[Federal Register Volume 89, Number 116 (Friday, June 14, 2024)]
[Notices]
[Pages 50656-50658]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-13049]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-100306; File No. SR-CboeBZX-2024-050]


Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend 
the ARK 21Shares Ethereum ETF To Amend the Trust Name and Reflect That 
the Trust Will No Longer Have a Sub-Adviser

June 10, 2024.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on June 7, 2024, Cboe BZX Exchange, Inc. (``Exchange'' or ``BZX'') 
filed with the Securities and Exchange Commission (``Commission'') the 
proposed rule change as described in Items I and II below, which Items 
have been prepared by the Exchange. The 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.
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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 ARK 21Shares Ethereum ETF (the 
``Trust''), shares of which have been approved by the Commission to 
list and trade on the Exchange pursuant to BZX Rule 14.11(e)(4), to 
amend the Trust name and reflect that the Trust will no longer have a 
sub-adviser.
    The text of the proposed rule change is also available on the 
Exchange's website (http://markets.cboe.com/us/equities/regulation/rule_filings/bzx/), at the Exchange's Office of the Secretary, and at 
the Commission's Public Reference Room.

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

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

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

1. Purpose
    The Commission approved the listing and trading of shares of the 
Trust (the ``Shares'') on the Exchange pursuant to Exchange Rule 
14.11(e)(4), Commodity-Based Trust Shares, on May 23, 2024.\3\ 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 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 will be issued by the 
Trust. The Trust was formed as a Delaware statutory trust on September 
5, 2023.
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    \3\ See Securities Exchange Act Release No. 100224 (May 23, 
2024) 89 FR 46937 (May 30, 2024) (SR-CboeBZX-2023-070) (Order 
Granting Accelerated Approval of Proposed Rule Changes, as Modified 
by Amendments Thereto, to List and Trade Shares of Ether-Based 
Exchange-Traded Products) (the ``Approval Order'').
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    The Exchange proposes to amend a representation set forth in the 
Exchange's previous rule filing to list and trade Shares of the Trust 
and to reflect a change to the Trust name.\4\ Specifically, Amendment 
No. 2 represented that ARK Investment Management LLC is the sub-adviser 
of the Trust and will provide data, research, and as needed, 
operational support to the Trust including with respect to assistance 
in the marketing of the Shares. Now, the Exchange proposes to provide 
that a sub-adviser will no longer serve the Trust.
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    \4\ See Securities Exchange Act Release No. 100216 (May 22, 
2024) 89 FR 46514 (May 29, 2024) (SR-CboeBZX-2023-070) (Notice of 
Filing of Amendment No. 2 to a Proposed Rule Change to List and 
Trade Shares of the ARK 21Shares Ethereum ETF Under BZX Rule 
14.11(e)(4), Commodity-Based Trust Shares) (``Amendment No. 2'').
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    The Exchange also proposes to change the name of the Trust to the 
21Shares Core Ethereum ETF. The proposed name change is consistent with 
an amended name to the Trust's charter and the Trust's registration 
statement on Form S-1 (as amended and supplemented from time to time, 
the ``Registration Statement'').\5\
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    \5\ See Amendment No. 3 to the Registration Statement on Form S-
1, dated May 31, 2024, submitted to the Commission by the Sponsor, 
as defined in the Registration Statement, on behalf of the Trust 
(333-274364).
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    Except for the above changes, all other representations in 
Amendment No. 2 remain unchanged and will continue to constitute 
continuing listing requirements. In addition, the Trust will continue 
to comply with the terms of Amendment No. 2 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.\6\ Specifically, the Exchange believes the proposed rule change is 
consistent with the section 6(b)(5) \7\ requirements that the rules of 
an exchange be designed to prevent fraudulent and manipulative acts and

[[Page 50657]]

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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    \6\ 15 U.S.C. 78f(b).
    \7\ 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 two representations in Amendment No. 2 
regarding the designation of a sub-adviser and the name of the Trust. 
As described above, the amendment to reflect that a sub-adviser will no 
longer serve the trust will conform to changes made to the Registration 
Statement. There is no requirement that a sub-adviser serve the Trust, 
and at least one other issuer of a spot ether exchange-traded product 
(``ETP'') has similarly not designated a sub-adviser to its trust.\8\ 
The proposed named change is also consistent with an amended name to 
the Trust's charter and the Trust's Registration Statement. Further, 
the proposed name will continue to accurately describe the Trust. 
Therefore, the proposed changes will promote clarity and transparency 
with respect to the Trust's name and service providers, to the benefit 
of all market participants.
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    \8\ For example, the proposal to list and trade shares of the 
VanEck Ethereum Trust did not provide for a sub-adviser. See 
Securities Exchange Act Release No. 100214 (May 22, 2024), 89 FR 
46476 [sic] (May 29, 2024) (SR-CboeBZX-2023-069) (Notice of Filing 
of Amendment No. 2 to a Proposed Rule Change to List and Trade 
Shares of the VanEck Ethereum Trust Under BZX Rule 14.11(e)(4), 
Commodity-Based Trust Shares). See also the Approval Order.
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    Except for these changes, all other representations made in 
Amendment No. 2 remain unchanged and will continue to constitute 
continuing listing requirements for the Trust. Accordingly, the 
Exchange believes that this proposed rule change raises no novel 
regulatory issues.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. As noted above, the proposed 
amendment is intended to reflect a name change to the Trust and to 
reflect that a sub-adviser will no longer serve the Trust. The Exchange 
believes these changes 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

    Because the foregoing proposed rule change does not: (i) 
significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to section 19(b)(3)(A) of the Act \9\ and Rule 19b-
4(f)(6) thereunder.\10\
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(6). 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, along 
with a brief description and text of the proposed rule change, at 
least five business days prior to the date of filing of the proposed 
rule change, or such shorter time as designated by the Commission. 
The Exchange has satisfied this requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) normally does 
not become operative for 30 days after the date of filing. However, 
pursuant to Rule 19b-4(f)(6)(iii),\11\ the Commission may designate a 
shorter time if such action is consistent with the protection of 
investors and the public interest. The Exchange has asked the 
Commission to waive the 30-day operative delay so that the proposal may 
become operative immediately upon filing. Waiver of the 30-day 
operative delay will allow the Exchange to immediately reflect changes 
to the Trust name and sub-adviser that are consistent with its 
Registration Statement and charter. The Commission believes that the 
proposed rule change presents no novel legal or regulatory issues, and 
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.\12\
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    \11\ 17 CFR 240.19b-4(f)(6)(iii).
    \12\ For purposes only of waiving the operative delay of this 
proposal, the Commission has also considered the proposed rule's 
impact on efficiency, competition, and capital formation. 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-2024-050 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-2024-050. 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-2024-050 and should 
be submitted on or before July 5, 2024.


[[Page 50658]]


    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12), (59).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-13049 Filed 6-13-24; 8:45 am]
BILLING CODE 8011-01-P