[Federal Register Volume 89, Number 15 (Tuesday, January 23, 2024)]
[Notices]
[Pages 4352-4353]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-01187]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-99353; File No. SR-NYSEARCA-2024-08]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend a
Representation Relating to the Grayscale Bitcoin Trust
January 17, 2024.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given
that, on January 16, 2024, NYSE Arca, Inc. (``NYSE Arca'' or the
``Exchange'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I and II
below, which Items have been prepared by the self-regulatory
organization. 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\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend a representation relating to the
Grayscale Bitcoin Trust (BTC) (the ``Trust''), shares of which are
currently listed and traded on the Exchange pursuant to NYSE Arca Rule
8.201-E. The proposed rule change is available on the Exchange's
website at www.nyse.com, at the principal office of the Exchange, 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 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 Commission approved the listing and trading of shares of the
Trust (the ``Shares'') on the Exchange pursuant to NYSE Arca Rule
8.201-E on January 10, 2024.\4\ NYSE Arca Rule 8.201-E governs the
listing and trading of Commodity-Based Trust Shares, which are
securities issued by a trust that represent investors' discrete
identifiable and undivided beneficial ownership interest in the
commodities deposited into the Trust. The Shares are issued by the
Trust, a Delaware statutory trust organized on September 13, 2013.\5\
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\4\ See Securities Exchange Act Release No. 99306 (January 10,
2024) (File Nos. SR-NYSEARCA-2021-90; SR-NYSEARCA-2023-44;
SRNYSEARCA-2023-58; SR-NASDAQ-2023-016; SR-NASDAQ-2023-019; SR-
CboeBZX-2023-028; SR-CboeBZX-2023-038; SR-CboeBZX-2023-040; SR-
CboeBZX-2023-042; SRCboeBZX-2023-044; SR-CboeBZX-2023-072) (Order
Granting Accelerated Approval of Proposed Rule Changes, as Modified
by Amendments Thereto, to List and Trade Bitcoin-Based Commodity-
Based Trust Shares and Trust Units) (the ``Approval Order'').
\5\ On October 19, 2023, the Trust filed a registration
statement on Form S-3 under the Securities Act (File No. 333-275079)
(the ``Registration Statement''). On November 22, 2023, the Trust
filed Amendment No. 1 to the Registration Statement on Form S-3. On
December 26, 2023, the Trust filed Amendment No. 2 to the
Registration Statement on Form S-3. On January 2, 2024, the Trust
filed Amendment No. 3 to the Registration Statement on Form S-3. On
January 9, 2024, the Trust filed Amendment No. 4 to the Registration
Statement. The descriptions of the Trust and Shares contained herein
are based, in part, on the Registration Statement.
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The purpose of this rule filing is to amend a representation set
forth in the Exchange's previous rule filing to list and trade Shares
of the Trust.\6\ Amendment No. 2 represented that, in connection with
the creation and redemption of Shares pursuant to Cash Orders, the term
``Cash Account'' would mean ``the account maintained by the Transfer
Agent in the name of Grayscale Securities, LLC, designated as `Special
Account for the Exclusive Benefit of Customers of Grayscale Securities,
LLC,' for purposes of receiving cash from, and distributing cash to,
Authorized Participants in connection with creations and redemptions
pursuant to Cash Orders. For the avoidance of doubt, the Trust shall
have no interest (beneficial, equitable or otherwise) in the Cash
Account or any cash held therein.'' \7\
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\6\ See Securities Exchange Act Release No. 99298 (January 9,
2024) (SR-NYSEARCA-2021-90) (Notice of Filing of Amendment No. 2 to
a Proposed Rule Change to List and Trade Shares of Grayscale Bitcoin
Trust under NYSE Arca Rule 8.201-E (Commodity-Based Trust Shares))
(``Amendment No. 2'').
\7\ Amendment No. 2 at 56-57. Unless otherwise specified,
capitalized terms used herein have the same meaning as in Amendment
No. 2.
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The Exchange proposes to amend this representation to redefine Cash
Account to remove reference to Grayscale Securities, LLC, such that the
term Cash Account means the account maintained by the Transfer Agent
for purposes of receiving cash from, and distributing cash to,
Authorized Participants in connection with creations and redemptions
pursuant to Cash Orders. This proposed change is intended to clarify
that the Commission has not approved Grayscale Securities, LLC or any
other broker-dealer to own or operate the Cash Account used to transfer
cash to the entity purchasing Bitcoin as part of the creation process
or receive cash from the entity that buys or sells Bitcoin as part of
the redemption process. The purchase and sale of Bitcoin as part of the
creation and redemption process will be undertaken by an entity that is
not registered as a broker-dealer. The Exchange believes that this
proposed change would promote clarity and transparency with respect to
the operation of the Cash Account, to the benefit of all market
participants.
Except for this change, all other representations in Amendment No.
2 remain unchanged and will continue to constitute continuing listing
requirements. In addition, the Trust will continue to comply with the
terms of the Approval Order and the requirements of Rule 8.201-E.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\8\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\9\ in particular, in that it
is 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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\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(5).
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The Exchange believes the proposed rule change is designed to
remove impediments to and perfect the mechanism of a free and open
market and, in general, to protect investors and the public interest
because it would update a representation in Amendment
[[Page 4353]]
No. 2 regarding the Cash Account used in connection with creation and
redemption of Shares. The proposed change would add clarity to the
description of the operation of the Cash Account, to the benefit of all
market participants. Except for this change, all other representations
made in Amendment No. 2 remain unchanged and will continue to
constitute continuing listing requirements for the Fund. Accordingly,
the Exchange believes that this proposed rule change raises no novel
regulatory issues.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purpose of the Act. As noted above, the proposed
rule change is intended only to clarify a representation regarding the
Cash Account and would facilitate the continued listing and trading of
Shares of the Fund on the Exchange, thereby promoting competition among
various exchange-traded products, to the benefit of investors and the
marketplace.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \10\ and Rule 19b-4(f)(6) thereunder.\11\
Because the proposed rule change does not: (i) significantly affect the
protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become operative prior to
30 days from the date on which it was filed, or such shorter time as
the Commission may designate, it has become effective pursuant to
Section 19(b)(3)(A) of the Act and Rule 19b-4(f)(6) thereunder.\12\
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\10\ 15 U.S.C. 78s(b)(3)(A)(iii).
\11\ 17 CFR 240.19b-4(f)(6).
\12\ 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 under Rule 19b-4(f)(6) \13\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b4(f)(6)(iii),\14\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposal
may become operative immediately upon filing. The Exchange states that
the proposed rule change is intended only to clarify a representation
in Amendment No. 2 relating to the Cash Account. Except for this
change, all other representations made in Amendment No. 2 remain
unchanged and will continue to constitute continuing listing
requirements for the Shares of the Trust. According to the Exchange,
the Trust also will continue to comply with the terms of the Approval
Order and the requirements of NYSE Arca Rule 8.201-E. The Commission
believes that waiver of the 30-day operative delay is consistent with
the protection of investors and the public interest because the
proposal provides a clarification to a representation of the Exchange
and does not raise any new or novel regulatory issues. Accordingly, the
Commission hereby waives the 30-day operative delay and designates the
proposal operative upon filing.\15\
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\13\ 17 CFR 240.19b-4(f)(6).
\14\ 17 CFR 240.19b-4(f)(6)(iii).
\15\ For purposes only of waiving the 30-day operative delay,
the Commission has 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-NYSEARCA-2024-08 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-2024-08. 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-NYSEARCA-2024-08 and should
be submitted on or before February 13, 2024.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12), (59).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-01187 Filed 1-22-24; 8:45 am]
BILLING CODE 8011-01-P