[Federal Register Volume 89, Number 108 (Tuesday, June 4, 2024)]
[Notices]
[Pages 48016-48018]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-12144]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-100245; File No. SR-CboeBZX-2024-040]


Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend 
the Franklin Bitcoin ETF

May 29, 2024.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on May 16, 2024, Cboe BZX Exchange, Inc. (``Exchange'') filed with the 
Securities and Exchange Commission

[[Page 48017]]

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

    Cboe BZX Exchange, Inc. (``BZX'' or the ``Exchange'') is filing 
with the Securities and Exchange Commission (``Commission'' or ``SEC'') 
a proposed rule change to amend the Franklin Bitcoin ETF (the 
``Fund''), shares of which are listed and traded on the Exchange 
pursuant to BZX Rule 14.11(e)(4), to amend the time at which purchase 
orders for cash transaction creation baskets must be placed.
    The text of the proposed rule change is also available on the 
Exchange's website (http://markets.cboe.com/us/equities/regulation/rule_filings/bzx/), at the Exchange's Office of the Secretary, and at 
the Commission's Public Reference Room.

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

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

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

1. Purpose
    The Commission approved the listing and trading of shares of the 
Fund (the ``Shares'') on the Exchange pursuant to Exchange Rule 
14.11(e)(4), Commodity-Based Trust Shares, on January 10, 2024.\5\ 
Exchange Rule 14.11(e)(4) governs the listing and trading of Commodity-
Based Trust Shares, which means a security (a) that is issued by a 
trust (``Trust'') that holds (1) a specified commodity deposited with 
the Trust, or (2) a specified commodity and, in addition to such 
specified commodity, cash; (b) that is issued by such Trust in a 
specified aggregate minimum number in return for a deposit of a 
quantity of the underlying commodity and/or cash; and (c) that, when 
aggregated in the same specified minimum number, may be redeemed at a 
holder's request by such Trust which will deliver to the redeeming 
holder the quantity of the underlying commodity and/or cash. The Shares 
are issued by the Fund, a series of Franklin Templeton Digital Holdings 
Trust (the ``Trust''). The Trust was formed as a Delaware statutory 
trust on September 6, 2023.
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    \5\ See Securities Exchange Act Release No. 99306 (January 10, 
2024) 89 FR 3008 (January 17, 2024) (File Nos. SR-NYSEARCA-2021-90; 
SR-NYSEARCA-2023-44; SRNYSEARCA-2023-58; SR-NASDAQ-2023-016; SR-
NASDAQ-2023-019; SR-CboeBZX-2023-028; SR-CboeBZX-2023-038; SR-
CboeBZX-2023-040; SR-CboeBZX-2023-042; SRCboeBZX-2023-044; SR-
CboeBZX-2023-072) (Order Granting Accelerated Approval of Proposed 
Rule Changes, as Modified by Amendments Thereto, to List and Trade 
Bitcoin-Based Commodity-Based Trust Shares and Trust Units) (the 
``Approval Order'').
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    The Exchange proposes to amend a representation set forth in the 
Exchange's previous rule filing to list and trade Shares of the 
Fund.\6\ Specifically, Amendment No. 1 represented that purchase orders 
for cash transaction creation baskets must be placed by 3:00 p.m. 
Eastern Time, or the close of regular trading on the Exchange, 
whichever is earlier. Now, the Exchange proposes to amend the time 
purchase orders for cash transaction creation baskets must be placed to 
2:00 p.m. Eastern Time, the close of regular trading on the Exchange, 
or another time determined by the Sponsor.\7\ The proposed change would 
provide additional flexibility for the Sponsor in determining the cut-
off time for submitting purchase orders for cash transaction creation 
baskets. Furthermore, at least one other issuer of spot bitcoin 
exchange-traded products (``ETPs'') has similarly provided for 
flexibility to the sponsor in determining the cut-off time for 
submitting such purchase orders.\8\
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    \6\ See supra note 5 and see also Securities Exchange Act 
Release No. 99286 (January 8, 2024) 89 FR 2372 (January 12, 2024) 
(SR-CboeBZX-2023-072) (Notice of Filing of Amendment No. 1 to a 
Proposed Rule Change to List and Trade Shares of Franklin Bitcoin 
ETF Under BZX Rule 14.11(e)(4), Commodity-Based Trust Shares)) 
(``Amendment No. 1'').
    \7\ The sponsor of the Fund is Franklin Holdings, LLC (the 
``Sponsor'').
    \8\ For example, the proposal to list and trade shares of the 
ARK 21Shares Bitcoin ETF provided for that purchase orders must be 
placed by 12:00 p.m. Eastern Time, the close of regular trading on 
the Exchange, or another time determined by the Sponsor. See 
Securities Exchange Act No. 99288 (January 8, 2024) 89 FR 2387 
(January 12. 2024) (SR-CboeBZX-2023-028) (Notice of Filing of 
Amendment No. 5 to a Proposed Rule Change to List and Trade Shares 
of the ARK 21Shares Bitcoin ETF under BZX Rule 14.11(e)(4), 
Commodity-Based Trust Shares). See also the Approval Order.
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    Except for the above change, all other representations in Amendment 
No. 1 and the Approval Order remain unchanged and will continue to 
constitute continuing listing requirements. In addition, the Fund will 
continue to comply with the terms of Amendment No. 1, the Approval 
Order, and the requirements of Rule 14.11(e)(4).
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the Act and the rules and regulations thereunder applicable to the 
Exchange and, in particular, the requirements of Section 6(b) of the 
Act.\9\ Specifically, the Exchange believes the proposed rule change is 
consistent with the Section 6(b)(5) \10\ requirements that the rules of 
an exchange be designed to prevent fraudulent and manipulative acts and 
practices, to promote just and equitable principles of trade, to foster 
cooperation and coordination with persons engaged in regulating, 
clearing, settling, processing information with respect to, and 
facilitating transactions in securities, to remove impediments to and 
perfect the mechanism of a free and open market and a national market 
system, and, in general, to protect investors and the public interest.
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    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes the proposed rule change is designed to 
remove impediments to and perfect the mechanism of a free and open 
market and, in general, to protect investors and the public interest 
because it would update a representation in Amendment No. 1 regarding 
the time at which purchase orders for cash transaction creation baskets 
must be placed. As described above, the proposed change would provide 
additional flexibility to the Sponsor in determining the cut-off time 
for such purchase orders. The Exchange believes the proposal will 
remove impediments to and perfect the mechanism of a free and open 
market because it would provide additional flexibility to the creation 
and redemption of Shares, which may result in tighter spreads and a 
more efficient market, to the benefit of all market participants. 
Specifically, allowing for a later cut-off time would provide 
additional time for market participants

[[Page 48018]]

to submit purchase orders which may result in additional creation and/
or redemption units on the day, which may in turn lead to tighter 
spreads and a more efficient market, and conversely, an earlier cut-off 
time may provide additional time for the trust to manage creation and 
redemptions, which may be necessary due to unforeseen circumstances. 
The Exchange believes permitting this flexibility to the Sponsor 
regarding the time at which purchase orders for cash transaction 
creation baskets must be placed, consistent with at least one other 
issuer of spot bitcoin ETP,\11\ would perfect the mechanism of a free 
and open market, and is therefore, consistent with section 6(b)(5) of 
the Act.
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    \11\ Supra note 7.
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. As noted above, the proposed 
amendment is intended to change the time at which purchase orders for 
cash transaction creation baskets must be placed. The Exchange believes 
that this change will not impose any burden on competition.

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

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

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

    Pursuant to Section 19(b)(3)(A) of the Act \12\ and Rule 19b-
4(f)(6) \13\ thereunder, the Exchange has designated this proposal as 
one that effects a change that: (i) does not significantly affect the 
protection of investors or the public interest; (ii) does not impose 
any significant burden on competition; and (iii) by its terms, does not 
become operative for 30 days after the date of the filing, or such 
shorter time as the Commission may designate if consistent with the 
protection of investors and the public interest.\14\
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    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 17 CFR 240.19b-4(f)(6).
    \14\ In addition, Rule 19b-4(f)(6) requires a self-regulatory 
organization to give the Commission written notice of its intent to 
file the proposed rule change at least five business days prior to 
the date of filing of the proposed rule change, or such shorter time 
as designated by the Commission. The Exchange has satisfied this 
requirement.
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    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act normally does not become operative for 30 days after the date of 
its filing. However, Rule 19b-4(f)(6)(iii) \15\ permits the Commission 
to designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange requested 
that the Commission waive the 30-day operative delay so that the 
proposal may become operative immediately upon filing. As discussed in 
greater detail above, the Exchange represents that the proposal would 
provide additional flexibility to the Sponsor in determining the cut-
off time for submitting purchase orders for cash transaction creation 
baskets, which may result in tighter spreads and a more efficient 
market. Furthermore, at least one other issuer of spot bitcoin ETPs has 
similarly provided for flexibility to the sponsor in determining the 
cut-off time for submitting purchase orders.\16\ The Exchange further 
represents that except for the change discussed herein, all other 
representations in Amendment No. 1 and the Approval Order remain 
unchanged and will continue to constitute continuing listing 
requirements, and the Fund will continue to comply with the terms of 
Amendment No. 1, the Approval Order, and the requirements of Rule 
14.11(e)(4). The proposed rule change thus raises no novel legal or 
regulatory issues. Therefore, the Commission believes that waiver of 
the 30-day operative delay is consistent with the protection of 
investors and the public interest. Accordingly, the Commission hereby 
waives the 30-day operative delay and designates the proposed rule 
change operative upon filing.\17\
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    \15\ 17 CFR 240.19b-4(f)(6)(iii).
    \16\ See supra note 8.
    \17\ For purposes only of waiving the 30-day operative delay, 
the Commission has also considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
file number SR-CboeBZX-2024-040 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to file number SR-CboeBZX-2024-040. This 
file number should be included on the subject line if email is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's internet website (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for website viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE, 
Washington, DC 20549, on official business days between the hours of 10 
a.m. and 3 p.m. Copies of the filing also will be available for 
inspection and copying at the principal office of the Exchange. Do not 
include personal identifiable information in submissions; you should 
submit only information that you wish to make available publicly. We 
may redact in part or withhold entirely from publication submitted 
material that is obscene or subject to copyright protection. All 
submissions should refer to file number SR-CboeBZX-2024-040 and should 
be submitted on or before June 25, 2024.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\18\
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    \18\ 17 CFR 200.30-3(a)(12), (59).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-12144 Filed 6-3-24; 8:45 am]
BILLING CODE 8011-01-P