] For the reasons set forth above, the Commission finds, pursuant to Section 19(b)(2) of the Act,[33] that the Proposal is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange, and in particular, with Section 6(b)(5) and Section 11A(a)(1)(C)(iii) of the Act.[34]
It is therefore ordered, pursuant to Section 19(b)(2) of the Act,[35] that the proposed rule change (SR-CboeBZX-2026-065) be, and hereby is, approved.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.[36]
Sherry R. Haywood,
Assistant Secretary.
15 U.S.C. 78s(b)(1)
17 CFR 240.19b-4
www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-bulletins-50
www.sec.gov/Archives/edgar/data/1415311/000119312526126553/d86378d424b3.htm