Notice2023-27805
Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Definition of Commodity-Based Trust Shares in Nasdaq Rule 5711(d)(iv)(A) and To Correct a Typographical Error in Nasdaq Rule 5711(d)(iv)(B)
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
December 19, 2023
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 88 Issue 242 (Tuesday, December 19, 2023)</title>
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[Federal Register Volume 88, Number 242 (Tuesday, December 19, 2023)]
[Notices]
[Pages 87827-87829]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-27805]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-99163; File No. SR-NASDAQ-2023-055]
Self-Regulatory Organizations; The Nasdaq Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend the Definition of Commodity-Based Trust Shares in Nasdaq Rule
5711(d)(iv)(A) and To Correct a Typographical Error in Nasdaq Rule
5711(d)(iv)(B)
December 13, 2023.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on December 11, 2023, The Nasdaq Stock Market LLC (``Nasdaq'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit
[[Page 87828]]
comments on the proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 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 amend Nasdaq Rule 5711(d)(iv)(A) to mirror
the definition of Commodity-Based Trust Shares in Section (c)(1) of
Arca's Rule 8.201-E. Commodity-Based Trust Shares, as well as to
correct a typographical error in Rule Nasdaq Rule 5711(d)(iv)(B).
The text of the proposed rule change is available on the Exchange's
website at <a href="https://listingcenter.nasdaq.com/rulebook/nasdaq/rules">https://listingcenter.nasdaq.com/rulebook/nasdaq/rules</a>, at
the principal office of the Exchange, and at the Commission's Public
Reference Room.
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 Exchange 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 these 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 aspects 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 purpose of the proposed rule change is to amend Nasdaq Rule
5711(d)(iv)(A) to mirror the definition of Commodity-Based Trust Shares
in Section (c)(1) of Arca's Rule 8.201-E. Commodity-Based Trust
Shares.\3\
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\3\ See Arca Rule 8.201-E(c)(1).
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The Exchange proposes to conform its rule language for the
definition of Commodity-Based Trust Shares to that of Arca's so that
there exists no discrepancy between the definitions. Specifically,
Nasdaq currently defines ``Commodity-Based Trust Shares'' as ``a
security (1) that is issued by a trust (``Trust'') that holds a
specified commodity deposited with the Trust; (2) that is issued by
such Trust in a specified aggregate minimum number in return for a
deposit of a quantity of the underlying commodity; and (3) that, when
aggregated in the same specified minimum number, may be redeemed at a
holder's request by such Trust which will deliver to the redeeming
holder the quantity of the underlying commodity.''
The term ``Commodity-Based Trust Shares'' will now mirror Arca's
and be defined as ``a security (1) that is issued by a trust
(``Trust'') that holds (a) a specified commodity deposited with the
Trust, or (b) a specified commodity and, in addition to such specified
commodity, cash; (2) that is issued by such Trust in a specified
aggregate minimum number in return for a deposit of a quantity of the
underlying commodity and/or cash; and (c) that, when aggregated in the
same specified minimum number, may be redeemed at a holder's request by
such Trust which will deliver to the redeeming holder the quantity of
the underlying commodity and/or cash.
Additionally, the Exchange proposes to correct a typographical
error in Rule Nasdaq Rule 5711(d)(iv)(B) to change the Commodity
Exchange Act cite from 1(a)(4) to 1a(9).
2. Statutory Basis
The Exchange believes that its proposal is consistent with section
6(b) of the Act,\4\ in general, and furthers the objectives of section
6(b)(5) of the Act,\5\ in particular, in that it is designed to promote
just and equitable principles of trade, to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general to protect investors and the public interest.
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\4\ 15 U.S.C. 78f(b).
\5\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that its proposal will remove impediments to
and perfect the mechanism of a free and open market and a national
market system, and, in general to protect investors and the public
interest by harmonizing the definition of Commodity-Based Trust Shares
with that of Arca and lessening any potential confusion among market
participants as to its meaning.
The Exchange also believes that correcting the typographical error
in Nasdaq Rule 5711(d)(iv)(B) serves to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general to protect investors and the public interest by
lessening possible confusion of market participants as to where the
term ``commodity'' is defined in the Commodity Exchange Act through
clarifying the rule language and enhancing transparency.
For the foregoing reasons, the Exchange believes that the proposed
rule change is consistent with the Act.
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 not necessary or appropriate in
furtherance of the purposes of the Act. The proposal merely harmonizes
the definition of Commodity-Based Trust Shares with that of Arca and
lessens any potential confusion among market participants as to its
meaning, as well as fixes a typographical error involving the Commodity
Exchange Act that will clarify the rule language and enhance
transparency.
For the foregoing reasons, the Exchange does not believe the
proposed rule change will result in any burden on competition that is
not necessary or appropriate in furtherance of the purposes of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Pursuant to section 19(b)(3)(A) of the Act \6\ and Rule 19b-4(f)(6)
\7\ thereunder, the Exchange has designated this proposal as one that
effects a change that: (i) does not significantly affect the protection
of investors or the public interest; (ii) does not impose any
significant burden on competition; and (iii) by its terms, does not
become operative for 30 days after the date of the filing, or such
shorter time as the Commission may designate if consistent with the
protection of investors and the public interest.\8\
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\6\ 15 U.S.C. 78s(b)(3)(A).
\7\ 17 CFR 240.19b-4(f)(6).
\8\ In addition, Rule 19b-4(f)(6) requires a self-regulatory
organization to give the Commission written notice of its intent to
file the proposed rule change at least five business days prior to
the date of filing of the proposed rule change, or such shorter time
as designated by the Commission. The Exchange has satisfied this
requirement.
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A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the
Act normally does not become operative for 30 days after the date of
its filing. However, Rule 19b-4(f)(6)(iii) \9\ permits the Commission
to designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange requested
that the Commission waive the 30-day operative delay so that the
proposal may become operative immediately upon
[[Page 87829]]
filing. The proposed rule change, which modifies the Exchange's rules
by conforming the definition of Commodity-Based Trust Shares with the
same definition used by another national securities exchange \10\ and
corrects the citation for the term ``commodity,'' as defined in the
Commodity Exchange Act, raises no unique or novel legal or regulatory
issues and will lessen any potential confusion among market
participants. Therefore, the Commission believes that waiver of the 30-
day operative delay is consistent with the protection of investors and
the public interest. Accordingly, the Commission hereby waives the 30-
day operative delay and designates the proposed rule change operative
upon filing.\11\
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\9\ 17 CFR 240.19b-4(f)(6)(iii).
\10\ See supra note 3.
\11\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act.
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="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#4230372e276f212d2f2f272c3631023127216c252d34"><span class="__cf_email__" data-cfemail="1e6c6b727b337d7173737b706a6d5e6d7b7d30797168">[email protected]</span></a>. Please include
file number SR-NASDAQ-2023-055 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-NASDAQ-2023-055. 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="https://www.sec.gov/rules/sro.shtml">https://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
a.m. and 3 p.m. Copies of the filing also will be available for
inspection and copying at the principal office of the Exchange. Do not
include personal identifiable information in submissions; you should
submit only information that you wish to make available publicly. We
may redact in part or withhold entirely from publication submitted
material that is obscene or subject to copyright protection. All
submissions should refer to file number SR-NASDAQ-2023-055 and should
be submitted on or before January 9, 2024.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12), (59).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-27805 Filed 12-18-23; 8:45 am]
BILLING CODE 8011-01-P
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