[Federal Register Volume 90, Number 179 (Thursday, September 18, 2025)]
[Notices]
[Pages 45082-45089]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-18045]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-103974; File No. SR-NYSEARCA-2025-54]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
of Amendment No. 1 to Proposed Rule Change To Adopt New Rule 8.201-E
(Generic) for Commodity-Based Trust Shares
September 15, 2025.
On July 30, 2025, NYSE Arca, Inc. (``Exchange'' or ``NYSE Arca'')
filed with the Securities and Exchange Commission (``Commission''),
pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'' or ``Exchange Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to adopt new Rule 8.201-E (Generic) to permit the
generic listing and trading of Commodity-Based Trust Shares that meet
the requirements of such rule. The proposed rule change was published
for comment in the Federal Register on August 4, 2025.\3\ On September
4, 2025, the Exchange filed with the Commission Amendment No. 1 to the
proposed rule change as described in Items I and II below, which Items
have been prepared by the Exchange. Amendment No. 1 replaces and
supersedes the proposed rule change as originally filed. The Commission
is publishing this notice to solicit comments on the proposed rule
change, as modified by Amendment No. 1, 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. 103598 (July 30,
2025), 90 FR 36485. Comments received on the proposed rule change
are available at: https://www.sec.gov/comments/sr-nysearca-2025-54/srnysearca202554.htm
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes new Rule 8.201-E (Generic) to permit the
generic listing and trading of Commodity-Based Trust Shares that meet
the requirements of such rule. This Amendment No. 1 to SR-NYSEARCA-
2025-54 replaces SR-NYSEARCA-2025-54 as originally filed and supersedes
such filing in its entirety. The proposed rule change is available on
the Exchange's website at www.nyse.com and at the principal office of
the Exchange.
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 self-regulatory organization
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 those 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 parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes new Rule 8.201-E (Generic), which would
permit the generic listing and trading of Commodity-Based Trust Shares
that meet the requirements of the Rule. Current Rule 8.201-E would
continue to provide for the listing and trading of series of Commodity-
Based Trust Shares for which the Exchange would file separate proposals
under Section 19(b) of the Act.\4\ Consistent with other
[[Page 45083]]
products that may currently list on the Exchange pursuant to generic
listing standards (e.g., Investment Company Units listed pursuant to
Rule 5.2-E(j)(3), Managed Fund Shares listed pursuant to Rule 8.600-E,
and ETF Shares listed pursuant to Rule 5.2-E(j)(8)), the Exchange
proposes that Commodity-Based Trust Shares that meet the requirements
of proposed Rule 8.201-E (Generic) would be permitted to be listed and
traded on the Exchange without prior Commission approval order or
notice of effectiveness pursuant to Section 19(b) of the Act.\5\ The
Exchange believes that the proposed generic listing standards for
Commodity-Based Trust Shares would facilitate the efficient listing of
such products by significantly reducing the time frame and costs
associated with bringing these securities to market, which would in
turn promote market competition among issuers of such products, to the
benefit of the investing public.
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\4\ To further distinguish current Rule 8.201-E from proposed
Rule 8.201-E (Generic) and promote clarity in Exchange rules, the
Exchange proposes to add a parenthetical to the title of Rule 8.201-
E to designate it as applicable to non-generically listed series of
Commodity-Based Trust Shares. The Exchange also proposes non-
substantive, conforming changes throughout current Rule 8.201-E to
add references to its new title, Rule 8.201-E (Non-Generic), to
ensure specificity and transparency in the rule text. The Exchange
proposes to retain Rule 8.201-E (Non-Generic) to accommodate the
existing products listed and traded under such rule that may not
meet the requirements of proposed Rule 8.201-E (Generic), as well as
to provide for the future listing and trading of products that do
not meet the generic listing standards.
\5\ Rule 19b-4(e)(1) provides that the listing and trading of a
new derivative securities product by a self-regulatory organization
(``SRO'') is not deemed a proposed rule change, pursuant to
paragraph (c)(1) of Rule 19b-4, if the Commission has approved,
pursuant to Section 19(b) of the Act, the SRO's trading rules,
procedures and listing standards for the product class that would
include the new derivative securities product and the SRO has a
surveillance program for the product class. As contemplated by
proposed Rule 8.201-E (Generic), the Exchange proposes to establish
generic listing standards for Commodity-Based Trust Shares that meet
the criteria of the rule. Commodity-Based Trust Shares listed under
proposed Rule 8.201-E (Generic) would therefore not need a separate
proposed rule change pursuant to Rule 19b-4 before they could be
listed and traded on the Exchange. Rule 19b-4(e) requires an SRO
seeking to rely on Rule 19b-4(e) to file Form 19b-4(e) with the
Commission within 5 business days after commencement of trading a
new derivative securities product that is not deemed to be a
proposed rule change.
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Proposed Rule 8.201-E (Generic)
Proposed Rule 8.201-E(a) (Generic) would provide that the Exchange
will consider for trading, whether by listing or pursuant to unlisted
trading privileges, Commodity-Based Trust Shares that meet the criteria
of this Rule and that the Exchange may list and/or trade Commodity-
Based Trust Shares that meet the standards set forth in this Rule
8.201-E (Generic) pursuant to Rule 19b-4(e) under the Exchange Act. If
a series of Commodity-Based Trust Shares listed pursuant to proposed
Rule 8.201-E (Generic) does not satisfy these requirements, the
Exchange may suspend trading in the shares and will initiate delisting
proceedings pursuant to Rule 5.5-E(m).
Proposed Rule 8.201-E(b) (Generic) would provide that Rule 8.201-E
(Generic) is applicable only to Commodity-Based Trust Shares listed
pursuant to this Rule. Except to the extent inconsistent with this
Rule, or unless the context otherwise requires, the provisions of the
Bylaws and all other rules and procedures of the Board of Directors
shall be applicable to the trading on the Exchange of such securities.
Commodity-Based Trust Shares are included within the definition of
``security'' or ``securities'' as such terms are used in the Bvlaws and
Rules of the Exchange and are subject to the Exchange's existing rules
governing the trading of equity securities.
Proposed Rule 8.201-E(c) (Generic) would set forth definitions for
purposes of Rule 8.201-E (Generic). Rule 8.201-E(c)(1) (Generic) would
define Commodity-Based Trust Shares for purposes of Rule 8.201-E
(Generic) as a security that:
Is issued by a trust, limited liability company,
partnership, or other similar entity (``Trust'') that, if applicable,
is operated by a registered commodity pool operator pursuant to the
Commodity Exchange Act, and is not registered as an investment company
pursuant to the Investment Company Act of 1940, or series or class
thereof (proposed Rule 8.201-E(c)(1)(i) (Generic));
Is designed to reflect the performance of one or more
reference assets or an index of reference assets, less expenses and
other liabilities (proposed Rule 8.201-E(c)(1)(ii) (Generic));
In order to reflect the performance as provided in
(c)(1)(ii) above, is issued by a Trust that holds (A) one or more
commodities or commodity-based assets as defined in (c)(3) below, and
(B) in addition to such commodities or commodity-based assets, may hold
securities, cash, and cash equivalents (proposed Rule 8.201-
E(c)(1)(iii) (Generic));
Is issued by a Trust in a specified aggregate minimum
number in return for a deposit of (A) a specified quantity of the
underlying commodities, commodity-based assets, securities, cash, and
cash equivalents or (B) a cash amount with a value based on the next
determined net asset value per Trust share (proposed Rule 8.201-
E(c)(1)(iv) (Generic)); and
When aggregated in the same specified minimum number, may
be redeemed at a holder's request by a Trust which will deliver to the
redeeming holder (A) the specified quantity of the-underlying
commodities, commodity-based assets, securities, cash, and cash
equivalents or (B) a cash amount with a value based on the next
determined net asset value per Trust share (proposed Rule 8.201-
E(c)(1)(v) (Generic)).
Proposed Rule 8.201-E(c)(2) (Generic) would define the term
``commodity'' to have the same meaning as set forth in Section 1a(9) of
the Commodity Exchange Act and to exclude ``excluded commodity'' as
defined in Section 1a(19) of the Commodity Exchange Act.
Proposed Rule 8.201-E(c)(3) (Generic) would define the term
``commodity-based asset'' to mean a future, option, or swap on a
commodity as defined in proposed Rule 8.201-E(c)(2) above.
Proposed Rule 8.201-E(c)(4) (Generic) would define the term ``cash
equivalent.'' The Exchange proposes that ``cash equivalents'' would
refer to short-term instruments with maturities of less than three
months and include the following, as defined in proposed Rules 8.201-
E(c)(4)(i) (Generic) through (vii) (Generic):
U.S. Government securities, including bills, notes, and
bonds differing as to maturity and rate of interest, which are either
issued or guaranteed by the U.S. Treasury or by U.S. Government
agencies or instrumentalities;
Certificates of deposit issued against funds deposited in
a bank or savings and loan association;
Bankers' acceptances, which are short-term credit
instruments used to finance commercial transactions;
Repurchase agreements and reverse repurchase agreements;
Bank time deposits, which are monies kept on deposit with
banks or savings and loan associations for a stated period of time at a
fixed rate of interest;
Commercial paper, which are short-term unsecured
promissory notes; and
Money market funds.
Proposed Rule 8.201-E(c)(5) (Generic) would define ``net asset
value'' as an amount reflecting the current market value of the assets
held by the Trust, less expenses and liabilities, used to periodically
compute the current price for the purpose of creation and redemption of
Trust shares.
Proposed Rule 8.201-E(c)(6) (Generic) would define ``designated
contract market'' as a board of trade or exchange
[[Page 45084]]
that has been designated as a contract market under Section 5 of the
Commodity Exchange Act and operates under the regulatory oversight of
the Commodity Futures Trading Commission, pursuant to Section 5 of the
Commodity Exchange Act.
Proposed Rule 8.201-E(c)(7) (Generic) would define ``exchange-
traded fund'' as an open-end management investment company or a unit
investment trust as defined in Section 4(2) of the Investment Company
Act of 1940 or series or class thereof, the shares of which are listed
and traded on a national securities exchange, and that has formed and
operates under an exemptive order under the Investment Company Act of
1940 or in reliance on an exemptive rule adopted by the Securities and
Exchange Commission.
Proposed Rule 8.201-E(c)(8) (Generic) would define ``indicative
trust value'' as the estimated indicative value of a Trust share based
on current information regarding the value of the Trust's underlying
assets.
Proposed Rule 8.201-E(c)(9) (Generic) would define ``market price''
as the official closing price of a Trust share or, if it more
accurately reflects the market value of a Trust share at the time as of
which the Trust calculates current net asset value per share, the price
that is the midpoint between the national best bid and national best
offer as of that time.
Proposed Rule 8.201-E(c)(10) (Generic) would define ``premium or
discount'' as the positive or negative difference between the market
price of a Trust share at the time as of which the current net asset
value is calculated and the Trust's current net asset value per share,
expressed as a percentage of the Trust share's current net asset value
per share.
Proposed Rule 8.201-E(d) (Generic) would set forth the eligibility
criteria for the holdings of Commodity-Based Trust Shares listed
pursuant to Rule 8.201-E (Generic). Proposed Rule 8.201-E(d)(1)
(Generic) would provide for the following criteria, at least one of
which must be met for each commodity or commodity that underlies a
commodity-based asset held by a Trust:
On an initial and continuing basis, the commodity trades
on a market that is an Intermarket Surveillance Group (``ISG'') member,
provided that the Exchange may obtain information about trading in such
commodity from the ISG member (proposed Rule 8.201-E(d)(1)(i)
(Generic));
On an initial and continuing basis, the commodity
underlies a futures contract that has been made available to trade on a
designated contract market for at least six months; \6\ provided that
the Exchange has a comprehensive surveillance sharing agreement,
whether directly or through common membership in ISG, with such
designated contract market (proposed Rule 8.201-E(d)(1)(ii) (Generic));
or
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\6\ I.e., such futures contract has been listed and traded on a
designated contract market for at least six months.
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On an initial basis, an exchange-traded fund designed to
provide economic exposure of no less than 40% of its net asset value to
the commodity lists and trades on a national securities exchange
(proposed Rule 8.201-E(d)(1)(iii) (Generic)).
Proposed Rule 8.201-E(d)(2) (Generic) would provide that, on an
initial and continuing basis, each security held by the Trust shall
meet the criteria of Rule 8.600-E (Managed Fund Shares), Commentary
.01(a) and (b) or, if the security is a listed option, trades on an ISG
market.
Proposed Rule 8.201-E(e) (Generic) would set forth the information
that the Trust must disclose prominently on its website, which must be
publicly available free of charge:
Before the opening of regular trading on the Exchange, for
the Trust's commodities, commodity-based assets, securities, cash and
cash equivalent, to the extent applicable: (i) ticker symbol; (ii)
identifier; (iii) description of the holding; (iv) the quantity of each
commodity, commodity-based asset, security, cash, and cash equivalents
held; and (v) percentage weighting of the Trust's assets (proposed Rule
8.201-E(e)(1) (Generic) and subparagraphs (i) through (v) thereunder);
The Trust's current net asset value per share, market
price, and premium or discount, each as of the end of the prior
business day (proposed Rule 8.201-E(e)(2) (Generic));
A table showing the number of days the Trust's shares
traded at a premium or discount during the most recently completed
calendar year and the most recently completed calendar quarters since
that year (or the life of the Trust, if shorter) (proposed Rule 8.201-
E(e)(3) (Generic));
A line graph showing the Trust share's premiums or
discounts for the most recently completed calendar year and the most
recently completed calendar quarters since that year (or the life of
the Trust, if shorter) (proposed Rule 8.201-E(e)(4) (Generic));
The Trust share's median-ask spread, expressed as a
percentage rounded to the nearest hundredth, computed by: (i)
identifying the Trust share's national best bid and national best offer
as of the end of each 10 second interval during each trading day of the
last 30 calendar days; (ii) dividing the difference between each such
bid and offer by the midpoint of the national best bid and national
best offer; and (iii) identifying the median of those values (proposed
Rule 8.201-E(e)(5) (Generic));
Liquidity risk policies and procedures as described in
paragraph (g) of proposed Rule 8.201-E (Generic) (proposed Rule 8.201-
E(e)(6) (Generic));
The Trust's methodology for the calculation of its net
asset value (proposed Rule 8.201-E(e)(7) (Generic));
The Trust's trading volume for the previous day (proposed
Rule 8.201-E(e)(8) (Generic)); and
The Trust's effective prospectus, in a form available for
download (proposed Rule 8.201-E(e)(9) (Generic)).
Proposed Rule 8.201-E(f) (Generic) would provide that the Trust may
not seek, directly or indirectly, to provide investment returns that
correspond to the performance of an index, benchmark, or reference
value by a specified multiple, or to provide investment returns that
have an inverse or multiple inverse relationship to the performance of
an index, benchmark, or reference value, over a predetermined period of
time.
Proposed Rule 8.201-E(g) (Generic) would provide that, if a Trust
has on a daily basis less than 85% of its assets readily available to
meet redemption requests, the Trust must have written liquidity risk
policies and procedures that are reasonably designed to address the
risk that it could not meet requests to redeem shares issued by the
Trust without significant dilution of remaining shareholders' interest
in the Trust.\7\ For purposes of this Rule, an asset is deemed not
readily available to meet redemption requests if it is segregated,
pledged, hypothecated, encumbered, or otherwise restricted or prevented
from being liquidated, sold, transferred, or assigned within one
business day. Rule 8.201-E(g) (Generic) would further provide that the
Trust's liquidity risk policies and procedures will be periodically
reviewed by the Trust (at least annually) and address the following
criteria, as applicable:
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\7\ The Exchange notes that proposed Rule 8.201-E(g) (Generic)
is intended to, for example, allow a Trust issuing Commodity-Based
Trust Shares to engage in protocol staking, in accordance with
guidance issued by Commission staff, of the commodity(ies) held by
the Trust, if applicable. See https://www.sec.gov/newsroom/speeches-statements/statement-certain-protocol-staking-activities-052925.
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The Trust's investment strategy and liquidity of the
Trust's assets during
[[Page 45085]]
normal and stressed conditions, including holdings in derivatives and
whether the investment strategy is appropriate for effective and
efficient arbitrage (proposed Rule 8.201-E(g)(1) (Generic));
Holdings of cash and cash equivalents, as well as
borrowing arrangements and other funding sources (proposed Rule 8.201-
E(g)(2) (Generic)); and
Percentage and description of the Trust's assets that are
segregated, pledged, hypothecated, encumbered, or otherwise restricted
or prevented from being liquidated, sold, transferred or assigned
(proposed Rule 8.201-E(g)(3) (Generic)).\8\
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\8\ For example, for crypto-based series of Commodity-Based
Trust Shares with protocol staked assets, the liquidity risk
policies and procedures would describe the asset(s) staked and the
percentage of such asset(s) subject to protocol staking.
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Proposed Rule 8.201-E(h) (Generic) would provide that Commodity-
Based Trust Shares may be listed and traded on the Exchange pursuant to
Rule 8.201-E (Generic) provided that, upon initial listing, the
Exchange will establish a minimum number of Commodity-Based Trust
Shares required to be outstanding at the time of commencement of
trading on the Exchange, and all Commodity-Based Trust Shares shall
have a stated investment objective, which shall be adhered to under
normal market conditions.
Proposed Rule 8.201-E(i) (Generic) would provide for continued
listing standards for Commodity-Based Trust Shares listed pursuant to
Rule 8.201-E (Generic). The Exchange will maintain surveillance
procedures for Commodity-Based Trust Shares listed under Rule 8.201-E
(Generic) and will consider the suspension of trading in and the
delisting of such Trust shares under any of the following
circumstances:
If, following the initial twelve-month period following
commencement of trading on the Exchange of Commodity-Based Trust
Shares, the Trust has more than 60 days remaining until termination and
there are fewer than 50 record and/or beneficial holders of Commodity-
Based Trust Shares (proposed Rule 8.201-E(i)(1) (Generic)); or
If, following the initial twelve-month period following
commencement of trading on the Exchange of Commodity-Based Trust
Shares, the Trust has fewer than 50,000 shares issued and outstanding
(proposed Rule 8.201-E(i)(2) (Generic)); or
If, following the initial twelve-month period following
commencement of trading on the Exchange of Commodity-Based Trust
Shares, the market value of all shares issued and outstanding is less
than $1,000,000 (proposed Rule 8.201-E(i)(3) (Generic)); or
If the value of the underlying reference asset(s) or index
is no longer calculated or made widely available on at least a 15-
second basis from a source unaffiliated with the sponsor or the Trust
(proposed Rule 8.201-E(i)(4) (Generic));
If the Indicative Trust Value is no longer calculated or
made widely available to all market participants at the same time on at
least a 15-second basis during the Core Trading Session (proposed Rule
8.201-E(i)(5) (Generic));
If the net asset value is not calculated at least once
daily or made widely available to all market participants at the same
time (proposed Rule 8.201-E(i)(6) (Generic));
If the information as set forth in this Rule 8.201-E is no
longer being disclosed in accordance with the requirement of paragraph
(e) above (proposed Rule 8.201-E(i)(7) (Generic));
If any of the other continued listing requirements set
forth in this Rule are not continuously maintained (proposed Rule
8.201-E(i)(8) (Generic));
If the Exchange submits a rule filing pursuant to Section
19(b) of the Securities Exchange Act of 1934 to permit the listing and
trading of a series of Commodity-Based Trust Shares that do not
otherwise meet the standards set forth in this Rule and any of the
statements or representations regarding (a) the description of the
index, portfolio, or reference asset, (b) limitations on the index,
portfolio holdings, or reference assets, or (c) the applicability of
Exchange listing rules specified in such rule filing are not
continuously maintained; or if such other event shall occur or
condition exists which in the opinion of the Exchange makes further
dealings on the Exchange inadvisable (proposed Rule 8.201-E(i)(9)
(Generic));
Upon termination of a Trust, the Exchange requires that
Commodity-Based Trust Shares issued in connection with such Trust be
removed from Exchange listing. A Trust may terminate in accordance with
the provisions of the Trust prospectus, which may provide for
termination if the value of the Trust falls below a specified amount
(proposed Rule 8.201-E(i)(10) (Generic)).
Rule 8.201-E(j) (Generic) would set forth requirements applicable
to Commodity-Based Trust Shares issued by an entity structured as a
trust, on an initial and continuing basis. Proposed Rule 8.201-E(j)(1)
(Generic) would require that the stated term of the trust be as stated
in the trust prospectus, provided that a trust may be terminated under
such earlier circumstances as may be specified in the trust prospectus.
Proposed Rule 8.201-E(j)(2) (Generic) would set forth requirements that
apply to the trustee of a trust. Proposed Rule 8.201-E(j)(2)(i)
(Generic) would require that the trustee of a trust must be a trust
company or banking institution having substantial capital and surplus
and the experience and facilities for handling corporate trust business
and that, if an individual has been appointed as trustee, a qualified
trust company or banking institution must be appointed co-trustee.
Proposed Rule 8.201-E(j)(2)(ii) (Generic) would provide that no change
is to be made in the trustee of a listed issue without prior notice to
and approval of the Exchange. Proposed Rule 8.201-E(j)(3) (Generic)
would provide that voting rights will be as set forth in the applicable
trust prospectus. Proposed Rule 8.201-E(j) (Generic) and the
subparagraphs thereunder are based on current Rule 8.201-E(e)(3)
through (5) without any substantive changes.
Rule 8.201-E(k) (Generic) would provide that an issuer of
Commodity-Based Trust Shares must promptly notify the Exchange of any
non-compliance with any of the applicable continued listing standards
set forth in Rule 8.201-E (Generic).
Rule 8.201-E(l) (Generic) would set forth rules relating to trading
halts. Proposed Rule 8.201-E(l)(1) (Generic) would provide that the
Exchange may halt trading during the day in which the interruption to
the following occurs: (i) the value of the underlying reference
asset(s) or index is not made widely available on at least a 15-second
basis from a source unaffiliated with the sponsor or the Trust; (ii)
the Indicative Trust Value is not made widely available to all market
participants at the same time on at least a 15-second basis during the
Core Trading Session; or (iii) the information required by proposed
Rule 8.201-E(e) (Generic) to be publicly disclosed on a Trust's
website, free of charge, is not being disclosed in that manner. If the
interruption 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. If Commodity-Based Trust Shares are
trading on the Exchange pursuant to unlisted trading privileges, the
Exchange will halt trading as specified in Rule 7.34-E(a). Proposed
Rule 8.201-E(l)(2) (Generic) would provide that, if the Exchange
becomes aware that the net asset value
[[Page 45086]]
is not disseminated to all the market participants at the same time, it
will halt trading in the Commodity-Based Trust Shares until such time
as the net asset value is available to all market participants.
Finally, proposed Rule 8.201-E(l)(3) (Generic) would provide that the
Exchange also may halt trading because of market conditions or for
reasons that, in the view of the Exchange, make trading in the Shares
inadvisable.
Proposed Rule 8.201-E(m) (Generic) would set forth rules related to
Market Maker accounts. An ETP Holder acting as a registered Market
Maker in Commodity-Based Trust Shares listed pursuant to Rule 8.201-E
(Generic) must file with the Exchange in a manner prescribed by the
Exchange and keep current a list identifying all accounts for trading
in each underlying commodity and commodity-based asset which the Market
Maker may have or over which it may exercise investment discretion. If
an ETP Holder is acting as a registered Market Maker in Commodity-Based
Trust Shares that have exposure to, but do not, consistent with the
definition of Commodity-Based Trust Shares in this Rule 8.201-E
(Generic), hold one or more non-U.S. currencies (``Underlying FX''),
such Market Maker also must file with the Exchange, in a manner
prescribed by the Exchange, and keep current a list identifying all
accounts for trading in Underlying FX and derivatives overlying
Underlying FX which the Market Maker may have or over which it may
exercise investment discretion, as well as a list of all commodity and
commodity-related accounts referenced above. No Market Maker in
Commodity-Based Trust Shares shall trade in a commodity, commodity-
based asset, Underlying FX, or any related derivative thereon in an
account that the Market Maker (1) directly or indirectly controls
trading activities or has direct interest in the profits or losses
thereof, (2) is required by this rule to disclose to the Exchange, and
(3) has not reported to the Exchange. In addition to the existing
obligations under Exchange rules regarding the production of books and
records, the ETP Holder acting as a 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 commodity or
commodity-based asset, applicable Underlying FX, or applicable
derivatives of each of the foregoing, as may be requested by the
Exchange. Proposed Rule 8.201-E(m) (Generic) is based on current Rule
8.201-E(g) without any substantive changes.
Proposed Rule 8.201-E(n) (Generic) would provide for the
establishment of firewalls. Specifically, proposed Rule 8.201-E(n)(1)
(Generic) would provide that, if the value of a Commodity-Based Trust
Share listed pursuant to Rule 8.201-E (Generic) is based in whole or in
part on an index that is maintained by a broker-dealer, the broker-
dealer shall erect and maintain a ``firewall'' around the personnel
responsible for the maintenance of such index or who have access to
information concerning changes and adjustments to the index. Proposed
Rule 8.201-E(n)(2) (Generic) would provide that any advisory committee,
supervisory board, or similar entity that advises an index licensor or
administrator or that makes decisions regarding the index composition
methodology, and related matters must implement and maintain, or be
subject to, procedures designed to prevent the use and dissemination of
material, non-public information regarding the applicable index.
Proposed Rule 8.201-E(n)(3) (Generic) would provide that, if the Trust
is affiliated with any entity that has the ability to influence the
price or supply of a commodity, or a commodity underlying a commodity-
based asset, held by the Trust, the Trust shall (i) implement and
maintain a ``firewall'' between any such entity and the Trust, (ii)
have written policies and procedures designed to prevent the use and
dissemination of material, non-public information regarding the Trust;
and (iii) have written policies and procedures designed to prevent
fraudulent, deceptive or manipulative acts, practices, or courses of
business with respect to the Trust and such commodity.
Proposed Rule 8.201-E(o) would set forth rules relating to the
limitation of Exchange liability. 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 pursuant to
Rule 8.201-E (Generic); 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. Proposed Rule
8.201-E(o) (Generic) is based on current Rule 8.201-E(f) without any
substantive changes.
Finally, the Exchange proposes Commentary to Rule 8.201-E (Generic)
as follows. Proposed Commentary .01 would provide that the Exchange
requires that ETP Holders provide all purchasers of newly issued
Commodity-Based Trust Shares a prospectus for the series of Commodity-
Based Trust Shares. Proposed Commentary .01 is based on current Rule
8.201-E, Commentary .02 without any changes. Proposed Commentary .02
would provide that transactions in Commodity-Based Trust Shares will
occur during the trading hours specified in NYSE Arca Rule 7.34-E.
Proposed Commentary .02 is based on current Rule 8.201-E, Commentary
.03 without any changes.
Proposed Conforming Changes
The Exchange proposes conforming changes to Rule 5.3-O, which sets
forth criteria applicable to underlying securities with respect to
which put or call option contracts are approved for listing and trading
on the Exchange, and Rule 5.2-E(j)(6), which sets forth listing
criteria for Equity Index-Linked Securities, Commodity-Linked
Securities, Currency Linked Securities, Fixed Income Index-Linked
Securities, Futures-Linked Securities, and Multifactor Index-Linked
Securities. Rule 5.3-O(j)(1)(B) defines Commodity-Linked Securities as
securities that provide for the payment at maturity of a cash amount
based on the performance or the leveraged (multiple or inverse)
performance of one or more physical commodities or commodity futures,
options on commodities, or other commodity derivatives or Commodity-
Based Trust Shares or a basket or index of any of the foregoing. Rule
5.2-E(j)(6) similarly provides that Commodity-Linked Securities provide
for payment at maturity based on the performance of one or more
physical commodities or commodity futures, options or other commodity
derivatives or Commodity-Based Trust Shares (as defined in NYSE Arca
Rule 8.201-E) or a basket or index of any of the foregoing. The
Exchange proposes, in both rules, to specify that the reference to
Commodity-Based Trust Shares is as defined in NYSE Arca Rule 8.201-E
(Non-Generic) or Rule 8.201-E (Generic) to ensure that these rules
accommodate
[[Page 45087]]
Commodity-Based Trust Shares listed pursuant to either rule.
The Exchange also proposes conforming changes to Rules 5.3-E and
5.3-E(e), which set forth requirements related to corporate governance
and disclosure policies and shareholder/annual meetings, respectively.
The Exchange proposes to amend Rule 5.3-E to include Commodity-Based
Trust Shares listed pursuant to Rule 8.201-E (Generic) among the
derivative or special purpose securities that are subject to a limited
set of corporate governance and disclosure policies and to update the
reference to current Rule 8.201-E to be to Rule 8.201-E (Non-Generic).
The Exchange likewise proposes to amend Rule 5.3-E(e) to include
Commodity-Based Trust Shares listed pursuant to Rule 8.201-E (Generic)
among the derivative or special purpose securities to which the
requirements concerning shareholder/annual meetings do not apply and to
update the title of current Rule 8.201-E to be Rule 8.201-E (Non-
Generic).
2. Statutory Basis
The proposed rule change is consistent with Section 6(b) of the
Act,\9\ in general, and furthers the objectives of Section 6(b)(5),\10\
in particular, because 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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\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(5).
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The Exchange believes proposed Rule 8.201-E (Generic) would promote
just and equitable principles of trade, remove impediments to, and
perfect the mechanism of, a free and open market and a national market
system, and protect investors and the public interest by establishing
generic standards for listing and trading of Commodity-Based Trust
Shares. Proposed Rule 8.201-E (Generic) would allow Commodity-Based
Trust Shares that meet the requirements of the Rule to be listed and
traded on the Exchange without prior Commission approval order or
notice of effectiveness pursuant to Section 19(b) of the Act.
Accordingly, the proposed rule change would promote just and equitable
principles of trade, remove impediments to, and perfect the mechanism
of, a free and open market and a national market system, and protect
investors and the public interest because it would facilitate efficient
procedures for listing series of Commodity-Based Trust Shares that meet
the requirements of proposed Rule 8.201-E (Generic), thereby reducing
the time, resources, and costs associated with bringing new series of
Commodity-Based Trust Shares to market and promoting competition among
issuers of such products, to the benefit of the market participants. In
addition, the Exchange believes that the proposed rule change would
further the intended objective of Rule 19b-4(e) under the Act by
permitting Commodity-Based Trust Shares that satisfy the proposed
listing standards in proposed Rule 8.201-E (Generic) to be listed and
traded without separate Commission approval.
To be listed under proposed Rule 8.201-E (Generic), each series of
Commodity-Based Trust Shares must satisfy the requirements of the Rule
upon initial listing and on a continuing basis. An issuer of Commodity-
Based Trust Shares must notify the Exchange of any failure to comply
with such requirements, as provided in proposed Rule 8.201-E(k)
(Generic). As provided in proposed Rule 8.201-E(i), the Exchange will
maintain surveillance procedures for securities listed under proposed
Rule 8.201-E (Generic) and will consider the suspension of trading in
and the delisting of series of Commodity-Based Trust Shares if an
issuer of such Trust shares notifies the Exchange that it is out of
compliance with any of the applicable continued listing standards set
forth in proposed Rule 8.201-E(i) (Generic), or if such other event
shall occur or condition exists which, in the opinion of the Exchange,
makes further dealings on the Exchange inadvisable. The Exchange
believes that this proposed change would promote just and equitable
principles of trade, remove impediments to, and perfect the mechanism
of, a free and open market and a national market system, and protect
investors and the public interest because it would allow the Exchange
to consider the suspension of trading in and the delisting of
Commodity-Based Trust Shares that do not meet the proposed continued
listing requirements, which are substantially the same as the continued
listing requirements for Rule 8.201-E (Non-Generic).
The Exchange further believes that the proposed rule change would
remove impediments to, and perfect the mechanism of, a free and open
market and a national market system and, in general, protect investors
and the public interest because proposed Rule 8.201-E(c) (Generic) sets
forth definitions for purposes of this Rule, thereby promoting clarity
and specificity in the Exchange's rules, and proposed Rule 8.201-E(d)
(Generic) sets forth specific eligibility criteria for the holdings of
Commodity-Based Trust Shares listed pursuant to this Rule. Proposed
Rule 8.201-E(c)(1)(iii) would provide that a Trust may hold, in
addition to one or more commodities or commodity-based assets,
securities, cash, and cash equivalents. The Exchange believes that the
proposed eligibility criteria in Rule 8.201-E(d)(2) (Generic), which
provides that a Trust may hold securities that meet the criteria of
Rule 8.600-E, Commentary .01(a) and (b) or listed options that trade on
an ISG market would remove impediments to, and perfect the mechanism
of, a free and open market and a national market system and, in
general, protect investors and the public interest by affording greater
flexibility to a Trust issuing Commodity-Based Trust Shares, to the
benefit of market participants. The Exchange believes that allowing a
Trust to hold cash and cash equivalents would remove impediments to,
and perfect the mechanism of, a free and open market and a national
market system and, in general, protect investors and the public
interest for the same reasons. The Exchange notes that Commentary
.01(a) and (b) to Rule 8.600-E set forth certain generic listing
requirements for Managed Fund Shares. In addition, to the extent a
Trust holds listed options, the Exchange could obtain information
regarding such securities from the ISG market on which they trade. The
Exchange further notes that Rule 8.201-E (Non-Generic) similarly
provides for cash holdings and that the proposed definition of ``cash
equivalent'' in Rule 8.201-E(c)(4) (Generic) is substantially identical
to the term as used in the generic listing standards for Rule 8.600-E
for Managed Fund Shares.
The Exchange believes that the proposed eligibility criteria for
the Commodity-Based Trust Shares holdings as set forth in proposed
Rules 8.201-E(d)(1)(i) (Generic) through (iii) (Generic) are designed
to prevent fraudulent and manipulative acts and practices because they
are intended to ensure that the Exchange could obtain information about
trading in each commodity or commodity that underlies a commodity-based
asset held by a Trust. Specifically, proposed Rules 8.201-E(d)(1)(i)
(Generic) through (iii) (Generic) provide that the Trust could hold a
commodity or commodity that underlies a commodity-based asset if
[[Page 45088]]
such commodity trades on a market that is an ISG member from which the
Exchange may obtain information about trading in such commodity from
the ISG member; if such commodity underlies a futures contract that has
been available to trade on a designated contract market, with which the
Exchange has a CSSA, for at least six months; or if economic exposure
to such commodity represents at least 40% of the NAV of an exchange-
traded fund that lists and trades on a national securities exchange.
The Exchange believes the proposed rule change would prevent fraudulent
and manipulative acts and practices, promote just and equitable
principles of trade, remove impediments to, and perfect the mechanism
of, a free and open market and a national market system and, in
general, protect investors and the public interest because the
Exchange's ability to obtain information regarding trading in the
commodities or commodities underlying commodity-based assets held by a
Trust issuing Commodity-Based Trust Shares would assist in monitoring
trading in such shares on the Exchange and to deter and detect
violations of Exchange rules and applicable federal securities laws. In
addition, with respect to proposed Rule 8.201-E(d)(1)(iii), the
Exchange believes that this proposed requirement would prevent
fraudulent and manipulative acts and practices, promote just and
equitable principles of trade, remove impediments to, and perfect the
mechanism of, a free and open market and a national market system and,
in general, protect investors and the public interest because it would
allow a Trust to hold a commodity or commodity underlying a commodity-
based asset where an existing exchange-traded fund that provides
economically similar exposure has been permitted to list and trade on a
national securities exchange, thereby promoting regulatory consistency
with respect to products providing exposure to the same underlying
commodities or commodities underlying commodity-based assets.
The Exchange has in place certain surveillance procedures that are
adequate to properly monitor trading in Commodity-Based Trust Shares on
the Exchange in all trading sessions and to deter and detect violations
of Exchange rules and applicable federal securities laws applicable to
the Shares of the Trust trading on the Exchange. The Exchange or the
Financial Industry Regulatory Authority (``FINRA''), on behalf of the
Exchange, or both, will communicate as needed regarding trading in the
Shares with other markets 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 Commodity-Based Trust Shares and
underlying commodities or commodity-based assets from such markets. In
addition, the Exchange may obtain information regarding trading in
Commodity-Based Trust Shares from markets with which the Exchange has
in place a CSSA. Also, pursuant to proposed Rule 8.201-E(m) (Generic),
the Exchange is able to obtain information from ETP Holders acting as
registered Market Makers regarding their trading (as principal or
agent) in Commodity-Based Trust Shares and any underlying commodities
or commodity-based assets.
Proposed Rule 8.201-E(e) (Generic) sets forth the information that
must be disclosed on the website of each Trust that issues Commodity-
Based Trust Shares pursuant to proposed Rule 8.201-E (Generic). The
Exchange believes that this proposed change would remove impediments
to, and perfect the mechanism of, a free and open market and a national
market system, as well as protect investors and the public interest, by
ensuring the public availability of information relevant to trading in
Commodity-Based Trust Shares, such as information relating to a Trust's
holdings, NAV, and effective prospectus. The information required by
proposed Rule 8.201-E(e) (Generic) is consistent with that disclosed by
products currently listed pursuant to Rule 8.201-E (Non-Generic).
Proposed Rule 8.201-E(f) (Generic) prohibits a Trust from seeking
performance that is the multiple or inverse multiple of an index,
benchmark, or reference value. The Exchange believes this proposed
change would remove impediments to, and perfect the mechanism of, a
free and open market and a national market system, and protect
investors and the public interest by limiting Commodity-Based Trust
Shares listed pursuant to the proposed generic listing standards from
seeking leverage or inverse leverage, thereby mitigating potential
risks uniquely associated with investments in leveraged or inverse
leveraged products (e.g., risk of amplified losses, decay risk due to
frequent rebalancing) given that the shares would be listed and traded
on the Exchange without a prior Commission approval order or notice of
effectiveness pursuant to Section 19(b) of the Act.
The Exchange further believes that the proposed rule change is
designed to remove impediments to, and perfect the mechanism of, a free
and open market and a national market system, as well as to protect
investors and the public interest, because proposed Rule 8.201-E(g)
(Generic) requires that, if a Trust has on a daily basis less than 85%
of its assets readily available to meet redemption requests, the Trust
must maintain liquidity risk policies and procedures that are
reasonably designed to address the risk that it could not meet requests
to redeem shares issued by the Trust, including the percentage and
description of the Trust's assets not readily available to satisfy
redemption requests. Such policies and procedures would provide
transparency to the investing public regarding risks associated with
the Trust's potential inability to meet requests to redeem shares
issued by the Trust without significant dilution of remaining
shareholders' interest in the Trust. In addition, proposed Rule 8.201-
E(n) (Generic), which would require the establishment of firewalls if,
for example, the value of a Commodity-Based Trust Share is based in
whole or in part on an index that is maintained by a broker-dealer or
if a Trust is affiliated with any entity that has the ability to
influence the price or supply of a commodity, or a commodity underlying
a commodity-based asset, held by the Trust, would provide for
protective measures to help mitigate against fraudulent and
manipulative acts and practices and protect investors and the public
interest.
Proposed Rule 8.201-E(1) (Generic) provides that the Exchange may
halt trading in a series of Commodity-Based Trust Shares if (1) the
value of a Trust's underlying reference asset(s) or index is not made
widely available on at least a 15-second basis from a source
unaffiliated with the sponsor or the Trust; (2) the Indicative Trust
Value is not made widely available to all market participants at the
same time on at least a 15-second basis during the Core Trading
Session; (3) information is not being disclosed in accordance with the
requirements of proposed Rule 8.201-E(e) (Generic); (4) the Exchange
becomes aware that the NAV is not disseminated to all the market
participants at the same time; or (5) the Exchange believes that
trading in the Shares would be inadvisable based on market conditions
or other reasons. This proposed change would promote just and equitable
principles of trade, remove impediments to, and perfect the mechanism
of, a free and open market and a national market system, and protect
investors and the public interest because trading in a series of
Commodity-Based Trust Shares could
[[Page 45089]]
be halted under circumstances where information relevant to trading in
the shares is not available to market participants or in other such
circumstances that, in the Exchange's view, make trading in the shares
inadvisable.
The Exchange believes that proposed Rules 8.201-E(j) (Generic),
8.201-E(m) (Generic), 8.201-E(o) (Generic), and Commentary .01 and .02
to Rule 8.201-E (Generic) would remove impediments to, and perfect the
mechanism of, a free and open market and a national market system, as
well as protect investors and the public interest because they are
based on existing provisions of Rule 8.201-E (Non-Generic) without any
substantive changes and would promote consistency between the
requirements of proposed Rule 8.201-E (Generic) and Rule 8.201-E (Non-
Generic).
The Exchange believes that the proposed conforming changes to
current Rule 8.201-E, Rule 5.3-O, Rule 5.2-E(j)(6), Rule 5.3-E, and
Rule 5.3-E(e) would remove impediments to, and perfect the mechanism
of, a free and open market and a national market system, as well as
protect investors and the public interest, by promoting clarity and
transparency in Exchange rules. The proposed changes to Rule 8.201-E
(Non-Generic) do not reflect any substantive changes to the rule and
are intended only to clearly distinguish between the requirements of
current Rule 8.201-E, which would be renamed Rule 8.201-E (Non-
Generic), and the requirements of proposed Rule 8.201-E (Generic). The
proposed changes to Rule 5.3-O and 5.2-E(j)(6) are intended to clarify
that references to Commodity-Based Trust Shares in those rules are
intended to include Commodity-Based Trust Shares listed under either
Rule 8.201-E (Non-Generic) or Rule 8.201-E (Generic). The Exchange also
believes that the proposed addition of Commodity-Based Trust Shares
listed pursuant to Rule 8.201-E (Generic) to the enumerated derivative
and special purpose securities that are subject to the provisions of
Rule 5.3-E (Corporate Governance and Disclosure Policies) and Rule 5.3-
E(e) (Shareholder/Annual Meetings) would promote just and equitable
principles of trade and remove impediments to and perfect the mechanism
of a free and open market and a national market system by holding
generically-listed Commodity Based Trust Shares to the same
requirements currently applicable to other similar derivative and
special purpose securities, including those listed pursuant to current
Rule 8.201-E.
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. Instead, the Exchange
believes that the proposed rule change would facilitate the listing and
trading of Commodity-Based Trust Shares through an efficient process
that would enhance competition among market participants, to the
benefit of investors and the marketplace. The Exchange believes that
the proposed generic listing standards in Rule 8.201-E (Generic) would
reduce the timeframe for bringing additional series of Commodity-Based
Trust Shares to market, thereby reducing the burdens on issuers and
other market participants and promoting competition among issuers of
such products.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to 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, as modified by Amendment No. 1, 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-NYSEARCA-2025-54 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-2025-54. 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 filing 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-2025-54 and should be submitted
on or before October 9, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
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\11\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-18045 Filed 9-17-25; 8:45 am]
BILLING CODE 8011-01-P