SEC Comment Letter 0000000000-25-011191 to Volatility Shares Trust (CIK 0001884021)
Volatility Shares Trust (CIK 0001884021)
Date: Dec. 2, 2025 · CIK: 0001884021 · Accession: 0000000000-25-011191
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 333-263619, 811-23785
Letter
December 2, 2025 VIA E-MAIL Barry Pershkow Chapman and Cutler LLP 1801 K Street NW, Suite 700 Washington, DC 20006
Re: Volatility Shares Trust Post-Effective Amendments on Form N-1A File Nos. 333-263619, 811-23785
Dear Mr. Pershkow:
We write to express concern regarding the registration of exchange-traded funds that seek to provide more than 200% (2x) leveraged exposure to underlying indices or securities. From October 14 to November 21, 2025, Volatility Shares Trust filed post-effective amendments on Form N-1A to add the series referenced in Appendix A attached hereto.
We will not perform a substantive review of these filings referenced in Appendix A until the issues raised in this letter are addressed. Further, we request that in your response letter you undertake to delay the effectiveness of the filings until these issues are resolved.
Rule 18f-4 under the Investment Company Act of 1940
Rule 18f-4 limits fund leverage risk by requiring that an open-end fund s Value-at-Risk (VaR) does not exceed 200% of the VaR of a designated reference portfolio. 1 The fund s designated reference portfolio provides the unleveraged baseline against which to compare the fund s leveraged portfolio for purposes of identifying the fund s leverage risk under the rule. Accordingly, in defining the term designated reference portfolio, rule 18f-4 provides that, if the fund s investment objective and strategy is to track the performance (including a leverage multiple or inverse multiple) of an unleveraged index, the fund must use that index as its designated reference portfolio. 2 As the Commission observed in adopting this requirement, where a fund tracks an index, that index will provide the most appropriate reference portfolio for a relative VaR test.
Rule 18f-4(c)(2). In circumstances not relevant here, a fund can satisfy a different test in the rule based on absolute VaR, rather than relative VaR. Rule 18f-4(a) (defining the term Designated reference portfolio ). Barry Pershkow Page 2 of 4
Each fund in the registrant s fund complex identified in Appendix A has an objective and strategy to track the performance, including a leverage multiple or inverse multiple, of an unleveraged index because each fund seeks to provide a leverage or inverse multiple of the return of one or more specific securities. Each fund therefore must use the security or securities that it tracks (collectively, the fund s reference assets ) as the fund s designated reference portfolio for purposes of the VaR test required by rule 18f-4. Whether the fund identifies the securities (or security) it tracks by their individual names or as an index does not change this conclusion.
Because each of these funds has an objective and strategy to provide a leverage multiple or inverse multiple of the return of the fund s reference assets, each fund s reference assets provide the precise representation of the fund s unleveraged portfolio and therefore the appropriate baseline to calculate the fund s leverage risk under the rule. Accordingly, we question how the fund s derivatives risk manager could reasonably determine to use a baseline other than the reference assets and how the funds directors, as fiduciaries, would be satisfied with the manager s choice.
* * *
We request the registrant revise its objective and strategy to be consistent with rule 18f-4, as discussed above, or withdraw its filings. A response to this letter should be in the form of a supplemental correspondence filed on EDGAR. We remind you that the fund and its management are responsible for the accuracy and adequacy of their disclosures, notwithstanding any review, comments, action, or absence of action by the staff.
Should you have any questions regarding this letter, please feel free to contact us at (202) 551-6921.
Sincerely,
Division of
Investment Management
Appendix A
Show Raw Text
<DOCUMENT> <TYPE>TEXT-EXTRACT <SEQUENCE>2 <FILENAME>filename2.txt <TEXT> December 2, 2025 VIA E-MAIL Barry Pershkow Chapman and Cutler LLP 1801 K Street NW, Suite 700 Washington, DC 20006 Re: Volatility Shares Trust Post-Effective Amendments on Form N-1A File Nos. 333-263619, 811-23785 Dear Mr. Pershkow: We write to express concern regarding the registration of exchange-traded funds that seek to provide more than 200% (2x) leveraged exposure to underlying indices or securities. From October 14 to November 21, 2025, Volatility Shares Trust filed post-effective amendments on Form N-1A to add the series referenced in Appendix A attached hereto. We will not perform a substantive review of these filings referenced in Appendix A until the issues raised in this letter are addressed. Further, we request that in your response letter you undertake to delay the effectiveness of the filings until these issues are resolved. Rule 18f-4 under the Investment Company Act of 1940 Rule 18f-4 limits fund leverage risk by requiring that an open-end fund s Value-at-Risk (VaR) does not exceed 200% of the VaR of a designated reference portfolio. 1 The fund s designated reference portfolio provides the unleveraged baseline against which to compare the fund s leveraged portfolio for purposes of identifying the fund s leverage risk under the rule. Accordingly, in defining the term designated reference portfolio, rule 18f-4 provides that, if the fund s investment objective and strategy is to track the performance (including a leverage multiple or inverse multiple) of an unleveraged index, the fund must use that index as its designated reference portfolio. 2 As the Commission observed in adopting this requirement, where a fund tracks an index, that index will provide the most appropriate reference portfolio for a relative VaR test. 1 Rule 18f-4(c)(2). In circumstances not relevant here, a fund can satisfy a different test in the rule based on absolute VaR, rather than relative VaR. 2 Rule 18f-4(a) (defining the term Designated reference portfolio ). Barry Pershkow Page 2 of 4 Each fund in the registrant s fund complex identified in Appendix A has an objective and strategy to track the performance, including a leverage multiple or inverse multiple, of an unleveraged index because each fund seeks to provide a leverage or inverse multiple of the return of one or more specific securities. Each fund therefore must use the security or securities that it tracks (collectively, the fund s reference assets ) as the fund s designated reference portfolio for purposes of the VaR test required by rule 18f-4. Whether the fund identifies the securities (or security) it tracks by their individual names or as an index does not change this conclusion. Because each of these funds has an objective and strategy to provide a leverage multiple or inverse multiple of the return of the fund s reference assets, each fund s reference assets provide the precise representation of the fund s unleveraged portfolio and therefore the appropriate baseline to calculate the fund s leverage risk under the rule. Accordingly, we question how the fund s derivatives risk manager could reasonably determine to use a baseline other than the reference assets and how the funds directors, as fiduciaries, would be satisfied with the manager s choice. * * * We request the registrant revise its objective and strategy to be consistent with rule 18f-4, as discussed above, or withdraw its filings. A response to this letter should be in the form of a supplemental correspondence filed on EDGAR. We remind you that the fund and its management are responsible for the accuracy and adequacy of their disclosures, notwithstanding any review, comments, action, or absence of action by the staff. Should you have any questions regarding this letter, please feel free to contact us at (202) 551-6921. Sincerely, Division of Investment Management Appendix A 33 Act No. Accession No Complex Entity Name Filing Date Series Names 333-263619 0001213900-25-098807 Volatility Shares Volatility Shares Trust 10/14/2025 3x AMD ETF 333-263619 0001213900-25-098809 Volatility Shares Volatility Shares Trust 10/14/2025 3x AMZN ETF 333-263619 0001213900-25-098810 Volatility Shares Volatility Shares Trust 10/14/2025 3x COIN ETF 333-263619 0001213900-25-098811 Volatility Shares Volatility Shares Trust 10/14/2025 3x CRCL ETF 333-263619 0001213900-25-098812 Volatility Shares Volatility Shares Trust 10/14/2025 3x GOOGL ETF 333-263619 0001213900-25-098815 Volatility Shares Volatility Shares Trust 10/14/2025 3x MSTR ETF 333-263619 0001213900-25-098816 Volatility Shares Volatility Shares Trust 10/14/2025 3x NVDA ETF 333-263619 0001213900-25-098818 Volatility Shares Volatility Shares Trust 10/14/2025 3x PLTR ETF 333-263619 0001213900-25-098820 Volatility Shares Volatility Shares Trust 10/14/2025 3x TSLA ETF 333-263619 0001213900-25-098821 Volatility Shares Volatility Shares Trust 10/14/2025 3x Bitcoin ETF 333-263619 0001213900-25-098823 Volatility Shares Volatility Shares Trust 10/14/2025 3x Ether ETF 333-263619 0001213900-25-098824 Volatility Shares Volatility Shares Trust 10/14/2025 3x Solana ETF 333-263619 0001213900-25-098829 Volatility Shares Volatility Shares Trust 10/14/2025 3x XRP ETF 333-263619 0001213900-25-098831 Volatility Shares Volatility Shares Trust 10/14/2025 3x VIX ETF 333-263619 0001213900-25-098833 Volatility Shares Volatility Shares Trust 10/14/2025 5x AMD ETF 333-263619 0001213900-25-098835 Volatility Shares Volatility Shares Trust 10/14/2025 5x AMZN ETF 333-263619 0001213900-25-098838 Volatility Shares Volatility Shares Trust 10/14/2025 5x COIN ETF 333-263619 0001213900-25-098839 Volatility Shares Volatility Shares Trust 10/14/2025 5x CRCL ETF 333-263619 0001213900-25-098840 Volatility Shares Volatility Shares Trust 10/14/2025 5x GOOGL ETF 333-263619 0001213900-25-098842 Volatility Shares Volatility Shares Trust 10/14/2025 5x MSTR ETF 333-263619 0001213900-25-098843 Volatility Shares Volatility Shares Trust 10/14/2025 5x NVDA ETF 333-263619 0001213900-25-098844 Volatility Shares Volatility Shares Trust 10/14/2025 5x PLTR ETF 333-263619 0001213900-25-098845 Volatility Shares Volatility Shares Trust 10/14/2025 5x TSLA ETF 333-263619 0001213900-25-098849 Volatility Shares Volatility Shares Trust 10/14/2025 5x Bitcoin ETF 333-263619 0001213900-25-098852 Volatility Shares Volatility Shares Trust 10/14/2025 5x Ether ETF 333-263619 0001213900-25-098855 Volatility Shares Volatility Shares Trust 10/14/2025 5x Solana ETF 333-263619 0001213900-25-098859 Volatility Shares Volatility Shares Trust 10/14/2025 5x XRP ETF 333-263619 0001213900-25-099617 Volatility Shares Volatility Shares Trust 10/16/2025 5x IWM ETF 333-263619 0001213900-25-099622 Volatility Shares Volatility Shares Trust 10/16/2025 5x QQQ ETF 333-263619 0001213900-25-099628 Volatility Shares Volatility Shares Trust 10/16/2025 5x SPY ETF 333-263619 0001213900-25-100875 Volatility Shares Volatility Shares Trust 10/21/2025 5x GDX ETF 333-263619 0001213900-25-100880 Volatility Shares Volatility Shares Trust 10/21/2025 5x GLD ETF 333-263619 0001213900-25-100881 Volatility Shares Volatility Shares Trust 10/21/2025 5x MAGS ETF 333-263619 0001213900-25-100883 Volatility Shares Volatility Shares Trust 10/21/2025 5x SLV ETF 333-263619 0001213900-25-100886 Volatility Shares Volatility Shares Trust 10/21/2025 5x SOXQ ETF 333-263619 0001213900-25-100868 Volatility Shares Volatility Shares Trust 10/21/2025 3x GDX ETF 333-263619 0001213900-25-100869 Volatility Shares Volatility Shares Trust 10/21/2025 3x MAGS ETF 333-263619 0001213900-25-100872 Volatility Shares Volatility Shares Trust 10/21/2025 3x GLD ETF 333-263619 0001213900-25-100874 Volatility Shares Volatility Shares Trust 10/21/2025 3x SLV ETF 333-263619 0001213900-25-102120 Volatility Shares Volatility Shares Trust 10/24/2025 3x AAPL ETF 333-263619 0001213900-25-102122 Volatility Shares Volatility Shares Trust 10/24/2025 5x AAPL ETF 333-263619 0001213900-25-102124 Volatility Shares Volatility Shares Trust 10/24/2025 3x AVGO ETF Barry Pershkow Page 4 of 4 333-263619 0001213900-25-102126 Volatility Shares Volatility Shares Trust 10/24/2025 5x AVGO ETF 333-263619 0001213900-25-102128 Volatility Shares Volatility Shares Trust 10/24/2025 3x BABA ETF 333-263619 0001213900-25-102129 Volatility Shares Volatility Shares Trust 10/24/2025 5x BABA ETF 333-263619 0001213900-25-102131 Volatility Shares Volatility Shares Trust 10/24/2025 3x BMNR ETF 333-263619 0001213900-25-102132 Volatility Shares Volatility Shares Trust 10/24/2025 5x BMNR ETF 333-263619 0001213900-25-102133 Volatility Shares Volatility Shares Trust 10/24/2025 3x CRWV ETF 333-263619 0001213900-25-102136 Volatility Shares Volatility Shares Trust 10/24/2025 5x CRWV ETF 333-263619 0001213900-25-102137 Volatility Shares Volatility Shares Trust 10/24/2025 3x HIMS ETF 333-263619 0001213900-25-102138 Volatility Shares Volatility Shares Trust 10/24/2025 5x HIMS ETF 333-263619 0001213900-25-102140 Volatility Shares Volatility Shares Trust 10/24/2025 3x HOOD ETF 333-263619 0001213900-25-102141 Volatility Shares Volatility Shares Trust 10/24/2025 5x HOOD ETF 333-263619 0001213900-25-102146 Volatility Shares Volatility Shares Trust 10/24/2025 3x INTC ETF 333-263619 0001213900-25-102151 Volatility Shares Volatility Shares Trust 10/24/2025 5x INTC ETF 333-263619 0001213900-25-102153 Volatility Shares Volatility Shares Trust 10/24/2025 3x META ETF 333-263619 0001213900-25-102156 Volatility Shares Volatility Shares Trust 10/24/2025 5x META ETF 333-263619 0001213900-25-102159 Volatility Shares Volatility Shares Trust 10/24/2025 3x MSFT ETF 333-263619 0001213900-25-102168 Volatility Shares Volatility Shares Trust 10/24/2025 5x MSFT ETF 333-263619 0001213900-25-102170 Volatility Shares Volatility Shares Trust 10/24/2025 3x NFLX ETF 333-263619 0001213900-25-102173 Volatility Shares Volatility Shares Trust 10/24/2025 5x NFLX ETF 333-263619 0001213900-25-102175 Volatility Shares Volatility Shares Trust 10/24/2025 3x ORCL ETF 333-263619 0001213900-25-102179 Volatility Shares Volatility Shares Trust 10/24/2025 5x ORCL ETF 333-263619 0001213900-25-102182 Volatility Shares Volatility Shares Trust 10/24/2025 3x SMCI ETF 333-263619 0001213900-25-102184 Volatility Shares Volatility Shares Trust 10/24/2025 5x SMCI ETF 333-263619 0001213900-25-102185 Volatility Shares Volatility Shares Trust 10/24/2025 3x TSM ETF 333-263619 0001213900-25-102186 Volatility Shares Volatility Shares Trust 10/24/2025 5x TSM ETF 333-263619 0001213900-25-102187 Volatility Shares Volatility Shares Trust 10/24/2025 3x UNH ETF 333-263619 0001213900-25-102193 Volatility Shares Volatility Shares Trust 10/24/2025 5x UNH ETF 333-263619 0001213900-25-113686 Volatility Shares Volatility Shares Trust 11/21/2025 5x TLT ETF 333-263619 0001213900-25-113688 Volatility Shares Volatility Shares Trust 11/21/2025 5x XLF ETF 333-263619 0001213900-25-113693 Volatility Shares Volatility Shares Trust 11/21/2025 5x FAANG ETF </TEXT> </DOCUMENT>