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Notice2024-06319

Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing of Amendment No. 1 to, and Designation of a Longer Period for Commission Action on Proceedings To Determine Whether To Approve or Disapprove, a Proposed Rule Change To List and Trade Shares of the VanEck Ethereum ETF Under BZX Rule 14.11(e)(4), Commodity-Based Trust Shares

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Published

March 26, 2024

Issuing agencies

Securities and Exchange Commission

Full Text

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[Federal Register Volume 89, Number 59 (Tuesday, March 26, 2024)]
[Notices]
[Pages 21032-21045]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-06319]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-99782; File No. SR-CboeBZX-2023-069]

Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of
Filing of Amendment No. 1 to, and Designation of a Longer Period for
Commission Action on Proceedings To Determine Whether To Approve or
Disapprove, a Proposed Rule Change To List and Trade Shares of the
VanEck Ethereum ETF Under BZX Rule 14.11(e)(4), Commodity-Based Trust
Shares

March 20, 2024.
On September 6, 2023, Cboe BZX Exchange, Inc. (``BZX'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to list and trade shares (``Shares'') of the
VanEck Ethereum ETF (``Trust'') under BZX Rule 14.11(e)(4), Commodity-
Based Trust Shares. The proposed rule change was published for comment
in the Federal Register on September 26, 2023.\3\
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 98457 (Sept. 20,
2023), 88 FR 66076. Comments on the proposed rule change are
available at: <a href="https://www.sec.gov/comments/sr-cboebzx-2023-069/srcboebzx2023069.htm">https://www.sec.gov/comments/sr-cboebzx-2023-069/srcboebzx2023069.htm</a>.
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On September 27, 2023, pursuant to Section 19(b)(2) of the Act,\4\
the Commission designated a longer period within which to approve the
proposed rule change, disapprove the proposed rule change, or institute
proceedings to determine whether to disapprove the proposed rule
change.\5\ On December 18, 2023, the Commission instituted proceedings
under Section 19(b)(2)(B) of the Act \6\ to determine whether to
approve or disapprove the proposed rule change.\7\ On February 16,
2024, the Exchange filed Amendment No. 1 to the proposed rule change as
described in Items I and II below, which Items have been prepared by
the Exchange. Amendment No. 1 amended and replaced in its entirety the
proposed rule change as originally submitted. The Commission is
publishing this notice to solicit comments on the proposed rule change,
as modified by Amendment No. 1, from interested persons and to extend
the time period for approving or disapproving the proposed rule change,
as modified by Amendment No. 1.
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\4\ 15 U.S.C. 78s(b)(2).
\5\ See Securities Exchange Act Release No. 98566, 88 FR 68236
(Oct. 3, 2023).
\6\ 15 U.S.C. 78s(b)(2)(B).
\7\ See Securities Exchange Act Release No. 99195, 88 FR 88683
(Dec. 22, 2023).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

Cboe BZX Exchange, Inc. (``BZX'' or the ``Exchange'') is filing
with the Securities and Exchange Commission (``Commission'' or ``SEC'')
a proposed rule change to list and trade shares of the VanEck Ethereum
ETF (the ``Trust''),\8\ under BZX Rule 14.11(e)(4), Commodity-Based
Trust Shares.
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\8\ The Trust was formed as a Delaware statutory trust on June
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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The text of the proposed rule change is also available on the
Exchange's website (<a href="http://markets.cboe.com/us/equities/regulation/rule_filings/bzx/">http://markets.cboe.com/us/equities/regulation/rule_filings/bzx/</a>), at the Exchange's Office of the Secretary, 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
Statutory Basis for, the Proposed Rule Change

1. Purpose
This Amendment No. 1 to SR-CboeBZX-2023-069 amends and replaces in
its entirety the proposal as originally submitted on September 6, 2023.
The Exchange submits this Amendment No. 1 in order to clarify certain
points and add additional details to the proposal.
The Exchange proposes to list and trade the Shares under BZX Rule
14.11(e)(4),\9\ which governs the listing and trading of Commodity-
Based Trust Shares on the Exchange.\10\ VanEck Digital Assets, LLC is
the sponsor of the Trust (``Sponsor''). The Shares will be registered
with the Commission by means of the Trust's registration statement on
Form S-1 (the ``Registration Statement'').\11\
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\9\ The Commission approved BZX Rule 14.11(e)(4) in Securities
Exchange Act Release No. 65225 (August 30, 2011), 76 FR 55148
(September 6, 2011) (SR-BATS-2011-018).
\10\ Any of the statements or representations regarding the
Benchmark composition, the description of the portfolio or reference
assets, limitations on portfolio holdings or reference assets,
dissemination and availability of index, reference asset, and
intraday indicative values, or the applicability of Exchange listing
rules specified in this filing to list a series of Other Securities
(collectively, ``Continued Listing Representations'') shall
constitute continued listing requirements for the Shares listed on
the Exchange.
\11\ See Amendment No. 1 to Registration Statement on Form S-1,
dated February 16, 2024, submitted to the Commission by the Sponsor
on behalf of the Trust (333-255888). The descriptions of the Trust,
the Shares, and the Benchmark contained herein are based, in part,
on information in 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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The Commission has historically approved or disapproved exchange
filings to list and trade series of Trust Issued Receipts, including
spot-based Commodity-Based Trust Shares, on the basis of whether the
listing exchange has in place a comprehensive surveillance sharing
agreement with a regulated market of significant size related to the
underlying commodity to be held.\12\ With this in mind, the CME

[[Page 21033]]

Ether Futures market, which launched in February 2021, is the proper
market to consider in determining whether there is a related regulated
market of significant size.
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\12\ See Securities Exchange Act Release No. 83723 (July 26,
2018), 83 FR 37579 (August 1, 2018). This proposal was subsequently
disapproved by the Commission. See Securities Exchange Act Release
No. 83723 (July 26, 2018), 83 FR 37579 (August 1, 2018) (the
``Winklevoss Order''). Prior orders from the Commission have pointed
out that in every prior approval order for Commodity-Based Trust
Shares, there has been a derivatives market that represents the
regulated market of significant size, generally a Commodity Futures
Trading Commission (the ``CFTC'') regulated futures market. Further
to this point, the Commission's prior orders have noted that the
spot commodities and currency markets for which it has previously
approved spot ETPs are generally unregulated and that the Commission
relied on the underlying futures market as the regulated market of
significant size that formed the basis for approving the series of
Currency and Commodity-Based Trust Shares, including gold, silver,
platinum, palladium, copper, and other commodities and currencies.
The Commission specifically noted in the Winklevoss Order that the
approval order issued related to the first spot gold ETP ``was based
on an assumption that the currency market and the spot gold market
were largely unregulated.'' See Winklevoss Order at 37592. As such,
the regulated market of significant size test does not require that
the spot bitcoin market be regulated in order for the Commission to
approve this proposal, and precedent makes clear that an underlying
market for a spot commodity or currency being a regulated market
would actually be an exception to the norm. These largely
unregulated currency and commodity markets do not provide the same
protections as the markets that are subject to the Commission's
oversight, but the Commission has consistently looked to
surveillance sharing agreements with the underlying futures market
in order to determine whether such products were consistent with the
Act.
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Recently, the Commission issued an order granting approval for
proposals to list bitcoin-based commodity trust and bitcoin-based trust
issued receipts (these proposed funds are nearly identical to the
Trust, but proposed to hold bitcoin instead of ethereum) (``Spot
Bitcoin ETPs'').\13\ By way of background, in 2022 the Commission
disapproved proposals \14\ to list Spot Bitcoin ETPs, including the
Grayscale Order.\15\ Grayscale appealed the decision with the U.S.
Court of Appeals for the D.C. Circuit, which held that the Commission
had failed to adequately explain its reasoning that the proposing
exchange had not established that the CME bitcoin futures market was a
market of significant size related to spot bitcoin, or that the ``other
means'' asserted were sufficient to satisfy the statutory standard. As
a result, the court vacated the Grayscale Order and remanded the matter
to the Commission.\16\ In considering the remand of the Grayscale Order
and Spot Bitcoin ETPs, the Commission determined in the Spot Bitcoin
ETP Approval Order that the CME Bitcoin Futures market is a regulated
market of significant size. Specifically, the Commission stated:
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\13\ See Exchange Act Release No. 99306 (January 10, 2024), 89
FR 3008 (January 17, 2024) (Self-Regulatory Organizations; NYSE
Arca, Inc.; The Nasdaq Stock Market LLC; Cboe BZX Exchange, Inc.;
Order Granting Accelerated Approval of Proposed Rule Changes, as
Modified by Amendments Thereto, To List and Trade Bitcoin-Based
Commodity-Based Trust Shares and Trust Units) (the ``Spot Bitcoin
ETP Approval Order'').
\14\ See Order Disapproving a Proposed Rule Change To List and
Trade Shares of the VanEck Bitcoin Trust Under BZX Rule 14.11(e)(4),
Commodity-Based Trust Shares, Securities Exchange Act Release No.
97102 (Mar. 10, 2023), 88 FR 16055 (Mar. 15, 2023) (SR-CboeBZX-2022-
035) (``VanEck Order II'') and n.11 therein for the complete list of
previous proposals.
\15\ See Securities Exchange Act Release No. 95180 (June 29,
2022) 87 FR 40299 (July 6, 2022) (SR-NYSEArca-2021-90) (Order
Disapproving a Proposed Rule Change, as Modified by Amendment No. 1,
to List and Trade Shares of Grayscale Bitcoin Trust Under NYSE Arca
Rule 8.201-E (Commodity-Based Trust Shares) (the ``Grayscale
Order'').
\16\ See Grayscale Investments, LLC v. SEC, 82 F.4th 1239 (D.C.
Cir. 2023).

[B]ased on the record before the Commission and the improved
quality of the correlation analysis in the record . . . the
Commission is able to conclude that fraud or manipulation that
impacts prices in spot bitcoin markets would likely similarly impact
CME bitcoin futures prices. And because the CME's surveillance can
assist in detecting those impacts on CME bitcoin futures prices, the
Exchanges' comprehensive surveillance-sharing agreement with the
CME--a U.S. regulated market whose bitcoin futures market is
consistently highly correlated to spot bitcoin, albeit not of
``significant size'' related to spot bitcoin--can be reasonably
expected to assist in surveilling for fraudulent and manipulative
acts and practices in the specific context of the [p]roposals.\17\
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\17\ See the Spot Bitcoin ETP Approval Order at 3011-3012.

As further discussed below, both the Exchange and the Sponsor
believe that this proposal and the included analysis are sufficient to
establish that the CME Ether Futures market represents a regulated
market of significant size and that this proposal should be approved.
Background
Ethereum (also referred to as ``ETH'' or ``ether'') is free
software that is hosted on computers distributed throughout the globe.
It employs an array of logic, called a protocol, to create a unified
understanding of ownership, commercial activity, and business logic.
This allows users to engage in commerce without the need to trust any
of its participants or counterparties. Ethereum code creates verifiable
and unambiguous rules that assign clear, strong property rights to
create a platform for unrestrained business formation and free
exchange. It is widely understood that no single intermediary or entity
operates or controls the Ethereum network (referred to as
``decentralization''), the transaction validation and recordkeeping
infrastructure of which is collectively maintained by a disparate user
base. The Ethereum network allows people to exchange tokens of value,
or ETH, which are recorded on a distributed public recordkeeping system
or ledger known as a blockchain (the ``Ethereum Blockchain''), and
which can be used to pay for goods and services, including
computational power on the Ethereum network, or converted to fiat
currencies, such as the U.S. dollar, at rates determined on digital
asset exchanges or in individual peer-to-peer transactions.
Furthermore, by combining the recordkeeping system of the Ethereum
Blockchain with a flexible scripting language that is programmable and
can be used to implement sophisticated logic and execute a wide variety
of instructions, the Ethereum network is intended to act as a
foundational infrastructure layer on top of which users can build their
own custom software programs, as an alternative to centralized web
servers. In theory, anyone can build their own custom software programs
on the Ethereum network. In this way, the Ethereum network represents a
project to expand blockchain deployment beyond a limited-purpose, peer-
to-peer private money system into a flexible, distributed alternative
computing infrastructure that is available to all. On the Ethereum
network, ETH is the unit of account that users pay for the
computational resources consumed by running their programs.
Heretofore, U.S. retail investors have lacked a U.S. regulated,
U.S. exchange-traded vehicle to gain exposure to ETH. Instead current
options include: (i) facing the counter-party risk, legal uncertainty,
technical risk, and complexity associated with accessing spot ether; or
(ii) over-the-counter ether funds (``OTC ETH Funds'') with high
management fees and potentially volatile premiums and discounts.
Meanwhile, investors in other countries, including Germany, Canada,
Switzerland, and France, are able to use more traditional exchange
listed and traded products (including exchange-traded funds holding
physical ETH) to gain exposure to ETH. Investors across Europe and
Canada have access to products which trade on regulated exchanges and
provide exposure to a broad array of spot crypto assets. U.S.
investors, by contrast, are left with fewer and more risky means of
getting ether exposure.\18\
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\18\ The Exchange notes that the list of countries above is not
exhaustive and that securities regulators in a number of additional
countries have either approved or otherwise allowed the listing and
trading of Spot Ether ETPs.
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To this point, the lack of an ETP that holds spot ETH (a ``Spot
Ether ETP'') exposes U.S. investor assets to significant risk because
investors that would otherwise seek cryptoasset exposure through a Spot
Ether ETP are forced to find alternative exposure through generally
riskier means. For example, investors in OTC ETH Funds are not afforded
the benefits and protections of regulated Spot Ether ETPs, resulting in
retail investors suffering losses due to drastic movements in the
premium/discount of OTC ETH Funds. An investor who purchased the
largest OTC ETH Fund in

[[Page 21034]]

January 2021 and held the position at the end of 2022 would have
suffered a 69% loss due to the premium/discount, even if the price of
ETH did not change. Many retail investors likely suffered losses due to
this premium/discount in OTC ETH Fund trading; all such losses could
have been avoided if a Spot Ether ETP had been available. Additionally,
many U.S. investors that held their digital assets in accounts at
FTX,\19\ Celsius Network LLC,\20\ BlockFi Inc.\21\ and Voyager Digital
Holdings, Inc.\22\ have become unsecured creditors in the insolvencies
of those entities. If a Spot Ether ETP was available, it is likely that
at least a portion of the billions of dollars tied up in those
proceedings would still reside in the brokerage accounts of U.S.
investors, having instead been invested in a transparent, regulated,
and well-understood structure--a Spot Ether ETP. To this point,
approval of a Spot Ether ETP would represent a major win for the
protection of U.S. investors in the cryptoasset space. The Trust, like
all other series of Commodity-Based Trust Shares, is designed to
protect investors against the risk of losses through fraud and
insolvency that arise by holding digital assets, including ETH, on
centralized platforms.
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\19\ See FTX Trading Ltd., et al., Case No. 22-11068.
\20\ See Celsius Network LLC, et al., Case No. 22-10964.
\21\ See BlockFi Inc., Case No. 22-19361.
\22\ See Voyager Digital Holdings, Inc., et al., Case No. 22-
10943.
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Ether Futures ETFs
The Exchange and Sponsor applaud the Commission for allowing the
launch of ETFs registered under the Investment Company Act of 1940, as
amended (the ``1940 Act'') that provide exposure to ether primarily
through CME Ether Futures (``Ether Futures ETFs''). Allowing such
products to list and trade is a productive first step in providing U.S.
investors and traders with transparent, exchange-listed tools for
expressing a view on ether.
The structure of Ether Futures ETFs provides negative outcomes for
buy and hold investors as compared to a Spot Ether ETP. Specifically,
the cost of rolling CME Ether Futures contracts will cause the Ether
Futures ETFs to lag the performance of ether itself and could cost U.S.
investors significant amounts of money on an annual basis compared to
Spot Ether ETPs. Such rolling costs would not be required for Spot
Ether ETPs that hold ether. Further, Ether Futures ETFs could
potentially hit CME position limits, which would force an Ether Futures
ETF to invest in non-futures assets for ether exposure and cause
potential investor confusion and lack of certainty about what such
Ether Futures ETFs are actually holding to try to get exposure to
ether, not to mention completely changing the risk profile associated
with such an ETF. While Ether Futures ETFs represent a useful trading
tool, they are clearly a sub-optimal structure for U.S. investors that
are looking for long-term exposure to ether that will unnecessarily
cost U.S. investors significant amounts of money every year compared to
Spot Ether ETPs and the Exchange believes that any proposal to list and
trade a Spot Ether ETP should be reviewed by the Commission with this
important investor protection context in mind.
To the extent the Commission may view differential treatment of
Ether Futures ETFs and Spot Ether ETPs as warranted based on the
Commission's concerns about the custody of physical ether that a Spot
Ether ETP would hold (compared to cash-settled futures contracts),\23\
the Sponsor believes this concern is mitigated to a significant degree
by the custodial arrangements that the Trust has contracted with the
Custodian to provide, as further outlined below. In the custody
statement, the Commission stated that the fourth step that a broker-
dealer could take to shield traditional securities customers and others
from the risks and consequences of digital asset security fraud, theft,
or loss is to establish, maintain, and enforce reasonably designed
written policies, procedures, and controls for safekeeping and
demonstrating the broker-dealer has exclusive possession or control
over digital asset securities that are consistent with industry best
practices to protect against the theft, loss, and unauthorized and
accidental use of the private keys necessary to access and transfer the
digital asset securities the broker-dealer holds in custody. While
ether is not a security and the Custodian is not a broker-dealer, the
Sponsor believes that similar considerations apply to the Custodian's
holding of the Trust's ether. After diligent investigation, the Sponsor
believes that the Custodian's policies, procedures, and controls for
safekeeping, exclusively possessing, and controlling the Trust's ether
holdings are consistent with industry best practices to protect against
the theft, loss, and unauthorized and accidental use of the private
keys. As a trust company chartered by the NYDFS, the Sponsor notes that
the Custodian is subject to extensive regulation and has among longest
track records in the industry of providing custodial services for
digital asset private keys. Under the circumstances, therefore, to the
extent the Commission believes that its concerns about the risks of
spot ether custody justifies differential treatment of a Ether Futures
ETF versus a Spot Ether ETP, the Sponsor believes that the fact that
the Custodian employs the same types of policies, procedures, and
safeguards in handling spot ether that the Commission has stated that
broker-dealers should implement with respect to digital asset
securities would appear to weaken the justification for treating a
Ether Futures ETF compared to a Spot Ether ETP differently due to spot
ether custody concerns.
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\23\ See, e.g., Division of Investment Management Staff, Staff
Statement on Funds Registered Under the Investment Company Act
Investing in the Bitcoin Futures Market, May 11, 2021 (``The Bitcoin
Futures market also has not presented the custody challenges
associated with some cryptocurrency-based investing because the
futures are cash-settled'').
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Based on the foregoing, the Exchange and Sponsor believe that any
objective review of the proposals to list Spot Ether ETPs compared to
the Ether Futures ETFs would lead to the conclusion that Spot Ether
ETPs should be available to U.S. investors and, as such, this proposal
and other comparable proposals to list and trade Spot Ether ETPs should
be approved by the Commission. Stated simply, U.S. investors will
continue to lose significant amounts of money from holding Ether
Futures ETFs as compared to Spot Ether ETPs, losses which could be
prevented by the Commission approving Spot Ether ETPs. Additionally,
any concerns related to preventing fraudulent and manipulative acts and
practices related to Spot Ether ETPs would apply equally to the spot
markets underlying the futures contracts held by an Ether Futures ETF.
Both the Exchange and Sponsor believe that the CME Ether Futures market
is a regulated market of significant size and that such manipulation
concerns are mitigated, as described extensively below. After allowing
the listing and trading of Ether Futures ETFs that hold primarily CME
Ether Futures, however, the only consistent outcome would be approving
Spot Ether ETPs on the basis that the CME Ether Futures market is a
regulated market of significant size.
Given the current landscape, approving this proposal (and others
like it) and allowing Spot Ether ETPs to be listed and traded alongside
Ether Futures ETFs and Spot Bitcoin ETPs would establish a consistent
regulatory approach, provide U.S. investors with choice in product
structures for ether exposure, and offer flexibility in the

[[Page 21035]]

means of gaining exposure to ether through transparent, regulated, U.S.
exchange-listed vehicles.
CME Ether Futures \24\
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\24\ Unless otherwise noted, all data and analysis presented in
this section and referenced elsewhere in the filing has been
provided by the Sponsor.
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CME began offering trading in Ether Futures in February 2021. Each
contract represents 50 ETH and is based on the CME CF Ether-Dollar
Reference Rate.\25\ The contracts trade and settle like other cash-
settled commodity futures contracts. Most measurable metrics related to
CME Ether Futures have generally trended up since launch, although some
metrics have slowed recently. For example, there were 76,293 CME Ether
Futures contracts traded in July 2023 (approximately $7.3 billion)
compared to 70,305 ($11.1 billion) and 158,409 ($7.5 billion) contracts
traded in July 2021, and July 2022 respectively.\26\ The Sponsor's
research indicates daily correlation between the spot ETH and the CME
Ether Futures is 0.998 from the period of 9/1/22 through 9/1/23.
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\25\ The CME CF Ether-Dollar Reference Rate is based on a
publicly available calculation methodology based on pricing sourced
from several crypto trading platforms, including Bitstamp, Coinbase,
Gemini, itBit, Kraken, and LMAX Digital.
\26\ Source: CME, 7/31/23
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The number of large open interest holders \27\ and unique accounts
trading CME Ether Futures have both increased, even in the face of
heightened ether price volatility.
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\27\ A large open interest holder in CME Ether Futures is an
entity that holds at least 25 contracts, which is the equivalent of
1,250 ether. At a price of approximately $1,867 per ether on 7/31/
2023, more than 59 firms had outstanding positions of greater than
$2.3 million in CME Ether Futures.
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[GRAPHIC] [TIFF OMITTED] TN26MR24.002

[GRAPHIC] [TIFF OMITTED] TN26MR24.003

Section 6(b)(5) and the Applicable Standards
The Commission has approved numerous series of Trust Issued
Receipts,\28\ including Commodity-Based Trust Shares,\29\ 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, specifically including: (i)
the requirement that a national securities exchange's rules are
designed to prevent fraudulent and manipulative acts and practices;
\30\ and (ii) the requirement that an exchange proposal be designed, in
general, to protect investors and the public interest. The Exchange
believes that this proposal is consistent with the requirements of
Section 6(b)(5) of the Act and that this filing sufficiently

[[Page 21037]]

demonstrates that the CME Ether Futures market represents a regulated
market of significant size and that, on the whole, the manipulation
concerns previously articulated by the Commission are sufficiently
mitigated to the point that they are outweighed by quantifiable
investor protection issues that would be resolved by approving this
proposal.
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\28\ See Exchange Rule 14.11(f).
\29\ Commodity-Based Trust Shares, as described in Exchange Rule
14.11(e)(4), are a type of Trust Issued Receipt.
\30\ The Exchange believes that ETH is resistant to price
manipulation and that ``other means to prevent fraudulent and
manipulative acts and practices'' exist to justify dispensing with
the requisite surveillance sharing agreement. The geographically
diverse and continuous nature of ETH trading render it difficult and
prohibitively costly to manipulate the price of ETH. The
fragmentation across ETH platforms, the relatively slow speed of
transactions, and the capital necessary to maintain a significant
presence on each trading platform make manipulation of ETH prices
through continuous trading activity challenging. To the extent that
there are ETH exchanges engaged in or allowing wash trading or other
activity intended to manipulate the price of ETH on other markets,
such pricing does not normally impact prices on other exchange
because participants will generally ignore markets with quotes that
they deem non-executable. Moreover, the linkage between the ETH
markets and the presence of arbitrageurs in those markets means that
the manipulation of the price of ETH price on any single venue would
require manipulation of the global ETH price in order to be
effective. Arbitrageurs must have funds distributed across multiple
trading platforms in order to take advantage of temporary price
dislocations, thereby making it unlikely that there will be strong
concentration of funds on any particular ETH exchange or OTC
platform. As a result, the potential for manipulation on a trading
platform would require overcoming the liquidity supply of such
arbitrageurs who are effectively eliminating any cross-market
pricing differences.
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(i) Designed To Prevent Fraudulent and Manipulative Acts and Practices
In order to meet this standard in a proposal to list and trade a
series of Commodity-Based Trust Shares, the Commission requires that an
exchange demonstrate that there is a comprehensive surveillance-sharing
agreement in place \31\ with a regulated market of significant size.
Both the Exchange and CME are members of the Intermarket Surveillance
Group (``ISG'').\32\ The only remaining issue to be addressed is
whether the Ether Futures market constitutes a market of significant
size, which both the Exchange and the Sponsor believe that it does. 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 manipulate the ETP, so that a
surveillance-sharing agreement would assist the listing exchange 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.\33\
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\31\ 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.'' The
Commission has historically held that joint membership in the ISG
constitutes such a surveillance sharing agreement. See Securities
Exchange Act Release No. 88284 (February 26, 2020), 85 FR 12595
(March 3, 2020) (SR-NYSEArca-2019-39) (the ``Wilshire Phoenix
Disapproval'').
\32\ For a list of the current members and affiliate members of
ISG, see <a href="http://www.isgportal.com">www.isgportal.com</a>.
\33\ See Wilshire Phoenix Disapproval.
---------------------------------------------------------------------------

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.<SUP>34 35</SUP>
---------------------------------------------------------------------------

\34\ See 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 Exchange 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 Exchange Act have been met.''
Id. at 37582.
\35\ According to reports, the Commission is poised to allow the
launch of ETFs registered under the Investment Company Act of 1940,
as amended (the ``1940 Act''), that provide exposure to ETH
primarily through CME Ether Futures (``ETH Futures ETFs'') as early
as October 2023. Allowing such products to list and trade is a
productive first step in providing U.S. investors and traders with
transparent, exchange-listed tools for expressing a view on ETH.
<a href="https://www.bloomberg.com/news/articles/2023-08-17/sec-said-to-be-poised-to-allow-us-debut-of-ether-futures-etfs-eth#xj4y7vzkg">https://www.bloomberg.com/news/articles/2023-08-17/sec-said-to-be-poised-to-allow-us-debut-of-ether-futures-etfs-eth#xj4y7vzkg</a>.
---------------------------------------------------------------------------

(a) Manipulation of the ETP
The significant market test requires that there is a reasonable
likelihood that a person attempting to manipulate the ETP would also
have to trade on that market to manipulate the ETP, so that a
surveillance-sharing agreement would assist the listing exchange in
detecting and deterring misconduct. In light of the similarly high
correlation between spot ETH/CME Ether Futures and spot bitcoin/CME
Bitcoin Futures, applying the same rationale that the Commission
applied to a Spot Bitcoin ETP in the Spot Bitcoin ETP Approval Order
\36\ also indicates that this test is satisfied for this proposal. As
noted above, in the Spot Bitcoin ETP Approval Order, the SEC concluded
that:
---------------------------------------------------------------------------

\36\ See Exchange Act Release No. 99306 (January 10, 2024), 89
FR 3008 (January 17, 2024) (Self-Regulatory Organizations; NYSE
Arca, Inc.; The Nasdaq Stock Market LLC; Cboe BZX Exchange, Inc.;
Order Granting Accelerated Approval of Proposed Rule Changes, as
Modified by Amendments Thereto, To List and Trade Bitcoin-Based
Commodity-Based Trust Shares and Trust Units) (the ``Spot Bitcoin
ETP Approval Order'').

. . . fraud or manipulation that impacts prices in spot bitcoin
markets would likely similarly impact CME bitcoin futures prices.
And because the CME's surveillance can assist in detecting those
impacts on CME bitcoin futures prices, the Exchanges' comprehensive
surveillance-sharing agreement with the CME . . . can be reasonably
expected to assist in surveilling for fraudulent and manipulative
acts and practices in the specific context of the [p]roposals.\37\
---------------------------------------------------------------------------

\37\ See the Spot Bitcoin ETP Approval Order at 3011-3012.

The assumptions from this statement are also true for CME Ether
Futures. CME Ether Futures pricing is based on pricing from spot ether
markets. The statement from the Spot Bitcoin ETP Approval Order that
the surveillance-sharing agreement with the CME ``can be reasonably
expected to assist in surveilling for fraudulent and manipulative acts
and practices in the specific context of the [p]roposals'' makes clear
that the Commission believes that CME's surveillance can capture the
effects of trading on the relevant spot markets on the pricing of CME
Bitcoin Futures. This same logic would extend to CME Ether Futures
markets where CME's surveillance would be able to capture the effects
of trading on the relevant spot markets on the pricing of CME Ether
Futures.
(b) Predominant Influence on Prices in Spot and ETH Futures
The Exchange and Sponsor also believe that trading in the Shares
would not be the predominant force on prices in the CME Ether Futures
market for a number of reasons. First, because the Trust would not hold
CME Ether Futures contracts, the only way that it could be the
predominant force on prices in that market is through the spot markets
that CME Ether Futures contracts use for pricing.\38\ The Sponsor notes
that ether total 24-hour spot trading volume has averaged $9.4 billion
over the year ending September 1, 2023.\39\ The Sponsor expects that
the Trust would represent a very small percentage of this daily trading
volume in the spot ether market even in its most aggressive projections
for the Trust's assets and therefore could not be the predominant force
on prices in the CME Ether Futures market. Second, much like the CME
Bitcoin Futures market, the CME Ether Futures market has progressed and
matured significantly. As the court found in the Grayscale Order,
``Because the spot market is deeper and more liquid than the futures
market, manipulation should be more difficult, not less.'' The Exchange
and Sponsor agree with this sentiment and

[[Page 21038]]

believe it applies equally to the spot ether and CME Ether Futures
markets.
---------------------------------------------------------------------------

\38\ This logic is reflected by the court in the Grayscale Order
at 17-18. Specifically, the court found that ``Because Grayscale
owns no futures contracts, trading in Grayscale can affect the
futures market only through the spot market . . . But Grayscale
holds just 3.4 percent of outstanding bitcoin, and the Commission
did not suggest Grayscale can dominate the price of bitcoin.''
\39\ Source: TokenTerminal.
---------------------------------------------------------------------------

\40\ Cash equivalents are short-term instruments with maturities
of less than 3 months.
---------------------------------------------------------------------------

According to the Registration Statement, each Share will represent
a fractional undivided beneficial interest in the Trust's net assets.
The Trust's assets will only consist of ether, cash and cash
equivalents.
According to the Registration Statement, the Trust is neither an
investment company registered under the Investment Company Act of 1940,
as amended,\41\ nor a commodity pool for purposes of the Commodity
Exchange Act (``CEA''), and neither the Trust nor the Sponsor is
subject to regulation as a commodity pool operator or a commodity
trading adviser in connection with the Shares.
---------------------------------------------------------------------------

\41\ 15 U.S.C. 80a-1.
---------------------------------------------------------------------------

When the Trust sells or redeems its Shares, it will do so in cash
transactions in blocks of 25,000 Shares (a ``Creation Basket'') at the
Trust's net asset value (``NAV''). A third party will use cash to buy
and deliver ether to create Shares or withdraw and sell ether for cash
to redeem Shares, on behalf of the Trust. For creations, authorized
participants will deliver cash to the Trust's account with the Cash
Custodian in exchange for Shares. Upon receipt of an approved creation
order, the Sponsor, on behalf of the Trust, will submit an order to buy
the amount of ether represented by a Creation Basket. Based off ether
executions, the Cash Custodian will request the required cash from the
authorized participant; the Transfer Agent will only issue ETF shares
when the authorized participant has made delivery of the cash.
Following receipt by the Cash Custodian of the cash from an authorized
participant, the Sponsor, on behalf of the Trust, will approve an order
with one or more previously onboarded trading partners to purchase the
amount of ether represented by the Creation Basket. This purchase of
ether will normally be cleared through an affiliate of the Custodian
(although the purchase may also occur directly with the trading
partner) and the ether will settle directly into the Trust's account at
the Custodian.\42\ Authorized participants may then offer Shares to the
public at prices that depend on various factors, including the supply
and demand for Shares, the value of the Trust's assets, and market
conditions at the time of a transaction. Shareholders who buy or sell
Shares during the day from their broker may do so at a premium or
discount relative to the NAV of the Shares of the Trust.
---------------------------------------------------------------------------

\42\ For redemptions, the process will occur in the reverse
order. Upon receipt of an approved redemption order, the Sponsor, on
behalf of the Trust, will submit an order to sell the amount of
ether represented by a Creation Basket and the cash proceeds will be
remitted to the authorized participant when the 50,000 Shares are
received by the Transfer Agent.
---------------------------------------------------------------------------

Investment Objective
According to the Registration Statement and as further described
below, the investment objective of the Trust is for the Shares to
reflect the performance of ether less the expenses of the Trust's
operations. In seeking to achieve its investment objective, the Trust
will hold ether and will value its Shares daily based on the reported
Benchmark and process all creations and redemptions in cash
transactions with authorized participants. The Trust is not actively
managed.
The Benchmark
As described in the Registration Statement, the Fund will use the
Benchmark to calculate the Trust's NAV. The Benchmark is designed to be
a robust price for ETH in USD and there is no component other than ETH
in the Benchmark. The underlying ether platforms are sourced from the
industry leading CryptoCompare Exchange Benchmark review report.
CryptoCompare Exchange Benchmark was established in 2019 as a tool
designed to bring clarity to the digital trading platform sector by
providing a framework for assessing risk and in turn bringing
transparency and accountability to a complex and rapidly evolving
market.\43\ The current ether platform composition of the Benchmark is
Bitstamp, Coinbase, Gemini, itBit, and Kraken. CryptoCompare Data
Limited is the index sponsor and index administrator for the Benchmark.
Data is the calculation agent for the Benchmark. The Benchmark is
calculated daily between 00:00 and 24:00 (CET) and the Benchmark values
are disseminated to

[[Page 21039]]

data vendors every fifteen seconds. The Benchmark is disseminated in
USD and the closing value is calculated at 16:00:00 ET with fixed 16:00
ether platform rates.
---------------------------------------------------------------------------

\43\ The CryptoCompare Exchange Benchmark methodology utilizes a
combination of qualitative and quantitative metrics to analyze a
comprehensive data set across eight categories of evaluation legal/
regulation, KYC/transaction risk, data provision, security, team/
exchange, asset quality/diversity, market quality and negative
events. The CryptoCompare Exchange Benchmark review report assigns a
grade to each exchange which helps identify what it believes to be
the lowest risk exchanges in the industry. Based on the
CryptoCompare Exchange Benchmark, MarketVector Indexes initially
selects the top five exchanges by rank for inclusion in the
MarketVector<SUP>TM</SUP> Ethereum Benchmark Rate. If an eligible
exchange is downgraded by two or more notches in a semi-annual
review and is no longer in the top five by rank, it is replaced by
the highest ranked non-component exchange. Adjustments to exchange
coverage are announced four business days prior to the first
business day of each of June and December 23:00 CET. The
MarketVector<SUP>TM</SUP> Ethereum Benchmark Rate is rebalanced at
16:00:00 GMT/BST on the last business day of each of May and
November.
---------------------------------------------------------------------------

In calculating the closing price of the Benchmark, the methodology
captures trade prices and sizes from ether platforms and examines
twenty three-minute periods leading up to 4:00 p.m. EST. It then
calculates an equal-weighted average of the volume-weighted median
price of these twenty three-minute periods, removing the highest and
lowest contributed prices. Using twenty consecutive three-minute
segments over a sixty-minute period means malicious actors would need
to sustain efforts to manipulate the market over an extended period of
time, or would need to replicate efforts multiple times across ether
platforms, potentially triggering review. This extended period also
supports authorized participant activity by capturing volume over a
longer time period, rather than forcing authorized participants to mark
an individual close or auction. The use of a median price reduces the
ability of outlier prices to impact the NAV, as it systematically
excludes those prices from the NAV calculation. The use of a volume-
weighted median (as opposed to a traditional median) serves as an
additional protection against attempts to manipulate the NAV by
executing a large number of low-dollar trades, because any manipulation
attempt would have to involve a majority of global spot ETH volume in a
three-minute window to have any influence on the NAV. As discussed in
the Registration Statement, removing the highest and lowest prices
further protects against attempts to manipulate the NAV, requiring bad
actors to act on multiple ether platforms at once to have any ability
to influence the price.
Net Asset Value
NAV means the total assets of the Trust (which includes all ether,
cash, and cash equivalents) less total liabilities of the Trust. The
Administrator determines the NAV of the Trust on each day that the
Exchange is open for regular trading, as promptly as practical after
4:00 p.m. ET based on the Benchmark. The NAV of the Trust is the
aggregate value of the Trust's assets less its estimated accrued but
unpaid liabilities (which include accrued expenses). In determining the
NAV, the Administrator values the Shares of the Trust based on the
closing price of the Benchmark as of 4:00 p.m. Eastern time. The
Administrator also determines the NAV per Share.
The NAV for the Trust will be calculated by the Administrator once
a day and will be disseminated daily to all market participants at the
same time. The Sponsor will monitor for significant events related to
crypto assets that may impact the value of ether and will determine, in
good faith, and in accordance with its valuation policies and
procedures, whether to fair value the Trust's ether on a given day
based on whether certain pre-determined criteria have been met. For
example, if the Benchmark deviates by more than a pre-determined amount
from an alternate benchmark available to the Sponsor, the Sponsor may
determine to utilize an alternate benchmark, such as the
MarketVector\TM\ Ethereum Index or the S&P Ethereum Index. The Sponsor
may also fair value the Trust's ether using observed market
transactions from various trading platforms, including some or all of
the trading platforms included in the Benchmark.\44\
---------------------------------------------------------------------------

\44\ Any alternative method to determining NAV will only be
employed on an ad hoc basis. Any permanent change to the calculation
of the NAV would require a proposed rule change under Rule 19b-4.
---------------------------------------------------------------------------

Availability of Information
In addition to the price transparency of the Benchmark, the Trust
will provide information regarding the Trust's ETH holdings as well as
additional data regarding the Trust. The website for the Trust, which
will be publicly accessible at no charge, will contain the following
information: (a) the current NAV per Share daily and the prior business
day's NAV and the reported closing price; (b) the BZX Official Closing
Price \45\ in relation to the NAV as of the time the NAV is calculated
and a calculation of the premium or discount of such price against such
NAV; (c) data in chart form displaying the frequency distribution of
discounts and premiums of the Official Closing Price against the NAV,
within appropriate ranges for each of the four previous calendar
quarters (or for the life of the Trust, if shorter); (d) the
prospectus; and (e) other applicable quantitative information. The
aforementioned information will be published as of the close of
business available on the Sponsor's website at <a href="http://www.vaneck.com">www.vaneck.com</a>, or any
successor thereto. The NAV for the Trust will be calculated by the
Administrator once a day and will be disseminated daily to all market
participants at the same time. Quotation and last-sale information
regarding the Shares will be disseminated through the facilities of the
Consolidated Tape Association (``CTA''). The Trust will also
disseminate its holdings on a daily basis on its website.
---------------------------------------------------------------------------

\45\ As defined in Rule 11.23(a)(3), the term ``BZX Official
Closing Price'' shall mean the price disseminated to the
consolidated tape as the market center closing trade.
---------------------------------------------------------------------------

[[Page 21040]]

volume information for the Shares will be published daily in the
financial section of newspapers.
The Custodian
The Custodian's services (i) allow ETH to be deposited from a
public blockchain address to the Trust's ETH account and (ii) allow ETH
to be withdrawn from the ETH account to a public blockchain address as
instructed by the Trust. The custody agreement requires the Custodian
to hold the Trust's ETH in cold storage, unless required to facilitate
withdrawals as a temporary measure. The Custodian will use segregated
cold storage ETH addresses for the Trust which are separate from the
ETH addresses that the Custodian uses for its other customers and which
are directly verifiable via the ETH blockchain. The Custodian will
safeguard the private keys to the ETH associated with the Trust's ETH
account. The Custodian will at all times record and identify in its
books and records that such ETH constitutes the property of the Trust.
The Custodian will not withdraw the Trust's ETH from the Trust's
account with the Custodian, or loan, hypothecate, pledge or otherwise
encumber the Trust's ETH, without the Trust's instruction. If the
custody agreement terminates, the Sponsor may appoint another custodian
and the Trust may enter into a custodian agreement with such custodian.
Creation and Redemption of Shares
When the Trust sells or redeems its Shares, it will do so in cash
transactions in blocks of 25,000 Shares that are based on the amount of
ether held by the Trust on a per unit (i.e., 25,000 Share) basis.
According to the Registration Statement, on any business day, an
authorized participant may place an order 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 an order is received is considered the purchase order
date. The total deposit of cash required to create each Creation Unit
is an amount of cash that is in the same proportion to the total assets
of the Trust, net of accrued expenses and other liabilities, on the
date the order to purchase is properly received, as the number of
Shares to be created under the purchase order is in proportion to the
total number of Shares outstanding on the date the order is received.
The Administrator determines the required deposit for a given day by
dividing the number of ether held by the Trust as of the opening of
business on that business day, adjusted for the amount of ether
constituting estimated accrued but unpaid fees and expenses of the
Trust as of the opening of business on that business day, by the
quotient of the number of Shares outstanding at the opening of business
divided by the number of Shares in a Creation Unit.
The authorized participants will deliver only cash to create shares
and will receive only cash when redeeming shares. Further, authorized
participants will not directly or indirectly purchase, hold, deliver,
or receive ether as part of the creation or redemption process or
otherwise direct the Trust or a third party with respect to purchasing,
holding, delivering, or receiving ether as part of the creation or
redemption process.
The Trust will create shares by receiving ether from a third party
that is not the authorized participant and the Trust--not the
authorized participant--is responsible for selecting the third party to
facilitate the delivery of the ether. Further, the third party will not
be acting as an agent of the authorized participant with respect to the
delivery of the ether to the Trust or acting at the direction of the
authorized participant with respect to the delivery of the ether to the
Trust. When fulfilling a redemption request, the Trust will deliver
ether to a third party that is not the authorized participant and the
Trust--not the authorized participant--is responsible for selecting
such third party to receive the ether. Further, the third party will
not be acting as an agent of the authorized participant with respect to
the receipt of the ether from the Trust or acting at the direction of
the authorized participant with respect to the receipt of the ether
from the Trust.
The procedures by which an authorized participant can redeem one or
more Creation Baskets mirror the procedures for the creation of
Creation Baskets. A third party, that is unaffiliated with the Trust
and the Sponsor, will use cash to buy and deliver ether to create
Shares or withdraw and sell ether for cash to redeem Shares, on behalf
of the Trust.
The Sponsor will maintain ownership and control of ether in a
manner consistent with good delivery requirements for spot commodity
transactions.
Rule 14.11(e)(4)--Commodity-Based Trust Shares
The Shares will be subject to BZX Rule 14.11(e)(4), which sets
forth the initial and continued listing criteria applicable to
Commodity-Based Trust Shares. The Exchange represents that, for initial
and continued listing, the Trust must be in compliance with Rule 10A-3
under the Act. A minimum of 100,000 Shares will be outstanding at the
commencement of listing on the Exchange. The Exchange will obtain a
representation that the NAV will be calculated daily and that the NAV
and information about the assets of the Trust will be made available to
all market participants at the same time. The Exchange notes that, as
defined in Rule 14.11(e)(4)(C)(i), the Shares will be: (a) issued by a
trust that holds (1) a specified commodity \46\ deposited with the
trust, or (2) a specified commodity and, in addition to such specified
commodity, cash; (b) 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) 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.
---------------------------------------------------------------------------

\46\ For purposes of Rule 14.11(e)(4), the term commodity takes
on the definition of the term as provided in the Commodity Exchange
Act.
---------------------------------------------------------------------------

Upon termination of the Trust, the Shares will be removed from
listing. The Trustee, Delaware Trust Company, is a trust company having
substantial capital and surplus and the experience and facilities for
handling corporate trust business, as required under Rule
14.11(e)(4)(E)(iv)(a) and that no change will be made to the trustee
without prior notice to and approval of the Exchange. The Exchange also
notes that, pursuant to Rule 14.11(e)(4)(F), neither the Exchange nor
any agent of the Exchange shall have any liability for damages, claims,
losses or expenses caused by any errors, omissions or delays in
calculating or disseminating any underlying commodity value, the
current value of the underlying commodity required to be deposited to
the Trust in connection with issuance of Commodity-Based Trust Shares;
resulting from any negligent act or omission by the Exchange, or any
agent of the Exchange, or any act, condition or cause beyond the
reasonable control of the Exchange, its agent, including, but not
limited to, an act of God; fire; flood; extraordinary weather
conditions; war; insurrection; riot; strike; accident; action of
government; communications or power failure; equipment or software
malfunction; or any error, omission or delay in the reports of
transactions in an underlying commodity. Finally, as required in Rule
14.11(e)(4)(G), the Exchange notes that any registered market maker
(``Market Maker'') in the Shares must file with the Exchange in a
manner prescribed by the Exchange

[[Page 21041]]

and keep current a list identifying all accounts for trading in an
underlying commodity, related commodity futures or options on commodity
futures, or any other related commodity derivatives, which the
registered Market Maker may have or over which it may exercise
investment discretion. No registered Market Maker shall trade in an
underlying commodity, related commodity futures or options on commodity
futures, or any other related commodity derivatives, in an account in
which a registered Market Maker, directly or indirectly, controls
trading activities, or has a direct interest in the profits or losses
thereof, which has not been reported to the Exchange as required by
this Rule. In addition to the existing obligations under Exchange rules
regarding the production of books and records (see, e.g., Rule 4.2),
the registered Market Maker in Commodity-Based Trust Shares shall make
available to the Exchange such books, records or other information
pertaining to transactions by such entity or registered or non-
registered employee affiliated with such entity for its or their own
accounts for trading the underlying physical commodity, related
commodity futures or options on commodity futures, or any other related
commodity derivatives, as may be requested by the Exchange.
The Exchange is able to obtain information regarding trading in the
Shares and the underlying ether, Eth Futures contracts, options on Eth
Futures, or any other ether derivative through members acting as
registered Market Makers, in connection with their proprietary or
customer trades.
As a general matter, the Exchange has regulatory jurisdiction over
its Members and their associated persons, which include any person or
entity controlling a Member. To the extent the Exchange may be found to
lack jurisdiction over a subsidiary or affiliate of a Member that does
business only in commodities or futures contracts, the Exchange could
obtain information regarding the activities of such subsidiary or
affiliate through surveillance sharing agreements with regulatory
organizations of which such subsidiary or affiliate is a member.
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. The Exchange will halt trading in the Shares
under the conditions specified in BZX Rule 11.18. Trading may be halted
because of market conditions or for reasons that, in the view of the
Exchange, make trading in the Shares inadvisable. These may include:
(1) the extent to which trading is not occurring in the ether
underlying the Shares; or (2) whether other unusual conditions or
circumstances detrimental to the maintenance of a fair and orderly
market are present. Trading in the Shares also will be subject to Rule
14.11(e)(4)(E)(ii), which sets forth circumstances under which trading
in the Shares may be halted.
If the IIV or the value of the Benchmark is not being disseminated
as required, the Exchange may halt trading during the day in which the
interruption to the dissemination of the IIV or the value of the
Benchmark occurs. If the interruption to the dissemination of the IIV
or the value of the Benchmark 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.
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. BZX will allow
trading in the Shares during all trading sessions on the Exchange. The
Exchange has appropriate rules to facilitate transactions in the Shares
during all trading sessions. As provided in BZX Rule 11.11(a) the
minimum price variation for quoting and entry of orders in securities
traded on the Exchange is $0.01 where the price is greater than $1.00
per share or $0.0001 where the price is less than $1.00 per share. The
Shares of the Trust will conform to the initial and continued listing
criteria set forth in BZX Rule 14.11(e)(4).
Surveillance
The Exchange represents that its surveillance procedures are
adequate to properly monitor the trading of the Shares on the Exchange
during all trading sessions and to deter and detect violations of
Exchange rules and the applicable federal securities laws. Trading of
the Shares through the Exchange will be subject to the Exchange's
surveillance procedures for derivative products, including Commodity-
Based Trust Shares. FINRA conducts certain 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.
The Exchange or FINRA, on behalf of the Exchange, or both, will
communicate as needed regarding trading in the Shares and Ether Futures
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
trading information regarding trading in the Shares and Ether Futures
from such markets and other entities.\47\ The Exchange may obtain
information regarding trading in the Shares and Eth Futures via ISG,
from other exchanges who are members or affiliates of the ISG, or with
which the Exchange has entered into a comprehensive surveillance
sharing agreement.
---------------------------------------------------------------------------

\47\ For a list of the current members and affiliate members of
ISG, see <a href="http://www.isgportal.com">www.isgportal.com</a>.
---------------------------------------------------------------------------

In addition, the Exchange also has a general policy prohibiting the
distribution of material, non-public information by its employees.
The issuer has represented to the Exchange that it will advise the
Exchange of any failure by the Trust or the Shares to comply with the
continued listing requirements, and, pursuant to its obligations under
Section 19(g)(1) of the Exchange Act, the Exchange will surveil for
compliance with the continued listing requirements. If the Trust or the
Shares are not in compliance with the applicable listing requirements,
the Exchange will commence delisting procedures under Exchange Rule
14.12.
Information Circular
Prior to the commencement of trading, the Exchange will inform its
members in an Information Circular of the special characteristics and
risks associated with trading the Shares. Specifically, the Information
Circular will discuss the following: (i) the procedures for the
creation and redemption of Creation Baskets (and that the Shares are
not individually redeemable); (ii) BZX Rule 3.7, which imposes
suitability obligations on Exchange members with respect to
recommending transactions in the Shares to customers; (iii) how
information regarding the IIV and the Trust's NAV are disseminated;
(iv) the risks involved in trading the Shares outside of Regular
Trading Hours \48\ when an updated IIV will not be calculated or
publicly disseminated; (v) the requirement that members deliver a
prospectus to investors purchasing

[[Page 21042]]

newly issued Shares prior to or concurrently with the confirmation of a
transaction; and (vi) trading information. The Information Circular
will also reference the fact that there is no regulated source of last
sale information regarding ether, that the Commission has no
jurisdiction over the trading of ether as a commodity, and that the
CFTC has regulatory jurisdiction over the trading of Ether Futures
contracts and options on Ether Futures contracts.
---------------------------------------------------------------------------

\48\ Regular Trading Hours is the time between 9:30 a.m. and
4:00 p.m. Eastern Time.
---------------------------------------------------------------------------

In addition, the Information Circular will advise members, prior to
the commencement of trading, of the prospectus delivery requirements
applicable to the Shares. Members purchasing the Shares for resale to
investors will deliver a prospectus to such investors. The Information
Circular will also discuss any exemptive, no-action and interpretive
relief granted by the Commission from any rules under the Act.
2. Statutory Basis
The Exchange believes that the proposal is consistent with Section
6(b) of the Act \49\ in general and Section 6(b)(5) of the Act \50\ in
particular in that it is 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
a national market system and, in general, to protect investors and the
public interest.
---------------------------------------------------------------------------

\49\ 15 U.S.C. 78f.
\50\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

The Commission has approved numerous series of Trust Issued
Receipts,\51\ including Commodity-Based Trust Shares,\52\ to be listed
on U.S. national securities. 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, specifically including: (i) the requirement
that a national securities exchange's rules are designed to prevent
fraudulent and manipulative acts and practices; \53\ and (ii) the
requirement that an exchange proposal be designed, in general, to
protect investors and the public interest. The Exchange believes that
this proposal is consistent with the requirements of Section 6(b)(5) of
the Act and that this filing sufficiently demonstrates that the CME
Ether Futures market represents a regulated market of significant size
and that, on the whole, the manipulation concerns previously
articulated by the Commission are sufficiently mitigated to the point
that they are outweighed by quantifiable investor protection issues
that would be resolved by approving this proposal.
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\51\ See Exchange Rule 14.11(f).
\52\ Commodity-Based Trust Shares, as described in Exchange Rule
14.11(e)(4), are a type of Trust Issued Receipt.
\53\ The Exchange believes that ETH is resistant to price
manipulation and that ``other means to prevent fraudulent and
manipulative acts and practices'' exist to justify dispensing with
the requisite surveillance sharing agreement. The geographically
diverse and continuous nature of ETH trading render it difficult and
prohibitively costly to manipulate the price of ETH. The
fragmentation across ETH platforms, the relatively slow speed of
transactions, and the capital necessary to maintain a significant
presence on each trading platform make manipulation of ETH prices
through continuous trading activity challenging. To the extent that
there are ETH exchanges engaged in or allowing wash trading or other
activity intended to manipulate the price of ETH on other markets,
such pricing does not normally impact prices on other exchange
because participants will generally ignore markets with quotes that
they deem non-executable. Moreover, the linkage between the ETH
markets and the presence of arbitrageurs in those markets means that
the manipulation of the price of ETH price on any single venue would
require manipulation of the global ETH price in order to be
effective. Arbitrageurs must have funds distributed across multiple
trading platforms in order to take advantage of temporary price
dislocations, thereby making it unlikely that there will be strong
concentration of funds on any particular ETH exchange or OTC
platform. As a result, the potential for manipulation on a trading
platform would require overcoming the liquidity supply of such
arbitrageurs who are effectively eliminating any cross-market
pricing differences.
---------------------------------------------------------------------------

(i) Designed To Prevent Fraudulent and Manipulative Acts and Practices
In order to meet this standard in a proposal to list and trade a
series of Commodity-Based Trust Shares, the Commission requires that an
exchange demonstrate that there is a comprehensive surveillance-sharing
agreement in place \54\ with a regulated market of significant size.
Both the Exchange and CME are members of ISG.\55\ The only remaining
issue to be addressed is whether the ETH Futures market constitutes a
market of significant size, which both the Exchange and the Sponsor
believe that it does. 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
manipulate the ETP, so that a surveillance-sharing agreement would
assist the listing exchange 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.\56\
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\54\ 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.'' The
Commission has historically held that joint membership in ISG
constitutes such a surveillance sharing agreement. See Wilshire
Phoenix Disapproval.
\55\ For a list of the current members and affiliate members of
ISG, see <a href="http://www.isgportal.com">www.isgportal.com</a>.
\56\ See Wilshire Phoenix Disapproval.
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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.\57\
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\57\ See 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 Exchange 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 Exchange Act have been met.''
Id. at 37582.
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[[Page 21043]]

indicates that this test is satisfied for this proposal. As noted
above, in the Spot Bitcoin ETP Approval Order, the SEC concluded that:
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\58\ See Exchange Act Release No. 99306 (January 10, 2024), 89
FR 3008 (January 17, 2024) (Self-Regulatory Organizations; NYSE
Arca, Inc.; The Nasdaq Stock Market LLC; Cboe BZX Exchange, Inc.;
Order Granting Accelerated Approval of Proposed Rule Changes, as
Modified by Amendments Thereto, To List and Trade Bitcoin-Based
Commodity-Based Trust Shares and Trust Units) (the ``Spot Bitcoin
ETP Approval Order'').

. . . fraud or manipulation that impacts prices in spot bitcoin
markets would likely similarly impact CME bitcoin futures prices.
And because the CME's surveillance can assist in detecting those
impacts on CME bitcoin futures prices, the Exchanges' comprehensive
surveillance-sharing agreement with the CME . . . can be reasonably
expected to assist in surveilling for fraudulent and manipulative
acts and practices in the specific context of the [p]roposals.\59\
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\59\ See the Spot Bitcoin ETP Approval Order at 3011-3012.

The assumptions from this statement are also true for CME Ether
Futures. CME Ether Futures pricing is based on pricing from spot ether
markets. The statement from the Spot Bitcoin ETP Approval Order that
the surveillance-sharing agreement with the CME ``can be reasonably
expected to assist in surveilling for fraudulent and manipulative acts
and practices in the specific context of the [p]roposals'' makes clear
that the Commission believes that CME's surveillance can capture the
effects of trading on the relevant spot markets on the pricing of CME
Bitcoin Futures. This same logic would extend to CME Ether Futures
markets where CME's surveillance would be able to capture the effects
of trading on the relevant spot markets on the pricing of CME Ether
Futures.
(b) Predominant Influence on Prices in Spot and ETH Futures
The Exchange and Sponsor also believe that trading in the Shares
would not be the predominant force on prices in the CME Ether Futures
market for a number of reasons. First, because the Trust would not hold
CME Ether Futures contracts, the only way that it could be the
predominant force on prices in that market is through the spot markets
that CME Ether Futures contracts use for pricing.\60\ The Sponsor notes
that ether total 24-hour spot trading volume has averaged $9.4 billion
over the year ending September 1, 2023.\61\ The Sponsor expects that
the Trust would represent a very small percentage of this daily trading
volume in the spot ether market even in its most aggressive projections
for the Trust's assets and therefore could not be the predominant force
on prices in the CME Ether Futures market. Second, much like the CME
Bitcoin Futures market, the CME Ether Futures market has progressed and
matured significantly. As the court found in the Grayscale Order,
``Because the spot market is deeper and more liquid than the futures
market, manipulation should be more difficult, not less.'' The Exchange
and Sponsor agree with this sentiment and believe it applies equally to
the spot ether and CME Ether Futures markets.
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\60\ This logic is reflected by the court in the Grayscale Order
at 17-18. Specifically, the court found that ``Because Grayscale
owns no futures contracts, trading in Grayscale can affect the
futures market only through the spot market . . . But Grayscale
holds just 3.4 percent of outstanding bitcoin, and the Commission
did not suggest Grayscale can dominate the price of bitcoin.''
\61\ Source: TokenTerminal.
---------------------------------------------------------------------------

(c) Other Means To Prevent Fraudulent and Manipulative Acts and
Practices
As noted above, the Commission also permits a listing exchange to
demonstrate that ``other means to prevent fraudulent and manipulative
acts and practices'' are sufficient to justify dispensing with the
requisite surveillance-sharing agreement. The Exchange and Sponsor
believe that such conditions are present.
The Exchange believes that the proposal is designed to protect
investors and the public interest. Over the past several years, U.S.
investor exposure to ether through OTC ETH Funds has grown. With that
growth, so too has grown the quantifiable investor protection issues to
U.S. investors through roll costs for Ether Futures ETFs and premium/
discount volatility and management fees for OTC ETH Funds. The Exchange
believes that the concerns related to the prevention of fraudulent and
manipulative acts and practices have been sufficiently addressed to be
consistent with the Act and, to the extent that the Commission
disagrees with that assertion, also believes that such concerns are now
outweighed by these investor protection concerns. As such, the Exchange
believes that approving this proposal (and comparable proposals)
provides the Commission with the opportunity to allow U.S. investors
with access to ether in a regulated and transparent exchange-traded
vehicle that would act to limit risk to U.S. investors by: (i) reducing
premium and discount volatility; (ii) reducing management fees through
meaningful competition; (iii) reducing risks and costs associated with
investing in Ether Futures ETFs and operating companies that are
imperfect proxies for ether exposure; and (iv) providing an alternative
to custodying spot ether.
Commodity-Based Trust Shares
The Exchange believes that the proposed rule change is designed to
prevent fraudulent and manipulative acts and practices in that the
Shares will be listed on the Exchange pursuant to the initial and
continued listing criteria in Exchange Rule 14.11(e)(4). The Exchange
believes that its surveillance procedures are adequate to properly
monitor the trading of the Shares on the Exchange during all trading
sessions and to deter and detect violations of Exchange rules and the
applicable federal securities laws. Trading of the Shares through the
Exchange will be subject to the Exchange's surveillance procedures for
derivative products, including Commodity-Based Trust Shares. The issuer
has represented to the Exchange that it will advise the Exchange of any
failure by the Trust or the Shares to comply with the continued listing
requirements, and, pursuant to its obligations under Section 19(g)(1)
of the Exchange Act, the Exchange will surveil for compliance with the
continued listing requirements. If the Trust or the Shares are not in
compliance with the applicable listing requirements, the Exchange will
commence delisting procedures under Exchange Rule 14.12. The Exchange
may obtain information regarding trading in the Shares and listed ether
derivatives via the ISG, from other exchanges who are members or
affiliates of the ISG, or with which the Exchange has entered into a
comprehensive surveillance sharing agreement.
Availability of Information
In addition to the price transparency of the Benchmark, the Trust
will provide information regarding the Trust's ETH holdings as well as
additional data regarding the Trust. The website for the Trust, which
will be publicly accessible at no charge, will contain the following
information: (a) the current NAV per Share daily and the prior business
day's NAV and the reported closing price; (b) the BZX Official Closing
Price \62\ in relation to the NAV as of the time the NAV is calculated
and a calculation of the premium or discount of such price against such
NAV; (c) data in chart form displaying the frequency distribution of
discounts and premiums of the Official Closing Price against the NAV,
within appropriate ranges for each of the four previous calendar
quarters (or for the life of the Trust, if shorter); (d) the
prospectus; and (e) other applicable quantitative information. The
aforementioned information will be published as of the close of
business

[[Page 21044]]

available on the Sponsor's website at <a href="http://www.vaneck.com">www.vaneck.com</a>, or any successor
thereto. The NAV for the Trust will be calculated by the Administrator
once a day and will be disseminated daily to all market participants at
the same time. Quotation and last-sale information regarding the Shares
will be disseminated through the facilities of the Consolidated Tape
Association (``CTA''). The Trust will also disseminate its holdings on
a daily basis on its website.
---------------------------------------------------------------------------

\62\ As defined in Rule 11.23(a)(3), the term ``BZX Official
Closing Price'' shall mean the price disseminated to the
consolidated tape as the market center closing trade.
---------------------------------------------------------------------------

The Intraday Indicative Value (``IIV'') will be updated during
Regular Trading Hours to reflect changes in the value of the Trust's
ether holdings during the trading day. The IIV may differ from the NAV
because NAV is calculated, using the closing price of the Benchmark,
once a day at 4:00 p.m. Eastern time whereas the IIV draws prices from
the last trade on each ether platform to produce a relevant, real-time
price. The IIV disseminated during Regular Trading Hours 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 Trust will
provide an IIV per Share updated every 15 seconds, as calculated by the
Exchange or a third-party financial data provider during the Exchange's
Regular Trading Hours (9:30 a.m. to 4:00 p.m. E.T.). The IIV will be
widely disseminated on a per Share basis every 15 seconds during the
Exchange's Regular Trading Hours through the facilities of the
consolidated tape association (CTA) and Consolidated Quotation System
(CQS) high speed lines. In addition, the IIV will be available through
on-line information services such as Bloomberg and Reuters.
The price of ether will be made available by one or more major
market data vendors, updated at least every 15 seconds during Regular
Trading Hours.
As noted above, the Benchmark is calculated every 15 seconds and
information about the Benchmark and Benchmark value, including index
data and key elements of how the Benchmark is calculated, will be
publicly available at <a href="https://www.marketvector.com/">https://www.marketvector.com/</a>.
Quotation and last sale information for ether is widely
disseminated through a variety of major market data vendors, including
Bloomberg and Reuters. Information relating to trading, including price
and volume information, in ether is available from major market data
vendors and from the trading platforms on which ether are traded. Depth
of book information is also available from ether trading platforms. The
normal trading hours for ether trading platforms are 24 hours per day,
365 days per year.
Information regarding market price and trading volume of the Shares
will be continually available on a real-time basis throughout the day
on brokers' computer screens and other electronic services. Information
regarding the previous day's closing price and trading volume
information for the Shares will be published daily in the financial
section of newspapers.
In sum, the Exchange believes that this proposal is consistent with
the requirements of Section 6(b)(5) of the Act, that this filing
sufficiently demonstrates that the CME Ether Futures market represents
a regulated market of significant size, and that on the whole the
manipulation concerns previously articulated by the Commission are
sufficiently mitigated to the point that they are outweighed by
investor protection issues that would be resolved by approving this
proposal.
The Exchange believes that the proposal is, in particular, designed
to protect investors and the public interest. Premium and discount
volatility, high fees, rolling costs, insufficient disclosures, and
technical hurdles are putting U.S. investor money at risk on a daily
basis that could potentially be eliminated through access to a Spot
Ether ETP. As such, the Exchange believes that this proposal acts to
limit the risk to U.S. investors that are increasingly seeking exposure
to ether by providing direct, 1-for-1 exposure to ether in a regulated,
transparent, exchange-traded vehicle, specifically by: (i) reducing
premium volatility; (ii) reducing management fees through meaningful
competition; (iii) providing an alternative to Ether Futures ETFs which
will eliminate roll cost; (iv) reducing risks associated with investing
in operating companies that are imperfect proxies for ether exposure;
and (v) providing an alternative to custodying spot ether. The investor
protection issues for U.S. investors has grown significantly over the
last several years, through roll costs for Ether Futures ETFs and
premium/discount volatility and management fees for OTC ETH Funds. As
discussed throughout, this growth investor protection concerns need to
be reevaluated and rebalanced with the prevention of fraudulent and
manipulative acts and practices concerns that previous disapproval
orders have relied upon. Finally, the Exchange notes that in addition
to all of the arguments herein which it believes sufficiently
establishes the CME Ether Futures market as a regulated market of
significant size, it is logically inconsistent to find that the CME
Ether Futures market is a significant market as it relates to the CME
Ether Futures market, but not a significant market as it relates to the
ether spot market for the numerous reasons laid out above.
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.

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, rather will facilitate the listing and trading of
an additional exchange-traded product that will enhance competition
among both market participants and listing venues, 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

The Exchange has neither solicited nor received written comments on
the proposed rule change.

III. Notice of Designation of a Longer Period for Commission Action on
Proceedings To Determine Whether To Approve or Disapprove the Proposed
Rule Change, as Modified by Amendment No. 1

Section 19(b)(2) of the Act \63\ provides that, after initiating
proceedings, the Commission shall issue an order approving or
disapproving the proposed rule change not later than 180 days after the
date of publication of notice of filing of the proposed rule change.
The Commission may extend the period for issuing an order approving or
disapproving the proposed rule change, however, by not more than 60
days if the Commission determines that a longer period is appropriate
and publishes the reasons for such determination. The proposed rule
change was published for comment in the Federal Register on September
26, 2023.\64\ The 180th day after publication of the proposed rule
change is March 24, 2024. The Commission is extending the time period
for approving or disapproving the proposed rule change for an
additional 60 days.
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\63\ 15 U.S.C. 78s(b)(2).
\64\ See supra note 3 and accompanying text.
---------------------------------------------------------------------------

The Commission finds that it is appropriate to designate a longer
period within which to issue an order approving or disapproving the
proposed rule change so that it has sufficient time to consider the
proposed rule change, as

[[Page 21045]]

modified by Amendment No. 1, and the issues raised therein.
Accordingly, the Commission, pursuant to Section 19(b)(2) of the
Act,\65\ designates May 23, 2024, as the date by which the Commission
shall either approve or disapprove the proposed rule change (File No.
SR-CboeBZX-2023-069).
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\65\ 15 U.S.C. 78s(b)(2).
---------------------------------------------------------------------------

IV. Solicitation of Comments

Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change, as modified by Amendment No. 1, 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#90e2e5fcf5bdf3fffdfdf5fee4e3d0e3f5f3bef7ffe6"><span class="__cf_email__" data-cfemail="097b7c656c246a6664646c677d7a497a6c6a276e667f">[email&#160;protected]</span></a>. Please include
file number SR-CboeBZX-2023-069 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-CboeBZX-2023-069. 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-CboeBZX-2023-069 and should
be submitted on or before April 16, 2024.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\66\
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\66\ 17 CFR 200.30-3(a)(12), (57).

Sherry Haywood,
Assistant Secretary.
[FR Doc. 2024-06319 Filed 3-25-24; 8:45 am]
BILLING CODE 8011-01-P

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