[Federal Register Volume 89, Number 53 (Monday, March 18, 2024)]
[Notices]
[Pages 19379-19380]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-05636]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-99724; File No. SR-CboeBZX-2024-022]


Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend 
the Creation Basket Size of the VanEck Bitcoin Trust

March 12, 2024.
    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 March 4, 2024, Cboe BZX Exchange, Inc. (``Exchange'') 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

    (a) Cboe BZX Exchange, Inc. (``BZX'' or the ``Exchange'') is filing 
with the Securities and Exchange Commission (``Commission'' or ``SEC'') 
a proposed rule change to amend the VanEck Bitcoin Trust (the 
``Trust''), shares of which are listed and traded on the Exchange 
pursuant to BZX Rule 14.11(e)(4), to amend the creation basket size.
    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 
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 Exchange Rule 
14.11(e)(4), Commodity-Based Trust Shares, on January 10, 2024.\5\ 
Exchange Rule 14.11(e)(4) governs the listing and trading of Commodity-
Based Trust Shares, which 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. The Shares 
are issued by the Trust, a Delaware statutory trust organized on 
December 17, 2020.
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    \5\ 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; SRCboeBZX-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'').
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    The Exchange proposes to amend a representation set forth in the 
Exchange's previous rule filing to list and trade Shares of the 
Trust.\6\ Specifically, Amendment No. 2 represented that that when the 
Trust sells or redeems its Shares, it will do so in cash transactions 
in blocks of 50,000 Shares (a ``Creation Basket'') at the Trust's NAV. 
Now, the Exchange proposes to reduce the Creation Basket size from 
50,000 Shares to 25,000 Shares. A decrease in the Creation Basket size 
would provide additional flexibility to the creation and redemption of 
Shares, which may result in tighter spreads and a more efficient 
market, to the benefit of all market participants. Furthermore, at 
least one other issuer of spot bitcoin exchange-traded products 
(``ETPs'') has similarly provided for Creation Basket sizes of less 
than 25,000 Shares.\7\
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    \6\ See supra note 5 and see also Securities Exchange Act 
Release No. 99289 (January 8, 2024) (SR-CboeBZX-2023-040) (Notice of 
Filing of Amendment No. 2 to a Proposed Rule Change to List and 
Trade Shares of VanEck Bitcoin Trust Under BZX Rule 14.11(e)(4), 
Commodity-Based Trust Shares)) (``Amendment No. 2'').
    \7\ For example, the proposal to list and trade shares of the 
ARK 21Shares Bitcoin ETF provided for a Creation Basket size of 
5,000 shares. See Securities Exchange Act No. 9928 (January 8, 2024) 
(SR-CboeBZX-2023-028) (Notice of Filing of Amendment No. 5 to a 
Proposed Rule Change to List and Trade Shares of the ARK 21Shares 
Bitcoin ETF under BZX Rule 14.11(e)(4), Commodity-Based Trust 
Shares). See also the Approval Order.
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    Except for the above change, all other representations in Amendment 
No. 2 and the Approval Order 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 14.11(e)(4).
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.\8\ Specifically, the Exchange believes the proposed rule change is 
consistent with the Section 6(b)(5) \9\ 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

[[Page 19380]]

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 No. 2 regarding 
the Creation Unit size. As described above, a decrease in the size of 
the Creation Basket would provide additional flexibility to the 
creation and redemption of Shares, which may result in tighter spreads 
and a more efficient market, to the benefit of all market participants. 
Furthermore, at least one other issuer of spot bitcoin ETPs has 
similarly provided for Creation Basket sizes of less than 25,000 
Shares.\10\
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    \10\ See supra note 7.
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    Except for this change, all other representations made in Amendment 
No. 2 and the Approval Order 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 purposes of the Act. As noted above, the proposed 
amendment is intended to change the Creation Basket size. The Exchange 
believes that this change will not impose any burden on competition.

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 \11\ and Rule 19b-
4(f)(6) \12\ 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.\13\
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    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f)(6).
    \13\ 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) \14\ 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 Exchange 
represents that a decrease in the Creation Basket size would provide 
additional flexibility to the creation and redemption of Shares, which 
may result in tighter spreads and a more efficient market, to the 
benefit of all market participants. Furthermore, at least one other 
issuer of spot bitcoin ETPs has similarly provided for Creation Basket 
sizes of less than 25,000 Shares.\15\ The Exchange further represents 
that except for the change to the size of the Creation Basket, all 
other representations in Amendment No. 2 and the Approval Order remain 
unchanged and will continue to constitute continuing listing 
requirements. The proposed rule change thus raises no novel legal or 
regulatory issues. 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.\16\
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    \14\ 17 CFR 240.19b-4(f)(6)(iii).
    \15\ See supra note 7.
    \16\ 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-2024-022 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-2024-022. 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-2024-022 and should 
be submitted on or before April 8, 2024.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12), (59).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-05636 Filed 3-15-24; 8:45 am]
BILLING CODE 8011-01-P