[Federal Register Volume 91, Number 118 (Monday, June 22, 2026)]
[Notices]
[Pages 37184-37189]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2026-12404]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-105698; File No. SR-NYSEARCA-2026-64]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Changes To Amend Certain
Representations Relating to United States Copper Index Fund
June 16, 2026
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given
that, on June 3, 2026, NYSE Arca, Inc. (``NYSE Arca'' or the
``Exchange'') filed with the Securities and Exchange Commission (the
``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\ 15 U.S.C. 78a.
\3\ 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
The Exchange proposes to make changes to certain representations
made in the proposed rule change previously filed with the Securities
and Exchange Commission (``Commission'') pursuant to Rule 19b-4
relating to United States Copper Index Fund, shares of which are
currently listed and traded under NYSE Arca Rule 8.200-E (Trust Issued
Receipts). 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 Commission has approved the listing and trading on the Exchange
of shares (``Shares'') of the United States Copper Index Fund (the
``Fund'') \4\ under NYSE Arca Rule 8.200-E, which governs the listing
and trading of Trust Issued Receipts.\5\
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\4\ See Securities Exchange Act Release Nos. 65601 (October 20,
2011), 76 FR 66339 (October 26, 2011) (SR-NYSEArca-2011-63) (Order
Approving a Proposed Rule Change To List and Trade Shares of the
United States Metals Index Fund, the United States Agriculture Index
Fund and the United States Copper Index Fund Under NYSE Arca
Equities Rule 8.200) (the ``Prior Order''); 65249 (September 2,
2011), 76 FR 55956 (September 9, 2011) (SR-NYSEArca-2011-63) (Notice
of Filing of Proposed Rule Change To List and Trade Shares of the
United States Metals Index Fund, the United States Agriculture Index
Fund and the United States Copper Index Fund Under NYSE Arca
Equities Rule 8.200) (the ``Prior Notice'' and, together with the
Prior Order, the ``Prior Release'').
\5\ Commentary .02 to NYSE Arca Rule 8.200-E applies to Trust
Issued Receipts that invest in ``Financial Instruments.'' The term
``Financial Instruments,'' as defined in Commentary .02(b)(4) to
NYSE Arca Rule 8.200-E, means any combination of investments,
including cash; securities; options on securities and indices;
futures contracts; options on futures contracts; forward contracts;
equity caps, collars and floors; and swap agreements.
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The Shares are issued by United States Commodity Index Funds Trust
(the ``Trust''). United States Commodity Funds LLC (the ``Sponsor'')
serves as the Trust's Sponsor.
In this proposed rule change, the Exchange proposes to amend
certain representations made in the Prior Release to afford the Fund
greater flexibility with respect to the combination of commodity
interests in which the Fund invests to meet its investment
objective.\6\
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\6\ The Fund has filed a registration statement on Form S-3
under the Securities Act of 1933 (File No. 333-268247) (the
``Registration Statement''). A post-effective amendment to the
Registration Statement containing the Fund's investment strategy, as
described herein, was declared effective on April 25, 2024, and the
Fund's prospectus was filed pursuant to Rule 424(b)(3) on April 26,
2024 (``Prospectus''). The description of the Fund and the Shares
contained herein are based on the Prospectus. The Sponsor represents
that it will not implement the changes described herein until this
proposed rule change is operative.
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The Exchange believes that providing the Fund such flexibility is
appropriate and consistent with the best interests of the Fund and Fund
shareholders because it will provide the Fund with the possibility of
obtaining greater liquidity and the potential to execute transactions
with more favorable pricing. The Exchange expects the proposed rule
change to better allow the Fund to meet its investment objective and
decrease the potential for tracking error by giving the Fund the
flexibility to track its underlying index in the most efficient and
cost-effective way through the use of Benchmark Component Copper
Futures Contracts, other Eligible Copper Futures Contracts (each as
defined in the Prior Release) or over-the-counter (``OTC'')
derivatives, as discussed below. In support of the proposed rule
change, the Exchange notes that the Commission has previously approved
rule changes for funds managed by the Sponsor that have the same
flexibility to invest in derivative instruments as is contemplated in
this proposed rule change.\7\ The Exchange believes that the Sponsor's
application of consistent procedures regarding its commodity-based
funds' investments in derivatives other than primary futures
contract(s) will promote operational efficiency in furtherance of each
fund's investment objective.
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\7\ See Securities Exchange Act Release Nos. 61881 (April 9,
2010), 75 FR 20028 (April 16, 2010) (SR-NYSEArca-2010-14) (Order
Granting Accelerated Approval of Proposed Rule Change Relating to
the Listing of the United States Brent Oil Fund, LP); 61721 (March
16, 2010), 75 FR 14237 (March 24, 2010) (SR-NYSEArca-2010-14)
(Notice of Filing of Proposed Rule Change Relating to the Listing of
the United States Brent Oil Fund, LP); 55632 (April 13, 2007), 72 FR
19987 (April 20, 2007) (SR-Amex-2006-112) (Order Granting Approval
of a Proposed Rule Change, as Modified by Amendment No. 1, Relating
to the Listing and Trading of Units of the United States Natural Gas
Fund, LP); and 55372 (February 28, 2007), 72 FR 10267 (March 7,
2007) (SR-Amex-2006-112) (Notice of Filing of Proposed Rule Change
as Modified by Amendment No. 1 Thereto Relating to the Listing and
Trading of Units of the United States Natural Gas Fund, LP).
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Investment Objective and Strategy as Stated in Prior Release
As stated in the Prior Release, the investment objective of the
Fund is for the daily changes in percentage terms of the Fund's Shares'
net asset value (``NAV'') to reflect the daily changes in percentage
terms of the SummerHaven Copper Index Total Return\TM\ (the ``Index''),
less the Fund's expenses. Specifically, the Fund seeks to achieve its
investment objective by investing so that the average daily percentage
change in the Fund's NAV for any period of 30 successive valuation days
will be within plus/minus ten percent (10%) of the average daily
percentage change in the prices of the Benchmark Component Copper
Futures Contracts over the same period. The Fund currently seeks to
[[Page 37185]]
achieve its investment objective by investing to the fullest extent
possible in the Benchmark Component Copper Futures Contracts. If
constrained by regulatory requirements (described below) or in view of
market conditions (described below), the Fund invests next in other
Eligible Copper Futures Contracts, and finally to a lesser extent, in
other exchange-traded futures contracts that are economically identical
or substantially similar to the Benchmark Component Copper Futures
Contracts (together with the Benchmark Component Copper Futures
Contracts and other Eligible Copper Futures Contracts, ``Futures
Contracts'') if one or more other Eligible Copper Futures Contracts are
not available. When the Fund has invested to the fullest extent
possible in Futures Contracts, the Fund may then invest in other
contracts and instruments based on the Benchmark Component Copper
Futures Contracts, other Eligible Copper Futures Contracts, or physical
copper, such as cash-settled options, forward contracts, cleared swap
contracts and non-cleared OTC transactions that are based on the price
of Benchmark Component Copper Futures Contracts, copper or indices
based on the foregoing (collectively, ``Other Copper Derivatives'').
Other exchange-traded futures contracts that are economically identical
or substantially similar to the Benchmark Component Copper Futures
Contracts and Other Copper Derivatives are collectively referred to as
``Other Copper-Related Investments.''
Regulatory Requirements. As stated in the Prior Release, the Fund
may at times invest in other Eligible Copper Futures Contracts, and to
a lesser extent, in other exchange-traded futures contracts that are
economically identical or substantially similar to the Benchmark
Component Copper Futures Contracts if one or more other Eligible Copper
Futures Contracts are not available in order to comply with regulatory
requirements. For example, the Fund's assets may be invested in one or
more other Eligible Copper Futures Contracts if the Fund is required by
law or regulation, or by one of its regulators, including a futures
exchange, to reduce its position in one or more Benchmark Component
Copper Futures Contracts to the applicable position limit or to a
specified accountability level for such contracts. If one or more such
Eligible Copper Futures Contracts were unavailable or economically
impracticable, the Fund could invest in Other Copper-Related
Investments that are intended to replicate the return on the Index or
particular Benchmark Component Copper Futures Contracts. As another
example, to avoid triggering applicable position limits, accountability
levels or other regulatory limits, the Fund may invest its assets in
one or more other Eligible Copper Futures Contracts to the extent
practicable and then in Other Copper-Related Investments.
When investing in Other Copper-Related Investments, the Fund first
invests in other exchange-traded futures contracts that are
economically identical or substantially similar to the Benchmark
Component Copper Futures Contracts, and then in Other Copper
Derivatives.
Market Conditions. As stated in the Prior Release, there may be
market conditions that could cause the Fund to invest in other Eligible
Copper Futures Contracts. One such type of market condition would be
where demand for Benchmark Component Copper Futures Contracts exceeded
supply and, as a result, the Fund was able to obtain more favorable
terms under other Eligible Copper Futures Contracts. An example of more
favorable terms would be where the aggregate costs to the Fund from
investing in other Eligible Copper Futures Contracts (including actual
or expected direct costs such as the costs to buy, hold, or sell such
investments, as well as indirect costs such as opportunity costs) were
less than the costs of investing in Benchmark Component Copper Futures
Contracts. Only after the Fund becomes subject to position limits in
any Eligible Copper Futures Contract does the Fund invest in Other
Copper-Related Investments to replicate exposure to the Eligible Copper
Futures Contract that is position-limited.
Greater Flexibility to Use OTC Derivatives
The Fund proposes to revise the limits on its use of OTC derivative
instruments in pursuit of its investment strategy to provide greater
flexibility in how the Fund achieves its investment objective. The
proposed rule change will allow the Fund to invest in OTC derivative
transactions that are based on the price of copper, such as swaps, even
when the Fund has not invested in Futures Contracts to the fullest
extent possible. The investment objective of the Fund will remain
unchanged.
As a result of the proposed change to the combination of commodity
interests that comprise the Fund's investments, the Exchange proposes
to amend the representations in the Prior Release described in the
previous sub-section as follows.
The Fund seeks to achieve its investment objective by investing
primarily in Benchmark Component Copper Futures Contracts. The Fund may
also, to a lesser extent, invest in other Eligible Copper Futures
Contracts beyond the Benchmark Component Copper Futures Contracts or
Other Copper-Related Investments. The following factors, among others,
may be considered when determining the Fund's investments in Eligible
Copper Futures Contracts or in Other Copper-Related Investments:
regulatory requirements, risk mitigation measures taken by the Fund,
the Fund's futures commission merchants, counterparties or other market
participants, liquidity requirements and market conditions. Other
factors that may impact the Fund's investments in other Eligible Copper
Futures Contracts or Other Copper-Related Investments include allowing
the Fund to obtain greater liquidity or to execute transactions with
more favorable pricing. In addition, the Fund may need to hold
significant portions of its portfolio in cash beyond what it has
historically held for reasons including (but not limited to) the need
to address changes in market conditions, regulatory requirements or
risk mitigation measures or the need to satisfy potential margin
requirements. For convenience and unless otherwise specified, Benchmark
Component Copper Futures Contracts, other Eligible Copper Futures
Contracts and Other Copper-Related Investments collectively are
referred to as ``Copper Interests.''
The Fund anticipates that the use of Copper Interests, as
necessary, will produce price and total return results that closely
track the Index. The Fund will invest only in Copper Interests that are
traded in sufficient volume to permit, in the opinion of the Sponsor
and SummerHaven Investment Management, LLC (``SummerHaven''), the
Fund's trading advisor, ease of accumulating and liquidating positions
in these financial interests. While certain Copper Interests traded on
exchanges can be physically settled, the Fund does not intend to take
or make physical delivery.
The Sponsor endeavors to have the value of the Fund's cash, whether
held by the Fund or posted as margin or collateral, at all times
approximate the aggregate market value of the Fund's obligations under
its Copper Interests. The Fund does not and will not borrow money or
use debt to satisfy its margin or collateral obligations in respect of
its investments.
Some copper-based derivatives transactions contain fairly generic
terms and conditions and are available from a
[[Page 37186]]
wide range of participants. Other copper-based derivatives have highly
customized terms and conditions and are not as widely available. Some
OTC contracts are cash-settled forwards for the future delivery of
copper that have terms similar to the Futures Contracts. Others take
the form of ``swaps'' in which the two parties exchange cash flows
based on pre-determined formulas tied to the copper spot price, forward
copper price, the Benchmark Component Copper Futures Contract price, or
other copper futures contract prices. Certain of these swaps may be
cleared through clearinghouses and have margin and other requirements
akin to those found in futures contracts. The Fund may also enter into
OTC derivative contracts such as swaps or cash-settled forwards for the
future delivery of copper that are not cleared. For example, the Fund
may enter into OTC derivative contracts whose value is tied to changes
in the difference between the Benchmark Component Copper Futures
Contract price and the price of other Futures Contracts that may be
invested in by the Fund.
To protect itself from the credit risk that arises in connection
with such OTC transactions, the Fund will enter into agreements with
each counterparty that provide for the netting of its overall exposure
to its counterparty, such as the agreements published by the
International Swaps and Derivatives Association, Inc. (``ISDA''). The
Fund will also require that the counterparty be highly rated and/or
provide collateral or other credit support to address the Fund's
exposure to the counterparty. The creditworthiness of each potential
counterparty will be assessed by the Sponsor.
The Exchange believes that providing the Fund with greater
flexibility with respect to the combination of commodity interests in
which the Fund invests to meet its investment objective (as described
herein) is appropriate and consistent with the best interests of the
Fund and Fund shareholders. While the Fund will have an increased
ability to invest in OTC derivative transactions, this additional
flexibility is not material because (1) the Fund's investment objective
and principal investment strategy will remain the same; (2) the Fund
will continue to primarily invest in Benchmark Component Copper Futures
Contracts; and (3) the principal investment risks are substantially the
same as those noted in the Prior Release. The Exchange notes that with
respect to the Fund's futures contracts and options on futures
contracts, which will all be traded on United States-based futures
exchanges (the ``Futures Exchanges''),\8\ not more than 10% of the
weight of such futures and options contracts in the aggregate shall
consist of components whose principal trading market is not a member of
Intermarket Surveillance Group (``ISG'') or is a market with which the
Exchange does not have a comprehensive surveillance sharing agreement
(``CSSA'').
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\8\ CME, CBOT, COMEX, NYMEX (all of which are part of CME Group,
Inc.) (collectively, ``CME Group''), London Metal Exchange
(``LME''), and ICE Futures (``ICE Futures''), are referred to,
collectively, as the ``Futures Exchanges.''
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This proposed rule change is intended to allow the Fund an
increased ability to invest in OTC derivative transactions related to
copper, although the Fund will continue to invest primarily in
Benchmark Component Copper Futures Contracts. This proposed rule change
is designed to provide the Fund with greater flexibility in pursuing
its investment objective, in light of increasing demand for copper and
the anticipated corresponding growth in Fund assets.\9\ As demand for
Futures Contracts, including Benchmark Component Copper Futures
Contracts, continues to increase, the Fund would benefit from the
flexibility to invest in Other Copper Derivatives to obtain more
favorable terms than may be available for Benchmark Component Copper
Futures Contracts. In addition, regulatory requirements and market
conditions may make Other Copper Derivatives more advantageous for the
Fund and its shareholders. For example, if the Fund began approaching
position limits, accountability levels or other regulatory limits, the
Fund may seek to avoid triggering such limits or levels by investing in
Other Copper Derivatives. Likewise, if demand for Benchmark Component
Copper Futures Contracts exceeded supply, the Fund would be better
positioned to continue to track its benchmark Index with increased
flexibility to invest in Other Copper Derivatives, such as OTC swaps,
that are designed to reflect the Fund's investments in the Benchmark
Component Copper Futures Contracts that comprise the Index. There is
increasing demand for copper overall. In addition, the Sponsor has
experienced corresponding growth in Fund assets and anticipates
continued growth as copper demand increases. The proposed rule change
is designed to provide the Fund with flexibility to obtain greater
liquidity and the potential to execute transactions with more favorable
pricing, which would benefit the Fund and its shareholders as the
copper market and Fund assets grow over time.
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\9\ There are widespread forecasts from industry experts that
project substantial increases in copper demand over the next decade
and beyond. As of January 2026, S&P Global Energy projects copper
demand will increase by 50% by 2040, driven by the growth of certain
key industries, including artificial intelligence, data centers,
digital industries, electric vehicles, defense spending, and grid
expansion. See Copper in the Age of AI: Challenges of
Electrification, S&P Global Energy & Market Intelligence (January
2026), available at https://www.spglobal.com/content/dam/spglobal/global-assets/en/special-reports/copper-in-the-age-of-ai/Copper%20in%20the%20Age%20of%20AI_Full%20Report_January%202026.pdf.
Further, in its commodity outlook report for 2026, CRU Group notes
rapidly growing data center production and artificial intelligence
have turned copper into a ``scarcity market.'' See Commodity Outlook
for 2026, CRU Group (2026), accessible at https://www.crugroup.com/en/campaigns/commodity-outlook-for-2026/. In addition, May 2025, the
International Energy Agency predicted an increase in demand for
copper over the next 15 years while warning of a potential 30%
supply deficit by 2035. See Global Critical Minerals Outlook 2025,
International Energy Agency (May 2025), available at: https://www.iea.org/reports/global-critical-minerals-outlook-2025.
Additionally, Bloomberg, calling out similar industries as S&P and
CRU Group, predicted that the rapid growth of generative artificial
intelligence and data centers could result in a 3% annual increase
in North American copper growth through 2035. See Copper demand is
set for data-center boost, Bloomberg Intelligence (June 17, 2024),
available at: https://www.bloomberg.com/professional/insights/commodities/copper-demand-is-set-for-data-center-boost/.
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Except for the changes noted above, all other representations made
in the Prior Release remain unchanged.\10\ The Fund is required to
comply with all continued listing requirements under NYSE Arca Rule
8.200-E, and the Sponsor is required to notify the Exchange if the Fund
ceases to comply with any such requirements.
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\10\ See supra, note 4.
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2. Statutory Basis
The basis under the Act for this proposed rule change is the
requirement under Section 6(b)(5) \11\ that an exchange have rules that
are designed to prevent fraudulent and manipulative acts and practices,
to promote just and equitable principles of trade, to remove
impediments to, and perfect the mechanism of a free and open market
and, in general, to protect investors and the public interest.
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\11\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that the proposed rule change is designed to
prevent fraudulent and manipulative acts and practices in that Shares
of the Fund will continue to be listed and traded on the Exchange
pursuant to the listing criteria in NYSE Arca Rule 8.200-E. The
Exchange represents that trading in the Shares of the Fund will be
subject to the existing trading surveillances administered by the
Exchange, as well as cross-market surveillances administered by the
Financial Industry Regulatory Authority
[[Page 37187]]
(``FINRA'') on behalf of the Exchange, which are designed to detect
violations of Exchange rules and applicable federal securities laws.
The Exchange represents that these procedures are adequate to properly
monitor Exchange trading of the Shares of the Fund in all trading
sessions and to deter and detect violations of Exchange rules and
federal securities laws applicable to trading on the Exchange.
The Exchange or FINRA, on behalf of the Exchange, or both, will
communicate as needed regarding trading of Shares of the Fund with
other markets and other entities 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 the Shares of the Fund from
such markets and other entities. In addition, the Exchange may obtain
information regarding trading in the Shares of the Fund from markets
and other entities that are members of ISG or with which the Exchange
has in place a CSSA. The Exchange may also obtain information regarding
trading in copper futures from markets trading such futures that are
members of ISG or with which the Exchange has in place a CSSA.
The Exchange notes that not all Other Copper Derivatives may trade
on markets that are members of ISG or with which the Exchange has in
place a CSSA. The Exchange believes that the proposal is nonetheless
consistent with Section 6(b)(5) of the Act in that it is designed to
prevent fraudulent and manipulative acts and practices. Whether the
Fund pursues its investment objective by investing in Futures Contracts
or in Other Copper Derivatives, the Fund's investment objective of
seeking daily changes in percentage terms of its NAV that reflect the
daily changes in percentage terms of the Index, less the Fund's
expenses, will not change. For the reasons discussed below, the
Exchange believes that the safeguards that currently exist to protect
the Fund's shareholders from fraudulent or manipulative activity would
be equally as effective if the Fund uses Other Copper Derivatives to
the extent contemplated in the proposal.
The Commission Has Recognized That Surveillance-Sharing Agreements Can
Help Detect and Prevent Manipulative and Fraudulent Trading Activity in
OTC Derivatives
The Exchange notes that affording flexibility with respect to the
combination of the Fund's commodity interests as provided by the
proposed rule change would be permitted for a product that is listed
and traded pursuant to the generic listing standards set forth in NYSE
Arca Rule 8.201-E (Generic) (Commodity-Based Trust Shares) (the
``Generic Listing Standards''). Among the holdings that exchange-traded
products may hold, while being listed and traded pursuant to the
Generic Listing Standards, are ``commodity-based assets'',\12\ where
the commodity underlying the commodity-based asset underlies a futures
contract that has been made available to trade on a designated contract
market (``DCM'') for at least six months; provided that the Exchange
has a CSSA, whether directly or through common membership in ISG, with
such DCM. The order approving the Generic Listing Standards states that
``the proposed eligibility requirements for commodities and commodity-
based assets that may underlie Commodity-Based Trust Shares are
reasonably designed to help prevent fraudulent and manipulative acts
and practices, to remove impediments to and perfect the mechanism of a
free and open market and a national market system, and to protect
investors and the public interest, and are therefore consistent with
the requirements of Section 6(b)(5) of the [Act].'' \13\ In coming to
this conclusion, the Commission noted the role of the surveillance
arrangements with the applicable DCMs to ensure the availability of
information with respect to the applicable commodity, or the commodity
that underlies commodity-based assets, necessary to detect and deter
potential fraud and manipulation. The Generic Listing Standards
Approval Order noted that ``[t]he Commission has previously recognized
that surveillance-sharing agreements assist in the detection and
deterrence of fraudulent and manipulative activity. . . . [T]he
Commission has stated that these agreements, whether through an ISG
membership or through a CSSA, should help to ensure the availability of
information necessary to detect and deter potential manipulations and
other trading abuses, thereby making the Commodity-Based Trust Shares
less readily susceptible to manipulation.'' \14\
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\12\ The term ``commodity-based asset'' means any future,
option, or swap on a commodity, as that term is defined in the
proposed generic listing standards. See NYSE Arca Rule 8.201-E(c)(3)
(Generic).
\13\ See Securities Exchange Act Release No. 103995 (September
17, 2025), 90 FR 45414 (September 22, 2025) (SR-NYSEArca-2025-54)
(Order Granting Accelerated Approval of Proposed Rule Changes, as
Modified by Amendments Thereto, to Adopt Generic Listing Standards
for Commodity-Based Trust Share) (the ``Generic Listing Standards
Approval Order'').
\14\ Id. (citing Securities Exchange Act Release No. 35518 (Mar.
21, 1995), 60 FR 15804, 15807 (Mar. 27, 1995) (SR-Amex-94-30)
(approving the listing and trading of Commodity Linked Notes)
(finding that the listing exchange had surveillance-sharing
agreements with the exchanges on which the futures contracts that
make up the reference indexes traded and was able to obtain market
surveillance information); Securities Exchange Act Release No. 36166
(Aug. 29, 1995), 60 FR 46637, 46641 (Sept. 7, 1995) (SR-PSE-94-28)
(approving a proposal to adopt uniform listing and trading
guidelines for stock-index, currency, and currency-index warrants)
(stating that ``a surveillance sharing agreement should provide the
parties with the ability to obtain information necessary to detect
and deter market manipulation and other trading abuses'' and, in the
context of foreign stock-index warrants, the Commission ``generally
requires that there be a surveillance sharing agreement in place
between an exchange listing or trading a derivative product and the
exchange(s) trading the stocks underlying the derivative contract
that specifically enables the relevant markets to surveil trading in
the derivative product and its underlying stocks''); Securities
Exchange Act Release No. 99306 (Jan. 10, 2024), 89 FR 3008, 3012
(Jan. 17, 2024) (SR-NYSEARCA2021-90; SR-NYSEARCA-2023-44; SR-
NYSEARCA-2023-58; SR-NASDAQ-2023-016; SR-NASDAQ2023-019; SR-CboeBZX-
2023-028; SR-CboeBZX-2023-038; SR-CboeBZX-2023-040; SR-CboeBZX2023-
042; SR-CboeBZX-2023-044; SR-CboeBZX-2023-072) (approving the
listing and trading of bitcoin-based Commodity-Based Trust Shares
and Trust Units) (concluding that a ``surveillance-sharing agreement
with the CME can be reasonably expected to assist in surveilling for
fraud and manipulation that may impact the proposed spot bitcoin
ETPs'') (``Spot BTC Approval Order''); Securities Exchange Act
Release No. 100224 (May 23, 2024), 89 FR 46937, 46940 (May 30, 2024)
(SR-NYSEARCA-2023-70; SRNYSEARCA-2024-31; SR-NASDAQ-2023-045; SR-
CboeBZX-2023-069; SR-CboeBZX-2023-070; SRCboeBZX-2023-087; SR-
CboeBZX-2023-095; SR-CboeBZX-2024-018) (approving the listing and
trading of ether-based exchange-traded products) (concluding that a
``surveillance-sharing agreement with the CME can be reasonably
expected to assist in surveilling for fraud and manipulation that
may impact the proposed spot ether ETPs'') (``Spot ETH Approval
Order''); Spot Gold Approval Order, supra note 12 at 64619 (finding
that the exchange's Memorandum of Understanding with NYMEX for the
sharing of information related to any financial instrument based, in
whole or in part, upon an interest in or performance of gold assists
in creating the basis for the exchange to monitor for fraudulent and
manipulative practices in the trading of the shares); Securities
Exchange Act Release No. 53521 (Mar. 20, 2006), 71 FR 14967, 14974
(Mar. 24, 2006) (SR-Amex-2005-072) (approving the listing and
trading of the iShares[supreg] Silver Trust) (stating that, although
an information sharing agreement with the OTC silver market was not
possible, the exchange's information sharing agreement with NYMEX
for the purpose of providing information in connection with trading
in or related to COMEX silver futures contracts helps create the
basis for Amex to monitor for fraudulent and manipulative practices
in the trading of the shares); Securities Exchange Act Release No.
86636 (Aug. 12, 2019), 84 FR 42030, 42034 (Aug. 16, 2019) (SR-
NYSEARCA-2018-98) (approving the listing and trading of iShares
Commodity Multi-Strategy ETF) (in a matter where an ETF holds up to
60% of its assets in OTC forwards, options, and swaps on a
commodities index or commodities from the same sectors as those
included in the index, finding that the exchange's representation
that each of the commodities in the index has futures traded on an
ISG market or futures exchange with which the exchange has a CSSA
helps to mitigate concerns that the ETF's investments in OTC
derivatives will make the shares more susceptible to manipulation);
and Securities Exchange Act Release No. 86698 (Aug. 16, 2019), 84 FR
43823, 43829 (Aug. 22, 2019) (SR-NYSEARCA-2018-83) (approving the
listing and trading the iShares Bloomberg Roll Select Commodity
Strategy ETF) (in a matter where an ETF holds up to 60% of its
assets in listed futures, options, and swaps, and up to 60% of its
assets in OTC forwards, options, and swaps, each on a commodities
index or on commodities from the same sectors as those included in
the index, finding that the exchange's representations that (i) the
futures contracts included in the index are traded on ISG markets or
futures exchanges with which the exchange has a CSSA, and (ii) all
commodities underlying the index have futures that are traded on ISG
markets or futures exchanges with which the exchange has a CSSA,
help to mitigate concerns that the ETF's investments in OTC and
listed derivatives will make the shares susceptible to
manipulation)).
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[[Page 37188]]
The Other Copper Derivatives would be eligible holdings for
products listed and traded pursuant to the Generic Listing Standards
because (1) they are ``commodity-based assets,'' and (2) the copper
underlying the Other Copper Derivatives underlies futures contracts
that have been made available to trade for at least six months on DCMs
that have CSSAs with the Exchange. Accordingly, the Exchange will have
the same access to information from DCMs that the Commission recognized
in the Generic Listing Standards Approval Order would assist in the
detection and deterrence of potential manipulations and other trading
abuses. Therefore, the Exchange believes that the proposed rule change
is reasonably designed to help prevent fraudulent and manipulative acts
and practices for the same reasons as those set forth in the Generic
Listing Standards.
The Proposed Flexibility to Use Other Copper Derivatives Constitutes a
Minor Change to the Prior Release
The Exchange notes that the Benchmark Component Copper Futures
Contracts are expected to continue to be the predominant investment of
the Fund, even if the Fund were to have the proposed flexibility to use
Other Copper Derivatives. The Benchmark Component Copper Futures
Contracts remain the most cost-effective, easily tradeable and liquid
investment option for the Fund.
In addition, as discussed above, the Fund's investment objective
will not change as a result of the proposal. Therefore, the Fund will
continue to seek for the daily changes in percentage terms of the
Fund's Shares' NAV to reflect the daily changes in percentage terms of
the Index, less the Fund's expenses. In order for the Other Copper
Derivatives to track the performance of the Index, the Other Copper
Derivatives are expected to be based primarily on the Benchmark
Component Copper Futures Contracts and, therefore, the performance of
the Other Copper Derivatives is expected to closely track the
performance of the Benchmark Component Copper Futures Contracts.
Attempts to manipulate the Fund Shares through manipulation of Other
Copper Derivatives would be reflected in increased tracking error
versus the Index.
In addition, position limits on the Fund's OTC derivatives would
also limit the ability to influence the copper or copper futures
markets. Because the Fund's OTC derivatives are expected to be based
primarily on the Benchmark Component Copper Futures Contracts, such OTC
derivatives are expected to be subject to the same position limits to
which the Benchmark Component Copper Futures Contracts are subject, as
discussed above. The limits on Benchmark Component Futures Contracts
will limit the extent to which the Fund can engage in OTC derivative
transactions, thereby limiting the possibility of the Fund's size
influencing the copper or copper futures markets.
The proposed rule change is designed to promote just and equitable
principles of trade and to protect investors and the public interest in
that the Exchange is proposing to amend representations in the Prior
Release regarding the flexibility that the Fund has to invest in
instruments other than Futures Contracts. The Fund will continue to
seek to achieve its investment objective by investing 1) primarily in
Benchmark Component Copper Futures Contracts; and 2) to a lesser
extent, in other Eligible Copper Futures Contracts beyond the Benchmark
Component Copper Futures Contracts and Other Copper-Related
Investments.
The Exchange believes that providing the Fund with greater
flexibility with respect to the combination of commodity interests in
which the Fund invests to meet its investment objective is appropriate
and consistent with the best interest of the Fund and Fund shareholders
because the changes will provide the Fund with the flexibility to
obtain greater liquidity and the potential to execute transactions with
more favorable pricing. The Exchange believes the proposed rule change
is designed to promote just and equitable principles of trade and to
protect investors and the public interest as it would better allow the
Fund to meet its investment objective and decrease the potential for
tracking error. In addition, as noted above, the Exchange has in place
surveillance procedures relating to trading in the Fund and may obtain
information via ISG from other exchanges that are members of ISG or
with which the Exchange has entered into a CSSA.
In addition to the foregoing, all other representations made in the
Prior Release with respect to promoting just and equitable principles
of trade and protecting investors and the public interest remain
unchanged.
The proposed rule change is designed to perfect the mechanism of a
free and open market and, in general, to protect investors and the
public interest in that it will facilitate the continued listing and
trading of an exchange-traded product that, through permitted use of
OTC derivatives, will enhance competition among market participants, to
the benefit of investors and the marketplace.
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. The Exchange believes the
proposed rule change to allow the Fund an increased ability to invest
in OTC derivatives related to copper will enhance competition and
benefit investors and the marketplace by permitting the continued
listing and trading of Shares of the Fund without impacting the
investment objective of the Fund.
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. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A) of the Act \15\ and Rule 19b-4(f)(6) \16\ thereunder.
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; or (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 \17\ and Rule 19b-4(f)(6) \18\ thereunder.
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\15\ 15 U.S.C. 78s(b)(3)(A).
\16\ 17 CFR 240.19b-4(f)(6).
\17\ 15 U.S.C. 78s(b)(3)(A).
\18\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires the Exchange 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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[[Page 37189]]
A proposed rule change filed under Rule 19b-4(f)(6) \19\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\20\ 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 proposed
rule change may become operative immediately upon filing. The Exchange
states that the purpose of the proposal is to modify the Fund's
investment strategy to permit the Fund an increased flexibility to
transact in Other Copper Derivatives. According to the Exchange, the
Fund's investment objective and principal investment strategy will
remain the same, the Fund will continue to primarily invest in
Benchmark Component Copper Futures Contracts, and, except for the
changes noted above, all other representations made in the Prior
Release remain unchanged. In addition, the Exchange states that, with
respect to the Fund's futures contracts and options on futures
contracts, which will all be traded on U.S.-based Futures Exchanges,
not more than 10% of the weight of such futures and options contracts
in the aggregate will consist of components whose principal trading
market is not a member of ISG or is a market with which the Exchange
does not have a CSSA. The Other Copper Derivatives are ``commodity-
based assets,'' and the copper underlying the Other Copper Derivatives
also underlies futures contracts that have been made available to trade
for at least six months on DCMs that have CSSAs with the Exchange.
Accordingly, the Exchange will have access to information from DCMs
that would assist in the detection and deterrence of potential
manipulations and other trading abuses. For these reasons, and because
the proposed rule change does not raise any novel legal or regulatory
issues, the Commission finds that waiver of the 30-day operative delay
is consistent with the protection of investors and the public interest.
Therefore, the Commission hereby waives the 30-day operative delay and
designates the proposed rule change to be operative upon filing.\21\
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\19\ 17 CFR 240.19b-4(f)(6).
\20\ 17 CFR 240.19b-4(f)(6)(iii).
\21\ 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. If the Commission
takes such action, the Commission will institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.
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-NYSEARCA-2026-64 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-2026-64. 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-2026-64 and should be submitted
on or before July 13, 2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\22\
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\22\ 17 CFR 200.30-3(a)(12) and (59).
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Stephanie J. Fouse,
Assistant Secretary.
[FR Doc. 2026-12404 Filed 6-18-26; 8:45 am]
BILLING CODE 8011-01-P