Notice2024-13049
Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the ARK 21Shares Ethereum ETF To Amend the Trust Name and Reflect That the Trust Will No Longer Have a Sub-Adviser
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
June 14, 2024
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 89 Issue 116 (Friday, June 14, 2024)</title>
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[Federal Register Volume 89, Number 116 (Friday, June 14, 2024)]
[Notices]
[Pages 50656-50658]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-13049]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-100306; File No. SR-CboeBZX-2024-050]
Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
the ARK 21Shares Ethereum ETF To Amend the Trust Name and Reflect That
the Trust Will No Longer Have a Sub-Adviser
June 10, 2024.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on June 7, 2024, Cboe BZX Exchange, Inc. (``Exchange'' or ``BZX'')
filed with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I and II below, which Items
have been prepared by the Exchange. The Commission is publishing this
notice to solicit comments on the proposed rule change from interested
persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Cboe BZX Exchange, Inc. (``BZX'' or the ``Exchange'') is filing
with the Securities and Exchange Commission (``Commission'' or ``SEC'')
a proposed rule change to amend the ARK 21Shares Ethereum ETF (the
``Trust''), shares of which have been approved by the Commission to
list and trade on the Exchange pursuant to BZX Rule 14.11(e)(4), to
amend the Trust name and reflect that the Trust will no longer have a
sub-adviser.
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
The Commission approved the listing and trading of shares of the
Trust (the ``Shares'') on the Exchange pursuant to Exchange Rule
14.11(e)(4), Commodity-Based Trust Shares, on May 23, 2024.\3\ Exchange
Rule 14.11(e)(4) governs the listing and trading of Commodity-Based
Trust Shares, which means a security (a) that is issued by a trust that
holds (1) a specified commodity deposited with the trust, or (2) a
specified commodity and, in addition to such specified commodity, cash;
(b) that is issued by such trust in a specified aggregate minimum
number in return for a deposit of a quantity of the underlying
commodity and/or cash; and (c) that, when aggregated in the same
specified minimum number, may be redeemed at a holder's request by such
trust which will deliver to the redeeming holder the quantity of the
underlying commodity and/or cash. The Shares will be issued by the
Trust. The Trust was formed as a Delaware statutory trust on September
5, 2023.
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\3\ See Securities Exchange Act Release No. 100224 (May 23,
2024) 89 FR 46937 (May 30, 2024) (SR-CboeBZX-2023-070) (Order
Granting Accelerated Approval of Proposed Rule Changes, as Modified
by Amendments Thereto, to List and Trade Shares of Ether-Based
Exchange-Traded Products) (the ``Approval Order'').
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The Exchange proposes to amend a representation set forth in the
Exchange's previous rule filing to list and trade Shares of the Trust
and to reflect a change to the Trust name.\4\ Specifically, Amendment
No. 2 represented that ARK Investment Management LLC is the sub-adviser
of the Trust and will provide data, research, and as needed,
operational support to the Trust including with respect to assistance
in the marketing of the Shares. Now, the Exchange proposes to provide
that a sub-adviser will no longer serve the Trust.
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\4\ See Securities Exchange Act Release No. 100216 (May 22,
2024) 89 FR 46514 (May 29, 2024) (SR-CboeBZX-2023-070) (Notice of
Filing of Amendment No. 2 to a Proposed Rule Change to List and
Trade Shares of the ARK 21Shares Ethereum ETF Under BZX Rule
14.11(e)(4), Commodity-Based Trust Shares) (``Amendment No. 2'').
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The Exchange also proposes to change the name of the Trust to the
21Shares Core Ethereum ETF. The proposed name change is consistent with
an amended name to the Trust's charter and the Trust's registration
statement on Form S-1 (as amended and supplemented from time to time,
the ``Registration Statement'').\5\
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\5\ See Amendment No. 3 to the Registration Statement on Form S-
1, dated May 31, 2024, submitted to the Commission by the Sponsor,
as defined in the Registration Statement, on behalf of the Trust
(333-274364).
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Except for the above changes, all other representations in
Amendment No. 2 remain unchanged and will continue to constitute
continuing listing requirements. In addition, the Trust will continue
to comply with the terms of Amendment No. 2 and the requirements of
Rule 14.11(e)(4).
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the Act and the rules and regulations thereunder applicable to the
Exchange and, in particular, the requirements of section 6(b) of the
Act.\6\ Specifically, the Exchange believes the proposed rule change is
consistent with the section 6(b)(5) \7\ requirements that the rules of
an exchange be designed to prevent fraudulent and manipulative acts and
[[Page 50657]]
practices, to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
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.
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\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(5).
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The Exchange believes the proposed rule change is designed to
remove impediments to and perfect the mechanism of a free and open
market and, in general, to protect investors and the public interest
because it would update two representations in Amendment No. 2
regarding the designation of a sub-adviser and the name of the Trust.
As described above, the amendment to reflect that a sub-adviser will no
longer serve the trust will conform to changes made to the Registration
Statement. There is no requirement that a sub-adviser serve the Trust,
and at least one other issuer of a spot ether exchange-traded product
(``ETP'') has similarly not designated a sub-adviser to its trust.\8\
The proposed named change is also consistent with an amended name to
the Trust's charter and the Trust's Registration Statement. Further,
the proposed name will continue to accurately describe the Trust.
Therefore, the proposed changes will promote clarity and transparency
with respect to the Trust's name and service providers, to the benefit
of all market participants.
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\8\ For example, the proposal to list and trade shares of the
VanEck Ethereum Trust did not provide for a sub-adviser. See
Securities Exchange Act Release No. 100214 (May 22, 2024), 89 FR
46476 [sic] (May 29, 2024) (SR-CboeBZX-2023-069) (Notice of Filing
of Amendment No. 2 to a Proposed Rule Change to List and Trade
Shares of the VanEck Ethereum Trust Under BZX Rule 14.11(e)(4),
Commodity-Based Trust Shares). See also the Approval Order.
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Except for these changes, all other representations made in
Amendment No. 2 remain unchanged and will continue to constitute
continuing listing requirements for the Trust. Accordingly, the
Exchange believes that this proposed rule change raises no novel
regulatory issues.
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 purposes of the Act. As noted above, the proposed
amendment is intended to reflect a name change to the Trust and to
reflect that a sub-adviser will no longer serve the Trust. The Exchange
believes these changes will not impose any burden on competition.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
The Exchange neither solicited nor received comments on the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not: (i)
significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to section 19(b)(3)(A) of the Act \9\ and Rule 19b-
4(f)(6) thereunder.\10\
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\9\ 15 U.S.C. 78s(b)(3)(A).
\10\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change, along
with a brief description and text of the proposed rule change, at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) normally does
not become operative for 30 days after the date of filing. However,
pursuant to Rule 19b-4(f)(6)(iii),\11\ the Commission may designate a
shorter time if such action is consistent with the protection of
investors and the public interest. The Exchange has asked the
Commission to waive the 30-day operative delay so that the proposal may
become operative immediately upon filing. Waiver of the 30-day
operative delay will allow the Exchange to immediately reflect changes
to the Trust name and sub-adviser that are consistent with its
Registration Statement and charter. The Commission believes that the
proposed rule change presents no novel legal or regulatory issues, and
that waiver of the 30-day operative delay is consistent with the
protection of investors and the public interest. Accordingly, the
Commission hereby waives the 30-day operative delay and designates the
proposed rule change operative upon filing.\12\
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\11\ 17 CFR 240.19b-4(f)(6)(iii).
\12\ For purposes only of waiving the operative delay of this
proposal, the Commission has also considered the proposed rule's
impact on efficiency, competition, and capital formation. 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
<bullet> Use the Commission's internet comment form (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#fa888f969fd7999597979f948e89ba899f99d49d958c"><span class="__cf_email__" data-cfemail="b7c5c2dbd29ad4d8dadad2d9c3c4f7c4d2d499d0d8c1">[email protected]</span></a>. Please include
file number SR-CboeBZX-2024-050 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-2024-050. 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-2024-050 and should
be submitted on or before July 5, 2024.
[[Page 50658]]
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(12), (59).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-13049 Filed 6-13-24; 8:45 am]
BILLING CODE 8011-01-P
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