[Federal Register Volume 88, Number 242 (Tuesday, December 19, 2023)]
[Notices]
[Pages 87830-87832]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-27786]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-99162; File No. SR-CboeBZX-2023-105]


Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend 
BZX Rule 14.11(e)(4)(C)(i) (Commodity-Based Trust Shares)

December 13, 2023.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on December

[[Page 87831]]

12, 2023, Cboe BZX Exchange, Inc. (``Exchange'' or ``BZX'') filed with 
the Securities and Exchange Commission (``Commission'') the proposed 
rule change as described in Items I and II below, which Items have been 
prepared by the Exchange. The Exchange filed the proposal as a ``non-
controversial'' proposed rule change pursuant to section 
19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-4(f)(6) thereunder.\4\ The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Cboe BZX Exchange, Inc. (``BZX'' or the ``Exchange'') is filing 
with the Securities and Exchange Commission (``Commission'' or ``SEC'') 
a proposed rule change to (1) to amend Exchange Rule 14.11(e)(4)(C)(i) 
(``Commodity-Based Trust Shares''); and (2) amend 14.11(e)(4)(C)(ii) to 
state that the term ``commodity'' is defined in section 1a(9) of the 
Commodity Exchange Act.
    The text of the proposed rule change is also available on the 
Exchange's website (http://markets.cboe.com/us/equities/regulation/rule_filings/bzx/), at the Exchange's Office of the Secretary, and at 
the Commission's Public Reference Room.

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

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of, and basis for, the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
sections A, B, and C below, of the most significant aspects of such 
statements.

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

1. Purpose
    The Exchange proposes (1) to amend Exchange Rule 14.11(e)(4)(C)(i) 
(``Commodity-Based Trust Shares''); and (2) to amend 14.11(e)(4)(C)(ii) 
to state that the term ``commodity'' is defined in section 1a(9) of the 
Commodity Exchange Act. The proposed rules are identical to NYSE Arca, 
Inc. (``Arca'') Rules 8.201-E(c)(1) and (2), respectively.\5\
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    \5\ See Securities and Exchange Act Nos. 89310 (July 14, 2020) 
85 FR 43932 (July 20, 2020) (SR-NYSEArca-2020-59) (Notice of Filing 
of Proposed Rule Change To Amend NYSE Arca Rule 8.201-E (Commodity-
Based Trust Shares) and To Permit the Listing and Trading of Shares 
of the United States Gold and Treasury Investment Trust Under NYSE 
Arca Rule 8.201-E); 90216 (October 16, 2020) 85 FR 67401 (October 
22, 2020) (Order Granting Accelerated Approval of a Proposed Rule 
Change, as Modified by Amendment No. 3, To Amend NYSE Arca Rule 
8.201-E (Commodity-Based Trust Shares) and To Permit the Listing and 
Trading of Shares of the Wilshire [w]Shares Enhanced Gold Trust 
Under Amended NYSE Arca Rule 8.201-E).
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    Under Exchange Rule 14.11(e)(4), the Exchange may propose to list 
and/or trade pursuant to UTP ``Commodity-Based Trust Shares.'' \6\ Rule 
14.11(e)(4)(C)(1) currently states that such securities are issued by a 
trust in a specified aggregate minimum number in return for a deposit 
of a quantity of the underlying commodity, and that, when aggregated in 
the same specified minimum number, may be redeemed at a holder's 
request by such trust which will deliver to the redeeming holder the 
quantity of the underlying commodity.
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    \6\ Commodity-Based Trust Shares are securities issued by a 
trust that represents investors' discrete identifiable and undivided 
beneficial ownership interest in the commodities deposited into the 
Trust. Rule 14.11(e)(4)(C)(i) defines the term ``Commodity-Based 
Trust Shares'' as follows: the term ``Commodity-Based Trust Shares'' 
means a security (a) that is issued by a trust (``Trust'') that 
holds a specified commodity deposited with the Trust; (b) that is 
issued by such Trust in a specified aggregate minimum number in 
return for a deposit of a quantity of the underlying commodity; and 
(c) that, when aggregated in the same specified minimum number, may 
be redeemed at a holder's request by such Trust which will deliver 
to the redeeming holder the quantity of the underlying commodity.
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    The Exchange proposes to amend Rule 14.11(e)(4)(C)(1) to provide: 
the term ``Commodity-Based Trust Shares'' means a security (a) that is 
issued by a trust (``Trust'') that holds (1) a specified commodity 
deposited with the Trust, or (2) a specified commodity and, in addition 
to such specified commodity, cash; (b) that is issued by such Trust in 
a specified aggregate minimum number in return for a deposit of a 
quantity of the underlying commodity and/or cash; and (c) that, when 
aggregated in the same specified minimum number, may be redeemed at a 
holder's request by such Trust which will deliver to the redeeming 
holder the quantity of the underlying commodity and/or cash. Given the 
competitive marketplace for exchange listings, the Exchange is 
conforming its listing rules to that of another exchange.\7\
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    \7\ See Arca Rule 8.201-E(c)(1).
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    The Exchange further proposes to amend Rule 14.11(e)(4)(C)(ii) to 
state that the term ``commodity'' is defined in section 1a(9) of the 
Commodity Exchange Act (rather than section 1(a)(4) as currently 
referenced in Rule 14.11(e)(4)(C)(ii)) to reflect an amendment to the 
Commodity Exchange Act included in the Dodd-Frank Wall Street Reform 
and Consumer Protection Act of 2010.\8\
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    \8\ Public Law 111-203, 124 Stat. 1900 (2010).
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    Last, the Exchange proposes to correct ministerial errors in Rule 
14.11(e)(4)(C)(ii) to remove several errant parentheses.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the Act and the rules and regulations thereunder applicable to the 
Exchange and, in particular, the requirements of section 6(b) of the 
Act.\9\ Specifically, the Exchange believes the proposed rule change is 
consistent with the section 6(b)(5) \10\ requirements that the rules of 
an exchange be designed to prevent fraudulent and manipulative acts and 
practices, to promote just and equitable principles of trade, to foster 
cooperation and coordination with persons engaged in regulating, 
clearing, settling, processing information with respect to, and 
facilitating transactions in securities, to remove impediments to and 
perfect the mechanism of a free and open market and a national market 
system, and, in general, to protect investors and the public interest. 
Additionally, the Exchange believes the proposed rule change is 
consistent with the section 6(b)(5) \11\ requirement that the rules of 
an exchange not be designed to permit unfair discrimination between 
customers, issuers, brokers, or dealers.
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    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(5).
    \11\ Id.
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    As noted above, the marketplace for exchange listings is highly 
competitive, and the Exchange's proposal is merely conforming its 
listing rules to that of another exchange. The Exchange believes the 
proposed change will facilitate the listing and trading of additional 
types of exchange-traded derivative securities products that will 
enhance competition among market participants, to the benefit of 
investors and the marketplace.
    The Exchange's proposal to amend Rule 14.11(e)(4)(C)(ii) to state 
that the term ``commodity'' is defined in section 1a(9) of the 
Commodity Exchange Act (rather than section 1(a)(4) as currently 
referenced in 14.11(e)(4)(C)(ii)) reflects an amendment to the 
Commodity Exchange Act included in the Dodd-Frank Wall Street Reform 
and Consumer

[[Page 87832]]

Protection Act of 2010.\12\ Furthermore, the proposed amendment is 
identical to Arca Rule 8.201-E(c)(2). The Exchange also believes its 
proposal to correct ministerial errors in Rule 14.11(e)(4)(C)(ii) will 
provide clarity in the Exchange's rulebook to the benefit of all 
investors.
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    \12\ Supra note 6.
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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 proposed rule change to 
Rule 14.11(e)(4)(C)(ii) does not address competitive issues, but 
rather, as discussed above, is merely intended to correct a reference 
to a modified Commodity Exchange Act rule. The Exchange believes the 
proposed rule change to Rule 14.11(e)(4)(C)(i) will enhance competition 
by accommodating Exchange trading of additional exchange-traded 
products.

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

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

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Pursuant to section 19(b)(3)(A) of the Act \13\ and Rule 19b-
4(f)(6) \14\ thereunder, the Exchange has designated this proposal as 
one that effects a change that: (i) does not significantly affect the 
protection of investors or the public interest; (ii) does not impose 
any significant burden on competition; and (iii) by its terms, does not 
become operative for 30 days after the date of the filing, or such 
shorter time as the Commission may designate if consistent with the 
protection of investors and the public interest.\15\
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    \13\ 15 U.S.C. 78s(b)(3)(A).
    \14\ 17 CFR 240.19b-4(f)(6).
    \15\ In addition, Rule 19b-4(f)(6) requires a self-regulatory 
organization to give the Commission written notice of its intent to 
file the proposed rule change at least five business days prior to 
the date of filing of the proposed rule change, or such shorter time 
as designated by the Commission. The Exchange has satisfied this 
requirement.
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    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act normally does not become operative for 30 days after the date of 
its filing. However, Rule 19b-4(f)(6)(iii) \16\ permits the Commission 
to designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange requested 
that the Commission waive the 30-day operative delay so that the 
proposal may become operative immediately upon filing. The proposed 
rule change, which modifies the Exchange's rules by conforming the 
definition of Commodity-Based Trust Shares with the same definition 
used by another national securities exchange \17\ and corrects the 
citation for the term ``commodity,'' as defined in the Commodity 
Exchange Act, raises no unique or novel legal or regulatory issues and 
will lessen any potential confusion among market participants. 
Therefore, the Commission believes that waiver of the 30-day operative 
delay is consistent with the protection of investors and the public 
interest. Accordingly, the Commission hereby waives the 30-day 
operative delay and designates the proposed rule change operative upon 
filing.\18\
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    \16\ 17 CFR 240.19b-4(f)(6)(iii).
    \17\ See supra note 7.
    \18\ For purposes only of waiving the 30-day operative delay, 
the Commission has also considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
file number SR-CboeBZX-2023-105 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-CboeBZX-2023-105. This 
file number should be included on the subject line if email is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's internet website (https://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 
a.m. and 3 p.m. Copies of the filing also will be available for 
inspection and copying at the principal office of the Exchange. Do not 
include personal identifiable information in submissions; you should 
submit only information that you wish to make available publicly. We 
may redact in part or withhold entirely from publication submitted 
material that is obscene or subject to copyright protection. All 
submissions should refer to file number SR-CboeBZX-2023-105 and should 
be submitted on or before January 9, 2024.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\19\
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    \19\ 17 CFR 200.30-3(a)(12), (59).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-27786 Filed 12-18-23; 8:45 am]
BILLING CODE 8011-01-P