[Federal Register Volume 89, Number 104 (Wednesday, May 29, 2024)]
[Notices]
[Pages 46478-46493]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-11707]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-100215; File No. SR-CboeBZX-2023-095]


Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of 
Filing of Amendment No. 2 to a Proposed Rule Change To List and Trade 
Shares of the Fidelity Ethereum Fund Under BZX Rule 14.11(e)(4), 
Commodity-Based Trust Shares

May 22, 2024.
    On November 17, 2023, Cboe BZX Exchange, Inc. (``BZX'' 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 
Fidelity Ethereum Fund under BZX Rule 14.11(e)(4), Commodity-Based 
Trust Shares. The proposed rule change was published for comment in the 
Federal Register on December 6, 2023.\3\ On January 18, 2024, 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 
disapprove the proposed rule change.\5\ On March 4, 2024, 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 March 15, 2024, the Exchange filed Amendment No. 1, which 
replaced and superseded the proposed rule change in its entirety. On 
April 2, 2024, the Commission published notice of Amendment No. 1 to 
the proposed rule change.\8\ On May 21, 2024, the Exchange filed 
Amendment No. 2 to the proposed rule change as described in Items I and 
II below, which Items have been prepared by the Exchange. Amendment No. 
2 amended and replaced the proposed rule change, as modified by 
Amendment No. 1, in its entirety. The Commission is publishing this 
notice to solicit comments on the proposed rule change, as modified by 
Amendment No. 2, from interested persons.
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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. 99045 (Nov. 30, 
2023), 88 FR 84840. Comments on the proposed rule change are 
available at: https://www.sec.gov/comments/sr-cboebzx-2023-095/srcboebzx2023095.htm.
    \4\ 15 U.S.C. 78s(b)(2).
    \5\ See Securities Exchange Act Release No. 99390, 89 FR 4639 
(Jan. 24, 2024).
    \6\ 15 U.S.C. 78s(b)(2)(B).
    \7\ See Securities Exchange Act Release No. 99667, 89 FR 16804 
(Mar. 8, 2024).
    \8\ See Securities Exchange Act Release No. 99888, 89 FR 24519 
(Apr. 8, 2024).
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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 list and trade shares of the Fidelity 
Ethereum Fund (the ``Trust''),\9\ under BZX Rule 14.11(e)(4), 
Commodity-Based Trust Shares.
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    \9\ The Trust was formed as a Delaware statutory trust on 
October 31, 2023, and is operated as a grantor trust for U.S. 
federal tax purposes. The Trust has no fixed termination date.

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[[Page 46479]]

    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
    This Amendment No. 2 to SR-CboeBZX-2023-095 amends and replaces in 
its entirety the proposal as originally submitted on November 17, 2023, 
and as amended by Amendment No. 1 on March 18, 2024. The Exchange 
submits this Amendment No. 2 in order to clarify certain points and add 
additional details to the proposal.
    The Exchange proposes to list and trade the Shares under BZX Rule 
14.11(e)(4),\10\ which governs the listing and trading of Commodity-
Based Trust Shares on the Exchange.\11\ FD Funds Management LLC is the 
sponsor of the Trust (``Sponsor''). The Shares will be registered with 
the Commission by means of the Trust's registration statement on Form 
S-1 (the ``Registration Statement'').\12\
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    \10\ The Commission approved BZX Rule 14.11(e)(4) in Securities 
Exchange Act Release No. 65225 (August 30, 2011), 76 FR 55148 
(September 6, 2011) (SR-BATS-2011-018).
    \11\ Any of the statements or representations regarding the 
index composition, the description of the portfolio or reference 
assets, limitations on portfolio holdings or reference assets, 
dissemination and availability of index, reference asset, and 
intraday indicative values, or the applicability of Exchange listing 
rules specified in this filing to list a series of Other Securities 
(collectively, ``Continued Listing Representations'') shall 
constitute continued listing requirements for the Shares listed on 
the Exchange.
    \12\ On May 21, 2024, the Trust filed with the Commission 
amendment no. 1 to the Registration Statement on Form S-1, submitted 
to the Commission by the Sponsor on behalf of the Trust (333-
278249). The descriptions of the Trust, the Shares, and the Index 
(as defined below) contained herein are based, in part, on 
information in the Registration Statement. 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.
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    The Commission has historically approved or disapproved exchange 
filings to list and trade series of Trust Issued Receipts, including 
spot-based Commodity-Based Trust Shares, on the basis of whether the 
listing exchange has in place a comprehensive surveillance sharing 
agreement with a regulated market of significant size related to the 
underlying commodity to be held.\13\ With this in mind, the Chicago 
Mercantile Exchange (``CME) ether futures (``Ether Futures'') market, 
which launched in February 2021, is the proper market to consider in 
determining whether there is a related regulated market of significant 
size.
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    \13\ See Securities Exchange Act Release No. 78262 (July 8, 
2016), 81 FR 78262 (July 14, 2016) (the ``Winklevoss Proposal''). 
The Winklevoss Proposal was subsequently disapproved by the 
Commission. See Securities Exchange Act Release No. 83723 (July 26, 
2018), 83 FR 37579 (August 1, 2018) (the ``Winklevoss Order''). 
Prior orders from the Commission have pointed out that in every 
prior approval order for Commodity-Based Trust Shares, there has 
been a derivatives market that represents the regulated market of 
significant size, generally a Commodity Futures Trading Commission 
(the ``CFTC'') regulated futures market. Further to this point, the 
Commission's prior orders have noted that the spot commodities and 
currency markets for which it has previously approved spot ETPs are 
generally unregulated and that the Commission relied on the 
underlying futures market as the regulated market of significant 
size that formed the basis for approving the series of Currency and 
Commodity-Based Trust Shares, including gold, silver, platinum, 
palladium, copper, and other commodities and currencies. The 
Commission specifically noted in the Winklevoss Order that the 
approval order issued related to the first spot gold ETP ``was based 
on an assumption that the currency market and the spot gold market 
were largely unregulated.'' See Winklevoss Order at 37592. As such, 
the regulated market of significant size test does not require that 
the spot ether market be regulated in order for the Commission to 
approve this proposal, and precedent makes clear that an underlying 
market for a spot commodity or currency being a regulated market 
would actually be an exception to the norm. These largely 
unregulated currency and commodity markets do not provide the same 
protections as the markets that are subject to the Commission's 
oversight, but the Commission has consistently looked to 
surveillance sharing agreements with the underlying futures market 
in order to determine whether such products were consistent with the 
Act.
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    Recently, the Commission issued an order granting approval for 
proposals to list bitcoin-based commodity trust and bitcoin-based trust 
issued receipts (these proposed funds are nearly identical to the 
Trust, but proposed to hold bitcoin instead of ether) (``Spot Bitcoin 
ETPs'').\14\ By way of background, in 2022 the Commission disapproved 
proposals \15\ to list Spot Bitcoin ETPs, including a proposal 
sponsored by Grayscale Investments, LLC (``Grayscale'').\16\ Grayscale 
appealed the decision with the U.S. Court of Appeals for the D.C. 
Circuit, which held that the Commission had failed to adequately 
explain its reasoning that the proposing exchange had not established 
that the CME bitcoin futures market was a market of significant size 
related to spot bitcoin, or that the ``other means'' asserted were 
sufficient to satisfy the statutory standard. As a result, the court 
vacated the Grayscale Order and remanded the matter to the 
Commission.\17\ In considering the remand of the Grayscale Order and 
Spot Bitcoin ETPs, the Commission determined in the Spot Bitcoin ETP 
Approval Order that the CME bitcoin futures (``Bitcoin Futures'') 
market is highly correlated to spot bitcoin. Specifically, the 
Commission stated:
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    \14\ See Exchange Act Release No. 99306 (January 10, 2024), 89 
FR 3008 (January 17, 2024) (Self-Regulatory Organizations; NYSE 
Arca, Inc.; The Nasdaq Stock Market LLC; Cboe BZX Exchange, Inc.; 
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 ``Spot Bitcoin 
ETP Approval Order'').
    \15\ See Order Disapproving a Proposed Rule Change To List and 
Trade Shares of the VanEck Bitcoin Trust Under BZX Rule 14.11(e)(4), 
Commodity-Based Trust Shares, Securities Exchange Act Release No. 
97102 (Mar. 10, 2023), 88 FR 16055 (Mar. 15, 2023) (SR-CboeBZX-2022-
035) (``VanEck Order II'') and n.11 therein for the complete list of 
previous proposals.
    \16\ See Securities Exchange Act Release No. 95180 (June 29, 
2022) 87 FR 40299 (July 6, 2022) (SR-NYSEArca-2021-90) (Order 
Disapproving a Proposed Rule Change, as Modified by Amendment No. 1, 
to List and Trade Shares of Grayscale Bitcoin Trust Under NYSE Arca 
Rule 8.201-E (Commodity-Based Trust Shares) (the ``Grayscale 
Order'').
    \17\ See Grayscale Investments, LLC v. SEC, 82 F.4th 1239 (D.C. 
Cir. 2023).

    [B]ased on the record before the Commission and the improved 
quality of the correlation analysis in the record. . .the Commission 
is able to conclude that fraud or manipulation that impacts prices 
in spot bitcoin markets would likely similarly impact CME bitcoin 
futures prices. And because the CME's surveillance can assist in 
detecting those impacts on CME bitcoin futures prices, the 
Exchanges' comprehensive surveillance-sharing agreement with the 
CME--a U.S. regulated market whose bitcoin futures market is 
consistently highly correlated to spot bitcoin, albeit not of 
``significant size'' related to spot bitcoin--can be reasonably 
expected to assist in surveilling for fraudulent and manipulative 
acts and practices in the specific context of the [p]roposals.\18\
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    \18\ See the Spot Bitcoin ETP Approval Order at 3011-3012.

    As further discussed below, both the Exchange and the Sponsor 
believe that this proposal and the included analysis are sufficient to 
establish that the CME Ether Futures market represents a

[[Page 46480]]

regulated market of significant size and that this proposal should be 
approved.
Background
    Ethereum is a network of computers all over the world that follow a 
set of rules called the Ethereum protocol. The Ethereum protocol 
creates a unified understanding of ownership, commercial activity, and 
business logic. This allows users to engage in commerce without the 
need to trust any of their counterparties. Ethereum code creates 
verifiable and unambiguous rules that assign clear, strong property 
rights to create a platform for unrestrained application formation and 
free exchange. It is widely understood that no single person or entity 
operates or controls the Ethereum network (referred to as 
``decentralization''), the transaction validation and recordkeeping 
infrastructure of which is collectively maintained by a disparate user 
base. The Ethereum network allows people to exchange tokens of value, 
including the native asset to the Ethereum network, referred to as 
``ether'' or ``ETH'', which are recorded on a distributed public 
recordkeeping system or ledger known as a blockchain (the ``Ethereum 
Blockchain''), and which can be used to pay for goods and services, 
including data storage, trading, and launching applications. 
Furthermore, by combining the recordkeeping system of the Ethereum 
Blockchain with a flexible scripting language that is programmable and 
can be used to implement sophisticated logic and execute a wide variety 
of instructions, the Ethereum network is intended to act as a 
foundational infrastructure layer on top of which users can build their 
own custom software programs, as an alternative to centralized web 
servers. In theory, anyone can build their own custom software programs 
on the Ethereum network. In this way, the Ethereum network represents a 
project to expand blockchain deployment beyond a limited-purpose, peer-
to-peer private money system into a flexible, distributed alternative 
computing infrastructure that is available to all. On the Ethereum 
network, ETH is the unit of account that users pay for the 
computational resources consumed by running their programs and 32 ETH 
serves as the minimum capital required to run validator software and 
participate in consensus to add new blocks to the blockchain.
Ether Futures ETFs
    The Exchange and Sponsor applaud the Commission for allowing the 
launch of ETFs registered under the Investment Company Act of 1940, as 
amended (the ``1940 Act'') that provide exposure to ether primarily 
through CME Ether Futures (``Ether Futures ETFs''). Allowing such 
products to list and trade is a productive first step in providing U.S. 
investors and traders with transparent, exchange-listed tools for 
expressing a view on ether.
    Based on the foregoing, the Exchange and Sponsor believe that any 
objective review of the proposals to list Spot Ether ETPs compared to 
the Ether Futures ETFs would lead to the conclusion that any concerns 
related to preventing fraudulent and manipulative acts and practices 
related to Spot Ether ETPs would apply equally to the spot markets 
underlying the futures contracts held by an Ether Futures ETF. Both the 
Exchange and Sponsor believe that the CME Ether Futures market is a 
regulated market of significant size and that such manipulation 
concerns are mitigated, as described extensively below. After allowing 
the listing and trading of Ether Futures ETFs that hold primarily CME 
Ether Futures, however, the only consistent outcome would be approving 
Spot Ether ETPs on the basis that the CME Ether Futures market is a 
regulated market of significant size.
    Given the current landscape, approving this proposal (and others 
like it) and allowing Spot Ether ETPs to be listed and traded alongside 
Ether Futures ETFs and Spot Bitcoin ETPs would establish a consistent 
regulatory approach, provide U.S. investors with choice in product 
structures for ether exposure, and offer flexibility in the means of 
gaining exposure to ether through transparent, regulated, U.S. 
exchange-listed vehicles.
CME Ether Futures \19\
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    \19\ Unless otherwise noted, all data and analysis presented in 
this section and referenced elsewhere in the filing has been 
provided by the Sponsor.
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    CME began offering trading in CME Ether Futures in February 2021. 
Each contract represents 50 ETH and is based on the CME CF Ether-Dollar 
Reference Rate.\20\ The contracts trade and settle like other cash-
settled commodity futures contracts. Most measurable metrics related to 
CME Ether Futures have generally trended up since launch, although some 
metrics have slowed recently. For example, there were 76,293 CME Ether 
Futures contracts traded in July 2023 (approximately $7.3 billion) 
compared to 70,305 ($11.1 billion) and 158,409 ($7.5 billion) contracts 
traded in July 2021, and July 2022 respectively.\21\
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    \20\ The CME CF Ether-Dollar Reference Rate is based on a 
publicly available calculation methodology based on pricing sourced 
from several crypto trading platforms, including Bitstamp, Coinbase, 
Gemini, itBit, Kraken, and LMAX Digital.
    \21\ Source: CME, 7/31/23.
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    The number of large open interest holders \22\ and unique accounts 
trading CME Ether Futures have both increased, even in the face of 
heightened Ether price volatility.
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    \22\ A large open interest holder in CME Ether Futures is an 
entity that holds at least 25 contracts, which is the equivalent of 
1250 ether. At a price of approximately $1,867 per ether on 7/31/
2023, more than 59 firms had outstanding positions of greater than 
$2.3 million in CME Ether Futures.

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    The market for CFTC-regulated trading of ether derivatives has 
developed substantially recently. From February 2021 to January 2024, 
CFTC regulated ether futures notional trading volume on Chicago 
Mercantile Exchange increased from 0.94 to 14.68 USD billion on a 
monthly basis. At the same time, total ether spot volume decreased from 
25.31 USD billion to 11.98 USD billion on a monthly basis using the CME 
CF Ether-Dollar Reference Rate related spot platforms.\23\ As a result, 
CME Ether Futures represented an increasing amount of ETH/USD spot and 
futures volumes, up to 55% as of the end of January 2024.
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    \23\ The CME CF Ether-Dollar Reference Rate is based on a 
publicly available calculation methodology based on pricing sourced 
from several crypto trading platforms, including Bitstamp, Coinbase, 
Gemini, itBit, Kraken, and LMAX Digital.
[GRAPHIC] [TIFF OMITTED] TN29MY24.028

    Furthermore, while CME Ether Futures represent less than 3% of 
global ETH futures volumes \24\ these same futures contracts represent 
greater than 10% of global ETH spot volumes,\25\ and has been as high 
as 30% of global ETH spot volumes in October 2023. Since the start of 
2023, both BTC and CME Ether Futures volumes have trended higher in 
their overall volume share of global futures activity and CME Ether 
Futures have often represented a larger percentage of global spot 
volumes compared to the BTC CME futures.
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    \24\ List of platforms used to determine stated volume can be 
found here: https://coverage.coinmetrics.io/exchange-metrics-v2/volume_reported_future_usd_1d.
    \25\ List of platforms used to determine the stated volumes can 
be found here: https://coverage.coinmetrics.io/exchange-metrics-v2/volume_reported_spot_usd_1d.

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Section 6(b)(5) and the Applicable Standards
    The Commission has approved numerous series of Trust Issued 
Receipts,\26\ including Commodity-Based Trust Shares,\27\ to be listed 
on U.S. national securities exchanges. In order for any proposed rule 
change from an exchange to be approved, the Commission must determine 
that, among other things, the proposal is consistent with the 
requirements of Section 6(b)(5) of the Act, specifically including: (i) 
the requirement that a national securities exchange's rules are 
designed to prevent fraudulent and manipulative acts and practices; 
\28\ and (ii) the requirement that an exchange proposal be designed, in 
general, to protect investors and the public interest. The Exchange 
believes that this proposal is consistent with the requirements of 
Section 6(b)(5) of the Act and that this filing sufficiently
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    \26\ See Exchange Rule 14.11(f).
    \27\ Commodity-Based Trust Shares, as described in Exchange Rule 
14.11(e)(4), are a type of Trust Issued Receipt.
    \28\ The Exchange believes that ETH is resistant to price 
manipulation and that ``other means to prevent fraudulent and 
manipulative acts and practices'' exist to justify dispensing with 
the requisite surveillance sharing agreement. The geographically 
diverse and continuous nature of ETH trading render it difficult and 
prohibitively costly to manipulate the price of ETH. The 
fragmentation across ETH platforms, the relatively slow speed of 
transactions, and the capital necessary to maintain a significant 
presence on each trading platform make manipulation of ETH prices 
through continuous trading activity challenging. To the extent that 
there are ETH trading platforms engaged in or allowing wash trading 
or other activity intended to manipulate the price of ETH on other 
markets, such pricing does not normally impact prices on other 
trading platforms because participants will generally ignore markets 
with quotes that they deem non-executable. Moreover, the linkage 
between the ETH markets and the presence of arbitrageurs in those 
markets means that the manipulation of the price of ETH on any 
single venue would require manipulation of the global ETH price in 
order to be effective. Arbitrageurs must have funds distributed 
across multiple trading platforms in order to take advantage of 
temporary price dislocations, thereby making it unlikely that there 
will be strong concentration of funds on any particular ETH trading 
platform or OTC platform. As a result, the potential for 
manipulation on a trading platform would require overcoming the 
liquidity supply of such arbitrageurs who are effectively 
eliminating any cross-market pricing differences.
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demonstrates that the CME Ether Futures market represents a regulated 
market of significant size and that, on the whole, the manipulation 
concerns previously articulated by the Commission are sufficiently 
mitigated to

[[Page 46484]]

the point that they are outweighed by quantifiable investor protection 
issues that would be resolved by approving this proposal.
(i) Designed To Prevent Fraudulent and Manipulative Acts and Practices
    In order to meet this standard in a proposal to list and trade a 
series of Commodity-Based Trust Shares, the Commission requires that an 
exchange demonstrate that there is a comprehensive surveillance-sharing 
agreement in place \29\ with a regulated market of significant size. 
Both the Exchange and CME are members of the Intermarket Surveillance 
Group (``ISG'').\30\ The only remaining issue to be addressed is 
whether the CME Ether Futures market constitutes a market of 
significant size, which both the Exchange and the Sponsor believe that 
it does. The terms ``significant market'' and ``market of significant 
size'' include a market (or group of markets) as to which: (a) there is 
a reasonable likelihood that a person attempting to manipulate the ETP 
would also have to trade on that market to manipulate the ETP, so that 
a surveillance-sharing agreement would assist the listing exchange in 
detecting and deterring misconduct; and (b) it is unlikely that trading 
in the ETP would be the predominant influence on prices in that 
market.\31\
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    \29\ As previously articulated by the Commission, ``The standard 
requires such surveillance-sharing agreements since ``they provide a 
necessary deterrent to manipulation because they facilitate the 
availability of information needed to fully investigate a 
manipulation if it were to occur.'' The Commission has emphasized 
that it is essential for an exchange listing a derivative securities 
product to enter into a surveillance-sharing agreement with markets 
trading underlying securities for the listing exchange to have the 
ability to obtain information necessary to detect, investigate, and 
deter fraud and market manipulation, as well as violations of 
exchange rules and applicable federal securities laws and rules. The 
hallmarks of a surveillance-sharing agreement are that the agreement 
provides for the sharing of information about market trading 
activity, clearing activity, and customer identity; that the parties 
to the agreement have reasonable ability to obtain access to and 
produce requested information; and that no existing rules, laws, or 
practices would impede one party to the agreement from obtaining 
this information from, or producing it to, the other party.'' The 
Commission has historically held that joint membership in the ISG 
constitutes such a surveillance sharing agreement. See Securities 
Exchange Act Release No. 88284 (February 26, 2020), 85 FR 12595 
(March 3, 2020) (SR-NYSEArca-2019-39) (the ``Wilshire Phoenix 
Disapproval'').
    \30\ For a list of the current members and affiliate members of 
ISG, see www.isgportal.com.
    \31\ See Wilshire Phoenix Disapproval.
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    The Commission has also recognized that the ``regulated market of 
significant size'' standard is not the only means for satisfying 
Section 6(b)(5) of the act, specifically providing that a listing 
exchange could demonstrate that ``other means to prevent fraudulent and 
manipulative acts and practices'' are sufficient to justify dispensing 
with the requisite surveillance-sharing agreement.\32\
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    \32\ See Winklevoss Order at 37580. The Commission has also 
specifically noted that it ``is not applying a `cannot be 
manipulated' standard; instead, the Commission is examining whether 
the proposal meets the requirements of the Exchange Act and, 
pursuant to its Rules of Practice, places the burden on the listing 
exchange to demonstrate the validity of its contentions and to 
establish that the requirements of the Exchange Act have been met.'' 
Id. at 37582.
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(a) Manipulation of the ETP
    The significant market test requires that there is a reasonable 
likelihood that a person attempting to manipulate the ETP would also 
have to trade on the surveilled market to manipulate the ETP, so that a 
surveillance-sharing agreement would assist the listing exchange in 
detecting and deterring misconduct.
    The Sponsor examined the correlation between the ETH spot price and 
the CME Ether Futures price. In this study, the price of the CME Ether 
Futures front month contract, i.e., the contract with the nearest 
expiration date, is compared to the ETH spot price. The rolling 
correlation between the assets with 90 days windows shows that the 
futures and spot prices are highly correlated and ranged between 0.94 
and 0.998. In addition, the daily returns for ETH spot and CME Ether 
Futures are highly correlated. The following charts evidence these 
relationships.
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    Furthermore, the Sponsor examined intra-day correlations for both 
price and returns using historical pricing data every hour. This study 
further evidences the high correlation between the ETH/USD spot price 
and CME Ether Futures across six the CME CF Ether-Dollar Reference Rate 
related spot platforms \33\ with hourly return correlations above 0.98.
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    \33\ The six platforms are Bitstamp, Coinbase, Gemini, itBit, 
Kraken, and LMAX Digital.

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                  ETH                      Intraday    Hourly              BTC               Intraday    Hourly
-----------------------------------------   price     returns  ----------------------------   price     returns
                                         ----------------------                            ---------------------
-----------------------------------------   Sample     Sample  ----------------------------   Sample     Sample
                                         ----------------------                            ---------------------
              Spot platform                                            Spot platform
----------------------------------------------------------------------------------------------------------------
Platform 1..............................      0.985      0.985  Platform 1................      0.999      0.989
Platform 2..............................      0.985      0.985  Platform 2................      0.999      0.988
Platform 3..............................      0.982      0.982  Platform 3................      0.999      0.986
Platform 4..............................      0.981      0.981  Platform 4................      0.999      0.986
Platform 5..............................      0.985      0.985  Platform 5................      0.999      0.986
Platform 6..............................      0.985      0.985  Platform 6................      0.999      0.987
----------------------------------------------------------------------------------------------------------------

    The Sponsor also examined the distribution of hourly returns of 
spot ETH/USD to CME Ether Futures. One approach to detect potential 
price manipulation involves analyzing price movements on unregulated 
platforms compared to the surveilled market. This comparison focuses on 
identifying abnormal activity such as sudden price spikes or repetitive 
trades on unregulated platforms. A preliminary analysis of CME data 
compared to spot platforms revealed little to no extreme deviation in 
hourly returns. The following table shows at least 97.9% cases the 
hourly returns of the spot platforms from the regulated exchange are 
within 50 basis points. This suggests a high degree of similarity in 
price movements between the regulated exchange and the spot platforms 
for most hours. Further analysis using Bitcoin data reveals a similar 
pattern to the ether spot platforms. The Sponsor concludes that the 
manipulation in the ETP would require the manipulators to participate 
in the surveilled market.

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                                                 Hourly return within CME's for   Hourly return within CME's for
                                                              ETH                              BTC
                 Spot platform                 -----------------------------------------------------------------
                                                 <200 bps   <100 bps   <50 bps    <200 bps   <100 bps   <50 bps
                                                   (%)        (%)        (%)        (%)        (%)        (%)
----------------------------------------------------------------------------------------------------------------
Platform 1....................................      99.98      99.92      98.63      99.96      99.94      99.46
Platform 2....................................     100.00      99.83      98.51      99.96      99.92      99.38
Platform 3....................................      99.96      99.69      97.89      99.96      99.85      98.99
Platform 4....................................      99.98      99.81      98.32      99.98      99.88      99.27
Platform 5....................................      99.92      99.71      98.32      99.94      99.85      99.25
Platform 6....................................      99.98      99.86      98.51      99.98      99.92      99.28
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[[Page 46486]]

    In light of the similarly high correlation between spot ETH/CME 
Ether Futures and spot bitcoin/CME Bitcoin Futures, applying the same 
rationale that the Commission applied to a Spot Bitcoin ETP in the Spot 
Bitcoin ETP Approval Order \34\ also indicates that this test is 
satisfied for this proposal. As noted above, in the Spot Bitcoin ETP 
Approval Order, the SEC concluded that:
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    \34\ See Exchange Act Release No. 99306 (January 10, 2024), 89 
FR 3008 (January 17, 2024) (Self-Regulatory Organizations; NYSE 
Arca, Inc.; The Nasdaq Stock Market LLC; Cboe BZX Exchange, Inc.; 
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 ``Spot Bitcoin 
ETP Approval Order'').

    . . . fraud or manipulation that impacts prices in spot bitcoin 
markets would likely similarly impact CME bitcoin futures prices. 
And because the CME's surveillance can assist in detecting those 
impacts on CME bitcoin futures prices, the Exchanges' comprehensive 
surveillance-sharing agreement with the CME . . . can be reasonably 
expected to assist in surveilling for fraudulent and manipulative 
acts and practices in the specific context of the [p]roposals.\35\
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    \35\ See the Spot Bitcoin ETP Approval Order at 3011-3012.

    The assumptions from this statement are also true for CME Ether 
Futures. CME Ether Futures pricing is based on pricing from spot ether 
markets. The statement from the Spot Bitcoin ETP Approval Order that 
the surveillance-sharing agreement with the CME ``can be reasonably 
expected to assist in surveilling for fraudulent and manipulative acts 
and practices in the specific context of the [p]roposals'' makes clear 
that the Commission believes that CME's surveillance can capture the 
effects of trading on the relevant spot markets on the pricing of CME 
Bitcoin Futures. This same logic would extend to CME Ether Futures 
markets where CME's surveillance would be able to capture the effects 
of trading on the relevant spot markets on the pricing of CME Ether 
Futures.
(b) Predominant Influence on Prices in Spot and ETH Futures
    The Exchange and Sponsor also believe that trading in the Shares 
would not be the predominant force on prices in the CME Ether Futures 
market for a number of reasons. First, because the Trust would not hold 
CME Ether Futures contracts, the only way that it could be the 
predominant force on prices in that market is through the spot markets 
that CME Ether Futures contracts use for pricing.\36\ The Sponsor notes 
that ETH total 24-hour spot trading volume has averaged $9.4 billion 
over the year ending September 1, 2023.\37\ The Sponsor expects that 
the Trust would represent a very small percentage of this daily trading 
volume in the spot ETH market even in its most aggressive projections 
for the Trust's assets and, thus, the Trust would not have an impact on 
the spot market and therefore could not be the predominant force on 
prices in the CME Ether Futures market. Second, much like the CME 
Bitcoin Futures market, the CME Ether Futures market has progressed and 
matured significantly. As the U.S. Court of Appeals for the D.C. 
Circuit found in its review of the Grayscale Order. ``Because the spot 
market is deeper and more liquid than the futures market, manipulation 
should be more difficult, not less.'' The Exchange and Sponsor agree 
with this sentiment and believe it applies equally to the spot ETH and 
CME Ether Futures markets.
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    \36\ This logic is reflected by U.S. Court of Appeals for the 
D.C. Circuit on its review of the Grayscale Order at 17-18. See 
Grayscale Investments, LLC v. SEC, 82 F. 4th 1239 (D.C. Cir. 2023). 
Specifically, the court found that ``Because Grayscale owns no 
futures contracts, trading in Grayscale can affect the futures 
market only through the spot market . . . But Grayscale holds just 
3.4 percent of outstanding bitcoin, and the Commission did not 
suggest Grayscale can dominate the price of bitcoin.''
    \37\ Source: TokenTerminal.
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(c) Other Means To Prevent Fraudulent and Manipulative Acts and 
Practices
    As noted above, the Commission also permits a listing exchange to 
demonstrate that ``other means to prevent fraudulent and manipulative 
acts and practices'' are sufficient to justify dispensing with the 
requisite surveillance-sharing agreement. The Exchange and Sponsor 
believe that such conditions are present.
    The Exchange believes that the proposal is designed to protect 
investors and the public interest. Over the past several years, U.S. 
investor exposure to ether through over-the-counter ether funds (``OTC 
ETH Funds'') has grown into the tens of billions of dollars and more 
than a billion dollars of exposure through Ether Futures ETFs. With 
that growth, so too has grown the quantifiable investor protection 
issues to U.S. investors through roll costs for Ether Futures ETFs and 
premium/discount volatility and management fees for OTC ETH Funds. The 
Exchange believes that the concerns related to the prevention of 
fraudulent and manipulative acts and practices have been sufficiently 
addressed to be consistent with the Act and, to the extent that the 
Commission disagrees with that assertion, also believes that such 
concerns are now outweighed by these investor protection concerns. As 
such, the Exchange believes that approving this proposal (and 
comparable proposals) provides the Commission with the opportunity to 
allow U.S. investors with access to ether in a regulated and 
transparent exchange-traded vehicle that would act to limit risk to 
U.S. investors by: (i) reducing premium and discount volatility; (ii) 
reducing management fees through meaningful competition; (iii) reducing 
risks and costs associated with investing in Ether Futures ETFs and 
operating companies that are imperfect proxies for ether exposure; and 
(iv) providing an alternative to custodying spot ether.
Fidelity Ethereum Fund
    The Registration Statement includes the following description of 
the Trust and its operations. The Trust will issue Shares that 
represent fractional undivided beneficial interests in and ownership of 
the Trust. The Trust is a Delaware statutory trust that operates 
pursuant to the Declaration of Trust and Trust Agreement (the ``Trust 
Agreement''), between Sponsor and Delaware Trust Company, the Delaware 
trustee of the Trust (the ``Trustee''). Sponsor manages the Trust and 
is responsible for the ongoing registration of the Shares. The Trust 
will engage Fidelity Service Company, Inc. (``FSC''), a Sponsor 
affiliate, to be the administrator (``Administrator''). State Street 
and Trust Company the (the ``Transfer Agent'' and ``Cash Custodian'')) 
will facilitate the issuance and redemption of Shares of the Trust and 
respond to correspondence by Trust shareholders and others relating to 
its duties, maintain shareholder accounts, and make periodic reports to 
the Trust. Another affiliate of Sponsor, Fidelity Distributors Company 
LLC, will be the distributor (``Distributor'') in connection with the 
creation and redemption of ``Creation Baskets'' of Shares. The Sponsor 
will provide assistance in the marketing of the Shares. Fidelity 
Digital Asset Services, LLC (``FDAS''), another Sponsor affiliate, will 
serve as the Custodian.
    According to the Registration Statement, each Share will represent 
a fractional undivided beneficial interest in the Trust. The Trust's 
assets will only consist of ether, cash, and cash equivalents.\38\ 
Except for cash temporarily held to pay Trust expenses, facilitate 
redemption transactions, or received in creation transactions, the 
Trust will only invest in ETH.
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    \38\ Cash equivalents are short-term instruments with maturities 
of less than 3 months.

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[[Page 46487]]

    According to the Registration Statement, the Trust is neither an 
investment company registered under the 1940 Act,\39\ nor a commodity 
pool for purposes of the Commodity Exchange Act (``CEA''), and neither 
the Trust nor the Sponsor is subject to regulation as a commodity pool 
operator or a commodity trading adviser in connection with the Shares.
---------------------------------------------------------------------------

    \39\ 15 U.S.C. 80a-1.
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    Neither the Trust, nor the Sponsor, nor the Custodian, nor any 
other person associated with the Trust will, directly or indirectly, 
engage in action where any portion of the Trust's ETH becomes subject 
to the Ethereum proof-of-stake validation or is used to earn additional 
ETH or generate income or other earnings. The Trust will not acquire 
and will disclaim any incidental right (``IR'') or IR asset received, 
for example as a result of forks or airdrops, and such assets will not 
be taken into account for purposes of determining NAV.
Investment Objective
    According to the Registration Statement, the investment objective 
of the Trust is to seek to track the performance of ETH, as measured by 
the performance of the Fidelity Ethereum Reference Rate (the 
``Index''), less the Trust's expenses and other liabilities. In seeking 
to achieve its investment objective, the Trust will hold ETH, cash, and 
cash equivalents and will value its Shares daily as of 4:00 p.m. 
Eastern time using the Index price to value the ether and process all 
creations and redemptions in transactions in cash transactions with 
authorized participants. The Trust is not actively managed.
The Index
    The Index is designed to reflect the performance of ETH in U.S. 
dollars. The current digital trading platform composition of the Index 
is Bitstamp, Coinbase, Gemini, itBit, Kraken, and LMAX Digital. The 
Index methodology was developed by Fidelity Product Services, LLC (the 
``Index Provider'') and is administered by the Fidelity Index 
Committee. Coin Metrics, Inc. is the third-party calculation agent for 
the Index.\40\
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    \40\ The Sponsor's affiliates have an ownership interest in Coin 
Metrics, Inc.
---------------------------------------------------------------------------

    The Index is constructed using ETH price feeds from eligible ETH 
spot markets and a volume-weighted median price (``VWMP'') methodology, 
calculated every 15 seconds based on VWMP spot market data over rolling 
sixty-minute increments to develop an ETH price composite. The Index 
market value is the volume-weighted median price of ETH in U.S. dollars 
over the previous sixty minutes, which is calculated by (1) ordering 
all individual transactions on eligible spot markets over the previous 
sixty minutes by price, and then (2) selecting the price associated 
with the 50th percentile of total volume. Using rolling sixty-minute 
segments means malicious actors would need to sustain efforts to 
manipulate the market over an extended period of time, or such 
malicious actors would need to replicate efforts multiple times across 
eligible ETH spot markets, potentially triggering review. This extended 
period also supports authorized participant activity by capturing 
volume over a longer time period, rather than forcing authorized 
participants to mark an individual close or auction. The use of a 
median price reduces the ability of outlier prices to impact the NAV, 
as it systematically excludes those prices from the NAV calculation. 
The use of a volume-weighted median (as opposed to a traditional 
median) serves as an additional protection against attempts to 
manipulate the NAV by executing a large number of low-dollar trades, 
because any manipulation attempt would have to involve a majority of 
global spot ETH volume in a sixty-minute window to have any influence 
on the NAV.
    Index data and the description of the Index are based on 
information made publicly available by the Index Provider on its 
website at i.fidelity.com/indices.
Net Asset Value
    As described in the Registration Statement, for purposes of 
calculating the Trust's NAV per Share, the Trust's holdings of ETH will 
be valued using the Index value as of 4:00 p.m. Eastern time. NAV means 
the total assets of the Trust which will include only ETH, cash, and 
cash equivalents, if any, less total liabilities of the Trust, each 
determined on the basis of generally accepted accounting principles. 
The Administrator calculates the NAV of the Trust once each Exchange 
trading day. The NAV for a normal trading day will be released after 
4:00 p.m. Eastern time. Trading during the core trading session on the 
Exchange typically closes at 4:00 p.m. Eastern time. However, NAVs are 
not officially struck until later in the day (often by 5:30 p.m. 
Eastern time and almost always by 8:00 p.m. Eastern time). The pause 
between 4:00 p.m. Eastern time and 5:30 p.m. Eastern time (or later) 
provides an opportunity to algorithmically detect, flag, investigate, 
and correct unusual pricing should it occur.
    The NAV for the Trust will be calculated by the Administrator once 
a day and will be disseminated daily to all market participants at the 
same time. If the Sponsor determines in good faith that the Index does 
not reflect an accurate ETH price, then the Trust will cause to be 
employed an alternative method to determine the fair value of the 
Trust's assets as reviewed and approved by the Sponsor's valuation 
committee.\41\
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    \41\ Such alternative method will only be employed on an ad hoc 
basis. Any permanent change to the calculation of the NAV would 
require a proposed rule change under Rule 19b-4.
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Availability of Information
    In addition to the price transparency of the Index, the Trust will 
provide information regarding the Trust's ETH holdings as well as 
additional data regarding the Trust. The website for the Trust, which 
will be publicly accessible at no charge, will contain the following 
information: (a) the current NAV per Share daily and the prior business 
day's NAV per Share and the reported BZX Official Closing Price; \42\ 
(b) the BZX Official Closing Price in relation to the NAV per Share as 
of the time the NAV is calculated and a calculation of the premium or 
discount of such price against such NAV per Share; (c) data in chart 
form displaying the frequency distribution of discounts and premiums of 
the BZX Official Closing Price against the NAV per Share, within 
appropriate ranges for each of the four previous calendar quarters (or 
for the life of the Trust, if shorter); (d) the prospectus; and other 
applicable quantitative information. The Trust will also disseminate 
its holdings on a daily basis on its website. The aforementioned 
information will be published as of the close of business and available 
on the Sponsor's website at www.fidelity.com, or any successor thereto.
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    \42\ As defined in Rule 11.23(a)(3), the term ``BZX Official 
Closing Price'' shall mean the price disseminated to the 
consolidated tape as the market center closing trade.
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    The Trust will provide an Intraday Indicative Value (``IIV'') per 
Share updated every 15 seconds, as calculated by the Exchange or a 
third-party financial data provider during the Exchange's Regular 
Trading Hours (9:30 a.m. to 4:00 p.m. Eastern time). The IIV will be 
widely disseminated on a per Share basis every 15 seconds during the 
Exchange's Regular Trading Hours through the facilities of the 
consolidated tape association (CTA) and Consolidated Quotation System 
(CQS) high speed lines. In addition, the IIV will be available through 
on-line information services such as Bloomberg

[[Page 46488]]

and Reuters. The IIV calculation agent will use the Trust's ETH 
holdings and cash and cash equivalents expected to comprise that day's 
NAV calculation to calculate the IIV. The calculation agent currently 
uses the Blockstream Crypto Data Feed Streaming Level 1 \43\ as the 
pricing source for the spot ETH, which will be used to update the IIV. 
The IIV disseminated during Regular Trading Hours should not be viewed 
as an actual real-time update of the NAV, which will be calculated only 
once at the end of each trading day.
---------------------------------------------------------------------------

    \43\ Blockstream provides cryptocurrency data feeds delivering 
real-time and historical trade data from the world's leading 
cryptocurrency venues. See blockstream.com/cryptofeed.
---------------------------------------------------------------------------

    The price of ETH will be made available by one or more major market 
data vendors, updated at least every 15 seconds during Regular Trading 
Hours.
    The value of the Index will be made available by one or more major 
market data vendors, updated at least every 15 seconds during Regular 
Trading Hours.
    As noted above, the Index is calculated every day and is 
constructed using ETH price feeds from eligible ETH spot markets and a 
VWMP methodology, calculated every 15 seconds based on VWMP spot market 
data over rolling sixty-minute increments. Information about the Index 
and Index value, including key elements of how the Index is calculated, 
will be publicly available at i.fidelity.com/indices.
    Quotation and last sale information for ETH is widely disseminated 
through a variety of major market data vendors, including Bloomberg and 
Reuters. Information relating to trading, including price and volume 
information, in ETH is available from major market data vendors and 
from the trading platforms on which ETH are traded. Depth of book 
information is also available from ETH trading platforms. The normal 
trading hours for ETH trading platforms are 24 hours per day, 365 days 
per year.
    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 BZX Official Closing Price and trading 
volume information for the Shares will be published daily in the 
financial section of newspapers. Quotation and last-sale information 
regarding the Shares will be disseminated through the facilities of the 
CTA.
The ETH Custodian
    The Sponsor has selected FDAS to be the Trust's Custodian. FDAS is 
a New York state limited liability trust \44\ that serves as ETH 
custodian to institutional and individual investors. The Custodian 
maintains a substantial portion of the private keys associated with the 
Trust's ETH in ``cold storage'' or similarly secure technology. Cold 
storage is a safeguarding method with multiple layers of protections 
and protocols, by which the private key(s) corresponding to the Trust's 
ETH is (are) generated and stored in an offline manner. Private keys 
are generated in offline computers that are not connected to the 
internet so that they are resistant to being hacked. Cold storage of 
private keys may involve keeping such keys on a non-networked computer 
or electronic device or storing the public key and private keys on a 
storage device or printed medium and deleting the keys from all 
computers.
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    \44\ New York state trust companies are subject to rigorous 
oversight similar to other types of entities, such as nationally 
chartered banking entities, that hold customer assets. Like national 
banks, they must obtain specific approval of their primary regulator 
for the exercise of their fiduciary powers. Moreover, limited 
purpose trust companies engaged in the custody of digital assets are 
subject to even more stringent requirements than national banks 
which, following initial approval of trust powers, generally can 
exercise those powers broadly without further approval of the OCC. 
In contrast, NYDFS requires in their approval orders that limited 
purpose trust companies obtain separate approval for all material 
changes in business.
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    The Custodian may receive deposits of ETH but may not send ETH 
without use of the corresponding private keys. In order to send ETH 
when the private keys are kept in cold storage, either the private keys 
must be retrieved from cold storage and entered into a software program 
to sign the transaction, or the unsigned transaction must be sent to 
the ``cold'' server in which the private keys are held for signature by 
the private keys. At that point, the Custodian can transfer the ETH. 
The Trust's Transfer Agent will facilitate the settlement of Shares in 
response to the placement of creation orders and redemption orders from 
authorized participants. The Trust will only hold ETH, cash and cash 
equivalents. The Trust will enter into a cash custody agreement with 
the Cash Custodian as custodian of the Trust's cash and cash 
equivalents.
Creation and Redemption of Shares
    When the Trust sells or redeems its Shares, it will do so in cash 
transactions in blocks of 25,000 Shares (a ``Creation Basket'') that 
are based on the amount of ETH held by the Trust on a per unit (i.e., 
25,000 Share) basis. According to the Registration Statement, on any 
business day, an authorized participant may place an order to create 
one or more Creation Baskets. Purchase orders must be placed by close 
of Regular Trading Hours on the Exchange or an earlier time as 
determined and communicated by the Sponsor and its agent. The day on 
which an order is received is considered the purchase order date. The 
total deposit of cash required is based on the combined NAV of the 
number of Shares included in the Creation Baskets being created 
determined as of 4:00 p.m. ET on the date the order to purchase is 
properly received. The Administrator determines the quantity of ether 
associated with a Creation Basket for a given day by dividing the 
number of ETH held by the Trust as of the opening of business on that 
business day, adjusted for the amount of ETH constituting estimated 
accrued but unpaid fees and expenses of the Trust as of the opening of 
business on that business day, by the quotient of the number of Shares 
outstanding at the opening of business divided by the aggregation of 
Shares associated with a Creation Basket. The procedures by which an 
authorized participant can redeem one or more Creation Baskets mirror 
the procedures for the creation of Creation Baskets.
    The authorized participants will deliver only cash to create Shares 
and will receive only cash when redeeming Shares. Further, authorized 
participants will not directly or indirectly purchase, hold, deliver, 
or receive ETH as part of the creation or redemption process or 
otherwise direct the Trust or a third party with respect to purchasing, 
holding, delivering, or receiving ETH as part of the creation or 
redemption process.
    The Trust will create Shares by receiving ETH from a third party 
that is not the authorized participant and the Trust--not the 
authorized participant--is responsible for selecting the third party to 
deliver the ETH. Further, the third party will not be acting as an 
agent of the authorized participant with respect to the delivery of the 
ETH to the Trust or acting at the direction of the authorized 
participant with respect to the delivery of the ETH to the Trust. The 
Trust will redeem Shares by delivering ETH to a third party that is not 
the authorized participant and the Trust--not the authorized 
participant--is responsible for selecting the third party to receive 
the ETH. Further, the third party will not be acting as an agent of the 
authorized participant with respect to the receipt of the ETH from the 
Trust or acting at the direction of the authorized participant with 
respect to the receipt of the ETH from the Trust.

[[Page 46489]]

    The procedures by which an authorized participant can redeem one or 
more Creation Baskets mirror the procedures for the creation of 
Creation Baskets.
    The Sponsor will maintain ownership and control of ETH in a manner 
consistent with good delivery requirements for spot commodity 
transactions.
Rule 14.11(e)(4)--Commodity-Based Trust Shares
    The Shares will be subject to BZX Rule 14.11(e)(4), which sets 
forth the initial and continued listing criteria applicable to 
Commodity-Based Trust Shares. The Exchange represents that, for initial 
and continued listing, the Trust must be in compliance with Rule 10A-3 
under the Act. A minimum of 100,000 Shares will be outstanding at the 
commencement of listing on the Exchange. The Exchange will obtain a 
representation that the NAV will be calculated daily and that the NAV 
and information about the assets of the Trust will be made available to 
all market participants at the same time. The Exchange notes that, as 
defined in Rule 14.11(e)(4)(C)(i), the Shares will be: (a) issued by a 
trust that holds (1) a specified commodity \45\ deposited with the 
trust, or (2) a specified commodity and, in addition to such specified 
commodity, cash; (b) 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) 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.
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    \45\ For purposes of Rule 14.11(e)(4), the term commodity takes 
on the definition of the term as provided in the Commodity Exchange 
Act.
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    Upon termination of the Trust, the Shares will be removed from 
listing. The Trustee, Delaware Trust Company, is a trust company having 
substantial capital and surplus and the experience and facilities for 
handling corporate trust business, as required under Rule 
14.11(e)(4)(E)(iv)(a) and that no change will be made to the trustee 
without prior notice to and approval of the Exchange. The Exchange also 
notes that, pursuant to Rule 14.11(e)(4)(F), neither the Exchange nor 
any agent of the Exchange shall have any liability for damages, claims, 
losses or expenses caused by any errors, omissions or delays in 
calculating or disseminating any underlying commodity value, the 
current value of the underlying commodity required to be deposited to 
the Trust in connection with issuance of Commodity-Based Trust Shares; 
resulting from any negligent act or omission by the Exchange, or any 
agent of the Exchange, or any act, condition or cause beyond the 
reasonable control of the Exchange, its agent, including, but not 
limited to, an act of God; fire; flood; extraordinary weather 
conditions; war; insurrection; riot; strike; accident; action of 
government; communications or power failure; equipment or software 
malfunction; or any error, omission or delay in the reports of 
transactions in an underlying commodity. Finally, as required in Rule 
14.11(e)(4)(G), the Exchange notes that any registered market maker 
(``Market Maker'') in the Shares must file with the Exchange in a 
manner prescribed by the Exchange and keep current a list identifying 
all accounts for trading in an underlying commodity, related commodity 
futures or options on commodity futures, or any other related commodity 
derivatives, which the registered Market Maker may have or over which 
it may exercise investment discretion. No registered Market Maker shall 
trade in an underlying commodity, related commodity futures or options 
on commodity futures, or any other related commodity derivatives, in an 
account in which a registered Market Maker, directly or indirectly, 
controls trading activities, or has a direct interest in the profits or 
losses thereof, which has not been reported to the Exchange as required 
by this Rule. In addition to the existing obligations under Exchange 
rules regarding the production of books and records (see, e.g., Rule 
4.2), the registered Market Maker in Commodity-Based Trust Shares shall 
make available to the Exchange such books, records or other information 
pertaining to transactions by such entity or registered or non-
registered employee affiliated with such entity for its or their own 
accounts for trading the underlying physical commodity, related 
commodity futures or options on commodity futures, or any other related 
commodity derivatives, as may be requested by the Exchange.
    The Exchange is able to obtain information regarding trading in the 
Shares and the underlying ETH, CME Ether Futures contracts, options on 
CME Ether Futures, or any other ETH derivative through members acting 
as registered Market Makers, in connection with their proprietary or 
customer trades.
    As a general matter, the Exchange has regulatory jurisdiction over 
its Members and their associated persons, which include any person or 
entity controlling a Member. To the extent the Exchange may be found to 
lack jurisdiction over a subsidiary or affiliate of a Member 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.
Trading Halts
    With respect to trading halts, the Exchange may consider all 
relevant factors in exercising its discretion to halt or suspend 
trading in the Shares. The Exchange will halt trading in the Shares 
under the conditions specified in BZX Rule 11.18. Trading 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 trading is not occurring in the ETH underlying 
the Shares; or (2) whether other unusual conditions or circumstances 
detrimental to the maintenance of a fair and orderly market are 
present. Trading in the Shares also will be subject to Rule 
14.11(e)(4)(E)(ii), which sets forth circumstances under which trading 
in the Shares may be halted.
    If the IIV or the value of the Index is not being disseminated as 
required, the Exchange may halt trading during the day in which the 
interruption to the dissemination of the IIV or the value of the Index 
occurs. If the interruption to the dissemination of the IIV or the 
value of the Index persists past the trading day in which it occurred, 
the Exchange will halt trading no later than the beginning of the 
trading day following the interruption.
    In addition, if the Exchange becomes aware that the NAV with 
respect to the Shares is not disseminated to all market participants at 
the same time, it will halt trading in the Shares until such time as 
the NAV is available to all market participants.
Trading Rules
    The Exchange deems the Shares to be equity securities, thus 
rendering trading in the Shares subject to the Exchange's existing 
rules governing the trading of equity securities. BZX will allow 
trading in the Shares during all trading sessions on the Exchange. The 
Exchange has appropriate rules to facilitate transactions in the Shares 
during all trading sessions. As provided in BZX Rule 11.11(a) the 
minimum price variation for quoting and entry of orders in securities 
traded on the Exchange is $0.01 where the price is greater than $1.00 
per share or $0.0001 where the price is less than $1.00 per share. The

[[Page 46490]]

Shares of the Trust will conform to the initial and continued listing 
criteria set forth in BZX Rule 14.11(e)(4).
Surveillance
    The Exchange represents that its surveillance procedures are 
adequate to properly monitor the trading of the Shares on the Exchange 
during all trading sessions and to deter and detect violations of 
Exchange rules and the applicable federal securities laws. Trading of 
the Shares through the Exchange will be subject to the Exchange's 
surveillance procedures for derivative products, including Commodity-
Based Trust Shares. FINRA conducts certain 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 Exchange or FINRA, on behalf of the Exchange, or both, will 
communicate as needed regarding trading in the Shares, CME Ether 
Futures, or any other ether derivative 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, CME Ether Futures, or any other ether 
derivative from such markets and other entities.\46\ The Exchange may 
obtain information regarding trading in the Shares, CME Ether Futures, 
or any other ether derivative via ISG, from other exchanges who are 
members or affiliates of the ISG, or with which the Exchange has 
entered into a comprehensive surveillance sharing agreement.
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    \46\ For a list of the current members and affiliate members of 
ISG, see www.isgportal.com.
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    In addition, the Exchange also has a general policy prohibiting the 
distribution of material, non-public information by its employees.
    The Sponsor has represented to the Exchange that it will advise the 
Exchange of any failure by the Trust or the Shares to comply with the 
continued listing requirements, and, pursuant to its obligations under 
Section 19(g)(1) of the Exchange Act, the Exchange will surveil for 
compliance with the continued listing requirements. If the Trust or the 
Shares are not in compliance with the applicable listing requirements, 
the Exchange will commence delisting procedures under Exchange Rule 
14.12.
The Information Circular
    Prior to the commencement of trading, the Exchange will inform its 
members in an Information Circular of the special characteristics and 
risks associated with trading the Shares. Specifically, the Information 
Circular will discuss the following: (i) the procedures for the 
creation and redemption of Creation Baskets (and that the Shares are 
not individually redeemable); (ii) BZX Rule 3.7, which imposes 
suitability obligations on Exchange members with respect to 
recommending transactions in the Shares to customers; (iii) how 
information regarding the IIV and the Trust's NAV are disseminated; 
(iv) the risks involved in trading the Shares outside of Regular 
Trading Hours \47\ when an updated IIV will not be calculated or 
publicly disseminated; (v) the requirement that members deliver a 
prospectus to investors purchasing newly issued Shares prior to or 
concurrently with the confirmation of a transaction; and (vi) trading 
information. The Information Circular will also reference the fact that 
there is no regulated source of last sale information regarding ETH, 
that the Commission has no jurisdiction over the trading of ETH as a 
commodity, and that the CFTC has regulatory jurisdiction over the 
trading of CME Ether Futures contracts and options on CME Ether Futures 
contracts.
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    \47\ Regular Trading Hours is the time between 9:30 a.m. and 
4:00 p.m. Eastern Time.
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    In addition, the Information Circular will advise members, prior to 
the commencement of trading, of the prospectus delivery requirements 
applicable to the Shares. Members purchasing the Shares for resale to 
investors will deliver a prospectus to such investors. The Information 
Circular will also discuss any exemptive, no-action and interpretive 
relief granted by the Commission from any rules under the Act.
2. Statutory Basis
    The Exchange believes that the proposal is consistent with Section 
6(b) of the Act \48\ in general and Section 6(b)(5) of the Act \49\ in 
particular in that it is 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 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.
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    \48\ 15 U.S.C. 78f.
    \49\ 15 U.S.C. 78f(b)(5).
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    The Commission has approved numerous series of Trust Issued 
Receipts, including Commodity-Based Trust Shares, to be listed on U.S. 
national securities exchanges. In order for any proposed rule change 
from an exchange to be approved, the Commission must determine that, 
among other things, the proposal is consistent with the requirements of 
Section 6(b)(5) of the Act, specifically including: (i) the requirement 
that a national securities exchange's rules are designed to prevent 
fraudulent and manipulative acts and practices; \50\ and (ii) the 
requirement that an exchange proposal be designed, in general, to 
protect investors and the public interest. The Exchange believes that 
this proposal is consistent with the requirements of Section 6(b)(5) of 
the and, as described and discussed above, the Sponsor's analysis 
demonstrates that the Exchange has satisfied the requirements under the 
Act that the CME Ether Futures Market (i) is a regulated market, (ii) 
has a comprehensive surveillance-sharing agreement with the Exchange; 
and (iii) satisfies the Commission's ``significant market'' 
definition.'' In addition, the Exchange believes that this proposal is 
consistent with the requirements of Section 6(b)(5) of the Act because 
this filing sufficiently demonstrates that the standard that has 
previously been articulated by the Commission applicable to Commodity-
Based Trust Shares has been met as outlined below.
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    \50\ The Exchange believes that ETH is resistant to price 
manipulation and that ``other means to prevent fraudulent and 
manipulative acts and practices'' exist to justify dispensing with 
the requisite surveillance sharing agreement. The geographically 
diverse and continuous nature of ETH trading render it difficult and 
prohibitively costly to manipulate the price of ETH. The 
fragmentation across ETH platforms, the relatively slow speed of 
transactions, and the capital necessary to maintain a significant 
presence on each trading platform make manipulation of ETH prices 
through continuous trading activity challenging. To the extent that 
there are ETH trading platforms engaged in or allowing wash trading 
or other activity intended to manipulate the price of ETH on other 
markets, such pricing does not normally impact prices on other 
trading platforms because participants will generally ignore markets 
with quotes that they deem non-executable. Moreover, the linkage 
between the ETH markets and the presence of arbitrageurs in those 
markets means that the manipulation of the price of ETH price on any 
single venue would require manipulation of the global ETH price in 
order to be effective. Arbitrageurs must have funds distributed 
across multiple trading platforms in order to take advantage of 
temporary price dislocations, thereby making it unlikely that there 
will be strong concentration of funds on any particular ETH trading 
platform or OTC platform. As a result, the potential for 
manipulation on a trading platform would require overcoming the 
liquidity supply of such arbitrageurs who are effectively 
eliminating any cross-market pricing differences.

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[[Page 46491]]

(i) Designed To Prevent Fraudulent and Manipulative Acts and Practices
    In order to meet this standard in a proposal to list and trade a 
series of Commodity-Based Trust Shares, the Commission requires that an 
exchange demonstrate that there is a comprehensive surveillance-sharing 
agreement in place \51\ with a regulated market of significant size. 
Both the Exchange and CME are members of ISG.\52\ As such, the only 
remaining issue to be addressed is whether the CME Ether Futures market 
constitutes a market of significant size, which both the Exchange and 
the Sponsor believe that it does. The terms ``significant market'' and 
``market of significant size'' include a market (or group of markets) 
as to which: (a) there is a reasonable likelihood that a person 
attempting to manipulate the ETP would also have to trade on that 
market to manipulate the ETP, so that a surveillance-sharing agreement 
would assist the listing exchange in detecting and deterring 
misconduct; and (b) it is unlikely that trading in the ETP would be the 
predominant influence on prices in that market.\53\
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    \51\ As previously articulated by the Commission, ``The standard 
requires such surveillance-sharing agreements since ``they provide a 
necessary deterrent to manipulation because they facilitate the 
availability of information needed to fully investigate a 
manipulation if it were to occur.'' The Commission has emphasized 
that it is essential for an exchange listing a derivative securities 
product to enter into a surveillance-sharing agreement with markets 
trading underlying securities for the listing exchange to have the 
ability to obtain information necessary to detect, investigate, and 
deter fraud and market manipulation, as well as violations of 
exchange rules and applicable federal securities laws and rules. The 
hallmarks of a surveillance-sharing agreement are that the agreement 
provides for the sharing of information about market trading 
activity, clearing activity, and customer identity; that the parties 
to the agreement have reasonable ability to obtain access to and 
produce requested information; and that no existing rules, laws, or 
practices would impede one party to the agreement from obtaining 
this information from, or producing it to, the other party.'' The 
Commission has historically held that joint membership in ISG 
constitutes such a surveillance sharing agreement. See Wilshire 
Phoenix Disapproval.
    \52\ For a list of the current members and affiliate members of 
ISG, see www.isgportal.com.
    \53\ See Wilshire Phoenix Disapproval.
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    The Commission has also recognized that the ``regulated market of 
significant size'' standard is not the only means for satisfying 
Section 6(b)(5) of the act, specifically providing that a listing 
exchange could demonstrate that ``other means to prevent fraudulent and 
manipulative acts and practices'' are sufficient to justify dispensing 
with the requisite surveillance-sharing agreement.\54\
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    \54\ See Winklevoss Order at 37580. The Commission has also 
specifically noted that it ``is not applying a `cannot be 
manipulated' standard; instead, the Commission is examining whether 
the proposal meets the requirements of the Exchange Act and, 
pursuant to its Rules of Practice, places the burden on the listing 
exchange to demonstrate the validity of its contentions and to 
establish that the requirements of the Exchange Act have been met.'' 
Id. at 37582.
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    The significant market test requires that there is a reasonable 
likelihood that a person attempting to manipulate the ETP would also 
have to trade on that market to manipulate the ETP, so that a 
surveillance-sharing agreement would assist the listing exchange in 
detecting and deterring misconduct. In light of the similarly high 
correlation between spot ETH/CME Ether Futures and spot bitcoin/CME 
Bitcoin Futures, applying the same rationale that the Commission 
applied to a Spot Bitcoin ETP in the Spot Bitcoin ETP Approval Order 
also indicates that this test is satisfied for this proposal. As noted 
above, in the Spot Bitcoin ETP Approval Order, the SEC concluded that:

. . . fraud or manipulation that impacts prices in spot bitcoin 
markets would likely similarly impact CME bitcoin futures prices. 
And because the CME's surveillance can assist in detecting those 
impacts on CME bitcoin futures prices, the Exchanges' comprehensive 
surveillance-sharing agreement with the CME . . . can be reasonably 
expected to assist in surveilling for fraudulent and manipulative 
acts and practices in the specific context of the [p]roposals.\55\
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    \55\ See the Spot Bitcoin ETP Approval Order at 3011-3012.

    The assumptions from this statement are also true for CME Ether 
Futures. CME Ether Futures pricing is based on pricing from spot ether 
markets. The statement from the Spot Bitcoin ETP Approval Order that 
the surveillance-sharing agreement with the CME ``can be reasonably 
expected to assist in surveilling for fraudulent and manipulative acts 
and practices in the specific context of the [p]roposals'' makes clear 
that the Commission believes that CME's surveillance can capture the 
effects of trading on the relevant spot markets on the pricing of CME 
Bitcoin Futures. This same logic would extend to CME Ether Futures 
markets where CME's surveillance would be able to capture the effects 
of trading on the relevant spot markets on the pricing of CME Ether 
Futures.
(b) Predominant Influence on Prices in Spot and ETH Futures
    The Exchange and Sponsor also believe that trading in the Shares 
would not be the predominant force on prices in the CME Ether Futures 
market for a number of reasons. First, because the Trust would not hold 
CME Ether Futures contracts, the only way that it could be the 
predominant force on prices in that market is through the spot markets 
that CME Ether Futures contracts use for pricing.\56\ The Sponsor notes 
that ether total 24-hour spot trading volume has averaged $9.4 billion 
over the year ending September 1, 2023.\57\ The Sponsor expects that 
the Trust would represent a very small percentage of this daily trading 
volume in the spot ether market even in its most aggressive projections 
for the Trust's assets and, thus, the Trust would not have an impact on 
the spot market and therefore could not be the predominant force on 
prices in the CME Ether Futures market. Second, much like the CME 
Bitcoin Futures market, the CME Ether Futures market has progressed and 
matured significantly. As the U.S. Court of Appeals for the D.C. 
Circuit found in its review of the Grayscale Order, ``Because the spot 
market is deeper and more liquid than the futures market, manipulation 
should be more difficult, not less.'' The Exchange and Sponsor agree 
with this sentiment and believe it applies equally to the spot ether 
and CME Ether Futures markets.
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    \56\ This logic is reflected by the U.S. Court of Appeals for 
the D.C. Circuit on its review of the Grayscale Order at 17-18court 
in the Grayscale Order at 17-18. See Grayscale Investments, LLC v. 
SEC, 82 F. 4th 1239 (D.C. Cir. 2023). Specifically, the court found 
that ``Because Grayscale owns no futures contracts, trading in 
Grayscale can affect the futures market only through the spot market 
. . . But Grayscale holds just 3.4 percent of outstanding bitcoin, 
and the Commission did not suggest Grayscale can dominate the price 
of bitcoin.''
    \57\ Source: TokenTerminal.
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(c) Other Means To Prevent Fraudulent and Manipulative Acts and 
Practices
    As noted above, the Commission also permits a listing exchange to 
demonstrate that ``other means to prevent fraudulent and manipulative 
acts and practices'' are sufficient to justify dispensing with the 
requisite surveillance-sharing agreement. The Exchange and Sponsor 
believe that such conditions are present.
    The Exchange believes that the proposal is designed to protect 
investors and the public interest. Over the past several years, U.S. 
investor exposure to ether through OTC ETH Funds has grown into the 
tens of billions of dollars and more than a billion dollars of exposure 
through Ether Futures ETFs. With that growth, so too has grown the 
quantifiable investor protection issues to U.S. investors through roll 
costs for Ether Futures ETFs and premium/discount volatility and 
management fees for OTC ETH Funds. The Exchange believes that the 
concerns related to the prevention of fraudulent and

[[Page 46492]]

manipulative acts and practices have been sufficiently addressed to be 
consistent with the Act and, to the extent that the Commission 
disagrees with that assertion, also believes that such concerns are now 
outweighed by these investor protection concerns. As such, the Exchange 
believes that approving this proposal (and comparable proposals) 
provides the Commission with the opportunity to allow U.S. investors 
with access to ether in a regulated and transparent exchange-traded 
vehicle that would act to limit risk to U.S. investors by: (i) reducing 
premium and discount volatility; (ii) reducing management fees through 
meaningful competition; (iii) reducing risks and costs associated with 
investing in Ether Futures ETFs and operating companies that are 
imperfect proxies for ether exposure; and (iv) providing an alternative 
to custodying spot ether.
Commodity-Based Trust Shares--Rule 14.11(e)(4)
    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 on the Exchange pursuant to the initial and 
continued listing criteria in Exchange Rule 14.11(e)(4). The Exchange 
believes that its surveillance procedures are adequate to properly 
monitor the trading of the Shares on the Exchange during all trading 
sessions and to deter and detect violations of Exchange rules and the 
applicable federal securities laws. Trading of the Shares through the 
Exchange will be subject to the Exchange's surveillance procedures for 
derivative products, including Commodity-Based Trust Shares. The issuer 
has represented to the Exchange that it will advise the Exchange of any 
failure by the Trust or the Shares to comply with the continued listing 
requirements, and, pursuant to its obligations under Section 19(g)(1) 
of the Exchange Act, the Exchange will surveil for compliance with the 
continued listing requirements. If the Trust or the Shares are not in 
compliance with the applicable listing requirements, the Exchange will 
commence delisting procedures under Exchange Rule 14.12. The Exchange 
may obtain information regarding trading in the Shares and listed ETH 
derivatives via the ISG, from other exchanges who are members or 
affiliates of the ISG, or with which the Exchange has entered into a 
comprehensive surveillance sharing agreement.
Availability of Information
    The Exchange also believes that the proposal promotes market 
transparency in that a large amount of information is currently 
available about ETH and will be available regarding the Trust and the 
Shares. In addition to the price transparency of the Index, the Trust 
will provide information regarding the Trust's ETH holdings as well as 
additional data regarding the Trust. The website for the Trust, which 
will be publicly accessible at no charge, will contain the following 
information: (a) the current NAV per Share daily and the prior business 
day's NAV per Share and the reported BZX Official Closing Price; (b) 
the BZX Official Closing Price in relation to the NAV per Share as of 
the time the NAV is calculated and a calculation of the premium or 
discount of such price against such NAV per Share; (c) data in chart 
form displaying the frequency distribution of discounts and premiums of 
the BZX Official Closing Price against the NAV per Share, within 
appropriate ranges for each of the four previous calendar quarters (or 
for the life of the Trust, if shorter); (d) the prospectus; and other 
applicable quantitative information. The Trust will also disseminate 
its holdings on a daily basis on its website. The aforementioned 
information will be published as of the close of business and available 
on the Sponsor's website at www.fidelity.com, or any successor thereto.
    The Trust will provide an IIV per Share updated every 15 seconds, 
as calculated by the Exchange or a third-party financial data provider 
during the Exchange's Regular Trading Hours (9:30 a.m. to 4:00 p.m. 
Eastern time). The IIV will be widely disseminated on a per Share basis 
every 15 seconds during the Exchange's Regular Trading Hours through 
the facilities of the CTA and CQS high speed lines. In addition, the 
IIV will be available through on-line information services such as 
Bloomberg and Reuters. The IIV calculation agent will use the Trust's 
ETH holdings and cash and cash equivalents expected to comprise that 
day's NAV calculation to calculate the IIV. The calculation agent 
currently uses the Blockstream Crypto Data Feed Streaming Level 1 \58\ 
as the pricing source for the spot ETH, which will be used to update 
the IIV. The IIV disseminated during Regular Trading Hours should not 
be viewed as an actual real-time update of the NAV, which will be 
calculated only once at the end of each trading day.
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    \58\ Blockstream provides cryptocurrency data feeds delivering 
real-time and historical trade data from the world's leading 
cryptocurrency venues. See https://blockstream.com/cryptofeed/.
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    The price of ETH will be made available by one or more major market 
data vendors, updated at least every 15 seconds during Regular Trading 
Hours.
    The value of the Index will be made available by one or more major 
market data vendors, updated at least every 15 seconds during Regular 
Trading Hours.
    As noted above, the Index is calculated every day and is 
constructed using ETH price feeds from eligible ETH spot markets and a 
VWMP methodology, calculated every 15 seconds based on VWMP spot market 
data over rolling sixty-minute increments. Information about the Index 
and Index value, including key elements of how the Index is calculated, 
will be publicly available at i.fidelity.com/indices.
    Quotation and last sale information for ETH is widely disseminated 
through a variety of major market data vendors, including Bloomberg and 
Reuters. Information relating to trading, including price and volume 
information, in ETH is available from major market data vendors and 
from the trading platforms on which ETH are traded. Depth of book 
information is also available from ETH trading platforms. The normal 
trading hours for ETH trading platforms are 24 hours per day, 365 days 
per year.
    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 BZX Official Closing Price and trading 
volume information for the Shares will be published daily in the 
financial section of newspapers. Quotation and last-sale information 
regarding the Shares will be disseminated through the facilities of the 
CTA.
    In sum, the Exchange believes that this proposal is consistent with 
the requirements of Section 6(b)(5) of the Act, that this filing 
sufficiently demonstrates that the CME Ether Futures market represents 
a regulated market of significant size, and that on the whole the 
manipulation concerns previously articulated by the Commission are 
sufficiently mitigated to the point that they are outweighed by 
investor protection issues that would be resolved by approving this 
proposal. For the above reasons, the Exchange believes that the 
proposed rule change is consistent with the requirements of Section 
6(b)(5) of the Act.

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

[[Page 46493]]

necessary or appropriate in furtherance of the purpose of the Act. The 
Exchange notes that the proposed rule change, rather will facilitate 
the listing and trading of an additional exchange-traded product that 
will enhance competition among both market participants and listing 
venues, 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

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

III. 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-2023-095 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-2023-095. 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-2023-095 and should 
be submitted on or before June 20, 2024.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\59\
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    \59\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2024-11707 Filed 5-28-24; 8:45 am]
BILLING CODE 8011-01-P