Notice2021-15197
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Proposed Rule Change To List and Trade Shares of the NYDIG Bitcoin ETF Under NYSE Arca Rule 8.201-E
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
July 19, 2021
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 86 Issue 135 (Monday, July 19, 2021)</title>
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[Federal Register Volume 86, Number 135 (Monday, July 19, 2021)]
[Notices]
[Pages 38129-38137]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-15197]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-92395; File No. SR-NYSEArca-2021-57]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
of Proposed Rule Change To List and Trade Shares of the NYDIG Bitcoin
ETF Under NYSE Arca Rule 8.201-E
July 13, 2021.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given
that, on June 30, 2021, NYSE Arca, Inc. (``NYSE Arca'' or the
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to list and trade the shares of the NYDIG
Bitcoin ETF (the ``Trust'') \4\ under NYSE Arca Rule 8.201-E. The
common shares of beneficial interest of the Trust are referred to
herein as the ``Shares.'' The proposed change is available on the
Exchange's website at <a href="http://www.nyse.com">www.nyse.com</a>, at the principal office of the
Exchange, and at the Commission's Public Reference Room.
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\4\ The Trust was formed as a Delaware statutory trust on
January 22, 2021, and is operated as a grantor trust for U.S.
federal tax purposes. The Trust has no fixed termination date.
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II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
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 those 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 parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to list and trade the Shares of the Trust
under NYSE Arca Rule 8.201-E, which governs the listing and trading of
Commodity-Based Trust Shares.
Description of the Trust
The Shares will be issued by the Trust, a Delaware statutory trust.
According to the Registration Statement, the Trust's investment
objective is to reflect the performance of the price of bitcoin less
the expenses of the Trust's operations. The Trust will not seek to
reflect the performance of any benchmark or index.\5\
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\5\ On February 16, 2021, the Trust filed a draft Registration
Statement on Form S-1 under the Securities Act of 1933 (the
``Registration Statement''). The description of the operation of the
Trust herein is based, in part, on the Registration Statement. The
Registration Statement is not yet effective, and the Shares will not
trade on the Exchange until such time that the Registration
Statement is effective.
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In seeking to achieve its investment objective, the Trust will only
hold bitcoin. The Trust will value its assets daily in accordance with
Generally Accepted Accounting Principles (``GAAP''), which, according
to the Registration Statement, generally value bitcoin by reference to
orderly transactions in the principal active market for bitcoin, as
described below.
NYDIG Asset Management LLC (the ``Sponsor'') is the Sponsor of the
Trust. Delaware Trust Company (the ``Trustee'') is the trustee of the
Trust and NYDIG Trust Company LLC (the ``Bitcoin Custodian'') will hold
all of the Trust's bitcoin on the Trust's behalf as custodian. Both the
Sponsor and the Bitcoin Custodian are indirect wholly-owned
subsidiaries of New York Digital Investment Group LLC (``NYDIG'').
Pursuant to the custodial agreement, the Bitcoin Custodian will be
responsible for (1) safekeeping all of the bitcoin owned by the Trust,
(2) opening an account that holds the Trust's bitcoin and (3)
facilitating the transfer of bitcoin required for the operation of the
Trust, as directed by the Sponsor. The Bitcoin Custodian is chartered
as a limited purpose trust company by the New York State Department of
Financial Services (``NYDFS'') and is authorized by NYDFS to provide
digital asset custody services. U.S. Bancorp Fund Services, LLC will
act as the transfer agent for the Trust (the ``Transfer Agent'') and as
the administrator of the Trust (the ``Administrator'') to perform
various administrative, tax, accounting and recordkeeping functions on
behalf of the Trust. The Transfer Agent and the Administrator will also
be responsible for issuing and redeeming Shares and calculating the net
asset value (``NAV'') of the Shares, respectively.
According to the Registration Statement, the Trust will process all
creations and redemptions of Shares in transactions with financial
firms that are authorized to do so (known as ``Authorized
Participants''). When the Trust issues or redeems its Shares, it will
do so only in ``in-kind'' transactions in blocks of 10,000 Shares
[[Page 38130]]
(a ``Creation Basket'') based on the quantity of bitcoin attributable
to each Share of the Trust (net of accrued but unpaid Sponsor fees and
any accrued but unpaid extraordinary expenses or liabilities). Because
the creation and redemption of Creation Baskets will be effected via
in-kind transactions based on the quantity of bitcoin attributable to
each Share, the quantity of Creation Baskets so created or redeemed
will generally not be affected by fluctuations in the value of bitcoin.
When purchasing Creation Baskets, Authorized Participants or their
agents will deliver bitcoin to the Trust's account with the Bitcoin
Custodian in exchange for Creation Baskets. When redeeming Creation
Baskets, Authorized Participants or their agents will receive bitcoin
from the Trust through the Bitcoin Custodian. The Trust will not
purchase or, barring a liquidation or extraordinary circumstances, sell
bitcoin directly.
According to the Registration Statement, to support the ability of
Authorized Participants to provide liquidity at prices that reflect the
value of the Trust's assets and to facilitate orderly transactions in
the Shares, the Trust will ordinarily process redemptions of Shares on
the next day when the Exchange is open for regular trading (a
``Business Day'') following receipt of a redemption request by an
Authorized Participant.
The Sponsor believes that the design of the Trust will enable
investors to effectively and efficiently implement strategic and
tactical asset allocation strategies that use bitcoin by investing in
the Shares rather than directly in bitcoin.
Custody of the Trust's Bitcoin
According to the Registration Statement, and as described above,
the Trust's Bitcoin Custodian will custody of all of the Trust's
bitcoin. Custody of bitcoin typically involves the generation, storage
and utilization of private keys. These private keys are used to effect
transfer transactions--i.e., transfers of bitcoin from an address
associated with the private key to another address. While private keys
must be used to send bitcoin, private keys do not need to be used or
shared in order to receive a bitcoin transfer; every private key has an
associated public key and an address derived from that public key that
can be freely shared, to which counterparties can transfer bitcoin. The
Bitcoin network has a public ledger, meaning that anybody with access
to the address can see the balance of digital assets in that address.
The Bitcoin Custodian carefully considers the design of the
physical, operational and cryptographic systems for secure storage of
the Trust's private keys in an effort to lower the risk of loss or
theft. According to the Registration Statement, no such system is
perfectly secure and loss or theft due to operational or other failure
is always possible. The Bitcoin Custodian uses a multi-factor security
system under which actions by multiple individuals working together are
required to access the private keys necessary to transfer such digital
assets and ensure the Trust's exclusive ownership. The multi-factor
security system generates private keys using a Federal Information
Processing Standards Publication 140-2 (``FIPS 140-2'')-certified
random number generator to ensure the keys' uniqueness. Before these
keys are used, the Bitcoin Custodian validates that the public
addresses associated with these keys have no associated digital asset
balances. The software used for key generation and verification is
tested by the Bitcoin Custodian and is reviewed by third-party advisors
from the security community with specific expertise in computer
security and applied cryptography. The private keys are stored in an
encrypted manner using a FIPS 140-2-certified security module held in
redundant secure, geographically dispersed locations with high levels
of physical security, including robust physical barriers to entry,
electronic surveillance and continuously roving patrols. The
operational procedures of these facilities and of the Bitcoin Custodian
are reviewed by third-party advisors with specific expertise in
physical security. The devices that store the keys will never be
connected to the internet or any other public or private distributed
network--this is colloquially known as ``cold storage.'' Only specific
individuals are authorized to participate in the custody process, and
no individual acting alone will be able to access or use any of the
private keys. In addition, no combination of the executive officers of
the Sponsor or the investment professionals managing the Trust, acting
alone or together, will be able to access or use any of the private
keys that hold the Trust's bitcoin.
The Trust generally does not intend to hold cash or cash
equivalents. However, the Trust may hold cash and cash equivalents on a
temporary basis to pay extraordinary expenses. The Trust will enter
into a cash custody agreement with U.S. Bank N.A. under which U.S. Bank
N.A. will act as custodian of the Trust's cash and cash equivalents.
Overview of Bitcoin and the Bitcoin Network
According to the Registration Statement, Bitcoin is a digital
asset, the ownership and behavior of which are determined by
participants in an online, peer-to-peer network that connects computers
that run publicly accessible, or ``open source,'' software that follows
the rules and procedures governing the Bitcoin network, commonly
referred to as the Bitcoin protocol. The value of bitcoin, like the
value of other digital assets, is not backed by any government,
corporation or other identified body. Ownership and the ability to
transfer or take other actions with respect to bitcoin is protected
through public-key cryptography. The supply of bitcoin is constrained
formulaically by the Bitcoin protocol instead of being explicitly
delegated to an identified body (e.g., a central bank or corporate
treasury) to control. Units of bitcoin are treated as fungible. Bitcoin
and certain other types of digital assets are sometimes referred to as
digital currencies or cryptocurrencies. No single entity owns or
operates the Bitcoin network, the infrastructure of which is
collectively maintained by (1) a decentralized group of participants
who run computer software that results in the recording and validation
of transactions (commonly referred to as ``miners''), (2) developers
who propose improvements to the Bitcoin protocol and the software that
enforces the protocol and (3) users who choose what Bitcoin software to
run. Bitcoin was released in 2009 and, as a result, there is little
data on its long-term investment potential. Bitcoin is not backed by a
government-issued legal tender or other assets or currency.
Bitcoin is ``stored'' or reflected on a digital transaction ledger
commonly known as a ``blockchain.'' A blockchain is a type of shared
and continually reconciled database, stored in a decentralized manner
on the computers of certain users of the digital asset. A blockchain is
a canonical record of every digital asset: The blockchain records every
``coin'' or ``token,'' balances of digital assets, every transaction
and every address associated with a quantity of a particular digital
asset. Bitcoin utilizes the blockchain to record transactions into and
out of different addresses, facilitating a determination of how much
bitcoin is in each address.
Bitcoin is created by ``mining.'' Mining involves miners using a
sophisticated computer program to repeatedly solve complex mathematical
problems on specialized computer hardware. The mathematical problem
[[Page 38131]]
involves a computation involving all or some bitcoin transactions that
have been proposed by the Bitcoin network's participants. When this
problem is solved, the computer creates a ``block'' consisting of these
transactions. As each newly solved block refers back to and
``connects'' with the immediately prior solved block, the addition of a
new block adds to the blockchain in a manner similar to a new link
being added to a chain. A miner's proposed block is added to the
blockchain once a majority of the nodes on the network confirm the
miner's work. A miner that is successful in adding a block to the
blockchain is automatically awarded a fixed amount of bitcoin for its
efforts plus any transaction fees paid by transferors whose
transactions are recorded in the block. This reward system is the means
by which new bitcoin enter circulation. This reward system, called
proof of work, also ensures that the local copies of the Bitcoin
blockchain maintained by participants in the Bitcoin network are kept
in consensus with one another.
The Bitcoin Market
According to the Registration Statement, Bitcoin is the oldest,
best-known and largest market-capitalization digital asset. Since the
advent of bitcoin, numerous other digital assets have been created. The
website <a href="http://CoinMarketCap.com">CoinMarketCap.com</a> tracks the U.S. dollar price and total market
capitalization for each of more than 5,000 traded digital assets. As of
April 30, 2021, bitcoin had a total market capitalization in excess of
$1 trillion and represented more than 45% of the entire digital asset
market.
The first trading venues for bitcoin were informal exchange
services marketed primarily in public online forums. Transactions on
these services were effected via anonymous email, and the fiat currency
portions of these transactions were effected through payment services
such as PayPal. These services required their operators to manually
match buyers and sellers in order to process transactions. Later,
automated exchanges that matched buyers and sellers began to form. Many
such exchanges have been created in the U.S. and abroad. In the U.S., a
number of exchanges now operate under licensing from the NYDFS.
Beginning in 2016, more institutional investors entered the bitcoin
market. As a result, an increasing number of transactions have occurred
in over-the-counter (``OTC'') markets instead of exchanges. This type
of trading allows for bespoke trading arrangements that may ease of the
burden of trade operations or reduce different types of risks (e.g.,
counterparty risk).
As a result, there is not a single source for pricing bitcoin.
According to the Registration Statement, the Trust believes that prices
on the bitcoin trading venues are generally formed by the levels of
demand on either side of the exchange's order book, and arbitrage
between exchanges typically prevents larger and/or more persistent
differences in prices between bitcoin trading venues. Factors that the
Trust believes may influence the relative balance of buyers and sellers
on the bitcoin trading venues include trading activity in the OTC
markets, global or regional economic conditions, expected levels of
inflation, growth or reversal in the adoption and use of bitcoin,
developments in the regulation of bitcoin, changes in the preference of
market participants between bitcoin and other digital assets,
maintenance and development of the open-source software protocol of the
Bitcoin network, and negative consumer or public perception of bitcoin
specifically or digital assets generally.
Bitcoin spot trading occurs on venues in the U.S. that are licensed
to conduct that business by the NYDFS, other venues in the U.S. and
non-U.S. venues. In addition, bitcoin futures and options trading
occurs on exchanges in the U.S. regulated by the Commodity Futures
Trading Commission (the ``CFTC''). The market for NYDFS-licensed and
CFTC-regulated trading of bitcoin and bitcoin derivatives has developed
substantially. Bitcoin market conditions in the three months ending on
April 30, 2021 are briefly summarized as follows:
<bullet> Bitcoin: Six NYDFS-licensed entities operate trading
venues with order books for spot trading of bitcoin, with a total
average daily trading volume of approximately $2.5 billion. Across
these venues, the average daily deviation of prices was less than
0.08%. The largest NYDFS-licensed trading venue by volume had an
average bid-ask spread during the period of less than 0.05% for trades
of $250,000.
<bullet> Futures: Two CFTC-regulated exchanges facilitate trading
of bitcoin futures, with a total average daily trading volume of
approximately $2.9 billion.
<bullet> Options: One CFTC-regulated exchange facilitates trading
of options on bitcoin futures, with average monthly trading volume of
approximately $380 million.
The following table shows the average daily trading volume for
bitcoin across the three largest NYDFS-licensed exchanges, as well as
the average daily trading volume and average daily open interest (i.e.,
the average total bitcoin exposure of futures contracts held by market
participants at the end of each trading day) for bitcoin futures
contracts on the Chicago Mercantile Exchange (``CME'') and the
Intercontinental Exchange. The bitcoin data shown is for trading
volumes of bitcoin against U.S. dollars and exclude trading
transactions of bitcoin against other digital assets (e.g., Tether) or
other fiat currencies (e.g., euros).
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Futures
Bitcoin daily Futures daily average open
Year volume (USD volume (USD interest (USD
millions) millions) millions)
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2016............................................................ 7.95
2017............................................................ 215.44 41.10 81.87
2018............................................................ 267.19 86.68 126.90
2019............................................................ 216.97 172.60 246.62
2020............................................................ 708.39 561.78 535.13
2021 (through 4/30)............................................. 2,564.30 2,507.96 2,934.98
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Calculation of Net Asset Value
The Trust's NAV is determined in accordance with GAAP as the total
value of bitcoin held by the Trust, plus any cash or other assets, less
any liabilities including accrued but unpaid expenses. The NAV per
Share is determined by dividing the NAV of the Trust by the number of
Shares outstanding. The NAV of the Trust is typically determined as of
4:00 p.m. Eastern Time (ET) on each Business
[[Page 38132]]
Day. The Administrator will calculate the NAV of the Trust once each
Exchange trading day. The Exchange's Core Trading Session closes at
4:00 p.m. ET. The Trust's daily activities are generally not reflected
in the NAV determined for the Business Day on which the transactions
are effected (the trade date), but rather on the following Business
Day. The NAV for the Trust's Shares will be disseminated daily to all
market participants at the same time.
Intraday Indicative Value
In order to provide updated information relating to the Trust for
use by shareholders and market professionals, the Trust will
disseminate an intraday indicative value (``IIV'') per Share updated
every 15 seconds. The IIV will be calculated by using the same
methodology that the Trust uses to determine NAV, which, as described
above, is to follow GAAP. Generally, GAAP requires the fair value of an
asset that is traded on a market to be measured by reference to orderly
transactions on an active market. Among all active markets with orderly
transactions, the market that is used to determine the fair value of an
asset is the principal market. The Sponsor expects that the principal
market will initially generally be the NYDFS-regulated trading venue
with the highest trading volume and level of activity.
The IIV disseminated during the Exchange's Core Trading Session
between 9:30 a.m. to 4:00 p.m. ET should not be viewed as an actual
real-time update of the NAV, which will be calculated only once at the
end of each trading day. The IIV will be widely disseminated on a per
Share basis every 15 seconds during the Exchange's Core Trading Session
by one or more major market data vendors.
Creation and Redemption of Shares
According to the Registration Statement, the Trust will create and
redeem Shares from time to time, but only in one or more blocks of
10,000 Shares (known as ``Creation Baskets''). Creation Baskets will
only be made in exchange for delivery to the Trust or the distribution
by the Trust of the amount of bitcoin represented by the Shares being
created or redeemed, the amount of which will be based on the quantity
of bitcoin attributable to each Share of the Trust (net of accrued but
unpaid Sponsor fees, extraordinary expenses or liabilities) being
created or redeemed determined as of 4:00 p.m. ET on the day the order
is properly received. Because creation and redemption of Creation
Baskets will be effected via in-kind transactions based on the quantity
of bitcoin attributable to each Share, the quantity of Creation Baskets
so created or redeemed will generally not be affected by fluctuations
in the value of bitcoin.
According to the Registration Statement, Authorized Participants
are the only persons that may place orders to create and redeem
Creation Baskets. Authorized Participants must be (1) registered
broker-dealers or other securities market participants, such as banks
or other financial institutions, that are not required to register as
broker-dealers to engage in securities transactions, and (2) entities
that have an account with The Depository Trust Company (``DTC'') such
as banks, brokers, dealers and trust companies. To become an Authorized
Participant, a person must enter into an authorized participant
agreement with the Trust and the Sponsor (the ``Authorized Participant
Agreement''). The Authorized Participant Agreement provides the
procedures for the creation and redemption of Shares and for the
delivery of the bitcoin required for such creation and redemptions.
According to the Registration Statement, Authorized Participants
will place orders through the Transfer Agent. The Transfer Agent will
coordinate with the Trust's Bitcoin Custodian in order to facilitate
settlement of the Shares and bitcoin.
Creation Procedures
According to the Registration Statement, on any Business Day, an
Authorized Participant may place an order with the Transfer Agent to
create one or more Creation Baskets. Purchase orders must be placed by
4:00 p.m. ET or the close of regular trading on the Exchange, whichever
is earlier. The day on which a valid order is received by the Transfer
Agent is considered the purchase order date.
By placing a purchase order, an Authorized Participant agrees to
facilitate the deposit of bitcoin with the Trust. If required by the
Sponsor and the Trust, prior to the delivery of Creation Baskets for a
purchase order, the Authorized Participant must also have wired to the
Transfer Agent the non-refundable transaction fee due for the purchase
order. Authorized Participants may not withdraw a purchase order.
The manner by which Creation Baskets are made is dictated by the
terms of the Authorized Participant Agreement. By placing a purchase
order, an Authorized Participant agrees to facilitate the deposit of
bitcoin with the Bitcoin Custodian. If an Authorized Participant fails
to consummate the foregoing, the order will be cancelled.
The total deposit of bitcoin required to create each Creation
Basket is an amount of bitcoin that is in the same proportion to the
total amount of bitcoin held by of the Trust (net of accrued but unpaid
Sponsor fees, extraordinary expenses or liabilities) on the date the
purchase order is properly received as the number of Shares to be
created under the purchase order is to the total number of Shares
outstanding on the date the order is received.
Following an Authorized Participant's purchase order, the Trust's
bitcoin account with the Bitcoin Custodian (the ``Bitcoin Account'') is
credited with the required bitcoin by the end of the second Business
Day following the purchase order date. Upon receipt of the bitcoin
deposit amount in the Trust's Bitcoin Account, the Bitcoin Custodian
will notify the Transfer Agent, the Authorized Participant and the
Sponsor that the bitcoin has been deposited. The Transfer Agent will
then direct DTC to credit the number of Shares created to the
Authorized Participant's DTC account.
Redemption Procedures
According to the Registration Statement, the procedures by which an
Authorized Participant can redeem one or more Creation Baskets mirror
the procedures for the creation of Creation Baskets. Accordingly, on
any Business Day, an Authorized Participant may place an order with the
Transfer Agent to redeem one or more Creation Baskets. Redemption
orders must be placed by 4:00 p.m. ET or the close of regular trading
on the Exchange, whichever is earlier. A redemption order will be
effective on the date it is received by the Transfer Agent.
The redemption distribution from the Trust consists of a transfer
of bitcoin to the redeeming Authorized Participant corresponding to the
number of Shares being redeemed. The redemption distribution due from
the Trust will be delivered once the Transfer Agent notifies the
Bitcoin Custodian and the Sponsor that the Authorized Participant has
delivered the Shares represented by the Creation Baskets to be redeemed
to the Transfer Agent's DTC account. If the Transfer Agent's DTC
account has not been credited with all of the Shares of the Creation
Baskets to be redeemed, the redemption distribution will be delayed
until such time as the Transfer Agent confirms receipt of all such
Shares.
Once the Transfer Agent notifies the Bitcoin Custodian and the
Sponsor that the Shares have been received in the Transfer Agent's DTC
account, the
[[Page 38133]]
Sponsor will instruct the Bitcoin Custodian to transfer the redemption
distribution from the Trust's Bitcoin Account to the Authorized
Participant.
Availability of Information
Quotation and last-sale information regarding the Shares will be
disseminated through the facilities of the Consolidated Tape
Association (``CTA'').
In addition, the Trust's website will display the applicable end of
day closing NAV. The daily holdings of the Trust will be available on
the Trust's website before 9:30 a.m. E.T. The Trust's website will also
include a form of the prospectus for the Trust that may be downloaded.
The website will include the Shares' ticker and CUSIP information,
along with additional quantitative information updated on a daily basis
for the Trust. The Trust's website will include (1) the prior Business
Day's trading volume, the prior Business Day's reported NAV and closing
price, and a calculation of the premium and discount of the closing
price or mid-point of the bid/ask spread at the time of NAV calculation
(``Bid/Ask Price'') against the NAV; and (2) data in chart format
displaying the frequency distribution of discounts and premiums of the
daily closing price or Bid/Ask Price against the NAV, within
appropriate ranges, for at least each of the four previous calendar
quarters. The Trust's website will be publicly available prior to the
public offering of Shares and accessible at no charge.
Trading Halts
With respect to trading halts, the Exchange may consider all
relevant factors in exercising its discretion to halt or suspend
trading in the Shares of the Trust.\6\ Trading in Shares of the Trust
will be halted if the circuit breaker parameters in NYSE Arca Rule
7.12-E have been reached. Trading also may be halted because of market
conditions or for reasons that, in the view of the Exchange, make
trading in the Shares inadvisable.
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\6\ See NYSE Arca Rule 7.12-E.
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If the Exchange becomes aware that the NAV with respect to the
Shares is not disseminated to all market participants at the same time,
it will halt trading in the Shares until such time as the NAV is
available to all market participants.
Trading Rules
The Exchange deems the Shares to be equity securities, thus
rendering trading in the Shares subject to the Exchange's existing
rules governing the trading of equity securities. Shares will trade on
the NYSE Arca Marketplace from 4:00 a.m. to 8:00 p.m. E.T. in
accordance with NYSE Arca Rule 7.34-E (Early, Core, and Late Trading
Sessions). The Exchange has appropriate rules to facilitate
transactions in the Shares during all trading sessions. As provided in
NYSE Arca Rule 7.6-E, the minimum price variation (``MPV'') for quoting
and entry of orders in equity securities traded on the NYSE Arca
Marketplace is $0.01, with the exception of securities that are priced
less than $1.00 for which the MPV for order entry is $0.0001.
The Shares will conform to the initial and continued listing
criteria under NYSE Arca Rule 8.201-E. The trading of the Shares will
be subject to NYSE Arca Rule 8.201-E(g), which sets forth certain
restrictions on firms that have been issued an Equity Trading Permit
(``ETP Holders'') to act as registered Market Makers in Commodity-Based
Trust Shares to facilitate surveillance. The Exchange represents that,
for initial and continued listing, the Trust will be in compliance with
Rule 10A-3 \7\ under the Act, as provided by NYSE Arca Rule 5.3-E. A
minimum of 100,000 Shares of the Trust will be outstanding at the
commencement of trading on the Exchange.
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\7\ 17 CFR 240.10A-3.
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Surveillance
The Exchange represents that trading in the Shares of the Trust
will be subject to the existing trading surveillances administered by
the Exchange, as well as cross-market surveillances administered by
FINRA on behalf of the Exchange, which are designed to detect
violations of Exchange rules and applicable federal securities laws.\8\
The Exchange represents that these procedures are adequate to properly
monitor Exchange trading of the Shares in all trading sessions and to
deter and detect violations of Exchange rules and federal securities
laws applicable to trading on the Exchange.
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\8\ FINRA conducts cross-market surveillances on behalf of the
Exchange pursuant to a regulatory services agreement. The Exchange
is responsible for FINRA's performance under this regulatory
services agreement.
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The surveillances referred to above generally focus on detecting
securities trading outside their normal patterns, which could be
indicative of manipulative or other violative activity. When such
situations are detected, surveillance analysis follows and
investigations are opened, where appropriate, to review the behavior of
all relevant parties for all relevant trading violations.
The Exchange or FINRA, on behalf of the Exchange, or both, will
communicate as needed regarding trading in the Shares with other
markets and other entities that are members of the Intermarket
Surveillance Group (``ISG''), and the Exchange or FINRA, on behalf of
the Exchange, or both, may obtain trading information regarding trading
in the Shares from such markets and other entities. In addition, the
Exchange may obtain information regarding trading in the Shares from
markets and other entities that are members of ISG or with which the
Exchange has in place a comprehensive surveillance sharing agreement
(``CSSA'').\9\ The Exchange is also able to obtain information
regarding trading in the Shares in connection with ETP Holders'
proprietary or customer trades which they effect through ETP Holders on
any relevant market.
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\9\ For a list of the current members of ISG, see
<a href="http://www.isgportal.org">www.isgportal.org</a>. The Exchange notes that not all components of the
Trust may trade on markets that are members of ISG or with which the
Exchange has in place a CSSA.
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In addition, the Exchange also has a general policy prohibiting the
distribution of material, non-public information by its employees.
All statements and representations made in this filing regarding
(a) the description of the portfolios of the Trust, (b) limitations on
portfolio holdings or reference assets, or (c) the applicability of
Exchange listing rules specified in this rule filing shall constitute
continued listing requirements for listing the Shares on the Exchange.
The issuer has represented to the Exchange that it will advise the
Exchange of any failure by the Trust to comply with the continued
listing requirements, and, pursuant to its obligations under Section
19(g)(1) of the Act, the Exchange will monitor for compliance with the
continued listing requirements. If the Trust is not in compliance with
the applicable listing requirements, the Exchange will commence
delisting procedures under NYSE Arca Rule 5.5-E(m).
Information Bulletin
Prior to the commencement of trading, the Exchange will inform its
ETP Holders in an information bulletin (the ``Information Bulletin'')
of the special characteristics and risks associated with trading the
Shares. Specifically, the Information Bulletin will discuss the
following: (1) The procedures for purchases and redemptions of Shares;
(2) NYSE Arca Rule 9.2-E(a), which imposes a duty of due diligence on
its ETP Holders to
[[Page 38134]]
learn the essential facts relating to every customer prior to trading
the Shares; (3) how information regarding portfolio holdings is
disseminated; (4) the requirement that ETP Holders deliver a prospectus
to investors purchasing newly issued Shares prior to or concurrently
with the confirmation of a transaction; and (5) trading information.
Prior to the commencement of trading, the Exchange will inform its
ETP Holders of the suitability requirements of NYSE Arca Rule 9.2-E(a)
in an Information Bulletin. Specifically, ETP Holders will be reminded
in the Information Bulletin that, in recommending transactions in the
Shares, they must have a reasonable basis to believe that (1) the
recommendation is suitable for a customer given reasonable inquiry
concerning the customer's investment objectives, financial situation,
needs, and any other information known by such ETP Holder, and (2) the
customer can evaluate the special characteristics, and is able to bear
the financial risks, of an investment in the Shares. In connection with
the suitability obligation, the Information Bulletin will also provide
that ETP Holders must make reasonable efforts to obtain the following
information: (1) The customer's financial status; (2) the customer's
tax status; (3) the customer's investment objectives; and (4) such
other information used or considered to be reasonable by such ETP
Holder or registered representative in making recommendations to the
customer.
In addition, the Information Bulletin will advise ETP Holders,
prior to the commencement of trading, of the prospectus delivery
requirements applicable to the Trust. The Information Bulletin will
also discuss any exemptive, no-action, and interpretive relief granted
by the Commission from any rules under the Act. In addition, the
Information Bulletin will reference that the Trust is subject to
various fees and expenses described in the Registration Statement.
2. Statutory Basis
The basis under the Act for this proposed rule change is the
requirement under Section 6(b)(5) \10\ that an exchange have rules that
are designed to prevent fraudulent and manipulative acts and practices,
to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in facilitating
transactions in securities, to remove impediments to and perfect the
mechanism of a free and open market and, in general, to protect
investors and the public interest. The Exchange believes that the
proposed rule change satisfies the requirements of Section 6(b)(5), as
discussed in more detail below.
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\10\ 15 U.S.C. 78f(b)(5).
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The Commission has approved numerous series of Trust Issued
Receipts,\11\ including Commodity-Based Trust Shares,\12\ to be listed
on U.S. national securities exchanges. In order for any proposed rule
change from an exchange to be approved, the Commission must determine
that, among other things, the proposal is consistent with the
requirements of Section 6(b)(5) of the Act, and, in particular, the
requirement that (i) a national securities exchange's rules are
designed to prevent fraudulent and manipulative acts and practices; and
(ii) an exchange proposal be designed, in general, to protect investors
and the public interest.
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\11\ See Exchange Rule 8.200-E.
\12\ Commodity-Based Trust Shares, as described in Exchange Rule
8.201-E, are a type of Trust Issued Receipt.
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As discussed below, the Exchange, as the listing exchange for the
Shares, and the CME, a regulated market of significant size relating to
bitcoin, are both members of ISG, the purpose of which is ``to provide
a framework for the sharing of information and the coordination of
regulatory efforts among exchanges trading securities and related
products to address potential intermarket manipulation and trading
abuses.'' \13\ In addition, the Sponsor believes that, on the whole,
the manipulation concerns previously articulated by the Commission have
since been significantly mitigated, and do not exceed those that exist
in the markets for other commodities that underly securities listed on
U.S. national securities exchanges. Specifically, significant increase
in trading volume and open interest in the bitcoin futures market,
growth of liquidity in the spot market for bitcoin, and certain
features of the Shares mitigate the manipulation concerns expressed by
the Commission when it last reviewed exchange proposals to list a
bitcoin exchange-traded product (``ETP'').
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\13\ See <a href="https://isgportal.org/overview">https://isgportal.org/overview</a>.
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The proposed rule change is designed to protect investors and the
public interest as an investment in the Trust would provide investors
with exposure to bitcoin in a manner that may be more efficient, more
convenient and more regulated than the purchase of bitcoin or other
investment products that provide exposure to bitcoin.
For example, the Sponsor notes that OTC bitcoin funds, which have
attracted significant investor interest, offer exposure to bitcoin in a
similar manner as the Trust. However, OTC bitcoin funds do not offer a
creation or redemption mechanism that would keep their shares trading
in line with their NAVs and, as a result, OTC bitcoin funds have
historically traded at significant premiums or discounts compared to
their NAVs. In contrast, when the Trust's Shares trade at a premium or
discount compared to their NAV, creation or redemption can be
facilitated by the Authorized Participants to drive the value of the
Shares towards their NAV. Notably, investors in OTC bitcoin funds also
have historically borne significantly higher fees and expenses than
those that would be borne by investors in the Trust.
Additionally, the Sponsor notes that investors holding bitcoin
through a cryptocurrency ``exchange'' often face credit risk to the
exchange for cash balances, and often face risk of loss or theft of
their bitcoin as a result of the exchange using internet-connected
storage (commonly known as ``hot'' wallets) and/or having poor private
key management (e.g., insufficient password protection, lost key,
etc.). In the Bitcoin Custodian, the Trust is holding bitcoin in 100%
``cold'' storage, meaning the entire storage process is done completely
offline, with a regulated and licensed entity applying industry best
practices.
(i) Designed To Prevent Fraudulent and Manipulative Acts and Practices
When considering whether an exchange's proposal to list bitcoin-
based ETPs is designed to prevent fraudulent and manipulative acts and
practices, the Commission requires that an exchange demonstrate that
there is a CSSA in place with a regulated market of significant size
relating to the underlying assets.\14\
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\14\ As previously articulated by the Commission, ``The standard
requires such surveillance-sharing agreements since `they provide a
necessary deterrent to manipulation because they facilitate the
availability of information needed to fully investigate a
manipulation if it were to occur.' The Commission has emphasized
that it is essential for an exchange listing a derivative securities
product to enter into a surveillance-sharing agreement with markets
trading underlying securities for the listing exchange to have the
ability to obtain information necessary to detect, investigate, and
deter fraud and market manipulation, as well as violations of
exchange rules and applicable federal securities laws and rules. The
hallmarks of a surveillance-sharing agreement are that the agreement
provides for the sharing of information about market trading
activity, clearing activity, and customer identity; that the parties
to the agreement have reasonable ability to obtain access to and
produce requested information; and that no existing rules, laws, or
practices would impede one party to the agreement from obtaining
this information from, or producing it to, the other party.'' See
Securities Exchange Act Release No. 88284 (Feb. 26, 2020), 85 FR
12595 (Mar. 3, 2020) (the ``Wilshire Phoenix Order'') at 12596.
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[[Page 38135]]
The Commission has also recognized that the ``regulated market of
significant size'' standard is not the only means for satisfying
Section 6(b)(5) of the Act, specifically providing that a listing
exchange could demonstrate that ``other means to prevent fraudulent and
manipulative acts and practices'' are sufficient to justify dispensing
with the requisite surveillance-sharing agreement.\15\ Sponsors of
proposed bitcoin-based ETPs in particular have attempted to demonstrate
that other means besides surveillance-sharing agreements are sufficient
to prevent fraudulent and manipulative acts and practices, and in
particular have attempted to demonstrate that the bitcoin market is
``uniquely'' and ``inherently'' resistant to fraud and
manipulation.\16\ Such resistance to fraud and manipulation must be
novel and beyond those protections that exist in traditional commodity
markets or equity markets for which the Commission has long required
surveillance-sharing agreements in the context of listing derivative
securities products. To date, exchanges proposing rule changes to list
bitcoin ETFs have not been able to establish that the relevant bitcoin
market possesses a resistance to manipulation that is unique beyond
that of traditional security or commodity markets such that it is
inherently resistant to manipulation.
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\15\ See Securities Exchange Act Release No. 83723 (July 26,
2018), 83 FR 37579 (August 1, 2018) (the ``Winklevoss Order'') at
37580. The Commission has also specifically noted that it ``is not
applying a `cannot be manipulated' standard; instead, the Commission
is examining whether the proposal meets the requirements of the
[Act] and, pursuant to its Rules of Practice, places the burden on
the listing exchange to demonstrate the validity of its contentions
and to establish that the requirements of the [Act] have been met.''
Id. at 37582.
\16\ See Winklevoss Order, 83 FR at 37580, 37582-91; see also
Securities Exchange Act Release No. 87267 (Oct. 9, 2019), 84 FR
55382 (Oct. 16, 2019) (the ``Bitwise Order'') at 55383, 55385-406.
The Commission noted that ``the Winklevoss Order addressed an
assertion that `bitcoin and bitcoin [spot] markets' generally, as
well as one bitcoin trading platform specifically, have unique
resistance to fraud and manipulation; and the Bitwise Order
addressed the assertion that prices from at least certain bitcoin
trading platforms (`the `real' bitcoin spot market as opposed to the
`fake' and non-economic bitcoin spot market') possessed such unique
resistance.'' See Wilshire Phoenix Order at 12597.
---------------------------------------------------------------------------
The Exchange understands the Commission's focus on potential
manipulation of a bitcoin-based ETP in prior disapproval orders,
including the Wilshire Phoenix Order, and believes that such concerns
have since been largely mitigated. The Exchange believes that increases
in investor participation in and institutional adoption of bitcoin have
facilitated the maturation of the bitcoin trading ecosystem.
However, the Exchange is not required to demonstrate ``other means
to prevent fraudulent and manipulative acts and practices,'' such as
the assertion that the relevant underlying bitcoin market is ``unique''
or ``inherently'' resistant to manipulation, if it can establish that
it has a CSSA with a regulated bitcoin market of significant size, or
that both the Exchange and the relevant futures market, in this case,
the CME, hold common membership in ISG. To this end, the Exchange
represents that both the Exchange and CME are members of the ISG. The
remaining determination to be made is whether the CME bitcoin futures
market constitutes a market of significant size, which the Exchange
contends that it does, unlike at the time of the Wilshire Phoenix
Order. In the context of this standard, the terms ``significant
market'' and ``market of significant size'' include a market (or group
of markets) as to which (a) there is a reasonable likelihood that a
person attempting to manipulate the ETP would also have to trade on
that market to successfully manipulate the ETP, so that a surveillance-
sharing agreement would assist in detecting and deterring misconduct,
and (b) it is unlikely that trading in the ETP would be the predominant
influence on prices in that market.\17\
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\17\ See Wilshire Phoenix Order at 12596.
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(a) Manipulation of the ETP
The significant growth in trading volumes, open interest, large
open interest holders, and total market participants in the bitcoin
futures market since the Wilshire Phoenix Order was issued is
reflective of that market's growing influence on the spot price of
bitcoin.
Some academic research \18\ suggests that the bitcoin futures
market has been leading bitcoin spot market price discovery since as
early as 2018. However, in the Wilshire Phoenix Order, the Commission
noted that academic research was, at the time, inconclusive as to the
influence of the bitcoin futures market on price discovery in bitcoin
spot markets, and noted specifically that existing research did not
focus appropriately on lead-lag analyses, or on the influence of non-
U.S. bitcoin spot market.\19\ To this end, NYDIG has developed more
recent proprietary research, including lead-lag analyses, that
demonstrates that prices in the CME bitcoin futures market do indeed
lead prices in the bitcoin spot market, including non-U.S. bitcoin spot
markets. This finding supports the thesis that a market participant
attempting to manipulate the Shares would have to trade on that market
to manipulate the ETP.
---------------------------------------------------------------------------
\18\ See Hu, Y., Hou, Y. and Oxley, L. (2019). ``What role do
futures markets play in Bitcoin pricing? Causality, cointegration
and price discovery from a time-varying perspective'' (available at:
<a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7481826/">https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7481826/</a>). This
academic research paper concludes that ``There exist no episodes
where the Bitcoin spot markets dominates the price discovery
processes with regard to Bitcoin futures. This points to a
conclusion that the price formation originates solely in the Bitcoin
futures market. We can, therefore, conclude that the Bitcoin futures
markets dominate the dynamic price discovery process based upon
time-varying information share measures. Overall, price discovery
seems to occur in the Bitcoin futures markets rather than the
underlying spot market based upon a time-varying perspective.''
\19\ See Wilshire Phoenix Order at 12613.
---------------------------------------------------------------------------
Because Shares can only be created or redeemed in kind, and further
because the Sponsor fee is accrued with respect to the quantity of
bitcoin held by the Trust and paid in kind by the Trust, the Trust
receives and holds only bitcoin. This substantially reduces the
potential for manipulation of the number of Shares created or redeemed,
which therefore substantially reduces the potential for shareholders to
be harmed by manipulation.
NYDIG's research shows that the bitcoin futures market is one of
the primary venues that market participants use to transact large
exposures to bitcoin. This can be attributed to multiple factors, such
as institutional familiarity with futures margining and settlement
processes, the simplicity of cash settlement instead of physical
settlement in a novel asset, and the efficient leverage offered by
exchange margining.
In contrast to the efficient leverage offered through the futures
market, many bitcoin spot trading venues require full pre-funding of
trading, which means it would be highly capital intensive to ``spoof''
or ``layer'' order books on spot trading venues. This further supports
NYDIG's conclusion that if a market participant intended to manipulate
the price of bitcoin, and thereby the Shares, the bitcoin futures
market is the one that would be manipulated first.
As such, part (a) of the significant market test outlined above is
satisfied and that common membership in ISG
[[Page 38136]]
between the Exchange and CME would assist the Exchange in detecting and
deterring misconduct in the Shares.
(b) Predominant Influence on Prices in Spot and Bitcoin Futures
According to the Sponsor, trading in the Shares would not be the
predominant force on prices in the bitcoin futures market (or spot
market) given the significant volume in the bitcoin futures market (in
excess of $2.5 billion in average daily volume), the size of bitcoin's
market cap (in excess of $1 trillion), and the significant liquidity
available in the spot market (in excess of $2.5 billion in average
daily volume, in each case as of April 30, 2021).
In addition, NYDIG performed a conservative analysis, considering
only a small subset of spot trading venues, that concludes that the
cost to buy or sell $5 million worth of bitcoin averages roughly 20
basis points.\20\ For a $10 million market order, the cost to buy or
sell is roughly 40 basis points. This is comparable to the liquidity of
existing commodity ETPs. Using more sophisticated execution strategies
and additional liquidity sources would likely result in a lower cost to
trade.
---------------------------------------------------------------------------
\20\ These statistics are based on three random daily samples of
bitcoin liquidity in USD (excluding stablecoins or Euro liquidity)
based on executable quotes on Coinbase Pro, Bitstamp and Itbit from
January 1, 2021 to April 30, 2021.
---------------------------------------------------------------------------
As such, the overall size of the bitcoin market and the ability for
market participants, including authorized participants creating and
redeeming in-kind with the Trust, to buy or sell large amounts of
bitcoin without significant market impact supports the Sponsor's belief
that the Shares are unlikely to become a predominant force on pricing
in either the bitcoin spot or bitcoin futures markets, satisfying part
(b) of the test outlined above.
The proposed rule change is also designed to prevent fraudulent and
manipulative acts and practices in that the Shares will be listed and
traded on the Exchange pursuant to the initial and continued listing
criteria in NYSE Arca Rule 8.201-E, which involve the maintenance of
surveillance procedures by the Exchange for the Shares. The Exchange
has in place surveillance procedures that are sufficiently robust to
properly monitor trading in the Shares in all trading sessions and to
deter and detect violations of Exchange rules and applicable federal
securities laws. The Exchange or FINRA, on behalf of the Exchange, or
both, will communicate as needed regarding trading in the Shares with
other markets that are members of the ISG, and the Exchange or FINRA,
on behalf of the Exchange, or both, may obtain information regarding
trading in the Shares with other markets and other entities that are
members of the ISG, and the Exchange or FINRA, on behalf of the
Exchange, or both, may obtain information regarding trading in the
Shares from such markets and other entities. In addition, the Exchange
may obtain information regarding trading in the Shares from markets
that are members of ISG or with which the Exchange has in place a CSSA.
Also, pursuant to NYSE Arca Rule 8.201-E(g), the Exchange is able to
obtain information regarding trading in the Shares through ETP Holders
acting as registered Market Makers, in connection with such ETP
Holders' proprietary or customer trades through ETP Holders which they
effect on any relevant market.
(ii) Designed To Protect Investors and the Public Interest
The Exchange believes the proposed rule change is designed to
protect investors and the public interest.
With the growth of OTC bitcoin funds, so too has grown the
potential risk to U.S. investors. Significant and prolonged premiums
and discounts, significant premium/discount volatility, high fees,
insufficient disclosures, limited liquidity to trade or borrow shares,
and the lack of surveillance and oversight through a listed exchange
are putting U.S. investor money at risk in ways that could potentially
be eliminated through access to the Shares. For example, the OTC
bitcoin fund with the largest assets under management in the United
States returned 46.41% year-to-date through April 30, 2021 while spot
bitcoin returned 95.61% over the same period. The deviation in price
performance can be attributed to the fluctuation in NAV of this fund.
As such, the Sponsor believes that this proposed rule change would
act to limit the risk to U.S. investors that are increasingly seeking
exposure to bitcoin, with benefits such as the elimination of
significant and prolonged premiums and discounts, the reduction of
significant premium/discount volatility, the reduction of management
fees through meaningful competition, the avoidance of risks associated
with investing in operating companies that are imperfect proxies for
bitcoin exposure, and substantially greater surveillance and regulatory
oversight.
The Exchange also notes there is a considerable amount of bitcoin
price and market information available on public websites and through
professional and subscription services. Investors may obtain, on a 24-
hour basis, bitcoin pricing information based on the spot price for
bitcoin from various financial information service providers. The
closing price and settlement prices of bitcoin are readily available
from the Bitcoin exchanges and other publicly available websites. In
addition, such prices are published in public sources, or on-line
information services such as Bloomberg. The Trust will provide daily
website disclosure of its bitcoin holdings, net asset value, and
closing price daily.
Quotation and last-sale information regarding the Shares will be
disseminated through the facilities of the CTA. Trading in Shares of
the Trust will be halted if the circuit breaker parameters in NYSE Arca
Rule 7.12-E have been reached or because of market conditions or for
reasons that, in the view of the Exchange, make trading in the Shares
inadvisable. Additionally, the Exchange represents that the Exchange
may halt trading during the day in which an interruption to the
dissemination of the IIV occurs. If the interruption to the
dissemination of the IIV persists past the trading day in which it
occurred, the Exchange will halt trading no later than the beginning of
the trading day following the interruption. In addition, if the
Exchange becomes aware that the NAV with respect to the Shares is not
disseminated to all market participants at the same time, it will halt
trading in the Shares until such time as the NAV is available to all
market participants.
Moreover, prior to the commencement of trading, the Exchange will
inform its ETP Holders in an Information Bulletin of the special
characteristics and risks associated with trading the Shares and of the
suitability requirements of NYSE Arca Rule 9.2-E(a). The Information
Bulletin will advise ETP Holders, prior to the commencement of trading,
of the prospectus delivery requirements applicable to the Trust. The
Information Bulletin will also discuss any exemptive, no-action, and
interpretive relief granted by the Commission from any rules under the
Act. In addition, the Information Bulletin will reference that the
Trust is subject to various fees and expenses described in the
Registration Statement. The Information Bulletin will disclose that
information about the Shares will be publicly available on the Trust's
website.
The proposed rule change is designed to perfect the mechanism of a
free and open market and, in general, to protect investors and the
public interest in that it will facilitate the listing and trading of
an additional type of exchange-traded product that will enhance
competition among market participants, to the benefit of investors and
the marketplace.
[[Page 38137]]
As noted above, the Exchange has in place surveillance procedures that
are adequate to properly monitor trading in the Shares in all trading
sessions and may obtain information via ISG from other exchanges that
are members of ISG or with which the Exchange has entered into a CSSA.
In addition, as noted above, investors will have ready access to
information regarding the Trust's bitcoin holdings, and quotation and
last sale information for the Shares.
For the above reasons, the Exchange believes that the proposed rule
change is consistent with the requirements of Section 6(b)(5) of the
Act, and in the best interest of investors and the public at large.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purpose of the Act. The Exchange notes that the
proposed rule change will facilitate the listing and trading of a new
type of Commodity-Based Trust Share based on the price of bitcoin that
will enhance competition among market participants, to the benefit of
investors and the marketplace.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Within 45 days of the date of publication of this notice in the
Federal Register or up to 90 days (i) as the Commission may designate
if it finds such longer period to be appropriate and publishes its
reasons for so finding or (ii) as to which the self-regulatory
organization consents, the Commission will:
(A) By order approve or disapprove the proposed rule change, or
(B) institute proceedings to determine whether the proposed rule
change should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
<bullet> Use the Commission's internet comment form (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#f381869f96de909c9e9e969d8780b3809690dd949c85"><span class="__cf_email__" data-cfemail="186a6d747d357b7775757d766c6b586b7d7b367f776e">[email protected]</span></a>. Please include
File Number SR-NYSEArca-2021-57 on the subject line.
Paper Comments
<bullet> Send paper comments in triplicate to: Secretary,
Securities and Exchange Commission, 100 F Street NE, Washington, DC
20549-1090.
All submissions should refer to File Number SR-NYSEArca-2021-57. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549 on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-NYSEArca-2021-57 and should be submitted
on or before August 9, 2021.
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\21\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\21\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-15197 Filed 7-16-21; 8:45 am]
BILLING CODE 8011-01-P
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</html>Indexed from Federal Register on July 19, 2021.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.