[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]


=======================================================================
-----------------------------------------------------------------------

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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

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\
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    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\
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    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\
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    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\
---------------------------------------------------------------------------

    \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).
---------------------------------------------------------------------------

    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\
---------------------------------------------------------------------------

    \16\ 17 CFR 200.30-3(a)(12), (59).
---------------------------------------------------------------------------

Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-01187 Filed 1-22-24; 8:45 am]
BILLING CODE 8011-01-P