[Federal Register Volume 87, Number 62 (Thursday, March 31, 2022)]
[Notices]
[Pages 18837-18848]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-06752]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-94518; File No. SR-NYSEArca-2021-65]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
of Amendment No. 1 and Order Granting Accelerated Approval of a 
Proposed Rule Change, as Modified by Amendment No. 1, To List and Trade 
Shares of the Sprott ESG Gold ETF Under NYSE Arca Rule 8.201-E 
(Commodity-Based Trust Shares)

March 25, 2022.

I. Introduction

    On July 19, 2021, NYSE Arca, Inc. (``NYSE Arca'' or ``Exchange'') 
filed with the Securities and Exchange Commission (``Commission''), 
pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ a proposed rule change to 
list and trade shares (``Shares'') of the Sprott ESG Gold ETF 
(``Trust'') under NYSE Arca Rule 8.201-E (Commodity-Based Trust 
Shares). The proposed rule change was published for comment in the 
Federal Register on July 30, 2021.\3\ On September 2, 2021, 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 
approve or disapprove the proposed rule change.\5\ On October 27, 2021, 
the Commission instituted proceedings under Section 19(b)(2)(B) of the 
Act \6\ to determine whether to approve or disapprove the proposed rule 
change.\7\ On January 19, 2022, pursuant to Section 19(b)(2) of the 
Act,\8\ the Commission designated a longer period within which to issue 
an order approving or disapproving the proposed rule change.\9\ On 
February 25, 2022, the Exchange filed Amendment No. 1 to the proposed 
rule change.\10\ This Amendment No. 1, set forth in Item II below, 
replaces SR-NYSE Arca-2021-65 as originally filed and supersedes such 
filing in its entirety. The Commission has received no comment letters 
on the proposal. The Commission is publishing this notice to solicit 
comments on the proposed rule change, as modified by Amendment No. 1, 
from interested persons, and is approving the proposed rule change, as 
modified by Amendment No. 1, on an accelerated basis.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 92506 (July 26, 
2021), 86 FR 41109.
    \4\ 15 U.S.C. 78s(b)(2).
    \5\ See Securities Exchange Act Release No. 92867, 86 FR 50568 
(September 9, 2021).
    \6\ 15 U.S.C. 78s(b)(2)(B).
    \7\ See Securities Exchange Act Release No. 93434, 86 FR 60516 
(November 2, 2021).
    \8\ 15 U.S.C. 78s(b)(2).
    \9\ See Securities Exchange Act Release No. 94003, 87 FR 3865 
(January 25, 2022). The Commission designated March 27, 2022, as the 
date by which the Commission shall either approve or disapprove the 
proposed rule change.
    \10\ Amendment No. 1 is available on the Commission's website at 
https://www.sec.gov/comments/sr-nysearca-2021-65/srnysearca202165-20117903-270825.pdf. Among other things, Amendment No. 1 to the 
proposed rule change provided greater detail with respect to 
characteristics of unallocated gold, Sprott ESG Approved Gold (as 
defined herein), and ESG Criteria (as defined herein), as well as 
valuation of the Trust's (as defined herein) gold. Amendment No. 1 
explained how Sprott ESG Approved Gold will be created for the 
Trust, as well as the process of the exchange or conversion of the 
types of gold held by the Trust, and how this occurs during 
creations and redemptions. Amendment No. 1 also represented that 
there is no separate market for Sprott ESG Approved Gold, there is 
no industry standard for ESG factors that apply to gold production, 
and the value of the gold held by the Trust, whether allocated 
Sprott ESG Approved Gold or unallocated gold, will be determined by 
the LBMA Gold Price PM (as defined herein). Amendment No. 1 made 
additional representations, including regarding the Information 
Bulletin. Finally, Amendment No. 1 provided clarifications and 
technical edits to the proposed rule change.
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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 self-regulatory organization 
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 those 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 parts of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to list and trade shares (``Shares'') of the 
Sprott ESG Gold ETF (the ``Trust''), under NYSE Arca Rule 8.201-E.\11\ 
Under NYSE Arca Rule 8.201-E, the Exchange may propose to list and/or 
trade Commodity-Based Trust Shares pursuant to unlisted trading 
privileges (``UTP'').\12\
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    \11\ On February 11, 2021, the Trust submitted to the Commission 
its draft registration statement on Form S-1 under the Securities 
Act of 1933 (15 U.S.C. 77a) (``Securities Act'') and on July 1, 
2021, the Trust submitted to the Commission the most recent 
amendment to its draft registration statement (collectively, the 
``Registration Statement''). The Jumpstart Our Business Startups 
Act, enacted on April 5, 2012, added Section 6(e) to the Securities 
Act. Section 6(e) of the Securities Act provides that an ``emerging 
growth company'' may confidentially submit to the Commission a draft 
registration statement for confidential, non-public review by the 
Commission staff prior to public filing, provided that the initial 
confidential submission and all amendments thereto shall be publicly 
filed not later than 21 days before the date on which the issuer 
conducts a road show, as such term is defined in Securities Act Rule 
433(h)(4). An emerging growth company is defined in Section 2(a)(19) 
of the Securities Act as an issuer with less than $1,070,000,000 
total annual gross revenues during its most recently completed 
fiscal year. The Trust meets the definition of an emerging growth 
company and consequently has submitted its Form S-1 Registration 
Statement on a confidential basis with the Commission. 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.
    \12\ Commodity-Based Trust Shares are securities issued by a 
trust that represent investors' discrete identifiable and undivided 
beneficial ownership interest in the commodities deposited into the 
Trust.
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    The Trust will not be registered as an investment company under the 
Investment Company Act of 1940, as amended,\13\ and is not required to 
register under such act. The Trust is not a commodity pool for purposes 
of the Commodity Exchange Act, as amended.\14\
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    \13\ 15 U.S.C. 80a-1.
    \14\ 17 U.S.C. 1.
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    The Sponsor of the Trust is Sprott Asset Management LP, a Canadian 
limited partnership. The Bank of New York Mellon serves as the Trust's 
administrator (the ``Administrator'') and

[[Page 18838]]

transfer agent (the ``Transfer Agent''). The Delaware Trust Company is 
the trustee of the Trust (the ``Trustee'').\15\ The Royal Canadian Mint 
is the custodian of the Trust's gold (the ``Gold Custodian'' or 
``Mint'') and also produces Sprott ESG Approved Gold (as defined below) 
in bar form for the Trust.\16\ The Bank of New York Mellon will also 
serve as the Trust's cash custodian (the ``Cash Custodian'') pursuant 
to the terms of the agreement between the Trust and the Cash Custodian. 
In its capacity as cash custodian, the Cash Custodian will maintain a 
custodial account that holds cash for the benefit of the Trust for the 
purpose of payment of the Sponsor's fee in cash or the other expenses 
of the Trust.
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    \15\ The Trustee is a fiduciary under the Trust Agreement and 
must satisfy the requirements of Section 3807 of the Delaware 
Statutory Trust Act. However, the fiduciary duties, responsibilities 
and liabilities of the Trustee are limited by, and are only those 
specifically set forth in, the Trust Agreement. The Trust does not 
have a Board of Directors or persons acting in a similar capacity.
    \16\ The Mint operates pursuant to the Royal Canadian Mint Act 
(Canada) and is a Canadian Crown corporation. Crown corporations are 
corporations wholly-owned by the Government of Canada. The Mint is, 
for all its purposes, an agent of Her Majesty in right of Canada 
and, as such, its obligations generally constitute unconditional 
obligations of the Government of Canada. The Gold Custodian is 
responsible for safekeeping the gold owned by the Trust pursuant to 
gold storage and custody agreements. The Gold Custodian will store 
gold for the account of the Trust on an allocated basis in the 
Trust's allocated account (the ``Trust Allocated Account''), except 
where gold is temporarily held in an unallocated account on an 
unallocated basis in the Trust's unallocated account (the ``Trust 
Unallocated Account''). Unallocated gold is gold stored by or on 
behalf of the Mint on behalf of its customers consisting of gold 
that is not specifically designated as being held by a particular 
customer and will not qualify as Sprott ESG Approved Gold. The Mint 
will facilitate the transfer of gold in and out of the Trust through 
(i) accounts that Authorized Participants (as defined below) have 
established at a London Precious Metals Clearing Limited clearing 
bank and (ii) the Trust Unallocated Account and Trust Allocated 
Account it will maintain for the Trust. The Gold Custodian is 
responsible for allocating specific bars of gold to the Trust 
Allocated Account. The Gold Custodian will provide the Trust with 
regular reports detailing the gold transfers in and out of the Trust 
Unallocated Account with the Gold Custodian and identifying the gold 
bars held in the Trust Allocated Account. Unallocated gold held by 
the Trust consists of a pool of London Good Delivery gold bars.
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    The Commission has previously approved listing on the Exchange 
under NYSE Arca Rules 5.2-E(j)(5) and 8.201-E of other precious metals 
and gold-based commodity trusts, including the GraniteShares Gold 
MiniBAR Trust; \17\ the GraniteShares Gold Trust; \18\ the Merk Gold 
Trust; \19\ the APMEX Physical-1 oz. Gold Redeemable Trust; \20\ and 
the Long Dollar Gold Trust.\21\
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    \17\ See Securities Exchange Act Release No. 84257 (September 
21, 2018), 83 FR 48877 (September 27, 2018) (SR-NYSEArca-2018-55).
    \18\ See Securities Exchange Act Release No. 81077 (July 5, 
2017), 82 FR 32024 (July 11, 2017) (SR-NYSEArca-2017-55).
    \19\ See Securities Exchange Act Release No. 71378 (January 23, 
2014), 79 FR 4786 (January 29, 2014) (SR-NYSEArca-2013-137).
    \20\ See Securities Exchange Act Release No. 66930 (May 7, 
2012), 77 FR 27817 (May 11, 2012) (SR-NYSEArca-2012-18)
    \21\ See Securities Exchange Act Release No. 79518 (December 9, 
2016), 81 FR 90876 (December 15, 2016) (SR-NYSEArca-2016-84) (order 
approving listing and trading of shares of the Long Dollar Gold 
Trust).
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    The Exchange represents that the Shares will satisfy the 
requirements of NYSE Arca Rule 8.201-E and thereby qualify for listing 
on the Exchange.\22\
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    \22\ With respect to the application of Rule 10A-3 (17 CFR 
240.10A-3) under the Act, the Trust relies on the exemption 
contained in Rule 10A-3(c)(7).
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Operation of the Trust 23
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    \23\ The description of the operation of the Trust, the Shares 
and the gold market contained herein are based, in part, on the 
Registration Statement. See note 11, supra.
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    The investment objective of the Trust will be for the Shares to 
reflect the performance of the price of gold, less the Trust's expenses 
and liabilities through an investment in physical gold bullion that 
meets certain ESG criteria determined by the Sponsor and on a temporary 
basis in unallocated gold. The Trust will issue Shares which represent 
units of fractional undivided beneficial interest in and ownership of 
the Trust.
    The Trust's assets are expected to consist primarily of fully 
allocated unencumbered physical gold bullion held by the Mint on behalf 
of the Trust that meets certain environmental, social and governance 
(``ESG'') standards and criteria established by the Sponsor (``Sprott 
ESG Approved Gold''). As described below, the Trust will also hold 
unallocated gold on a temporary basis, particularly in connection with 
creations and redemptions. Such unallocated gold will not qualify as 
Sprott ESG Approved Gold. The Trust does not have a minimum amount of 
Sprott ESG Approved Gold that it is required to hold at any given time. 
Sprott ESG Approved Gold and unallocated gold are described in more 
detail below.
    The Trust will not trade in gold futures, options or swap contracts 
on any futures exchange or over the counter (``OTC''). The Trust will 
not hold or trade in commodity futures contracts, ``commodity 
interests'', or any other instruments regulated by the Commodity 
Exchange Act. The Trust's Cash Custodian may hold cash temporarily 
received from the sale of gold. The Trust's assets will only consist of 
Sprott ESG Approved Gold, unallocated gold and cash.
    The Shares are intended to constitute a simple and cost-effective 
means of making an investment similar to an investment in gold bullion 
that meets the ESG Criteria. Although the Shares are not the exact 
equivalent of an investment in gold, they provide investors with an 
alternative that allows a level of participation in the gold market 
through the securities market.
Sprott ESG Approved Gold
    Sprott ESG Approved Gold will be produced by the Mint specifically 
for the Trust using raw material that meets the criteria discussed 
below. Sprott ESG Approved Gold, as defined for purposes of the Trust, 
is not available in the general marketplace, although others, including 
other funds, may use the term ``ESG'' for gold used for their purposes.
    The term ``Sprott ESG Approved Gold'' refers to gold that is 
physically indistinguishable from other gold but that has been sourced 
and produced in a manner consistent with the ESG standards and criteria 
used by the Sponsor (the ``ESG Criteria''), which are designed to 
provide investors with an enhanced level of ESG scrutiny along with 
disclosure of the provenance of the metal sourced, and include an 
evaluation of mining companies and mines.\24\ Mining companies and 
mines that meet the ESG Criteria (``Sprott ESG Approved Mining 
Companies'' and ``Sprott ESG Approved Mines'', respectively) must also 
comply with the Mint Responsible Sourcing Requirements (as defined 
below). An overview of the Sponsor's application of the ESG Criteria to 
mining companies and mines that can provide the material for Sprott ESG 
Approved Gold is provided below.
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    \24\ The ESG Criteria are anticipated to evolve over time at the 
discretion of the Sponsor. Also, one or more criterion may not be 
relevant with respect to all sources of gold that are eligible for 
investment. Factors that could be considered by the Sponsor in 
modifying the ESG Criteria include changes to current gold mining 
techniques or standards, evolving legal standards, the introduction 
of new standards or evaluation frameworks within the mining industry 
or the elimination of existing standards or frameworks that in the 
view of the Sponsor are relevant to the ESG assessment of a mining 
company or mine site.
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    The application of the ESG Criteria involves multiple levels of 
analysis. While the Sponsor's evaluation of mines and mining companies 
will include the objective factors discussed below, the Sponsor will 
also evaluate company reports and, where possible, interview key 
personnel to assess whether such a mining company or mine meets the ESG

[[Page 18839]]

Criteria, which will require the subjective judgment of the Sponsor. 
The selection of these factors and how they are applied will be based, 
at least to some degree, on the judgment of the Sponsor and may or may 
not be consistent with current or future standards used by others in 
the industry. The ESG Criteria are subject to change by the Sponsor in 
its sole discretion. Any such changes will be reflected on the Trust's 
website promptly after any change to the ESG Criteria, Sprott ESG 
Approved Mines or Sprott ESG Approved Mining Companies has been made.
    The ESG Criteria are in addition to those used in the LBMA 
Responsible Sourcing Program, as detailed in the LBMA's Responsible 
Gold Guidance, and are designed to provide investors with an enhanced 
level of ESG scrutiny along with disclosure of the provenance of the 
metal sourced. The Mint currently requires that its refining customers, 
including mines, meet the requirements outlined in the OECD Due 
Diligence Guidance for Responsible Supply Chains of Minerals from 
Conflict-Affected and High-Risk Areas, the LBMA Responsible Gold 
Guidance, the Mint's Responsible Metals Program and the Mint's Anti-
Money Laundering and Anti-Terrorist Financing Program in compliance 
with the Proceeds of Crime (Money Laundering) and Terrorist Financing 
Act (Canada) (collectively, the ``Mint Responsible Sourcing 
Requirements''). Only mines which the Mint determines meet and maintain 
the Mint Responsible Sourcing Requirements and with whom the Mint has a 
contractual refining relationship (each a ``Mint Approved Mine'', 
collectively the ``Mint Approved Mines'') will be eligible for 
consideration by the Sponsor as a provider of Sprott ESG Approved Gold. 
The Mint will cease refining gold from any Mint Approved Mine that no 
longer meets the Mint Responsible Sourcing Requirements, as determined 
by the Mint from time to time. The Mint Responsible Sourcing 
Requirements are subject to change by the Mint in its sole discretion.
    The ESG factors are a component of the ESG Criteria and are used 
for the ESG assessment of mines and miners generally, and will 
encompass the following factors:

 Environmental Factors
    [cir] Energy use and greenhouse gas emissions
    [cir] Tailings and waste management
    [cir] Conservation and water management
    [cir] Mine site remediation
 Social Factors
    [cir] Worker safety and health
    [cir] Community relations
    [cir] Natural resource benefit to local communities
    [cir] Child and forced labor
 Governance Factors
    [cir] Corporate governance
    [cir] Workplace and gender diversity
    [cir] Fair executive compensation
    [cir] Corporate transparency and disclosures
    Mining companies that qualify for the LBMA's Responsible Sourcing 
Program and are Mint Approved Mines will then be subject to two levels 
of ESG screening by the Sponsor: At the overall company level and at 
the individual mine site level.
    First, the Sponsor will evaluate a mining company that operates a 
Mint Approved Mine using ESG factors determined by the Sponsor 
(described above). This evaluation will use a number of tools, which 
include ratings from third-party research providers, such as 
Sustainalytics ESG Risk Ratings, along with sell-side equity research 
reports. With respect to corporate governance, the Sponsor will 
evaluate recommendations from proxy voting research providers, such as 
the Glass Lewis Proxy Review. The Sponsor will also use compliance with 
precious metals industry standards as an objective factor in its 
evaluation of such mining companies. Each such mining company with high 
ESG ratings and favorable recommendations from proxy voting research 
providers that complies with precious metals industry standards will be 
designated as a Sprott ESG Approved Mining Company. Second, the Sponsor 
will evaluate individual mine site locations of each Sprott ESG 
Approved Mining Company. Each mine location of a Sprott ESG Approved 
Mining Company will then be evaluated by the Sponsor as follows: (1) 
The performance of each mine against various indicators in the Mining 
Association of Canada's Towards Sustainable Mining standards; (2) using 
the ESG factors described above; and (3) whether such mine is in a 
heightened risk or conflict area.\25\ Each mining location of that 
Sprott ESG Approved Mining Company that (a) the Sponsor determines to 
meet the Mining Association of Canada's Towards Sustainable Mining 
standards and the ESG factors, and (b) is not in a heightened risk or 
conflict area will be designated as a Sprott ESG Approved Mine. Only 
Sprott ESG Approved Mines will be permitted to supply the raw material 
for Sprott ESG Approved Gold to the Mint, which will then refine the 
raw material to create Sprott ESG Approved Gold for the Trust. This 
means that the provenance of Sprott ESG Approved Gold will be known to 
the Trust. Notwithstanding its special provenance, there is no separate 
market for gold from Sprott ESG Approved Mines.
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    \25\ Heightened risk or conflict areas include areas where:
     human rights abuses, forced or child labor, war crimes 
or genocide are prevalent;
     mines are involved in direct or indirect support to 
non-state actors that use arms without legal authority;
     mines transport gold or supplies along routes that 
involve payment of illegal taxes or extortions; and
     mines are involved in money laundering or terrorism 
financing.
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    Based on its analysis of certain existing mines and taking into 
consideration the amount of physical gold bullion held by existing gold 
bullion ETFs, the Sponsor believes that a sufficient amount of raw 
material to create Sprott ESG Approved Gold for the Trust exists and 
will exist in the future.\26\
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    \26\ Current output from North American mines that the Sponsor 
estimates would likely meet the definition of Sprott ESG Approved 
Mines (based on currently available public information) is between 
$12 and $15 billion per year. If the Sprott ESG Approved Gold held 
by the Trust would increase in any given year by approximately 25% 
of that estimated output, the Mint has represented that it would 
have the operational capacity to refine such amount of Sprott ESG 
Approved Gold. If the Trust's increase would exceed that amount, the 
Trust would have to locate additional refiners, either in North 
America (for dor[eacute] mined in North America) or elsewhere (for 
dor[eacute] mined outside of North America); based on its experience 
in the gold industry, the Sponsor does not expect any difficulties 
with engaging such additional refiners in a timely manner.
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    The Sponsor's fee, which will be paid for by the Trust, and thus 
the shareholders, will include any costs associated with researching, 
establishing and maintaining the ESG Criteria, assessing mining 
companies and mines against certain of the ESG Criteria and the 
diligence of the Trust's Sprott ESG Approved Gold holdings. The Sponsor 
will conduct research on each mining company using its in-house 
investment professionals and may use the services of outside 
consultants.
Unallocated Gold
    The Trust's assets will also include unallocated unencumbered 
physical gold bullion stored by the Mint on behalf of the Trust and 
cash. Unallocated gold is gold stored by or on behalf of the Mint in a 
pool on behalf of its customers; gold in that pool is not specifically 
designated as being held by a particular customer and shall mean, for 
purposes of this proposal, any gold

[[Page 18840]]

that does not qualify as Sprott ESG Approved Gold.
    While there is no minimum amount of Sprott ESG Approved Gold that 
the Trust will hold, the Sponsor expects to exchange the Trust's 
holdings of unallocated physical gold into Sprott ESG Approved Gold as 
soon as reasonably practicable, to the extent that unallocated physical 
gold is not needed under the circumstances described below.\27\
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    \27\ See ``Creation and Redemption of Shares'' below, further 
discussing the exchange process from unallocated physical gold to 
Sprott ESG Approved Gold.
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    From time-to-time, on a temporary basis the Trust will hold 
unallocated physical gold bullion under the following circumstances: 
(1) In connection with transfers of gold to settle creations and 
redemptions of Creation Units (as defined below); \28\ (2) until 
additional Sprott ESG Approved Gold can be produced by the Mint; (3) to 
the extent that the Trust holds gold in an amount less than a whole 
bar; and (4) in connection with payment of expenses of the Trust. 
Although the Trust intends to instruct the Mint to exchange unallocated 
physical gold bullion to Sprott ESG Approved Gold as soon as reasonably 
practicable, there is no limit on the amount of unallocated physical 
gold bullion that the Trust can hold. The Mint's ability to exchange 
unallocated physical gold bullion into Sprott ESG Approved Gold depends 
on various factors, including the size of the Trust's unallocated 
physical gold bullion holdings, the Trust's need for unallocated 
physical gold bullion to meet redemption requests, the availability of 
raw material for the Mint to produce additional Sprott ESG Approved 
Gold, the Mint's production capacity and certain minimum size 
requirements.
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    \28\ Unallocated gold has been used for creation and redemption 
requests by gold ETFs and ETPs for many years and has become the 
main form of gold in which creation and redemption requests are 
settled.
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    The Trust does not intend to hold a certain amount and maintains no 
minimum amount of gold in unallocated form to satisfy redemption 
requests or to pay expenses. Because the Trust has to pay the Sponsor's 
fee on a monthly basis and may receive a redemption request on any 
given business day (days other than a Saturday, Sunday or holiday) 
(``Business Day''), the Trust expects to hold some amount of 
unallocated gold at any given point in time. The Trust's holdings of 
unallocated gold may be a significant percentage of the Trust's assets 
if, for example, the Trust has received more requests for creations 
than redemptions or the Trust's unallocated gold holdings are not 
sufficient to meet certain minimum size requirements to exchange 
unallocated gold to Sprott ESG Approved Gold at the Mint. There may be 
other times when the Trust's holdings of unallocated gold are a 
significant percentage of the Trust's assets, and there is no maximum 
percentage of the Trust's assets that may consist of unallocated gold. 
The Trust may need to instruct the Mint to exchange Sprott ESG Approved 
Gold into unallocated gold if insufficient unallocated gold is 
available to be sold to pay expenses or to meet redemption 
requests.\29\
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    \29\ Because Authorized Participants (as defined below) expect 
redemption requests to be settled through the delivery of 
unallocated gold (as opposed to allocated gold which is in the form 
of physical bars), the Trust may at times need to exchange allocated 
for unallocated gold.
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There Is No Industry Standard for ESG Factors That Apply to Gold 
Production
    There is no industry standard for ESG factors that apply to gold 
production. The ESG Criteria and the processes and methods for 
producing and using Sprott ESG Approved Gold for the Trust's operations 
have been developed by the Sponsor specifically for the Trust; 
specifically, the Mint will segregate the dor[eacute] \30\ received 
from Sprott ESG Approved Mines from dor[eacute] originating from non-
Sprott ESG Approved Mines, and will segregate Sprott ESG Approved Gold 
from gold produced from dor[eacute] originating from non-Sprott ESG 
Approved Mines. Sprott ESG Approved Gold will be produced by the Mint 
in special runs that will ensure that no gold from non-Sprott ESG 
Approved Mines will be included in the bars of Sprott ESG Approved 
Gold. No such special runs will take place until the launch of the 
Trust; therefore, there have been no market transactions in Sprott ESG 
Approved Gold. The Trust is not aware of a separate market for Sprott 
ESG Approved Gold and does not believe that one will develop. Bars that 
consist of Sprott ESG Approved Gold are not marked in any special way, 
nor do such bars have any special physical characteristics (aside from 
consisting only of Sprott ESG Approved Gold) and they are 
indistinguishable from LBMA London Good Delivery. Once Sprott ESG 
Approved Gold bars leave the possession of the Trust, they will be 
treated as regular LBMA London Good Delivery gold. It is not possible 
for a market participant to purchase all the Sprott ESG Approved Gold 
bars in order to affect the ability of the Trust to add Sprott ESG 
Approved Gold bars to its inventory, as the Trust relies on the Mint to 
refine and produce the Sprott ESG Approved Gold bars and does not rely 
on any bars that have left the possession of the Trust. Although there 
are additional costs associated with sourcing and producing Sprott ESG 
Approved Gold that will be included in the Sponsor's fee, the value of 
the Sprott ESG Approved Gold held by the Trust will be determined by 
utilizing the LBMA Gold Price PM (as defined below), which does not 
distinguish between gold that meets ESG Criteria and gold that does 
not.\31\ The ESG Criteria used by the Sponsor to screen the sources for 
the Trust's Sprott ESG Approved Gold may or may not be consistent with 
current or future standards used by others in the industry.
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    \30\ The raw material created by mines that is used to refine 
gold is called ``dor[eacute]''.
    \31\ See ``How Sprott ESG Approved Gold Will be Created for the 
Trust'' and ``Valuation of the Trust's Gold'' below.
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How Sprott ESG Approved Gold Will Be Created for the Trust
    In order to create Sprott ESG Approved Gold, the Mint will, upon 
request by the Trust, from time to time refine dor[eacute] from Sprott 
ESG Approved Mines to produce bars of Sprott ESG Approved Gold. The 
dor[eacute] used to create Sprott ESG Approved Gold is 
indistinguishable from dor[eacute] already used by the Mint for gold 
production; \32\ no separate market or marketplace exists for gold 
produced using such dor[eacute]. Sprott ESG Approved Gold is the 
combination of sourcing of the dor[eacute] and production of the gold 
by the Mint in special production runs.
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    \32\ The Mint uses dor[eacute] from these mines to create Post-
2012 LBMA Bars. See footnote 32 [sic], infra.
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    In order to ensure that the Sprott ESG Approved Gold created by the 
Mint uses only dor[eacute] from Sprott ESG Approved Mines, the Mint 
will create the Trust's Sprott ESG Approved Gold in special production 
runs, and will charge a special processing fee for that. This special 
processing fee, along with any additional costs associated with the 
enhanced sourcing requirements of Sprott ESG Approved Gold, including 
researching, establishing and maintaining the ESG Criteria, assessing 
mining companies and mines against certain of the ESG Criteria and the 
diligence of the Trust's Sprott ESG Approved Gold Holdings will be 
included in the Sponsor's fee.
Valuation of the Trust's Gold
    ``London Good Delivery'' means gold bars that meet the standard 
measure of quality in gold bullion as set forth by

[[Page 18841]]

the London Bullion Market Association (``LBMA''). All London Good 
Delivery gold is priced equally; the only requirement is that it meets 
LBMA standards.'' \33\
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    \33\ For instance, LBMA changed its gold sourcing standards in 
2012. Because gold is generally never destroyed once it is minted, 
today there are London Good Delivery gold bars available that were 
created before 2012 (using pre-2012 LBMA standards) (``Pre-2012 LBMA 
Bars'') and London Good Delivery gold bars that were created after 
the 2012 standards were implemented by the LBMA (``Post-2012 LBMA 
Bars''). When purchasing London Good Delivery gold bars, it is 
possible to selectively purchase Post-2012 LBMA Bars. 
Notwithstanding the differing sourcing standards, both Pre-2012 LBMA 
Bars and Post-2012 LBMA Bars are priced the same.
---------------------------------------------------------------------------

    Sprott ESG Approved Gold meets the standards of London Good 
Delivery gold bars and the more stringent ESG Criteria developed by the 
Sponsor and shall be from Sprott ESG Approved Mines. As discussed below 
under ``No Separate Market for Sprott ESG Approved Gold Exists'', no 
separate market for Sprott ESG Approved Gold exists and none is 
expected to develop. Because Sprott ESG Approved Gold is London Good 
Delivery gold and because no separate market for Sprott ESG Approved 
Gold exists, the Sponsor determined that its Sprott ESG Approved Gold 
should be valued, for purposes of determining the net asset value 
(``NAV'') of the Trust, as London Good Delivery gold.\34\
---------------------------------------------------------------------------

    \34\ The Trust reached that conclusion based on the fact that 
Pre-2012 LBMA Bars and Post-2012 LBMA Bars are valued the same. See 
footnote 32 [sic], supra.
---------------------------------------------------------------------------

    The value of the gold held by the Trust, whether allocated Sprott 
ESG Approved Gold or unallocated gold, will be determined by utilizing 
the p.m. price of gold expressed in U.S. dollars, as published by the 
LBMA (the ``LBMA Gold Price PM'').\35\ The LBMA Gold Price PM, which is 
used to value gold by many stakeholders in the securities industry,\36\ 
applies to all forms of gold and does not distinguish between Sprott 
ESG Approved Gold and other gold.
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    \35\ All references to LBMA Gold Price PM are used with the 
permission of Ice Benchmark Administration Limited and have been 
provided for information purposes only. Ice Benchmark Administration 
Limited accepts no liability or responsibility for the accuracy of 
the prices or the underlying product to which the prices may be 
referenced.
    \36\ The SPDR Gold Trust, the iShares Gold Trust, the Aberdeen 
Standard Physical Gold Shares ETF, the VanEck Merk Gold Trust and 
the GraniteShares Gold Trust, among others, each use the LBMA Gold 
Price PM.
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Operation of the Gold Market
    The global trade in gold consists of OTC transactions in spot, 
forwards, and options and other derivatives, together with exchange-
traded futures and options.
    The OTC gold market includes spot, forward, and option and other 
derivative transactions conducted on a principal-to-principal basis. 
While this is a global, nearly 24-hour per day market, its main centers 
are London, New York, and Zurich.
    According to the Registration Statement, most OTC market trades are 
cleared through London. The LBMA plays an important role in setting OTC 
gold trading industry standards. A London Good Delivery Bar (as 
described below), which is acceptable for settlement of any OTC 
transaction, will be acceptable for delivery to the Trust in connection 
with the issuance of Creation Units (defined below).
    The most significant gold futures exchange in the U.S. is COMEX, 
operated by Commodities Exchange, Inc., a subsidiary of New York 
Mercantile Exchange, Inc., and a subsidiary of the Chicago Mercantile 
Exchange Group (the ``CME Group''). Other commodity exchanges include 
the Tokyo Commodity Exchange (``TOCOM''), the Multi Commodity Exchange 
Of India (``MCX''), the Shanghai Futures Exchange, ICE Futures US (the 
``ICE''), and the Dubai Gold & Commodities Exchange. The CME Group and 
ICE are members of the Intermarket Surveillance Group (``ISG'').
No Separate Market for Sprott ESG Approved Gold
    As discussed in ``Valuation of the Trust's Gold'' above, all London 
Good Delivery gold is deemed fungible by participants in the gold 
market and is valued the same. For example, Pre-2012 LBMA Bars and 
Post-2012 LBMA Bars are priced identically, even though the dor[eacute] 
to create gold Post-2012 LBMA Bars is subject to different and 
generally more rigorous responsible gold sourcing guidelines than gold 
used to create Pre-2012 LBMA Bars.
    In addition, there is no industry standard for ESG factors that 
apply to gold production and even if an industry standard for ESG 
factors that apply to gold production were to develop, it is likely 
that such industry standards would be different than the ESG Criteria. 
The ESG Criteria and the method for producing and using Sprott ESG 
Approved Gold for the Trust's operations have been designed by the 
Sponsor specifically for the Trust, and the ESG Criteria are not used 
by anyone other than the Trust. The Mint will not conduct any special 
runs to produce Sprott ESG Approved Gold until the launch of the Trust; 
therefore, there have been no market transactions in Sprott ESG 
Approved Gold. The Trust is not aware of a separate market for Sprott 
ESG Approved Gold and does not believe that one will develop, both 
because the ESG Criteria are unique to the Trust and the uniform 
pricing of London Good Delivery gold throughout the gold market, as 
shown by the example of Pre-2012 LBMA bars and Post-2012 LBMA bars.\37\
---------------------------------------------------------------------------

    \37\ See also ``There Is No Industry Standard for ESG Factors 
That Apply to Gold Production,'' supra, discussing how Sprott ESG 
Approved Gold bars and other London Good Delivery Bars will be 
indistinguishable from each other once Sprott ESG Approved Gold bars 
are no longer in the possession of the Trust.
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The London Gold Bullion Market
    According to the Registration Statement, most trading in physical 
gold is conducted on the OTC market, predominantly in London. LBMA 
coordinates various OTC-market activities, including clearing and 
vaulting, acts as the principal intermediary between physical gold 
market participants and the relevant regulators, promotes good trading 
practices and develops standard market documentation. In addition, the 
LBMA promotes refining standards for the gold market by maintaining the 
``London Good Delivery List,'' which identifies refiners of gold that 
have been approved by the LBMA. In the OTC market, gold bars that meet 
the specifications for weight, dimensions, fineness (or purity), 
identifying marks (including the assay stamp of an LBMA-acceptable 
refiner) and appearance described in ``The Good Delivery Rules for Gold 
and Silver Bars'' published by the LBMA are referred to as ``London 
Good Delivery Bars.'' A London Good Delivery Bar (typically called a 
``400 ounce bar'') must contain between 350 and 430 fine troy ounces of 
gold (1 troy ounce = 31.1034768 grams), with a minimum fineness (or 
purity) of 995 parts per 1000 (99.5%), be of good appearance and be 
easy to handle and stack. The fine gold content of a gold bar is 
calculated by multiplying the gross weight of the bar (expressed in 
units of 0.025 troy ounces) by the fineness of the bar. A London Good 
Delivery Bar must also bear the stamp of one of the refiners identified 
on the London Good Delivery List.
    Following the enactment of the Financial Markets Act 2012, the 
Prudential Regulation Authority of the Bank of England is responsible 
for regulating most of the financial firms that are active in the 
bullion market, and the Financial Conduct Authority is responsible for 
consumer and competition issues. Trading in spot, forwards and 
wholesale deposits in the bullion market is subject to the Non-

[[Page 18842]]

Investment Products (``NIPS'') Code adopted by market participants.
Creation and Redemption of Shares
    The Trust will create and redeem Shares on a continuous basis in 
one or more blocks of 25,000 Shares (a block of 25,000 Shares is called 
a ``Creation Unit''). As described below, the Trust will issue Shares 
in Creation Units to certain authorized participants (``Authorized 
Participants'') on an ongoing basis. Each Authorized Participant must 
be a registered broker-dealer or other securities market participant 
such as a bank or other financial institution which is not required to 
register as a broker-dealer to engage in securities transactions, a 
participant in The Depository Trust Company (``DTC''), must have 
entered into an agreement with the Administrator (the ``Participant 
Agreement''), and must maintain an unallocated gold account with a 
London Precious Metals Clearing Limited clearing bank (the ``London 
Gold Clearing Bank''). The creation or redemption of Creation Units is 
only made in exchange for LBMA unallocated gold delivered to the Trust 
by an Authorized Participant or from the Trust to an Authorized 
Participant. Unallocated gold delivered to the Trust in connection with 
the creation of Creation Baskets will be exchanged by the Mint into 
Sprott ESG Approved Gold as described in ``Exchange of Unallocated Gold 
to Sprott ESG Approved Gold and Sprott ESG Approved Gold to Unallocated 
Gold'' below; likewise, whenever there is a redemption of Creation 
Units, the Mint will exchange Sprott ESG Approved Gold into unallocated 
gold. All such conversions are on a 1:1 basis, that is, each ounce of 
unallocated gold upon conversion will result in one ounce of Sprott ESG 
Approved Gold, and vice versa. Fees incurred with the exchange will be 
borne by the Sponsor, not the Trust.
    Creation Units may be created or redeemed only by Authorized 
Participants. Orders must be placed by 3:59 p.m. Eastern Time 
(``E.T.''). The day on which a Trust receives a valid purchase or 
redemption order is the order date. An Authorized Participant will be 
required to enter into a trading agreement with the Mint for purposes 
of facilitating transfers of unallocated gold between the Trust and the 
Authorized Participant.
    If an Authorized Participant places a creation order for a Creation 
Unit, it will deliver unallocated gold to the Trust, and the Mint will 
subsequently exchange the unallocated gold into an equal amount of 
Sprott ESG Approved Gold. The Mint stores Sprott ESG Approved Gold for 
the account of the Trust on an allocated basis (i.e., numbered gold 
bars held in the Mint's nominated vaults are identified in the Mint's 
records as belonging to the Trust). Generally, the Mint will also, from 
time-to-time, on a temporary basis store unallocated physical gold 
bullion under the following circumstances: (1) In connection with 
transfers of gold to settle creations and redemptions of Creation 
Units; (2) until additional Sprott ESG Approved Gold can be produced by 
the Mint; (3) to the extent that the Trust holds gold in an amount less 
than a whole bar; and (4) in connection with payment of expenses of the 
Trust.
    Creation Units are only issued or redeemed on a day that the 
Exchange is open for regular trading in an amount of gold determined by 
the Administrator. Because Sprott ESG Approved Gold can be sourced by 
the Mint only from a limited number of suppliers, from time-to-time, on 
a temporary basis until additional Sprott ESG Approved Gold can be 
produced by the Mint,\38\ the Trust will hold gold in unallocated form. 
No Shares will be issued unless the Mint has received the corresponding 
amount of unallocated gold from the Authorized Participant and 
allocated it to the Trust's Unallocated Account.
---------------------------------------------------------------------------

    \38\ Currently, the Mint expects that the creation of new Sprott 
ESG Approved Gold bars would take about five Business Days. See 
footnote 26 and accompanying text, supra, discussing why the Sponsor 
believes that a sufficient amount of raw material to create Sprott 
ESG Approved Gold for the Trust exists and will exist in the future.
---------------------------------------------------------------------------

    According to the Registration Statement, Authorized Participants 
may surrender Creation Units in exchange for the corresponding amount 
of gold announced by the Transfer Agent. Generally, all gold delivered 
to Authorized Participants in connection with such redemptions will be 
in unallocated form. The Sponsor will instruct the Mint to exchange 
Sprott ESG Approved Gold into unallocated gold using the procedure 
described above if the Trust does not have sufficient unallocated gold 
to meet a redemption request. Upon the surrender of such Shares and the 
payment of the Transfer Agent's applicable fee and of any expenses, 
taxes or charges, the Transfer Agent will deliver to the order of the 
redeeming Authorized Participant the amount of unallocated gold 
corresponding to the redeemed Creation Units to such Authorized 
Participant's account at a London Gold Clearing Bank. Shares can only 
be surrendered for redemption in Creation Units of 25,000 Shares each.
    Before surrendering Creation Units for redemption, an Authorized 
Participant must deliver to the Trustee a written request indicating 
the number of Creation Units it intends to redeem. The date the Trustee 
receives that order determines the amount of unallocated gold to be 
received in exchange. However, orders received by the Trustee after 
3:59 p.m. E.T. will be rejected.
    The redemption distribution from the Trust will consist of a 
delivery of unallocated gold to the redeeming Authorized Participant's 
account at a London Gold Clearing Bank representing the amount of the 
unallocated gold held by the Trust evidenced by the Shares being 
redeemed as of the date of the redemption order.
Exchange of Unallocated Gold to Sprott ESG Approved Gold and Sprott ESG 
Approved Gold to Unallocated Gold
    Creations and redemptions of Creation Units will be settled in 
unallocated gold, meaning that if an Authorized Participant places a 
creation order for a Creation Unit, it will deliver unallocated gold to 
the Trust, which will be held in the Trust's Unallocated Gold Account. 
The Mint will subsequently exchange the unallocated gold into an equal 
amount of Sprott ESG Approved Gold as described in ``How Sprott ESG 
Approved Gold Will be Created for the Trust'' above upon receipt of 
instructions from the Sponsor on behalf of the Trust to do so. Once 
exchanged into bars of Sprott ESG Approved Gold, the Mint stores such 
gold for account of the Trust on an allocated basis (i.e., numbered 
gold bars held in the Mint's nominated vaults are identified in the 
Mint's records as belonging to the Trust).
    The Mint expects that it will be able to produce Sprott ESG 
Approved Gold within approximately five Business Days following the 
receipt of completed conversion request by the Sponsor on behalf of the 
Trust to exchange unallocated gold into Sprott ESG Approved Gold, 
subject to production capacity, availability and size requirements. The 
Business Day on which the conversion is to occur will be confirmed to 
the Sponsor in writing by the Mint. The Mint will issue a receipt of 
deposit of the bars of Sprott ESG Approved Gold to the Trust's 
Allocated Gold Account on the Business Day the production of all Sprott 
ESG Approved Gold underlying a conversion request form is completed and 
the Sprott ESG Approved Gold has been delivered to the Trust's 
Allocated Gold Account.

[[Page 18843]]

    Like creations, redemptions of Creation Units will be settled in 
unallocated gold. If there is not sufficient unallocated gold in the 
Trust's Unallocated Gold Account, the Mint will exchange Sprott ESG 
Approved Gold for an equal amount of unallocated gold upon the receipt 
of proper instructions from the Sponsor to exchange an amount of Sprott 
ESG Approved Gold from the Trust's Allocated Account and deposit an 
equal amount of unallocated gold into the Trust's Unallocated Account. 
The Sponsor will make such exchange requests based on its determination 
of the Trust's needs for unallocated gold to meet redemption requests 
and to pay expenses. The written exchange request must specify the 
Sprott ESG Approved Gold to be exchanged, including, for each bar to be 
exchanged, the bar number, the weight in fine and gross troy ounces and 
the assay characteristics. Exchanges of Sprott ESG Approved Gold into 
unallocated gold will be processed within one (1) Business Day from 
reception of proper and complete instructions in writing and will be 
confirmed by the Mint by facsimile or email on the day the exchange is 
completed. The Mint will issue a confirmation of a completed exchange 
by facsimile or by email on the Business Day that the exchange is 
completed.
    All exchanges of unallocated gold to Sprott ESG Approved Gold and 
from Sprott ESG Approved Gold to unallocated gold are on a 1:1 basis, 
that is, each ounce of unallocated gold upon conversion will result in 
one ounce of Sprott ESG Approved Gold, and vice versa. Fees incurred 
with the exchange will included in the Sponsor's fee.
Net Asset Value
    The NAV of the Trust will be calculated by subtracting the Trust's 
expenses and liabilities on any day from the value of the gold (in 
whatever form) and cash (if any) owned by the Trust on that day; the 
NAV per Share will be obtained by dividing the NAV of the Trust on a 
given day by the number of Shares outstanding on that day.\39\
---------------------------------------------------------------------------

    \39\ The Trust will be responsible for the Sponsor's fee and the 
fees and expenses that are not contractually assumed by the Sponsor, 
including but not limited to taxes and governmental charges, 
expenses related to extraordinary services performed by the Sponsor 
or other service provider of the Trust, and litigation and 
indemnification obligations of the Trust. The Trust only invests in 
gold, but may have other assets on its balance sheet from time to 
time such as cash on a temporary basis or a receivable that is 
incidental to the operations of the Trust (for example, a receivable 
created as a result of a fee waiver from the Sponsor).
---------------------------------------------------------------------------

    On each day on which the Exchange is open for regular trading, the 
Administrator will determine the NAV as promptly as practicable after 
4:00 p.m. E.T. The Administrator will value the Trust's gold, 
regardless of whether it is in the form of allocated Sprott ESG 
Approved Gold or unallocated gold, on the basis of LBMA Gold Price PM. 
If the Sponsor deems it necessary, the Sponsor and the Administrator 
may agree to use a widely recognized pricing service for purposes of 
ascertaining the price of gold to use when calculating the NAV. The NAV 
per Share will be calculated by taking the current price of the Trust's 
total assets, subtracting any liabilities, and dividing by the total 
number of Shares outstanding.
    Authorized Participants will not receive from the Sponsor, the 
Trust or any affiliates any fee or other compensation in connection 
with the offering of the Shares.
Availability of Information Regarding Gold
    Currently, the Consolidated Tape Plan does not provide for 
dissemination of the spot price of a commodity such as gold over the 
Consolidated Tape. However, there will be disseminated over the 
Consolidated Tape the last sale price for the Shares, as is the case 
for all equity securities traded on the Exchange (including exchange-
traded funds). In addition, there is a considerable amount of 
information about gold and gold markets available on public websites 
and through professional and subscription services.
    Investors may obtain gold pricing information on a 24-hour basis 
based on the spot price for an ounce of gold from various financial 
information service providers, such as Reuters and Bloomberg.
    Reuters and Bloomberg, for example, provide at no charge on their 
websites delayed information regarding the spot price of gold and last 
sale prices of gold futures, as well as information about news and 
developments in the gold market. Reuters and Bloomberg also offer a 
professional service to subscribers for a fee that provides information 
on gold prices directly from market participants. Complete real-time 
data for gold futures and options prices traded on the COMEX are 
available by subscription from Reuters and Bloomberg. There are a 
variety of other public websites providing information on gold, ranging 
from those specializing in precious metals to sites maintained by major 
newspapers. In addition, the LBMA Gold Price is publicly available at 
no charge at www.lbma.org.uk.
Availability of Information
    The intraday indicative value (``IIV'') per Share for the Shares 
will be disseminated by one or more major market data vendors on at 
least a 15-second delayed basis, as required by NYSE Arca Rule 8.201-
E(e)(2)(v). The IIV will be calculated based on the amount of gold held 
by the Trust (regardless of whether it is in the form of allocated 
Sprott ESG Approved Gold or unallocated gold) and a price of gold 
derived from updated bids and offers indicative of the spot price of 
gold.\40\ The NAV of the Trust will be published on each Business Day 
and will be posted on the Trust's website.
---------------------------------------------------------------------------

    \40\ The IIV on a per Share basis disseminated during the Core 
Trading Session should not be viewed as a real-time update of the 
NAV, which is calculated once a day.
---------------------------------------------------------------------------

    The website for the Trust (https://sprott.com/investment-strategies/physical-bullion-trusts) will contain the following 
information, on a per Share basis, for the Trust: (a) The mid-point of 
the bid-ask price \41\ at the close of trading (``Bid/Ask Price''), and 
a calculation of the premium or discount of such price against such 
NAV; and (b) data in chart format displaying the frequency distribution 
of discounts and premiums of the Bid/Ask Price against the NAV, within 
appropriate ranges, for each of the four previous calendar quarters. 
The website for the Trust will also provide the Trust's prospectus as 
well as the two most recent reports to shareholders. The daily holdings 
of the Trust's unallocated gold and Sprott ESG Approved Gold will be 
available on the Trust's website before 9:30 a.m. E.T. each Business 
Day. Finally, the Trust's website will be updated once daily to provide 
the last sale price of the Shares as traded in the U.S. market at the 
end of regular trading. In addition, information regarding market price 
and trading volume of the Shares will be continually available on a 
real-time basis throughout the day on brokers' computer screens and 
other electronic services. Information regarding the previous day's 
closing price and trading volume information for the Shares will be 
published daily in the financial section of newspapers.
---------------------------------------------------------------------------

    \41\ The bid-ask price of the Shares will be determined using 
the highest bid and lowest offer on the Consolidated Tape as of the 
time of calculation of the closing day NAV.
---------------------------------------------------------------------------

    The Trust will maintain, on its website, current lists of the ESG 
Criteria, and Sprott ESG Approved Mines and Sprott ESG Approved Mining 
Companies from which the Trust sources its Sprott ESG Approved Gold. 
The Trust anticipates that Sprott ESG Approved Mines and Sprott ESG

[[Page 18844]]

Approved Mining Companies may be added or removed from such lists over 
time based on, among other things, whether such Sprott ESG Approved 
Mines and Sprott ESG Approved Mining Companies meet the evolving ESG 
Criteria and whether they are Mint Approved Mines. The Trust will 
update the information on its website promptly after any change to the 
ESG Criteria, Sprott ESG Approved Mines or Sprott ESG Approved Mining 
Companies.
Criteria for Initial and Continued Listing
    The Trust will be subject to the criteria in NYSE Arca Rule 8.201-
E(e) for initial and continued listing of the Shares.
    A minimum of two Creation Units or 100,000 Shares will be required 
to be outstanding at the start of trading, which is equivalent to 
20,000 fine ounces of gold or about $36,527,000 as of February 9, 2022. 
The Exchange believes that the anticipated minimum number of Shares 
outstanding at the start of trading is sufficient to provide adequate 
market liquidity.
Trading Rules
    The Exchange deems the Shares to be equity securities, thus 
rendering trading in the Trust subject to the Exchange's existing rules 
governing the trading of equity securities. Trading in the Shares on 
the Exchange will occur in accordance with NYSE Arca Rule 7.34-E(a). 
The Exchange has appropriate rules to facilitate transactions in the 
Shares during all trading sessions. As provided in NYSE Arca Rule 7.6-
E, Commentary .03, the minimum price variation (``MPV'') for quoting 
and entry of orders in equity securities traded on the NYSE Arca 
Marketplace is $0.01, with the exception of securities that are priced 
less than $1.00 for which the MPV for order entry is $0.0001.
    Further, NYSE Arca Rule 8.201-E sets forth certain restrictions on 
ETP Holders acting as registered Market Makers in the Shares to 
facilitate surveillance. Under NYSE Arca Rule 8.201-E(g), an ETP Holder 
acting as a registered Market Maker in the Shares is required to 
provide the Exchange with information relating to its trading in the 
underlying gold, any related futures or options on futures, or any 
other related derivatives. Commentary .04 of NYSE Arca Rule 11.3-E 
requires an ETP Holder acting as a registered Market Maker, and its 
affiliates, in the Shares to establish, maintain and enforce written 
policies and procedures reasonably designed to prevent the misuse of 
any material nonpublic information with respect to such products, any 
components of the related products, any physical asset or commodity 
underlying the product, applicable currencies, underlying indexes, 
related futures or options on futures, and any related derivative 
instruments (including the Shares).
    As a general matter, the Exchange has regulatory jurisdiction over 
its ETP Holders and their associated persons, which include any person 
or entity controlling an ETP Holder. To the extent the Exchange may be 
found to lack jurisdiction over a subsidiary or affiliate of an ETP 
Holder 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.
    With respect to trading halts, the Exchange may consider all 
relevant factors in exercising its discretion to halt or suspend 
trading in the Shares. Trading on the Exchange in the Shares 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 conditions in the underlying gold 
market have caused disruptions and/or lack of trading, or (2) whether 
other unusual conditions or circumstances detrimental to the 
maintenance of a fair and orderly market are present. In addition, 
trading in Shares will be subject to trading halts caused by 
extraordinary market volatility pursuant to the Exchange's ``circuit 
breaker'' rule.\42\ The Exchange will halt trading in the Shares if the 
NAV of the Trust is not calculated or disseminated daily. The Exchange 
may halt trading during the day in which an interruption occurs to the 
dissemination of the IIV, as described above. If the interruption to 
the dissemination of the IIV persists past the trading day in which it 
occurs, the Exchange will halt trading no later than the beginning of 
the trading day following the interruption.
---------------------------------------------------------------------------

    \42\ See NYSE Arca Rule 7.12-E.
---------------------------------------------------------------------------

Surveillance
    The Exchange represents that trading in the Shares will be subject 
to the existing trading surveillances administered by the Exchange, as 
well as cross-market surveillances administered by the Financial 
Industry Regulatory Authority (``FINRA'') on behalf of the Exchange, 
which are designed to detect violations of Exchange rules and 
applicable federal securities laws.\43\ The Exchange represents that 
these procedures are adequate to properly monitor Exchange trading of 
the Shares in all trading sessions and to deter and detect violations 
of Exchange rules and federal securities laws applicable to trading on 
the Exchange.
---------------------------------------------------------------------------

    \43\ FINRA conducts 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 surveillances referred to above generally focus on detecting 
securities trading outside their normal patterns, which could be 
indicative of manipulative or other violative activity. When such 
situations are detected, surveillance analysis follows and 
investigations are opened, where appropriate, to review the behavior of 
all relevant parties for all relevant trading violations.
    The Exchange or FINRA, on behalf of the Exchange, or both, will 
communicate as needed regarding trading in the Shares with other 
markets and other entities that are members of the ISG, and the 
Exchange or FINRA, on behalf of the Exchange, or both, may obtain 
trading information regarding trading in the Shares from such markets 
and other entities. In addition, the Exchange may obtain information 
regarding trading in the Shares from markets and other entities that 
are members of ISG or with which the Exchange has in place a 
comprehensive surveillance sharing agreement.\44\
---------------------------------------------------------------------------

    \44\ For a list of the current members of ISG, see 
www.isgportal.org.
---------------------------------------------------------------------------

    Also, pursuant to NYSE Arca Rule 8.201-E(g), the Exchange is able 
to obtain information regarding trading in the Shares and the 
underlying gold, gold futures contracts, options on gold futures or any 
other gold derivatives through ETP Holders acting as registered Market 
Makers, in connection with such ETP Holders' proprietary or customer 
trades through ETP Holders which they effect on any relevant market.
    In addition, the Exchange also has a general policy prohibiting the 
distribution of material, non-public information by its employees.
    All statements and representations made in this filing regarding 
(a) the description of the portfolio or reference assets, (b) 
limitations on portfolio holdings or reference assets, or (c) the 
applicability of Exchange listing rules specified in this rule filing 
shall constitute continued listing requirements for listing the Shares 
of the Trust on the Exchange.
    The issuer has represented to the Exchange that it will advise the 
Exchange of any failure by the Trust to

[[Page 18845]]

comply with the continued listing requirements, and, pursuant to its 
obligations under Section 19(g)(1) of the Act, the Exchange will 
monitor for compliance with the continued listing requirements. If the 
Trust is not in compliance with the applicable listing requirements, 
the Exchange will commence delisting procedures under NYSE Arca Rule 
5.5-E(m).
Information Bulletin
    Prior to the commencement of trading, the Exchange will inform its 
ETP Holders in an Information Bulletin of the special characteristics 
and risks associated with trading the Shares. Specifically, the 
Information Bulletin will discuss the following: (1) The procedures for 
purchases and redemptions of Shares in Creation Units (including noting 
that Shares are not individually redeemable); (2) NYSE Arca Rule 9.2-
E(a), which imposes a duty of due diligence on its ETP Holders to learn 
the essential facts relating to every customer prior to trading the 
Shares; (3) how information regarding the IIV is disseminated; (4) the 
requirement that ETP Holders deliver a prospectus to investors 
purchasing newly issued Shares prior to or concurrently with the 
confirmation of a transaction; (5) the possibility that trading spreads 
and the premium or discount on the Shares may widen as a result of 
reduced liquidity of gold trading during the Core and Late Trading 
Sessions after the close of the major world gold markets; and (6) 
trading information. For example, the Information Bulletin will advise 
ETP Holders, prior to the commencement of trading, of the prospectus 
delivery requirements applicable to the Trust. The Exchange notes that 
investors purchasing Shares directly from the Trust will receive a 
prospectus. ETP Holders purchasing Shares from the Trust for resale to 
investors will deliver a prospectus to such investors. In addition, the 
Information Bulletin will reference that the Trust is subject to 
various fees and expenses as will be described in the Registration 
Statement. The Information Bulletin will also reference the fact that 
there is no regulated source of last sale information regarding 
physical gold, that the Commission has no jurisdiction over the trading 
of gold as a physical commodity, and that the CFTC has regulatory 
jurisdiction over the trading of gold futures contracts and options on 
gold futures contracts. The Information Bulletin will also discuss any 
relief, if granted, by the Commission or the staff from any rules under 
the Act.
2. Statutory Basis
    The basis under the Act for this proposed rule change is the 
requirement under Section 6(b)(5) \45\ that an exchange have rules that 
are designed to prevent fraudulent and manipulative acts and practices, 
to promote just and equitable principles of trade, to remove 
impediments to, and perfect the mechanism of a free and open market 
and, in general, to protect investors and the public interest.
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    \45\ 15 U.S.C. 78f(b)(5).
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    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 and traded on the Exchange pursuant to the 
initial and continued listing criteria in NYSE Arca Rule 8.201-E. The 
Exchange has in place surveillance procedures that are adequate to 
properly monitor trading in the Shares in all trading sessions and to 
deter and detect violations of Exchange rules and applicable federal 
securities laws. The Exchange may obtain information via ISG from other 
exchanges that are members of ISG or with which the Exchange has 
entered into a comprehensive surveillance sharing agreement.
    The proposed rule change is designed to promote just and equitable 
principles of trade and to protect investors and the public interest in 
that there is a considerable amount of gold price and gold market 
information available on public websites and through professional and 
subscription services. Investors may obtain on a 24-hour basis gold 
pricing information based on the spot price for an ounce of gold from 
various financial information service providers. Investors may obtain 
gold pricing information based on the spot price for an ounce of gold 
from various financial information service providers. Current spot 
prices also are generally available with bid/ask spreads from gold 
bullion dealers. In addition, the Trust's website will provide pricing 
information for gold spot prices and the Shares. Market prices for the 
Shares will be available from a variety of sources including brokerage 
firms, information websites and other information service providers. 
The NAV of the Trust will be published by the Sponsor on each day that 
the NYSE Arca is open for regular trading and will be posted on the 
Trust's website. The IIV relating to the Shares will be widely 
disseminated by one or more major market data vendors at least every 15 
seconds during the Core Trading Session. In addition, the LBMA Gold 
Price is publicly available at no charge at www.lbma.org.uk. The 
Trust's website will also provide the Trust's prospectus, as well as 
the two most recent reports to shareholders, and lists of the Trust's 
ESG Criteria, Sprott ESG Approved Mines and Sprott ESG Approved Mining 
Companies from which the Trust will source its Sprott ESG Approved 
Gold. In addition, information regarding market price and trading 
volume of the Shares will be continually available on a real-time basis 
throughout the day on brokers' computer screens and other electronic 
services. Information regarding the previous day's closing price and 
trading volume information for the Shares will be published daily in 
the financial section of newspapers.
    The proposed rule change is designed to perfect the mechanism of a 
free and open market and, in general, to protect investors and the 
public interest in that it will facilitate the listing and trading of 
an additional type of exchange-traded product that will enhance 
competition among market participants, to the benefit of investors and 
the marketplace. As noted above, the Exchange has in place surveillance 
procedures relating to trading in the Shares and may obtain information 
via ISG from other exchanges that are members of ISG or with which the 
Exchange has entered into a comprehensive surveillance sharing 
agreement. In addition, as noted above, investors will have ready 
access to information regarding gold pricing.

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. The Exchange believes the 
proposed rule change will enhance competition by accommodating Exchange 
trading of an additional exchange-traded product relating to physical 
gold.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were solicited or received with respect to the 
proposed rule change.

III. Discussion and Commission's Findings

    After careful review, the Commission finds that the proposed rule 
change, as modified by Amendment No. 1, is consistent with the Act and 
the rules and regulations thereunder applicable to

[[Page 18846]]

a national securities exchange.\46\ In particular, the Commission finds 
that the proposed rule change, as modified by Amendment No. 1, is 
consistent with Section 6(b)(5) of the Act,\47\ which requires, among 
other things, that the Exchange's rules be designed to prevent 
fraudulent and manipulative acts and practices, to promote just and 
equitable principles of trade, to remove impediments to and perfect the 
mechanism of a free and open market and a national market system, and, 
in general, to protect investors and the public interest.
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    \46\ In approving this proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. See 15 U.S.C. 78c(f).
    \47\ 15 U.S.C. 78f(b)(5).
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    The Commission believes that the proposed rule change is reasonably 
designed to promote fair disclosure of information that may be 
necessary to price the Shares appropriately. The NAV of the Trust will 
be published by the Sponsor on each day that the NYSE Arca is open for 
regular trading and will be posted on the Trust's website. The IIV 
relating to the Shares will be widely disseminated by one or more major 
market data vendors at least every 15 seconds during the Core Trading 
Session. The IIV will be calculated based on the amount of gold held by 
the Trust (regardless of whether it is in the form of allocated Sprott 
ESG Approved Gold or unallocated gold) and a price of gold derived from 
updated bids and offers indicative of the spot price of gold. Based on 
the information provided by the Exchange, the Commission believes that 
there is no separate market for Sprott ESG Approved Gold. Sprott ESG 
Approved Gold will be physically indistinguishable from LBMA London 
Good Delivery gold. All gold held by the Trust, whether Sprott ESG 
Approved Gold or unallocated gold, will be valued the same and will be 
determined by the p.m. price of gold expressed in U.S. dollars, as 
published by the LBMA. Sprott ESG Approved Gold will meet the London 
Good Delivery standards, and unallocated gold held by the Trust 
consists of a pool of London Good Delivery gold bars. The LBMA Gold 
Price is publicly available at no charge at www.lbma.org.uk.
    Additionally, the website for the Trust (https://sprott.com/investment-strategies/physical-bullion-trusts) will contain the 
following information, on a per Share basis, for the Trust: (a) The 
mid-point of the bid-ask price \48\ at the close of trading (``Bid/Ask 
Price''), and a calculation of the premium or discount of such price 
against such NAV; and (b) data in chart format displaying the frequency 
distribution of discounts and premiums of the Bid/Ask Price against the 
NAV, within appropriate ranges, for each of the four previous calendar 
quarters. The website for the Trust will also provide the Trust's 
prospectus as well as the two most recent reports to shareholders.
---------------------------------------------------------------------------

    \48\ The bid-ask price of the Shares will be determined using 
the highest bid and lowest offer on the Consolidated Tape as of the 
time of calculation of the closing day NAV.
---------------------------------------------------------------------------

    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. The Trust's 
website will be updated once daily to provide the last sale price of 
the Shares as traded in the U.S. market at the end of regular trading. 
Information regarding the previous day's closing price and trading 
volume information for the Shares will be published daily in the 
financial section of newspapers. While the Consolidated Tape Plan does 
not provide for dissemination of the spot price of a commodity such as 
gold over the Consolidated Tape, the last sale price for the Shares 
will be disseminated over the Consolidated Tape. In addition, there is 
a considerable amount of information about gold and gold markets 
available on public websites and through professional and subscription 
services. Investors may obtain gold pricing information on a 24-hour 
basis based on the spot price for an ounce of gold from various 
financial information service providers.\49\
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    \49\ As the Exchange states, Reuters and Bloomberg, for example, 
provide at no charge on their websites delayed information regarding 
the spot price of gold and last sale prices of gold futures, as well 
as information about news and developments in the gold market. 
Reuters and Bloomberg also offer a professional service to 
subscribers for a fee that provides information on gold prices 
directly from market participants. Complete real-time data for gold 
futures and options prices traded on the COMEX are available by 
subscription from Reuters and Bloomberg. There are a variety of 
other public websites providing information on gold, ranging from 
those specializing in precious metals to sites maintained by major 
newspapers.
---------------------------------------------------------------------------

    The Commission also believes that the proposal is reasonably 
designed to prevent trading when a reasonable degree of transparency 
cannot be assured. The Exchange represents that it will halt trading in 
the Shares if the NAV of the Trust is not calculated or disseminated 
daily. If the IIV is not being disseminated as required, the Exchange 
may halt trading during the day in which the interruption to the 
dissemination of the IIV occurs. If the interruption to the 
dissemination of the IIV persists past the trading day in which it 
occurs, the Exchange will halt trading no later than the beginning of 
the trading day following the interruption. With respect to trading 
halts, the Exchange states that it may consider all relevant factors in 
exercising its discretion to halt or suspend trading in the Shares. 
Trading on the Exchange in the Shares 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 conditions in the underlying gold market have caused disruptions 
and/or lack of trading, or (2) whether other unusual conditions or 
circumstances detrimental to the maintenance of a fair and orderly 
market are present. In addition, trading in Shares will be subject to 
trading halts caused by extraordinary market volatility pursuant to the 
Exchange's ``circuit breaker'' rule.
    Additionally, NYSE Arca Rule 8.201-E(g) sets forth certain 
restrictions on ETP Holders acting as registered Market Makers in the 
Shares to facilitate surveillance. Under NYSE Arca Rule 8.201-E(g), an 
ETP Holder acting as a registered Market Maker in the Shares is 
required to provide the Exchange with information relating to its 
trading in the underlying gold, related futures or options on futures, 
or any other related derivatives. Commentary .04 of NYSE Arca Rule 
11.3-E requires an ETP Holder acting as a registered Market Maker, and 
its affiliates, in the Shares to establish, maintain and enforce 
written policies and procedures reasonably designed to prevent the 
misuse of any material nonpublic information with respect to such 
products, any components of the related products, any physical asset or 
commodity underlying the product, applicable currencies, underlying 
indexes, related futures or options on futures, and any related 
derivative instruments (including the Shares).\50\
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    \50\ The Exchange confirms that it has regulatory jurisdiction 
over its ETP Holders and their associated persons, which include any 
person or entity controlling an ETP Holder. A subsidiary or 
affiliate of an ETP Holder that does business only in commodities or 
futures contracts would not be subject to Exchange jurisdiction, but 
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.
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    Moreover, the Commission concludes that the proposal is reasonably 
designed to mitigate the Shares' susceptibility to manipulation and 
misuse of nonpublic information in trading in the Shares, consistent 
with Section 6(b)(5) of the Act,\51\ because the Shares will be subject

[[Page 18847]]

to the Exchange's and other rules below. Specifically:
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    \51\ 15 U.S.C. 78f(b)(5).
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    (1) The Trust will be subject to the criteria in NYSE Arca Rule 
8.201-E(e) for initial and continued listing of the Shares.
    (2) The Exchange has appropriate rules to facilitate transactions 
in the Shares during all trading sessions. Trading in the Shares on the 
Exchange will occur in accordance with NYSE Arca Rule 7.34-E(a).
    (3) The Exchange deems the Shares to be equity securities, thus 
rendering trading in the Trust subject to the Exchange's existing rules 
governing the trading of equity securities.
    (4) Trading in the Shares will be subject to the existing trading 
surveillances administered by the Exchange, as well as cross-market 
surveillances administered by FINRA on behalf of the Exchange, which 
are designed to detect violations of Exchange rules and applicable 
federal securities laws.\52\ The Exchange represents that these 
procedures are adequate to properly monitor Exchange trading of the 
Shares in all trading sessions and to deter and detect violations of 
Exchange rules and federal securities laws applicable to trading on the 
Exchange. These surveillances generally focus on detecting securities 
trading outside their normal patterns, which could be indicative of 
manipulative or other violative activity. When such situations are 
detected, surveillance analysis follows and investigations are opened, 
where appropriate, to review the behavior of all relevant parties for 
all relevant trading violations.
---------------------------------------------------------------------------

    \52\ FINRA conducts 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.
---------------------------------------------------------------------------

    (5) The Exchange or FINRA, on behalf of the Exchange, or both, will 
communicate as needed regarding trading in the Shares with other 
markets and other entities that are members of the ISG, and the 
Exchange or FINRA, on behalf of the Exchange, or both, may obtain 
trading information regarding trading in the Shares from such markets 
and other entities. In addition, the Exchange may obtain information 
regarding trading in the Shares from markets and other entities that 
are members of ISG or with which the Exchange has in place a 
comprehensive surveillance sharing agreement.
    (6) Pursuant to NYSE Arca Rule 8.201-E(g), the Exchange is able to 
obtain information regarding trading in the Shares and the underlying 
gold, gold futures contracts, options on gold futures or any other gold 
derivatives through ETP Holders acting as registered Market Makers, in 
connection with such ETP Holders' proprietary or customer trades 
through ETP Holders which they effect on any relevant market.
    (7) The Exchange has a general policy prohibiting the distribution 
of material, non-public information by its employees.
    (8) Prior to the commencement of trading, the Exchange will inform 
its ETP Holders in an Information Bulletin of the special 
characteristics and risks associated with trading the Shares. 
Specifically, the Information Bulletin will discuss the following: (a) 
The procedures for purchases and redemptions of Shares in Creation 
Units (including noting that Shares are not individually redeemable); 
(b) NYSE Arca Rule 9.2-E(a), which imposes a duty of due diligence on 
its ETP Holders to learn the essential facts relating to every customer 
prior to trading the Shares; (c) how information regarding the IIV is 
disseminated; (d) the requirement that ETP Holders deliver a prospectus 
to investors purchasing newly issued Shares prior to or concurrently 
with the confirmation of a transaction; (e) the possibility that 
trading spreads and the premium or discount on the Shares may widen as 
a result of reduced liquidity of gold trading during the Core and Late 
Trading Sessions after the close of the major world gold markets; and 
(f) trading information. The Exchange states that investors purchasing 
Shares directly from the Trust will receive a prospectus. ETP Holders 
purchasing Shares from the Trust for resale to investors will deliver a 
prospectus to such investors. In addition, the Information Bulletin 
will reference that the Trust is subject to various fees and expenses 
as will be described in the Registration Statement. The Information 
Bulletin will also reference the fact that there is no regulated source 
of last sale information regarding physical gold, that the Commission 
has no jurisdiction over the trading of gold as a physical commodity, 
and that the CFTC has regulatory jurisdiction over the trading of gold 
futures contracts and options on gold futures contracts. The 
Information Bulletin will also discuss any relief, if granted, by the 
Commission or the staff from any rules under the Act.
    (9) A minimum of 100,000 Shares will be required to be outstanding 
at the start of trading.
    In addition, pursuant to Commentary .04 of NYSE Arca Rule 8.201-E, 
all statements and representations made in this filing regarding (a) 
the description of the portfolio or reference assets, (b) limitations 
on portfolio holdings or reference assets, or (c) the applicability of 
Exchange listing rules specified in this rule filing shall constitute 
continued listing requirements for listing the Shares of the Trust on 
the Exchange.
    The issuer must notify the Exchange of any failure by the Trust to 
comply with the continued listing requirements. Pursuant to its 
obligations under Section 19(g)(1) of the Act, the Exchange will 
monitor \53\ for compliance with the continued listing requirements. If 
the Trust is not in compliance with the applicable listing 
requirements, the Exchange will commence delisting procedures under 
NYSE Arca Rule 5.5-E(m).
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    \53\ The Commission notes that certain proposals for the listing 
and trading of exchange-traded products include a representation 
that the exchange will ``surveil'' for compliance with the continued 
listing requirements. See, e.g., Securities Exchange Act Release No. 
77499 (April 1, 2016), 81 FR 20428, 20432 (April 7, 2016) (SR-BATS-
2016-04). In the context of this representation, it is the 
Commission's view that ``monitor'' and ``surveil'' both mean ongoing 
oversight of compliance with the continued listing requirements. 
Therefore, the Commission does not view ``monitor'' as a more or 
less stringent obligation than ``surveil'' with respect to the 
continued listing requirements.
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    Accordingly, for the foregoing reasons, the Commission finds that 
the proposed rule change, as modified by Amendment No. 1, is consistent 
with Section 6(b)(5) of the Act \54\ and the rules and regulations 
thereunder applicable to a national securities exchange.
---------------------------------------------------------------------------

    \54\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

IV. Solicitation of Comments on the Proposed Rule Change, as Modified 
by Amendment No. 1

    Interested persons are invited to submit written views, data, and 
arguments concerning whether the proposed rule change, as modified by 
Amendment No. 1, is consistent with the Act. Comments may be submitted 
by any of the following methods:

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-NYSEArca-2021-65 on the subject line.

Paper Comments

     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-NYSEArca-2021-65. This 
file number should be included on the

[[Page 18848]]

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 
(http://www.sec.gov/rules/sro.shtml). 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 10:00 a.m. and 3:00 p.m. Copies of 
the filing also will be available for inspection and copying at the 
principal office of the Exchange. All comments received will be posted 
without change. Persons submitting comments are cautioned that we do 
not redact or edit personal identifying information from comment 
submissions. You should submit only information that you wish to make 
available publicly. All submissions should refer to File Number SR-
NYSEArca-2021-65 and should be submitted on or before April 21, 2022.

V. Accelerated Approval of the Proposed Rule Change, as Modified by 
Amendment No. 1

    The Commission finds good cause to approve the proposed rule 
change, as modified by Amendment No. 1, prior to the thirtieth day 
after the date of publication of notice of the filing of Amendment No. 
1 in the Federal Register. As stated above, among other things, 
Amendment No. 1 to the proposed rule change went into greater detail 
with respect to characteristics of unallocated gold, Sprott ESG 
Approved Gold, and ESG Criteria, as well as valuation of the Trust's 
gold. Amendment No. 1 explained how Sprott ESG Approved Gold will be 
created for the Trust, as well as the process of the exchange or 
conversion of the types of gold held by the Trust, and how this occurs 
during creations and redemptions. Further, Amendment No. 1 represented 
that there is no separate market for Sprott ESG Approved Gold, there is 
no industry standard for ESG factors that apply to gold production and 
the value of the gold held by the Trust, whether allocated Sprott ESG 
Approved Gold or unallocated gold, will be determined by the LBMA Gold 
Price PM. Amendment No. 1 made additional representations, including 
regarding the Information Bulletin. Finally, Amendment No. 1 provided 
clarifications and technical edits to the proposed rule change. These 
changes and additional information in Amendment No. 1 assist the 
Commission in evaluating the Exchange's proposal and in determining 
that it is consistent with the Act. The Commission believes that such 
changes and additional information do not raise unique or novel 
regulatory issues under the Act. Accordingly, the Commission finds good 
cause, pursuant to Section 19(b)(2) of the Act,\55\ to approve the 
proposed rule change, as modified by Amendment No. 1, on an accelerated 
basis.
---------------------------------------------------------------------------

    \55\ 15 U.S.C. 78s(b)(2).
---------------------------------------------------------------------------

VI. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\56\ that the proposed rule change (SR-NYSEArca-2021-65), as 
modified by Amendment No. 1, be, and it hereby is, approved on an 
accelerated basis.
---------------------------------------------------------------------------

    \56\ Id.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\57\
---------------------------------------------------------------------------

    \57\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-06752 Filed 3-30-22; 8:45 am]
BILLING CODE 8011-01-P