[Federal Register Volume 90, Number 114 (Monday, June 16, 2025)]
[Notices]
[Pages 25389-25390]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-10881]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-103215; File No. SR-NYSEARCA-2025-15]
Self-Regulatory Organizations; NYSE Arca, Inc.; Order Instituting
Proceedings To Determine Whether To Approve or Disapprove a Proposed
Rule Change To List and Trade Shares of the Bitwise Bitcoin and
Ethereum ETF Under NYSE Arca Rule 8.201-E (Commodity-Based Trust
Shares)
June 10, 2025.
I. Introduction
On February 19, 2025, NYSE Arca, Inc. (``NYSE Arca'' 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
Bitwise Bitcoin and Ethereum ETF (``Trust'') under NYSE Arca Rule
8.201-E (Commodity-Based Trust Shares). The proposed rule change was
published for comment in the Federal Register on March 12, 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. 102534 (Mar. 6,
2025), 90 FR 11855 (``Notice''). Comments received on the proposed
rule change are available at: https://www.sec.gov/comments/sr-nysearca-2025-15/srnysearca202515.htm.
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On April 24, 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. 102925, 90 FR 17985
(Apr. 30, 2025). The Commission designated June 10, 2025, as the
date by which the Commission shall approve or 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 NYSE Arca Rule 8.201-E,
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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According to the Exchange, the investment objective of the Trust is
to seek to provide exposure to the value of bitcoin and ether held by
the Trust, less the expenses of the Trust's operations and other
liabilities.\8\ In seeking to achieve its investment objective, the
Trust will hold bitcoin and ether \9\ and will establish its net asset
value at the end of every business day by reference to the CME CF
Bitcoin--New York Variant for its bitcoin holdings and to the CME CF
Ether--Dollar Reference Rate--New York Variant for its ether
holdings.\10\ The Trust's assets will consist solely of bitcoin, ether,
and cash.\11\ The Trust will create and redeem Shares in cash with
authorized participants on an ongoing basis in one or more blocks of
10,000 Shares.\12\
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\8\ See id. at 11855. Bitwise Investment Advisers, LLC is the
sponsor of the Trust and Delaware Trust Company is the trustee of
the Trust. Coinbase Custody Trust Company, LLC will maintain custody
of the Trust's bitcoin and ether. See id.
\9\ The Trust's allocation of its assets to bitcoin and ether
will approximate the relative market capitalization of bitcoin and
ether to one another. See id. The Exchange states that, as of the
date of the filing, the relative market capitalization of bitcoin
and ether was 83% bitcoin and 17% ether. See id. at 11855 n.9.
\10\ See id. at 11855. These pricing benchmarks are calculated
by CF Benchmarks Ltd. based on an aggregation of executed trade flow
of major bitcoin and ether trading platforms. See id. at 11855 n.10.
\11\ See id. at 11855.
\12\ See id. at 11857.
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III. Proceedings To Determine Whether To Approve or Disapprove SR-
NYSEARCA-2025-15 and Grounds for Disapproval Under Consideration
The Commission is instituting proceedings pursuant to Section
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
[[Page 25390]]
``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 bitcoin and ether, 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, Public Law 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 July 7, 2025. Any person who wishes to file a
rebuttal to any other person's submission must file that rebuttal by
July 21, 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-NYSEARCA-2025-15 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-NYSEARCA-2025-15. 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-NYSEARCA-2025-15 and should
be submitted on or before July 7, 2025. Rebuttal comments should be
submitted by July 21, 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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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-10881 Filed 6-13-25; 8:45 am]
BILLING CODE 8011-01-P