Notice2025-17444
Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing of a Proposed Rule Change To List and Trade Shares of the Canary Staked SEI ETF Under BZX Rule 14.11(e)(4), Commodity-Based Trust Shares
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
September 11, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 174 (Thursday, September 11, 2025)</title>
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[Federal Register Volume 90, Number 174 (Thursday, September 11, 2025)]
[Notices]
[Pages 44129-44137]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-17444]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-103902; File No. SR-CboeBZX-2025-120]
Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of
Filing of a Proposed Rule Change To List and Trade Shares of the Canary
Staked SEI ETF Under BZX Rule 14.11(e)(4), Commodity-Based Trust Shares
September 8, 2025.
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 August 26, 2025, Cboe BZX Exchange, Inc. (the ``Exchange'' or
``BZX'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I, II,
and III 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 list and trade shares of the Canary Staked
SEI ETF (the ``Trust''),\3\ under BZX Rule 14.11(e)(4), Commodity-Based
Trust Shares.
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\3\ The Trust was formed as a Delaware statutory trust on April
23, 2025. 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>) and at the Exchange's Office of the Secretary.
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 Exchange proposes to list and trade the Shares under BZX Rule
14.11(e)(4),\4\ which governs the listing and trading of Commodity-
Based Trust Shares on the Exchange.\5\ Canary Capital Group LLC is the
sponsor of the Trust (the ``Sponsor''). The Shares will be registered
with the Commission by means of the Trust's registration statement on
Form S-1 (the ``Registration Statement'').\6\ According to the
Registration Statement, the Trust is neither an investment company
registered under the Investment Company Act of 1940, as amended,\7\ 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.
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\4\ 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).
\5\ Any of the statements or representations regarding the index
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.
\6\ See the Registration Statement on Form S-1, dated April 30,
2025, submitted by the Sponsor on behalf of the Trust. The
descriptions of the Trust, the Shares, and the Pricing Benchmark (as
defined below) 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.
\7\ 15 U.S.C. 80a-1.
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Since 2017, the Commission has 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 (the ``Winklevoss Test'').\8\ The
Commission has also consistently recognized that this not the exclusive
means by which an ETP listing exchange can meet this statutory
obligation.\9\ A listing exchange could, alternatively, demonstrate
that ``other means to prevent fraudulent and manipulative acts and
practices will be sufficient'' to justify dispensing with a
[[Page 44130]]
surveillance-sharing agreement with a regulated market of significant
size.\10\
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\8\ See Securities Exchange Act Release Nos. 78262 (July 8,
2016), 81 FR 78262 (July 14, 2016) (the ``Winklevoss Proposal'').
The Winklevoss Proposal was the first exchange rule filing proposing
to list and trade shares of an ETP that would hold spot bitcoin (a
``Spot Bitcoin ETP''). It 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'');
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''); 100224 (May 23,
2024), 89 FR 46937 (May 30, 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 Shares of
Ether-Based Exchange-Traded Products) (the ``Spot ETH ETP Approval
Order'').
\9\ See Winklevoss Order, 83 FR at 37580; see Spot Bitcoin ETP
Approval Order, 89 FR at 3009; see Spot ETH ETP Approval Order 89 FR
at 46938.
\10\ The Exchange notes that that the Winklevoss Test was first
applied in 2017 in the Winklevoss Order, which was the first
disapproval order related to an exchange proposal to list and trade
a Spot Bitcoin ETP. All prior approval orders issued by the
Commission approving the listing and trading of series of Trust
Issued Receipts included no specific analysis related to a
``regulated market of significant size.'' The Winklevoss Order and
the Commission's prior orders approving the listing and trading of
series of Trust Issued Receipts 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 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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The Commission recently issued orders granting approval for
proposals to list bitcoin- and ether-based commodity trust shares and
bitcoin-based, ether-based, and a combination of bitcoin- and ether-
based trust issued receipts (these proposed funds are nearly identical
to the Trust, but proposed to hold bitcoin and/or ether, respectively,
instead of SEI) (``Spot Bitcoin ETPs'' and ``Spot ETH ETPs''). In both
the Spot Bitcoin ETP Approval Order and Spot ETH ETP Approval Order,
the Commission found that sufficient ``other means'' of preventing
fraud and manipulation had been demonstrated that justified dispensing
with a surveillance-sharing agreement of significant size.
Specifically, the Commission found that while the Chicago Mercantile
Exchange (``CME'') futures market for both bitcoin and ether were not
of ``significant size'' related to the spot market, the Exchange
demonstrated that other means could be reasonably expected to assist in
surveilling for fraudulent and manipulative acts and practices in the
specific context of the proposals.
As further discussed below, both the Exchange and the Sponsor
believe that this proposal and the included analysis are sufficient to
establish that the proposal is consistent with the Act itself and,
additionally, that there are sufficient ``other means'' of preventing
fraud and manipulation that warrant dispensing of the surveillance-
sharing agreement with a regulated market of significant size, as was
done with both Spot Bitcoin ETPs and Spot ETH ETPs, and that this
proposal should be approved.
Background
SEI is the native cryptographic token of the SEI Network, which is
a decentralized application-specific Layer 1 blockchain designed to
serve as foundational infrastructure for high-performance trading and
exchange-focused decentralized applications. The SEI Network
distinguishes itself through its specialized architecture designed to
deliver low-latency, high-throughput execution while supporting use
cases across decentralized finance (``DeFi''), gaming and non-fungible
tokens (``NFTs''). Unlike general-purpose smart contract platforms, the
SEI Network integrates a native order-matching engine, a batch-based
auction mechanism and protocol-level transaction parallelization
tailored for trading applications.
The SEI Network operates under a proof-of-stake consensus model
built on Tendermint Core, a Byzantine Fault Tolerant engine that
finalizes blocks deterministically and separates consensus from
application logic. The SEI Network enhances this consensus model
through ``Twin-Turbo'' architecture, which combines intelligent block
propagation with speculative, pre-commit transaction execution.
Validators propose and confirm transactions, and holders of SEI may
delegate their stake to validators in exchange for staking rewards and
governance rights. The Twin-Turbo system improves block finality and
reduces latency, making the SEI Network especially suitable for real-
time execution and high-frequency strategies.
Unlike many other blockchain networks that rely on externally
deployed smart contracts for trading logic, the SEI Network integrates
core exchange functionality directly at the protocol level. At the
center of the SEI Network's trading design is its native order-matching
engine, which enables applications to create and operate on-chain
central limit order books. The SEI Network implements a frequent batch
auction mechanism to minimize front-running and ensure equitable
execution, aggregating orders submitted within a block and clearing
them at a uniform price determined by market conditions.
The SEI Network operates on a delegated proof-of-stake model, where
validators stake SEI to secure the network, validate transactions, and
participate in governance. Validators play a critical role in
maintaining network integrity by operating nodes that commit new blocks
to the SEI Blockchain. SEI token holders can delegate their tokens to
validators without operating nodes themselves, earning a share of
validator rewards distributed proportionally to their stake. The
network employs on-chain governance where SEI holders participate by
submitting and voting on protocol proposals, with voting power
proportional to the amount of SEI staked to a validator.
Unlike proof-of-work assets such as bitcoin, SEI was not mined but
was pre-allocated prior to the launch of the SEI Network. At genesis, a
fixed maximum supply of 10 billion SEI was established to support long-
term ecosystem growth, validator incentives and community
participation. The initial token distribution included: (i) 48% to
ecosystem reserves, supporting payment of staking rewards, ecosystem
initiatives and incentives; (ii) 20% to SEI Labs and core contributors
for protocol development; (iii) 20% to early backers and private
investors; (iv) 9% to foundation and community reserves; and (v) 3% to
a public launch allocation. The SEI Network does not implement an
inflationary block reward model by default, with any future token
issuance subject to governance by SEI holders.
The SEI token serves multiple functions within the SEI Network,
including securing the network through proof-of-stake validator
delegation, facilitating on-chain governance by enabling token holder
voting, and serving as the payment mechanism for transaction fees
related to order execution, smart contract interactions and general
network activity. All transactions on the SEI Network require SEI to
cover gas fees associated with transaction execution, smart contract
interactions and validator compensation. Additionally, SEI facilitates
value transfer and in-protocol utility across decentralized exchanges,
DeFi applications and NFT platforms built on the SEI Network.
The SEI Network supports advanced trading applications through its
integrated financial primitives, including the native order-matching
engine that enables shared liquidity across applications and the
frequent batch auction mechanism that promotes fair execution. The
network can handle complex trading operations including spot trading,
derivatives, and cross-chain transactions through its
[[Page 44131]]
interoperability with other Cosmos SDK-based blockchains via the Inter-
Blockchain Communication (``IBC'') protocol. SEI can be transferred in
direct peer-to-peer transactions through the direct sending of SEI over
the SEI Network from one SEI address to another.
As noted above, this proposal is to list and trade shares of the
Trust that would hold spot SEI and, as described below, cause the Trust
to stake a portion of its SEI.
Section 6(b)(5) and the Applicable Standards
The Commission has approved numerous series of Trust Issued
Receipts,\11\ including Commodity-Based Trust Shares,\12\ to be listed
on U.S. national securities exchanges. In order for any proposed rule
change from an exchange to be approved, the Commission must determine
that, among other things, the proposal is consistent with the
requirements of Section 6(b)(5) of the Act, specifically including: (i)
the requirement that a national securities exchange's rules are
designed to prevent fraudulent and manipulative acts and practices;
\13\ 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 potential policy concerns under the Act 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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\11\ See Exchange Rule 14.11(f).
\12\ Commodity-Based Trust Shares, as described in Exchange Rule
14.11(e)(4), are a type of Trust Issued Receipt.
\13\ Much like bitcoin and ETH, the Exchange believes that SEI
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 SEI trading render
it difficult and prohibitively costly to manipulate the price of
SEI. The fragmentation across platforms and the capital necessary to
maintain a significant presence on each trading platform make
manipulation of SEI prices through continuous trading activity
challenging. To the extent that there are trading platforms engaged
in or allowing wash trading or other activity intended to manipulate
the price of SEI on other markets, such pricing does not normally
impact prices on other trading platforms because participants will
generally ignore markets with quotes that they deem non-executable.
Moreover, the linkage between SEI markets and the presence of
arbitrageurs in those markets means that the manipulation of the
price of SEI on any single venue would require manipulation of the
global SEI 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 trading platforms or OTC platform. Further, the speed and
relatively inexpensive nature of transactions on the SEI Network
allow arbitrageurs to quickly move capital between trading platforms
where price dislocations may occur. 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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More recently, the Commission has applied the Winklevoss Test while
also recognizing that the ``regulated market of significant size''
standard is not the only means for satisfying Section 6(b)(5) of the
Act by 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.\14\ While there is currently no futures
market for SEI, in the Spot Bitcoin ETP Approval Order and Spot ETH ETP
Approval Order the Commission determined that the CME bitcoin futures
market and CME ETH futures market, respectively, were not of
``significant size'' related to the spot market. Instead, the
Commission found that sufficient ``other means'' of preventing fraud
and manipulation had been demonstrated that justified dispensing with a
surveillance-sharing agreement of significant size. The Exchange and
Sponsor believe that this proposal provides for other means of
preventing fraud and manipulation that justify dispensing with a
surveillance-sharing agreement of significant size.
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\14\ 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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Over the past several years, U.S. investor exposure to SEI has
grown into billions of dollars reaching a fully diluted market cap of
approximately $3.13 billion as of April 2025. The Exchange believes
that approving this proposal (and comparable proposals) provides the
Commission with the opportunity to allow U.S. investors with access to
SEI in a regulated and transparent exchange-traded vehicle that would
act to limit risk to U.S. investors.
The policy concerns that the Exchange Act is designed to address
are also otherwise mitigated by the fact that the size of the market
for the underlying reference asset ($3.13 billion fully diluted value)
and the nature of the SEI ecosystem reduces its susceptibility to
manipulation. The geographically diverse and continuous nature of SEI
trading makes it difficult and prohibitively costly to manipulate the
price of SEI and, in many instances, the SEI market can be less
susceptible to manipulation than the equity, fixed income, and
commodity futures markets. There are a number of reasons this is the
case, including that (i) there is not inside information about revenue,
earnings, corporate activities, or sources of supply; (ii) manipulation
of the price on any single venue would require manipulation of the
global SEI price in order to be effective; (iii) a substantial over-
the-counter market provides liquidity and shock-absorbing capacity;
(iv) SEI's 24/7/365 nature provides constant arbitrage opportunities
across all trading venues; and (v) it is unlikely that any one actor
could obtain a dominant market share.
Further, SEI is arguably less susceptible to manipulation than
other commodities that underlie ETPs; there may be inside information
relating to the supply of the physical commodity such as the discovery
of new sources of supply or significant disruptions at mining
facilities that supply the commodity that simply are inapplicable as it
relates to certain cryptoassets, including SEI. Further, the Exchange
believes that the fragmentation across SEI trading platforms and
increased adoption of SEI, as displayed through increased user
engagement and trading volumes, and the SEI Network makes manipulation
of SEI prices through continuous trading activity more difficult.
Moreover, the linkage between the SEI markets and the presence of
arbitrageurs in those markets means that the manipulation of the price
of SEI price on any single venue would require manipulation of the
global SEI price in order to be effective. Arbitrageurs must have funds
distributed across multiple SEI trading platforms in order to take
advantage of temporary price dislocations, thereby making it unlikely
that there will be a strong concentration of funds on any particular
SEI trading platform. As a result, the potential for manipulation on a
particular SEI trading platform would require overcoming the liquidity
supply of such arbitrageurs who are effectively eliminating any cross-
market pricing differences. For all of these reasons, SEI is not
particularly susceptible to manipulation, especially as compared to
other approved ETP reference assets.
Canary Staked SEI ETF
CSC Delaware Trust Company is the trustee (``Trustee''). A third
party will be the administrator (``Administrator'') and
[[Page 44132]]
transfer agent (``Transfer Agent'') and will be responsible for the
custody of the Trust's cash and cash equivalents \15\ (the ``Cash
Custodian''). A third-party custodian (the ``Custodian'') will be
responsible for custody of the Trust's SEI.
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\15\ Cash equivalents are short-term instruments with maturities
of less than 3 months.
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According to the Registration Statement, each Share will represent
a fractional undivided beneficial interest in and ownership of the
Trust. The Trust's assets will only consist of SEI, cash, or cash and
cash equivalents.
According to the Registration Statement, the Trust will be neither
an investment company registered under the Investment Company Act of
1940, as amended,\16\ nor a commodity pool for purposes of the 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.
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\16\ 15 U.S.C. 80a-1.
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The Sponsor may stake, or cause to be staked, all or a portion of
the Trust's SEI through one or more trusted staking providers
(``Staking Providers''). In consideration for any staking activity in
which the Trust may engage, the Trust would receive all or a portion of
the staking rewards generated through staking activities, which may be
treated as income to the Trust. The Trust will not acquire and will
disclaim any incidental right (``IR''), or IR asset received, for
example as a result of forks or airdrops, and such assets will not be
taken into account for purposes of determining NAV.
When the Trust creates or redeems its Shares, it will do so in cash
transactions or in-kind transactions, in blocks of 10,000 Shares (a
``Creation Basket'') at the Trust's net asset value (``NAV''). For cash
creations and redemptions authorized participants will deliver, or
facilitate the delivery of, cash to the Trust's account with the Cash
Custodian, in exchange for Shares when they create Shares, and the
Trust, through the Cash Custodian, will deliver cash to such authorized
participants when they redeem Shares with the Trust. For in-kind
creation and redemptions authorized participants will deliver, or
facilitate delivery of, SEI to the Trust's account with the Custodian,
in exchange for Shares when they create Shares, and the Trust, through
the Custodian, will deliver SEI to such authorized participants when
they redeem Shares with the Trust. An affiliate of the Sponsor may
serve as an authorized participant of the Trust. 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.
Investment Objective
According to the Registration Statement and as further described
below, the Trust's investment objective is to seek to track the
performance of SEI, as measured by the CoinDesk SEI USD CCIX 60 min NY
Rate (``Pricing Benchmark''), adjusted for the Trust's expenses and
other liabilities. In seeking to achieve its investment objective, the
Trust will hold SEI and will value its Shares daily as of 4:00 p.m. ET
using the same methodology used to calculate the Pricing Benchmark. All
of the Trust's SEI will be held by the Custodian.
The Pricing Benchmark
As described in the Registration Statement, The Trust will use the
Pricing Benchmark to calculate the Trust's NAV. The Trust will
determine the SEI Pricing Benchmark price and value its Shares daily
based on the value of SEI as reflected by the Pricing Benchmark. The
Pricing Benchmark will be calculated daily and aggregates the notional
value of SEI trading across major SEI spot trading platforms, as
determined by the provider.
Net Asset Value
NAV means the total assets of the Trust (which includes all SEI and
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 closing value of the Pricing 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 SEI
held by the Trust based on the closing value of the Pricing Benchmark
as of 4:00 p.m. ET. 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.
Availability of Information
In addition to the price transparency of the Pricing Benchmark, the
Trust will provide information regarding the Trust's SEI 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 per Share and the reported BZX Official
Closing Price; \17\ (b) the BZX Official Closing Price in relation to
the NAV per Share as of the time the NAV is calculated and a
calculation of the premium or discount of such price against such NAV
per Share; (c) data in chart form displaying the frequency distribution
of discounts and premiums of the BZX Official Closing Price against the
NAV per Share, 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 and available on the Sponsor's website at <a href="https://canary.capital">https://canary.capital</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.
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\17\ 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.
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The Intraday Indicative Value (``IIV'') will be updated during
Regular Trading Hours to reflect changes in the value of the Trust's
SEI holdings during the trading day. 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 IIV may differ from the NAV because NAV is
calculated, using the closing value of the Pricing Benchmark, once a
day at 4 p.m. ET, whereas the IIV draws prices from the last trade on
each constituent platform in an effort to produce a relevant, real-time
price). 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 CTA and Consolidated Quotation System (CQS) high
speed lines. In addition, the IIV will be available through on-line
[[Page 44133]]
information services, such as Bloomberg and Reuters.
The price of SEI 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 Pricing Benchmark is calculated every 15
seconds and information about the Pricing Benchmark and Pricing
Benchmark value, including index data and key elements of how the
Pricing Benchmark is calculated, will be publicly available at a
website maintained by the provider of the Pricing Benchmark.
Quotation and last sale information for SEI 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 SEI is available from major market data vendors and
from the trading platforms on which SEI are traded. Depth of book
information is also available from SEI trading platforms. The normal
trading hours for SEI 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 BZX Official Closing Price and trading
volume information for the Shares will be published daily in the
financial section of newspapers. Quotation and last-sale information
regarding the Shares will be disseminated through the facilities of the
CTA.
The Custodian
The Custodian's services (i) allow SEI to be deposited from a
public blockchain address to the Trust's SEI account; (ii) allow SEI to
be withdrawn from the SEI account to a public blockchain address as
instructed by the Trust; and (iii) allow SEI to be staked. The custody
agreement requires the Custodian to hold the Trust's SEI in cold
storage, unless required to facilitate withdrawals as a temporary
measure. The Custodian will use segregated cold storage SEI addresses
for the Trust which are separate from the SEI addresses that the
Custodian uses for its other customers and which are directly
verifiable via the SEI blockchain. The Custodian will safeguard the
private keys to the SEI associated with the Trust's SEI account. The
Custodian will at all times record and identify in its books and
records that such SEI constitutes the property of the Trust. The
Custodian will not withdraw the Trust's SEI from the Trust's account
with the Custodian, or loan, hypothecate, pledge or otherwise encumber
the Trust's SEI, 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 creates or redeems its Shares, it will do so in cash
or in-kind. When the Trust creates or redeems its Shares in cash or in-
kind, it will do so in Creation Baskets that are based on the quantity
of SEI attributable to each Share of the Trust (net of the accrued but
unpaid Sponsor's fee and any accrued but unpaid expenses or
liabilities). Creation Baskets are issued and redeemed in exchange for
SEI or cash. 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 the close of 4:00
p.m. or the close of regular trading on the Exchange, whichever is
earlier. The day on which an order is properly received is considered
the purchase order date. For cash creations, authorized participants
will deliver, or facilitate the delivery of, cash to the Trust's
account with the Cash Custodian in exchange for Shares. Upon receipt of
an approved cash creation order, the Sponsor, on behalf of the Trust,
will submit to one or more previously onboarded trading partners an
order to buy the amount of SEI represented by a Creation Basket. For
in-kind creations, authorized participants or their designee will
deliver, or facilitate the delivery of, SEI to the Trust's account with
the Custodian in exchange for Shares. For a cash creation order, the
total deposit of cash required is based on the combined NAV of the
number of Shares included in the Creation Baskets being created
determined as of 4:00 p.m. ET on the date the order to purchase is
properly received. With respect to a cash purchase order, as between
the Trust and the authorized participant, the authorized participant is
responsible for the dollar cost of the difference between the SEI price
utilized in calculating NAV on trade date and the price at which the
Trust acquires the SEI to the extent the price realized in buying the
SEI is higher than the SEI price utilized in the NAV. To the extent the
price realized in buying the SEI is lower than the price utilized in
the NAV, the Authorized Participant shall keep the dollar impact of any
such difference.
For a creation order in-kind, the total in-kind transfer of SEI is
based on the quantity of SEI attributable to the Creation Basket
applicable to the date the order to purchase is properly received.
After the close of business each day, the Administrator determines the
quantity of SEI used to calculate the a Creation Basket for a given day
by dividing the number of SEI held by the Trust, adjusted for the
amount of SEI 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 Basket. The
procedures by which an authorized participant can redeem one or more
Creation Baskets mirror the procedures for the creation of Creation
Baskets. For a cash redemption order, an authorized participant will
deliver Shares to the Trust and will receive cash for the Shares
delivered. With respect to a cash redemption order, between the Trust
and the Authorized Participant, the Authorized Participant will be
responsible for the dollar cost of the difference between the SEI price
utilized in calculating the NAV on trade date and the price realized in
selling the SEI to raise the cash needed for the cash redemption order
to the extent the price realized in selling the SEI is lower than the
SEI price utilized in the NAV. To the extent the price realized from
selling the SEI is higher than the price utilized in the NAV, the
Authorized Participant shall get to keep the dollar impact of any such
difference. For an in-kind redemption order, an authorized participant
will deliver Shares to the Trust and the authorized participant or its
designee will receive SEI for the Shares delivered. The Sponsor
(including its delegates) will maintain ownership and control of the
Trust's SEI 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
[[Page 44134]]
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
\18\ 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.
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\18\ 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.
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Upon termination of the Trust, the Shares will be removed from
listing. The Trustee, CSC 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 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 SEI or any other SEI 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 SEI 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 Pricing 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 Pricing Benchmark occurs. If the interruption to the
dissemination of the IIV or the value of the Pricing 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 or any other SEI
derivative with other markets and other
[[Page 44135]]
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 or any other SEI derivative from such
markets and other entities.\19\ The Exchange may obtain information
regarding trading in the Shares or any other SEI derivative 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.
---------------------------------------------------------------------------
\19\ 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 Sponsor 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 \20\ when an updated IIV will not be calculated or
publicly disseminated; (v) the requirement that members deliver a
prospectus to investors purchasing 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 SEI,
and that the Commission has no jurisdiction over the trading of SEI as
a commodity.
---------------------------------------------------------------------------
\20\ 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 \21\ in general and Section 6(b)(5) of the Act \22\ 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.
---------------------------------------------------------------------------
\21\ 15 U.S.C. 78f.
\22\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
The Commission has approved numerous series of Trust Issued
Receipts,\23\ including Commodity-Based Trust Shares,\24\ 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;
\25\ 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 potential policy concerns under the Act are
sufficiently mitigated to the point that they are outweighed by
quantifiable investor protection issues that would be resolved by
approving this proposal.
---------------------------------------------------------------------------
\23\ See Exchange Rule 14.11(f).
\24\ Commodity-Based Trust Shares, as described in Exchange Rule
14.11(e)(4), are a type of Trust Issued Receipt.
\25\ Much like bitcoin and ETH, the Exchange believes that SEI
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 SEI trading render
it difficult and prohibitively costly to manipulate the price of
SEI. The fragmentation across platforms and the capital necessary to
maintain a significant presence on each trading platform make
manipulation of SEI prices through continuous trading activity
challenging. To the extent that there are trading platforms engaged
in or allowing wash trading or other activity intended to manipulate
the price of SEI on other markets, such pricing does not normally
impact prices on other trading platforms because participants will
generally ignore markets with quotes that they deem non-executable.
Moreover, the linkage between SEI markets and the presence of
arbitrageurs in those markets means that the manipulation of the
price of SEI on any single venue would require manipulation of the
global SEI 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 trading platforms or OTC platform. Further, the speed and
relatively inexpensive nature of transactions on the SEI Network
allow arbitrageurs to quickly move capital between trading platforms
where price dislocations may occur. 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.
---------------------------------------------------------------------------
More recently, the Commission has applied the Winklevoss Test while
also recognizing that the ``regulated market of significant size''
standard is not the only means for satisfying Section 6(b)(5) of the
Act. In the 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.\26\ While there is currently
no futures market for SEI, in the Spot Bitcoin ETP Approval Order and
Spot ETH ETP Approval Order the Commission determined that the CME
bitcoin futures market and CME ETH futures market, respectively, were
not of ``significant size'' related to the spot market. Instead, the
Commission found that sufficient ``other means'' of preventing fraud
and manipulation had been demonstrated that justified dispensing with a
surveillance-sharing agreement of significant size. The Exchange and
Sponsor believe that this proposal provides for other means of
preventing fraud and manipulation justify dispensing with a
surveillance-sharing agreement of significant size.
---------------------------------------------------------------------------
\26\ 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 44136]]
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 SEI has grown into billions of dollars with a
fully diluted market cap of approximately $3.13 billion as of April
2025. The Exchange believes that approving this proposal (and
comparable proposals) provides the Commission with the opportunity to
allow U.S. investors with access to SEI in a regulated and transparent
exchange-traded vehicle that would act to limit risk to U.S. investors.
The policy concerns that the Exchange Act is designed to address
are also otherwise mitigated by the fact that the size of the market
for the underlying reference asset ($3.13 billion fully diluted value)
and the nature of the SEI ecosystem reduces its susceptibility to
manipulation. The geographically diverse and continuous nature of SEI
trading makes it difficult and prohibitively costly to manipulate the
price of SEI and, in many instances, the SEI market can be less
susceptible to manipulation than the equity, fixed income, and
commodity futures markets. There are a number of reasons this is the
case, including that there is not inside information about revenue,
earnings, corporate activities, or sources of supply; manipulation of
the price on any single venue would require manipulation of the global
SEI price in order to be effective; a substantial over-the-counter
market provides liquidity and shock-absorbing capacity; SEI's 24/7/365
nature provides constant arbitrage opportunities across all trading
venues; and it is unlikely that any one actor could obtain a dominant
market share.
Further, SEI is arguably less susceptible to manipulation than
other commodities that underlie ETPs; there may be inside information
relating to the supply of the physical commodity such as the discovery
of new sources of supply or significant disruptions at mining
facilities that supply the commodity that simply are inapplicable as it
relates to certain cryptoassets, including SEI. Further, the Exchange
believes that the fragmentation across SEI trading platforms and
increased adoption of SEI, as displayed through increased user
engagement and trading volumes, and the SEI Network make manipulation
of SEI prices through continuous trading activity more difficult.
Moreover, the linkage between the SEI markets and the presence of
arbitrageurs in those markets means that the manipulation of the price
of SEI price on any single venue would require manipulation of the
global SEI price in order to be effective. Arbitrageurs must have funds
distributed across multiple SEI 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 SEI
trading platform. As a result, the potential for manipulation on a
particular SEI trading platform would require overcoming the liquidity
supply of such arbitrageurs who are effectively eliminating any cross-
market pricing differences. For all of these reasons, SEI is not
particularly susceptible to manipulation, especially as compared to
other approved ETP reference assets.
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 SEI
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 Pricing Benchmark, the
Trust will provide information regarding the Trust's SEI 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 per Share and the reported BZX Official
Closing Price; \27\ (b) the BZX Official Closing Price in relation to
the NAV per Share as of the time the NAV is calculated and a
calculation of the premium or discount of such price against such NAV
per Share; (c) data in chart form displaying the frequency distribution
of discounts and premiums of the BZX Official Closing Price against the
NAV per Share, 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 and available on the Sponsor's website at www.canary.capital,
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 CTA. The Trust will also disseminate its holdings on
a daily basis on its website.
---------------------------------------------------------------------------
\27\ 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
SEI holdings during the trading day. The IIV may differ from the NAV
because NAV is calculated, using the closing value of the Pricing
Benchmark, once a day at 4:00 p.m. Eastern time whereas the IIV draws
prices from the last trade on each constituent 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 CTA and CQS high speed lines. In addition, the IIV
will be available through on-line information services such as
Bloomberg and Reuters.
The price of SEI will be made available by one or more major market
data vendors, updated at least every 15 seconds during Regular Trading
Hours.
[[Page 44137]]
As noted above, the Pricing Benchmark is calculated every 15
seconds and information about the Pricing Benchmark and Pricing
Benchmark value, including index data and key elements of how the
Pricing Benchmark is calculated, will be publicly available at a
website maintained by the provider of the Pricing Benchmark.
Quotation and last sale information for SEI 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 SEI is available from major market data vendors and
from the trading platforms on which SEI are traded. Depth of book
information is also available from SEI trading platforms. The normal
trading hours for SEI 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 BZX Official Closing Price and trading
volume information for the Shares will be published daily in the
financial section of newspapers. Quotation and last-sale information
regarding the Shares will be disseminated through the facilities of the
CTA.
In sum, the Exchange believes that this proposal is consistent with
the requirements of Section 6(b)(5) of the Act, 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. The investor protection
issues for U.S. investors has grown significantly over the last several
years. As discussed throughout, this growth investor protection
concerns need to be re-evaluated and rebalanced with the prevention of
fraudulent and manipulative acts and practices concerns that previous
disapproval orders have relied upon.
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 neither solicited nor received comments on the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period up to 90 days (i) as the
Commission may designate if it finds such longer period to be
appropriate and publishes its reasons for so finding or (ii) as to
which the Exchange consents, the Commission will:
A. by order approve or disapprove such proposed rule change, or
B. institute proceedings to determine whether the proposed rule
change should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
<bullet> Use the Commission's internet comment form (<a href="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#f280879e97df919d9f9f979c8681b2819791dc959d84"><span class="__cf_email__" data-cfemail="d1a3a4bdb4fcb2bebcbcb4bfa5a291a2b4b2ffb6bea7">[email protected]</span></a>. Please include
file number SR-CboeBZX-2025-120 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-2025-120. 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 filing 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-2025-120 and should be submitted
on or before October 2, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\28\
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\28\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-17444 Filed 9-10-25; 8:45 am]
BILLING CODE 8011-01-P
</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body>
</html>Indexed from Federal Register on September 11, 2025.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.