[Federal Register Volume 90, Number 104 (Monday, June 2, 2025)]
[Notices]
[Pages 23396-23397]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-09848]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-103124; File No. SR-CboeBZX-2025-019]
Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Order
Instituting Proceedings To Determine Whether To Approve or Disapprove a
Proposed Rule Change To List and Trade Shares of the WisdomTree XRP
Fund Under BZX Rule 14.11(e)(4), Commodity-Based Trust Shares
May 27, 2025.
I. Introduction
On February 6, 2025, 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
WisdomTree XRP Fund (``Trust'') under BZX Rule 14.11(e)(4), Commodity-
Based Trust Shares. The proposed rule change was published for comment
in the Federal Register on February 26, 2025.\3\
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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. 102445 (Feb. 19,
2025), 90 FR 10769 (``Notice''). Comments received on the proposed
rule change are available at: https://www.sec.gov/comments/sr-cboebzx-2025-019/srcboebzx2025019.htm.
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On March 11, 2025, 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\ This order institutes proceedings under Section 19(b)(2)(B)
of the Act \6\ to determine whether to approve or disapprove the
proposed rule change.
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\4\ 15 U.S.C. 78s(b)(2).
\5\ See Securities Exchange Act Release No. 102592, 90 FR 12410
(Mar. 17, 2025). The Commission designated May 27, 2025, as the date
by which the Commission shall approve, disapprove, or institute
proceedings to determine whether to disapprove the proposed rule
change.
\6\ 15 U.S.C. 78s(b)(2)(B).
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II. Summary of the Proposal
As described in more detail in the Notice,\7\ the Exchange proposes
to list and trade the Shares of the Trust under BZX Rule 14.11(e)(4),
which governs the listing and trading of Commodity-Based Trust Shares
on the Exchange.
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\7\ See Notice, supra note 3.
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The investment objective of the Trust is to seek to track the
performance of XRP,\8\ as measured by the CME CF Ripple-Dollar
Reference Rate--New York Variant (``Pricing Benchmark''), adjusted for
the Trust's expenses and other liabilities.\9\ In seeking to achieve
its investment objective, the Trust will hold XRP and will value the
Shares daily as of 4:00 p.m. ET using the same methodology used to
calculate the Pricing Benchmark.\10\ The Trust's assets will only
consist of XRP, cash, and cash equivalents.\11\ When the Trust sells or
redeems its Shares, it will do so in cash transactions with authorized
participants in blocks of 5,000 Shares.\12\
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\8\ The Exchange states that XRP is a digital asset that is
created and transmitted through the operations of the XRP Ledger, a
decentralized ledger upon which XRP transactions are processed and
settled. See id. at 10770-71.
\9\ See id. at 10773. WisdomTree Digital Commodity Services, LLC
is the sponsor of the Trust, Delaware Trust Company is the trustee,
and a third-party custodian will be responsible for custody of the
Trust's XRP. See id. at 10770, 10772.
\10\ See id. at 10773.
\11\ See id. at 10772.
\12\ See id.
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III. Proceedings To Determine Whether To Approve or Disapprove SR-
CboeBZX-2025-019 and Grounds for Disapproval Under Consideration
The Commission is instituting proceedings pursuant to Section
[[Page 23397]]
19(b)(2)(B) of the Act \13\ to determine whether the proposed rule
change should be approved or disapproved. Institution of proceedings is
appropriate at this time in view of the legal and policy issues raised
by the proposed rule change. Institution of proceedings does not
indicate that the Commission has reached any conclusions with respect
to any of the issues involved. Rather, the Commission seeks and
encourages interested persons to provide comments on the proposed rule
change.
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\13\ 15 U.S.C. 78s(b)(2)(B).
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Pursuant to Section 19(b)(2)(B) of the Act,\14\ the Commission is
providing notice of the grounds for disapproval under consideration.
The Commission is instituting proceedings to allow for additional
analysis of the proposed rule change's consistency with Section 6(b)(5)
of the Act, which requires, among other things, that the rules of a
national securities exchange be ``designed to prevent fraudulent and
manipulative acts and practices'' and ``to protect investors and the
public interest.'' \15\
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\14\ Id.
\15\ 15 U.S.C. 78f(b)(5).
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The Commission asks that commenters address the sufficiency of the
Exchange's statements in support of the proposal, which are set forth
in the Notice, in addition to any other comments they may wish to
submit about the proposed rule change. In particular, the Commission
seeks comment on whether the proposal to list and trade Shares of the
Trust, which would hold XRP, is designed to prevent fraudulent and
manipulative acts and practices or raises any new or novel concerns not
previously contemplated by the Commission.
IV. Procedure: Request for Written Comments
The Commission requests that interested persons provide written
submissions of their views, data, and arguments with respect to the
issues identified above, as well as any other concerns they may have
with the proposal. In particular, the Commission invites the written
views of interested persons concerning whether the proposal is
consistent with Section 6(b)(5) or any other provision of the Act, and
the rules and regulations thereunder. Although there do not appear to
be any issues relevant to approval or disapproval that would be
facilitated by an oral presentation of views, data, and arguments, the
Commission will consider, pursuant to Rule 19b-4, any request for an
opportunity to make an oral presentation.\16\
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\16\ Section 19(b)(2) of the Act, as amended by the Securities
Acts Amendments of 1975, Pub. L. 94-29 (June 4, 1975), grants the
Commission flexibility to determine what type of proceeding--either
oral or notice and opportunity for written comments--is appropriate
for consideration of a particular proposal by a self-regulatory
organization. See Securities Acts Amendments of 1975, Senate Comm.
on Banking, Housing & Urban Affairs, S. Rep. No. 75, 94th Cong., 1st
Sess. 30 (1975).
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Interested persons are invited to submit written data, views, and
arguments regarding whether the proposed rule change should be approved
or disapproved by June 23, 2025. Any person who wishes to file a
rebuttal to any other person's submission must file that rebuttal by
July 7, 2025.
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-2025-019 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-2025-019. 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-2025-019 and should
be submitted on or before June 23, 2025. Rebuttal comments should be
submitted by July 7, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
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\17\ 17 CFR 200.30-3(a)(57).
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Stephanie J. Fouse,
Assistant Secretary.
[FR Doc. 2025-09848 Filed 5-30-25; 8:45 am]
BILLING CODE 8011-01-P