On 09 May 2023, the United States Securities and Exchange Commission (US SEC) published a notice of proposed rule change filed by Cboe BZX Exchange, Inc., initiating the public comment process regarding the potential listing and trading of two leveraged exchange-traded funds (ETFs) i.e. the 2x Long VIX Futures ETF (UVIX) and the -1x Short VIX Futures ETF (SVIX). Released as Exchange Act Release No. 34–102991, the notice pertains to amendments submitted pursuant to Section 19(b)(1) of the United States Securities Exchange Act of 1934 and Rule 19b-4 thereunder. At this stage, the US SEC has not approved the proposal but is instead soliciting comments from interested parties to assess whether the rule change meets statutory standards for fairness, investor protection, and market integrity.
The proposed rule change seeks to permit the listing of UVIX and SVIX as series of the 2X Futures Access ETF Trust. Sponsored by Volatility Shares LLC, these products are structured to offer daily leveraged exposure to the Long VIX Futures Index — UVIX targeting 2x the index return, and SVIX aiming for -1x inverse performance. Unlike conventional equity ETFs, these instruments represent leveraged exchange-traded products (LETPs), relying on futures contracts linked to the Cboe Volatility Index (VIX). Their operation involves daily rebalancing and is subject to compounding effects, which may cause returns to diverge from the benchmark over periods longer than one trading day.
In its filing, Cboe BZX Exchange, Inc. proposed amendments to its Rule 14.11(f), which governs Trust Issued Receipts, in order to accommodate the trading of these volatility-linked products. The United States Securities and Exchange Commission, while acknowledging the potential for product innovation, has explicitly stated that its current objective is to evaluate public feedback. Under the process set forth by the Exchange Act, the Commission will, within 45 days of publication in the Federal Register, either approve, disapprove, or initiate proceedings to determine whether to disapprove the rule change.
The regulatory context for this proposed change is framed by heightened scrutiny of volatility ETFs following the February 2018 “Volmageddon” event, in which similar inverse VIX products suffered catastrophic losses. Accordingly, the US SEC has highlighted the importance of investor education, transparency, and adequate risk disclosures. The notice requires that interested persons submit comments on market structure impacts, the suitability of these products for retail investors, and whether the proposed rule is consistent with Section 6(b)(5) of the Exchange Act — which mandates that exchange rules must be designed to prevent fraudulent practices and protect investors.
Until a formal order of approval is issued, the rule change remains provisional. The US SEC’s current action is limited to the procedural step of publishing the proposed amendments for public comment. The outcome will depend on the volume and substance of stakeholder responses and the Commission’s internal evaluation.
(Source: https://www.sec.gov/files/rules/sro/cboebzx/2025/34-102991.pdf)
