Notice2025-18961
Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Order Instituting Proceedings To Determine Whether To Approve or Disapprove a Proposed Rule Change, as Modified by Amendment No. 2, To List and Trade Shares of the Canary PENGU 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 30, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
<html>
<head>
<title>Federal Register, Volume 90 Issue 187 (Tuesday, September 30, 2025)</title>
</head>
<body><pre>
[Federal Register Volume 90, Number 187 (Tuesday, September 30, 2025)]
[Notices]
[Pages 46974-46976]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-18961]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104070; File No. SR-CboeBZX-2025-081]
Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Order
Instituting Proceedings To Determine Whether To Approve or Disapprove a
Proposed Rule Change, as Modified by Amendment No. 2, To List and Trade
Shares of the Canary PENGU ETF Under BZX Rule 14.11(e)(4), Commodity-
Based Trust Shares
September 25, 2025.
I. Introduction
On June 25, 2025, Cboe BZX Exchange, Inc. (``Exchange'' or ``BZX'')
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 Canary PENGU ETF (``Trust'')
under BZX Rule 14.11(e)(4), Commodity-Based Trust Shares. On July 7,
2025, the Exchange filed Amendment No. 1 to the proposed rule change,
which replaced and superseded the original filing in its entirety. On
July 8, 2025, the Exchange filed Amendment No. 2 to the proposed rule
change, which replaced and superseded the proposed rule change, as
modified by Amendment No. 1, in its entirety. The proposed rule change,
as modified by Amendment No. 2, was published for comment in the
Federal Register on July 14, 2025.\3\
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 103408 (July 9,
2025), 90 FR 31542 (``Notice''). The Commission has received no
comment letters on the proposed rule change.
---------------------------------------------------------------------------
On August 25, 2025, 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\ This order institutes proceedings under Section 19(b)(2)(B)
of the Act \6\ to determine whether to approve or disapprove the
[[Page 46975]]
proposed rule change, as modified by Amendment No. 2.
---------------------------------------------------------------------------
\4\ 15 U.S.C. 78s(b)(2).
\5\ See Securities Exchange Act Release No. 103773, 90 FR 42051
(Aug. 28, 2025). The Commission designated Oct. 12, 2025, as the
date by which the Commission shall approve, disapprove, or institute
proceedings to determine whether to disapprove the proposed rule
change, as modified by Amendment No. 2.
\6\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------
II. Summary of the Proposal, as Modified by Amendment No. 2
As described in more detail in the Notice,\7\ the Exchange proposes
to list and trade the Shares of the Trust under BZX Rule 14.11(e)(4),
which governs the listing and trading of Commodity-Based Trust Shares
on the Exchange.
---------------------------------------------------------------------------
\7\ See Notice, supra note 3.
---------------------------------------------------------------------------
The investment objective of the Trust is to provide capital
appreciation.\8\ In seeking to achieve its investment objective, the
Trust will hold PENGU,\9\ Pudgy Penguin non-fungible tokens (``Pudgy
Penguin NFTs''),\10\ SOL, and ETH (collectively, the ``Portfolio
Digital Assets'').\11\ The Trust expects that, under normal
circumstances, at least 95% of the Trust's total assets will be
invested in PENGU and Pudgy Penguin NFTs, with approximately 80-95% of
its total assets in PENGU and 5-15% of its total assets in Pudgy
Penguin NFTs.\12\ The Trust will also hold SOL and ETH as necessary or
incidental to the purchase, sale, and transfer of the Trust's PENGU and
Pudgy Penguins NFTs.\13\ The Trust will value its Shares daily as of
4:00 p.m. ET.\14\ The Trust's holdings in PENGU, SOL, and ETH will be
valued using certain pricing benchmarks and the Trust's Pudgy Penguin
NFT holdings will be valued using a third-party non-fungible token
pricing service.\15\ When the Trust sells or redeems its Shares, it
will do so in cash transactions with authorized participants in blocks
of 10,000 Shares.\16\
---------------------------------------------------------------------------
\8\ See id. at 31545. Canary Capital Group LLC (``Sponsor'') is
the sponsor of the Trust, CSC Delaware Trust Company is the trustee,
and a third-party custodian will be responsible for custody of the
Trust's Portfolio Digital Assets (as defined herein). See id. at
31542-43, 31545.
\9\ The Exchange states that PENGU is a digital asset created
and transmitted through the Solana Network, a peer-to-peer,
decentralized computer network operating on cryptographic protocols.
According to the Exchange, PENGU exists as a token on the Solana
Network, and is often considered a digital collector's item. See id.
at 31544.
\10\ The Exchange states that Pudgy Penguin NFTs are a
collection of 8,888 non-fungible tokens launched in July 2021,
consisting of unique, hand-drawn penguins. According to the
Exchange, Pudgy Penguin NFTs are tokens that are recorded and
transferred through the operation of the peer-to-peer Ethereum
Network. See id.
\11\ See id. at 31545.
\12\ See id. The Sponsor will select which Pudgy Penguin NFTs to
purchase by considering factors such as price, relative rarity,
perceived desirability of a particular NFTs traits and
characteristics, and the overall collection value. See id. at 31546.
\13\ See id. at 31546. According to the Exchange, the Trust
intends to hold only as much SOL or ETH as the Sponsor believes is
necessary to pay for anticipated transaction expenses or to purchase
Pudgy Penguin NFTs. See id. at 31545-46.
\14\ See id. at 31546.
\15\ See id.
\16\ See id. at 31545.
---------------------------------------------------------------------------
III. Proceedings To Determine Whether To Approve or Disapprove SR-
CboeBZX-2025-081 and Grounds for Disapproval Under Consideration
The Commission is instituting proceedings pursuant to Section
19(b)(2)(B) of the Act \17\ to determine whether the proposed rule
change, as modified by Amendment No. 2, should be approved or
disapproved. Institution of proceedings is appropriate at this time in
view of the legal and policy issues raised by the proposed rule change.
Institution of proceedings does not indicate that the Commission has
reached any conclusions with respect to any of the issues involved.
Rather, the Commission seeks and encourages interested persons to
provide comments on the proposed rule change, as modified by Amendment
No. 2.
---------------------------------------------------------------------------
\17\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------
Pursuant to Section 19(b)(2)(B) of the Act,\18\ the Commission is
providing notice of the grounds for disapproval under consideration.
The Commission is instituting proceedings to allow for additional
analysis of the proposed rule change's consistency with Section 6(b)(5)
of the Act, which requires, among other things, that the rules of a
national securities exchange be ``designed to prevent fraudulent and
manipulative acts and practices'' and ``to protect investors and the
public interest.'' \19\
---------------------------------------------------------------------------
\18\ Id.
\19\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
The Commission asks that commenters address the sufficiency of the
Exchange's statements in support of the proposal, which are set forth
in the Notice, in addition to any other comments they may wish to
submit about the proposed rule change. In particular, the Commission
seeks comment on whether the proposal to list and trade Shares of the
Trust, which would hold PENGU, Pudgy Penguin NFTs, SOL, and ETH, is
designed to prevent fraudulent and manipulative acts and practices or
raises any new or novel concerns not previously contemplated by the
Commission.
IV. Procedure: Request for Written Comments
The Commission requests that interested persons provide written
submissions of their views, data, and arguments with respect to the
issues identified above, as well as any other concerns they may have
with the proposal. In particular, the Commission invites the written
views of interested persons concerning whether the proposal, as
modified by Amendment No. 2, is consistent with Section 6(b)(5) or any
other provision of the Act, and the rules and regulations thereunder.
Although there do not appear to be any issues relevant to approval or
disapproval that would be facilitated by an oral presentation of views,
data, and arguments, the Commission will consider, pursuant to Rule
19b-4, any request for an opportunity to make an oral presentation.\20\
---------------------------------------------------------------------------
\20\ Section 19(b)(2) of the Act, as amended by the Securities
Acts Amendments of 1975, Public Law 94-29 (June 4, 1975), grants the
Commission flexibility to determine what type of proceeding--either
oral or notice and opportunity for written comments--is appropriate
for consideration of a particular proposal by a self-regulatory
organization. See Securities Acts Amendments of 1975, Senate Comm.
on Banking, Housing & Urban Affairs, S. Rep. No. 75, 94th Cong., 1st
Sess. 30 (1975).
---------------------------------------------------------------------------
Interested persons are invited to submit written data, views, and
arguments regarding whether the proposed rule change, as modified by
Amendment No. 2, should be approved or disapproved by October 21, 2025.
Any person who wishes to file a rebuttal to any other person's
submission must file that rebuttal by November 4, 2025.
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#e092958c85cd838f8d8d858e9493a0938583ce878f96"><span class="__cf_email__" data-cfemail="5321263f367e303c3e3e363d2720132036307d343c25">[email protected]</span></a>. Please include
file number SR-CboeBZX-2025-081 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-2025-081. 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
[[Page 46976]]
to file number SR-CboeBZX-2025-081 and should be submitted on or before
October 21, 2025. Rebuttal comments should be submitted by November 4,
2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\21\
---------------------------------------------------------------------------
\21\ 17 CFR 200.30-3(a)(57).
---------------------------------------------------------------------------
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-18961 Filed 9-29-25; 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 30, 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.