80854 Federal Register / Vol. 85, No. 240 / Monday, December 14, 2020 / Notices 

10 Id. 

11 17 CFR 200.30–3(a)(57). 

1 15 U.S.C. 78s(b)(1). 

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4Commentary .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. 

5On September 21, 2020, the Trust filed with the 

Commission a registration statement on Form S–1 

under the Securities Act of 1933 (15 U.S.C. 77a) 

(‘‘Securities Act’’) relating to the Fund (File No. 

333–248948) (the ‘‘Registration Statement’’). The 

description of the operation of the Trust and the 

Fund herein is based, in part, on the Registration 

Statement. 

6According to the Registration Statement, futures 

contracts are agreements between two parties that 

are executed on a designated contract market 

(‘‘DCM’’), i.e., a commodity futures exchange, and 

that are cleared and margined through a derivatives 

clearing organization (‘‘DCO’’), i.e., a clearing 

house. One party agrees to buy a commodity such 

as water from the other party at a later date at a 

price and quantity agreed upon when the contract 

is made. In market terminology, a party who 

purchases a futures contract is long in the market 

and a party who sells a futures contract is short in 

the market. The contractual obligations of a buyer 

or seller may generally be satisfied by taking or 

making physical delivery of the underlying 

commodity or by making an offsetting sale or 

purchase of an identical futures contract on the 

same or linked exchange before the designated date 

of delivery. The difference between the price at 

which the futures contract is purchased or sold and 

the price paid for the offsetting sale or purchase, 

after allowance for brokerage commissions, 

constitutes the profit or loss to the trader. 

February 13, 2021, is 240 days from that 

date. 

The Commission finds it appropriate 

to designate a longer period within 

which to issue an order approving or 

disapproving the proposed rule change 

so that it has sufficient time to consider 

this proposed rule change. Accordingly, 

the Commission, pursuant to Section 

19(b)(2) of the Act,10 designates 

February 13, 2021, as the date by which 

the Commission shall either approve or 

disapprove the proposed rule change, as 

modified by Amendment No. 1 (File No. 

SR–CBOE–2020–051). 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.11

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2020–27389 Filed 12–11–20; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90608; File No. SR– 

NYSEArca–2020–105] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing of Proposed 

Rule Change To List and Trade the 

Shares of the Teucrium Water Fund 

Under NYSE Arca Rule 8.200–E, 

Commentary .02 

December 8, 2020. 

Pursuant to Section 19(b)(1) 1 of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that, on 

November 25, 2020, 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, II, and III below, which Items 

have been prepared by the selfregulatory organization. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to list and 

trade the shares of the following under 

NYSE Arca Rule 8.200–E, Commentary 

.02 (‘‘Trust Issued Receipts’’): Teucrium 

Water Fund. The proposed change is 

available on the Exchange’s website at 

www.nyse.com, at the principal office of 

the Exchange, and at the Commission’s 

Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

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 to list and 

trade shares (‘‘Shares’’) of the following 

under NYSE Arca Rule 8.200–E, 

Commentary .02, which governs the 

listing and trading of Trust Issued 

Receipts: Teucrium Water Fund (the 

‘‘Fund’’).4

The Fund is a series of Teucrium 

Commodity Trust (the ‘‘Trust’’), a 

Delaware statutory trust.5 The Fund is 

managed and controlled by Teucrium 

Trading, LLC (‘‘Teucrium Trading’’ or 

the ‘‘Sponsor’’). Teucrium Trading is 

registered as a commodity pool operator 

(‘‘CPO’’) and a commodity trading 

adviser (‘‘CTA’’) with the Commodity 

Futures Trading Commission (‘‘CFTC’’) 

and is a member of the National Futures 

Association (‘‘NFA’’). Foreside Fund 

Services, LLC will be the Fund’s 

distributor (‘‘Distributor’’). In its 

capacity as the Custodian for the Fund, 

U.S. Bank, N.A. (‘‘U.S. Bank’’) may hold 

the Fund’s securities and cash and/or 

cash equivalents pursuant to a custodial 

agreement (the ‘‘Custodian’’). U.S. 

Bancorp Fund Services, LLC, (‘‘U.S. 

Bancorp’’) will be the Fund’s ‘‘Transfer 

Agent.’’ In addition, in its capacity as 

Administrator for the Fund, U.S. 

Bancorp (the ‘‘Administrator’’) will 

perform certain administrative and 

accounting services for the Fund and 

prepare certain Commission and CFTC 

reports on behalf of the Fund. 

The Fund’s Investment Objective and 

Strategy 

The investment objective of the Fund 

is for changes in the Shares’ Net Asset 

Value (‘‘NAV’’) to reflect the changes of 

the price of water rights in the state of 

California, as measured by the Fund’s 

Benchmark (as defined below). The 

Benchmark is a weighted average of the 

closing settlement prices for three 

equally weighted Nasdaq Veles 

California Water index futures contracts 

(‘‘Benchmark Component Futures 

Contracts’’) that are traded on the 

Chicago Mercantile Exchange Inc. 

(‘‘CME’’).6 Nasdaq Veles California 

Water index futures contracts will be 

financially settled and will trade eight 

consecutive quarterly contracts (March, 

June, September and December) plus the 

two nearest serial months which are not 

included in the quarterly contracts. 

Settlement for each futures contract will 

occur the third Wednesday of the 

expiration month. 

The Benchmark will have three 

components, consisting of equally 

weighted Nasdaq Veles California Water 

index futures contracts selected from 

the following contract months: May, 

June, July, August and September. The 

Benchmark will always hold a June 

contract month. The Benchmark will 

roll upon the expiration of the February, 

May, June, July and August contract 

months. See grid below for the full 

futures rolls and holdings. The 


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7The term ‘‘normal market conditions’’ includes, 

but is not limited to, the absence of: trading halts 

in the applicable financial markets generally; 

operational issues (e.g., systems failure) causing 

dissemination of inaccurate market information; or 

force majeure type events such as natural or 

manmade disaster, act of God, armed conflict, act 

of terrorism, riot or labor disruption or any similar 

intervening circumstance. See NYSE Arca Rule 

8.600–E(c)(5). 

8For a list of the current members of ISG, see 

www.isgportal.org. The Exchange notes that not all 

components of the Fund may trade on markets that 

are members of ISG or with which the Exchange has 

in place a CSSA. 

Benchmark is not designed to track the 

spot price of water or water rights. 

ANNUAL ROLL SCHEDULE

Roll month Old contract New contract Holdings post roll 

February ............ September ........ May ............................................... May, June (1st to expire), June (2nd to expire)*. 

May .................... May ................... July ................................................ June (1st to expire), July, June (2nd to expire). 

June ................... June .................. August ........................................... July, August, June (2nd to expire). 

July .................... July ................... September (2nd to expire) ............ August, June (1st to expire), September (2nd to expire). 

August ................ August .............. June (2nd to expire) ...................... June (1st to expire), September, June (2nd to expire). 

* 1st to expire—The contract month available for investment that is going to expire first; 2nd to expire—The contract month available for investment that is going to expire second. 

According to the Registration 

Statement, the Nasdaq Veles California 

Water Index was designed to provide 

water market participants with a price 

for water through verifiable price 

discovery. The index sets a weekly 

benchmark spot price of water rights in 

California, based on the volumeweighted average of the transaction 

price in California’s five largest and 

most actively traded water markets. 

In seeking to achieve the Fund’s 

investment objective, the Sponsor will 

employ a ‘‘neutral’’ investment strategy 

that is intended to track the changes in 

the Benchmark regardless of whether 

the Benchmark goes up or goes down. 

According to the Registration Statement, 

the Fund will endeavor to trade in 

Benchmark Component Futures 

Contracts so that the Fund’s average 

daily tracking error against the 

Benchmark will be less than 10 percent 

over any period of 30 trading days. 

According to the Registration Statement, 

the Fund’s ‘‘neutral’’ investment 

strategy is designed to permit investors 

generally to purchase and sell the 

Fund’s Shares for the purpose of 

investing indirectly in the California 

water market. Such investors may 

include participants in the agricultural 

industry and other industries seeking to 

hedge the risk of losses in their water 

related transactions, as well as investors 

seeking exposure to the water market. 

The Fund will seek to achieve its 

investment objective by investing in 

Benchmark Component Futures 

Contracts. Under normal market 

conditions,7 the Fund expects that 

100% of the Fund’s assets will be 

invested in Benchmark Component 

Futures Contracts and in cash and cash 

equivalents, such as short-term Treasury 

Bills, money market funds, demand 

deposit accounts and commercial paper. 

The Fund may, to a lesser extent, obtain 

exposure to the Benchmark through 

investment in over-the-counter (‘‘OTC’’) 

swap agreements, OTC forward 

contracts, both exchange-listed and OTC 

options, exchange-listed futures and 

exchange-listed options on futures. Not 

more than 10% of the net assets of the 

Fund in the aggregate invested in 

exchange-traded futures contracts or 

exchange-traded options on futures 

shall consist of futures contracts or 

options on futures whose principal 

market is not a member of the 

Intermarket Surveillance Group (‘‘ISG’’) 

or is a market with which the Exchange 

does not have a comprehensive 

surveillance sharing agreement 

(‘‘CSSA’’).8

According to the Registration 

Statement, the price of water, over time, 

fluctuates based on a number of market 

factors, including demand for water 

relative to its supply. The value of 

Benchmark Component Futures 

Contracts likewise will fluctuate in 

reaction to a number of market factors. 

Because the Fund seeks to maintain its 

holdings in Benchmark Component 

Futures Contracts with a roughly 

constant expiration profile, the Fund’s 

positions are changed or ‘‘rolled’’ on a 

regular basis in order to track the 

changing nature of the Benchmark by 

closing out soon to expire contracts that 

are no longer part of the Benchmark and 

entering into subsequent to expire 

contracts. One factor determining the 

total return from investing in futures 

contracts is the price relationship 

between soon to expire contracts and 

later to expire contracts. 

According to the Registration 

Statement, if the futures market is in a 

state of backwardation (i.e., when the 

price of water in the future is expected 

to be less than the current price), the 

Fund will buy later to expire contracts 

for a lower price than the sooner to 

expire contracts that it sells. 

Hypothetically, and assuming no 

changes to either prevailing water prices 

or the price relationship between soon 

to expire contracts and later to expire 

contracts, the value of a contract will 

rise as it approaches expiration. Over 

time, if backwardation remained 

constant, the differences would 

continue to increase. If the futures 

market is in contango, the Fund will 

buy later to expire contracts for a higher 

price than the sooner to expire contracts 

that it sells. Hypothetically, and 

assuming no other changes to either 

prevailing water prices or the price 

relationship between the spot price, 

soon to expire contracts and later to 

expire contracts, the value of a contract 

will fall as it approaches expiration. 

Over time, if contango remained 

constant, the difference would continue 

to increase. Frequently, whether 

contango or backwardation exists is a 

function, among other factors, of the 

seasonality of the underlying market 

and government policy. 

Overview of the Water Market 

According to the Registration 

Statement, water is the natural resource 

required to sustain all life on the planet, 

arguably making it the most important 

commodity on Earth. U.S. water usage 

falls into three major categories: 

residential, agricultural and industrial 

use. Therefore, a primary challenge 

confronting the United States, 

particularly the Western States, is water 

scarcity which can be attributed to 

increased demand from population 

growth, economic expansion, 

agricultural production, and climate 

change resulting in rapidly changing 

and variable weather patterns. 

The U.S. ranks first globally in per 

capita water consumption and second 

globally in total water consumption 

behind only China. California ranks first 


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80856 Federal Register / Vol. 85, No. 240 / Monday, December 14, 2020 / Notices 

9Several major market data vendors display and/ 

or make widely available IFVs taken from the CTA 

or other data feeds. In addition, the normal trading 

hours for Water Futures Contracts on CME are 

generally shorter than those of NYSE Arca. As a 

result, there is a gap in time at the beginning and 

the end of each day during which the Fund’s Shares 

are traded on NYSE Arca, but real-time CME trading 

prices for Water Futures Contracts are not available. 

During such gaps, there will be no update to the 

IFV. 

in U.S. demand. Competition continues 

to increase between domestic use, 

agriculture, and industrial use. Food 

production and urban expansion could 

both be threatened by water scarcity, 

and it is becoming increasingly difficult 

and expensive to balance the water 

needs of farmers growing crops in many 

parts of the country with water demands 

created by expanding urban population 

centers. As water availability becomes 

increasingly variable, state and local 

governments will have increasing roles 

in rationing and disbursing water. 

California is one of the most active 

water trading markets in the U.S. Water 

prices tend to trade in cycles generally 

tied to rain/snowfall patterns. Western 

States receive most annual precipitation 

from winter storms. Beyond that they 

must rely on spring rainstorms. Western 

statewide precipitation occurs from 

November through March. 

Approximately half occurs from 

December through February, coinciding 

with winter storms. A few storms during 

the winter season can determine if the 

year will be wet or dry. Droughts occur 

when dry conditions persist long 

enough to impact natural water levels. 

Water trading has become a fast-growing 

activity throughout the Western United 

States; California, Washington, Arizona, 

Colorado, and Texas are among the most 

active places where water rights are 

transacted. As climate change continues 

to impact the planet, urban, industrial 

and agricultural expansion will likely 

increase the demand for water, 

increasing the need for the most 

efficient allocation of water possible 

among competing users. The trading of 

water rights is a practical and effective 

tool available to all participants in their 

continued efforts at securing water. 

Net Asset Value 

According to the Registration 

Statement, the Fund’s NAV per Share 

will be calculated by taking the current 

market value of its total assets, 

subtracting any liabilities, and dividing 

that total by the number of Shares. 

The Administrator of the Fund will 

calculate the NAV once each trading 

day, as of the earlier of the close of the 

New York Stock Exchange or 4:00 p.m. 

Eastern Standard Time (EST). 

To determine the value of Benchmark 

Component Futures Contracts, the 

Fund’s Administrator will use the 

Benchmark Component Futures 

Contract settlement price on the 

exchange on which the contract is 

traded, except that the ‘‘fair value’’ of 

Benchmark Component Futures 

Contracts (as described in more detail 

below) may be used when Benchmark 

Component Futures Contracts close at 

their price fluctuation limit for the day. 

The Fund’s Administrator will 

determine the value of all other Fund 

investments as of the earlier of the close 

of the New York Stock Exchange or 4:00 

p.m. EST. The value of over the counter 

water interests will be determined based 

on the value of the commodity or 

futures contract underlying such water 

interest, except that a fair value may be 

determined if the Fund’s Sponsor 

believes that the Fund is subject to 

significant credit risk relating to the 

counterparty to such water interest. The 

Fund’s NAV will include any 

unrealized profit or loss on open water 

interests and any other credit or debit 

accruing to the Fund but unpaid or not 

received by the Fund. 

The fair value of a water interest will 

be determined by the Fund’s Sponsor in 

good faith and in a manner that assesses 

the water interest’s value based on a 

consideration of all available facts and 

all available information on the 

valuation date. When a Benchmark 

Component Futures Contract has closed 

at its price fluctuation limit, the fair 

value determination will attempt to 

estimate the price at which such 

Benchmark Component Futures 

Contract would be trading in the 

absence of the price fluctuation limit 

(either above such limit when an 

upward limit has been reached or below 

such limit when a downward limit has 

been reached). Typically, this estimate 

will be made primarily by reference to 

the price of comparable water interests 

trading in the over the counter market. 

The fair value of a water interest may 

not reflect such security’s market value 

or the amount that the Fund might 

reasonably expect to receive for the 

water interest upon its current sale. 

Indicative Fund Value 

In order to provide updated 

information relating to the Fund for use 

by investors and market professionals, 

ICE Data Indices, LLC will calculate an 

updated ‘‘Indicative Fund Value’’ 

(‘‘IFV’’). The IFV will be calculated by 

using the prior day’s closing NAV per 

Share of the Fund as a base and will be 

updated throughout the Core Trading 

Session of 9:30 a.m. E.T. to 4:00 p.m. 

E.T. to reflect changes in the value of 

the Fund’s water interests during the 

trading day. 

The IFV will be disseminated on a per 

Share basis every 15 seconds during the 

Exchange’s Core Trading Session and be 

widely disseminated by one or more 

major market data vendors during the 

NYSE Arca Core Trading Session.9

Creation and Redemption of Shares 

According to the Registration 

Statement, the Shares issued by the 

Fund may only be purchased by 

Authorized Purchasers and only in 

blocks of 10,000 Shares called ‘‘Creation 

Baskets.’’ The amount of the purchase 

payment for a Creation Basket is equal 

to the total NAV of Shares in the 

Creation Basket. Similarly, only 

Authorized Purchasers may redeem 

Shares and only in blocks of 10,000 

Shares called ‘‘Redemption Baskets.’’ 

The amount of the redemption proceeds 

for a Redemption Basket is equal to the 

total NAV of Shares in the Redemption 

Basket. The purchase price for Creation 

Baskets and the redemption price for 

Redemption Baskets are the actual NAV 

calculated at the end of the business day 

when a request for a purchase or 

redemption is received by the Fund. 

‘‘Authorized Purchasers’’ will be the 

only persons that may place orders to 

create and redeem Creation Baskets. 

Authorized Purchasers must be (1) 

either registered broker-dealers or other 

securities market participants, such as 

banks and other financial institutions, 

that are not required to register as 

broker-dealers to engage in securities 

transactions, and (2) DTC Participants. 

An Authorized Purchaser is an entity 

that has entered into an Authorized 

Purchaser Agreement with the Sponsor. 

Creation Procedures 

On any ‘‘Business Day’’, an 

Authorized Purchaser may place an 

order with the Transfer Agent to create 

one or more Creation Baskets. For 

purposes of processing both purchase 

and redemption orders, a ‘‘Business 

Day’’ means any day other than a day 

when any of the NYSE Arca, the CME, 

or the New York Stock Exchange is 

closed for regular trading. Purchase 

orders for Creation Baskets must be 

placed by 12:00 p.m. EST or the close 

of regular trading on the New York 

Stock Exchange, which is earlier. The 

day on which the Distributor receives a 

valid purchase order is referred to as the 

purchase order date. If the purchase 

order is received after the applicable 

cut-off time, the purchase order date 

will be the next Business Day. Purchase 

orders are irrevocable. 


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10See NYSE Arca Rule 7.12–E. 

By placing a purchase order, an 

Authorized Purchaser generally agrees 

to deposit cash with the Custodian. 

Redemption Procedures 

According to the Registration 

Statement, the procedures by which an 

Authorized Purchaser can redeem one 

or more Creation Baskets will mirror the 

procedures for the creation of Creation 

Baskets. On any Business Day, an 

Authorized Purchaser may place an 

order with the Transfer Agent to redeem 

one or more Creation Baskets. 

The redemption procedures allow 

Authorized Purchasers to redeem 

Creation Baskets. Individual 

shareholders may not redeem directly 

from the Fund. By placing a redemption 

order, an Authorized Purchaser agrees 

to deliver the Creation Baskets to be 

redeemed through DTC’s book entry 

system to the Fund by the end of the 

next Business Day following the 

effective date of the redemption order or 

by the end of such later business day. 

Determination of Redemption 

Distribution 

The redemption distribution from the 

Fund will consist of an amount of cash, 

cash equivalents and/or commodity 

futures that is in the same proportion to 

the total assets of the Fund on the date 

that the order to redeem is properly 

received as the number of Shares to be 

redeemed under the redemption order is 

in proportion to the total number of 

Shares outstanding on the date the order 

is received. 

Delivery of Redemption Distribution 

An Authorized Purchaser who places 

a purchase order will transfer to the 

Custodian the required amount of cash, 

cash equivalents and/or commodity 

futures by the end of the next business 

day following the purchase order date or 

by the end of such later business day, 

not to exceed three business days after 

the purchase order date, as agreed to 

between the Authorized Purchaser and 

the Custodian when the purchase order 

is placed (the ‘‘Purchase Settlement 

Date’’). Upon receipt of the deposit 

amount, the Custodian will direct DTC 

to credit the number of Creation Baskets 

ordered to the Authorized Purchaser’s 

DTC account on the Purchase 

Settlement Date. 

Availability of Information 

The NAV for the Fund’s Shares will 

be disseminated daily to all market 

participants at the same time. The 

intraday, closing prices, and settlement 

prices of the Benchmark Component 

Futures Contracts will be readily 

available from the applicable futures 

exchange websites, automated quotation 

systems, published or other public 

sources, or major market data vendors. 

Complete real-time data for the 

Benchmark Component Futures 

Contracts will be available by 

subscription through on-line 

information services. ICE Futures U.S. 

and CME also provide delayed futures 

and options on futures information on 

current and past trading sessions and 

market news free of charge on their 

respective websites. The specific 

contract specifications for Benchmark 

Component Futures Contracts will also 

be available on such websites, as well as 

other financial informational sources. 

Quotation and last-sale information 

regarding the Shares will be 

disseminated through the facilities of 

the Consolidated Tape Association 

(‘‘CTA’’). Quotation information for cash 

equivalents and commodity futures may 

be obtained from brokers and dealers 

who make markets in such instruments. 

Intra-day price and closing price level 

information for the Benchmark will be 

available from major market data 

vendors. The Benchmark value will be 

disseminated once every 15 seconds. 

The IFV will be available through online information services. 

In addition, the Funds’ website, 

www.teucrium.com, will display the 

applicable end of day closing NAV. The 

daily holdings of the Fund will be 

available on the Fund’s website. The 

Fund’s website will also include a form 

of the prospectus for the Fund that may 

be downloaded. The website will 

include the Shares’ ticker and CUSIP 

information along with additional 

quantitative information updated on a 

daily basis, including: (1) The prior 

Business Day’s reported NAV and 

closing price and a calculation of the 

premium and discount of the closing 

price or mid-point of the bid/ask spread 

at the time of NAV calculation (the 

‘‘Bid/Ask Price’’) against the NAV; and 

(2) data in chart format displaying the 

frequency distribution of discounts and 

premiums of the daily closing price or 

Bid/Ask Price against the NAV, within 

appropriate ranges, for at least each of 

the four previous calendar quarters. The 

website disclosure of portfolio holdings 

will be made daily and will include, as 

applicable, (i) the name, quantity, price, 

and market value of Benchmark 

Component Futures Contracts, (ii) the 

counterparty to and value of swap 

agreements, forward contracts and any 

other financial instruments tracking the 

Benchmark, and (iii) the total cash and 

cash equivalents held in the Fund’s 

portfolio, if applicable. 

The Fund’s website will be publicly 

available at the time of the public 

offering of the Shares and accessible at 

no charge. 

Trading Halts 

With respect to trading halts, the 

Exchange may consider all relevant 

factors in exercising its discretion to 

halt or suspend trading in the Shares of 

the Fund.10 Trading in Shares of the 

Fund will be halted if the circuit breaker 

parameters in NYSE Arca Rule 7.12–E 

have been reached. Trading also may be 

halted because of market conditions or 

for reasons that, in the view of the 

Exchange, make trading in the Shares 

inadvisable. 

The Exchange may halt trading during 

the day in which an interruption to the 

dissemination of the IFV or the value of 

the Benchmark occurs. The Benchmark 

value will be disseminated once every 

15 seconds. If the interruption to the 

dissemination of the IFV, or the value of 

the Benchmark 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. In addition, if the 

Exchange becomes aware that the NAV 

with respect to the Shares is not 

disseminated to all market participants 

at the same time, it will halt trading in 

the Shares until such time as the NAV 

is available to all market participants. 

Trading Rules 

The Exchange deems the Shares to be 

equity securities, thus rendering trading 

in the Shares subject to the Exchange’s 

existing rules governing the trading of 

equity securities. Shares will trade on 

the NYSE Arca Marketplace from 4 a.m. 

to 8 p.m. E.T. in accordance with NYSE 

Arca Rule 7.34–E (Early, Core, and Late 

Trading Sessions). The Exchange has 

appropriate rules to facilitate 

transactions in the Shares during all 

trading sessions. As provided in NYSE 

Arca Rule 7.6–E, the minimum price 

variation (‘‘MPV’’) for quoting and entry 

of orders in equity securities traded on 

the NYSE Arca Marketplace is $0.01, 

with the exception of securities that are 

priced less than $1.00 for which the 

MPV for order entry is $0.0001. 

The Shares will conform to the initial 

and continued listing criteria under 

NYSE Arca Rule 8.200–E. The trading of 

the Shares will be subject to NYSE Arca 

Rule 8.200–E, Commentary .02(e), 

which sets forth certain restrictions on 

Equity Trading Permit (‘‘ETP’’) Holders 

acting as registered Market Makers in 

Trust Issued Receipts to facilitate 

surveillance. With respect to the 


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80858 Federal Register / Vol. 85, No. 240 / Monday, December 14, 2020 / Notices 

11 17 CFR 240.10A–3. 

12See Rule 10A–3(c)(7), 17 CFR 240.10A–3(c)(7) 

(stating that a listed issuer is not subject to the 

requirements of Rule 10A–3 if the issuer is 

organized as an unincorporated association that 

does not have a board of directors and the activities 

of the issuer are limited to passively owning or 

holding securities or other assets on behalf of or for 

the benefit of the holders of the listed securities). 

13FINRA conducts cross-market surveillances on 

behalf of the Exchange pursuant to a regulatory 

services agreement. The Exchange is responsible for 

FINRA’s performance under this regulatory services 

agreement. 14 15 U.S.C. 78f(b)(5). 

application of Rule 10A–3 11 under the 

Act, the Trust will rely on the exception 

contained in Rule 10A–3(c)(7).12 A 

minimum of 100,000 Shares of the Fund 

will be outstanding at the 

commencement of trading on the 

Exchange. 

Surveillance 

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 (‘‘FINRA’’) on 

behalf of the Exchange, which are 

designed to detect violations of 

Exchange rules and applicable federal 

securities laws.13 The Exchange 

represents that these procedures are 

adequate to properly monitor Exchange 

trading of the Shares in all trading 

sessions and to deter and detect 

violations of Exchange rules and federal 

securities laws applicable to trading on 

the Exchange. 

The surveillances referred to above 

generally focus on detecting securities 

trading outside their normal patterns, 

which could be indicative of 

manipulative or other violative activity. 

When such situations are detected, 

surveillance analysis follows and 

investigations are opened, where 

appropriate, to review the behavior of 

all relevant parties for all relevant 

trading violations. 

The Exchange or FINRA, on behalf of 

the Exchange, or both, will 

communicate as needed regarding 

trading in the Shares, the Benchmark 

Component Futures Contracts and 

certain other futures, and options on 

futures 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, the Benchmark Component 

Futures Contracts and certain other 

futures, and options on futures from 

such markets and other entities. In 

addition, the Exchange may obtain 

information regarding trading in the 

Shares, the Benchmark Component 

Futures Contracts and certain other 

futures, and options on futures from 

markets and other entities that are 

members of ISG or with which the 

Exchange has in place a CSSA. The 

Exchange is also able to obtain 

information regarding trading in the 

Shares, the physical commodities 

underlying the futures contracts through 

ETP Holders, in connection with such 

ETP Holders’ proprietary or customer 

trades which they effect through ETP 

Holders on any relevant market. The 

Exchange can obtain market 

surveillance information, including 

customer identity information, with 

respect to transactions (including 

transactions in futures contracts) 

occurring on US futures exchanges, 

which are members of the ISG. 

Not more than 10% of the net assets 

of the Fund in the aggregate invested in 

exchange-traded futures contracts or 

exchange-traded options on futures 

shall consist of futures contracts or 

options on futures whose principal 

market is not a member of the ISG or is 

a market with which the Exchange does 

not have a CSSA. 

In addition, the Exchange also has a 

general policy prohibiting the 

distribution of material, non-public 

information by its employees. 

All statements and representations 

made in this filing regarding (a) the 

description of the portfolios of the 

Funds or Benchmark, (b) limitations on 

portfolio holdings or the Benchmark, or 

(c) the applicability of Exchange listing 

rules specified in this rule filing shall 

constitute continued listing 

requirements for listing the Shares on 

the Exchange. 

The issuer has represented to the 

Exchange that it will advise the 

Exchange of any failure by the Fund to 

comply with the continued listing 

requirements, and, pursuant to its 

obligations under Section 19(g)(1) of the 

Act, the Exchange will monitor for 

compliance with the continued listing 

requirements. If the Fund is not in 

compliance with the applicable listing 

requirements, the Exchange will 

commence delisting procedures under 

NYSE Arca Rule 5.5–E(m). 

2. Statutory Basis 

The basis under the Act for this 

proposed rule change is the requirement 

under Section 6(b)(5) 14 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. 

The Exchange believes that the 

proposed rule change is designed to 

prevent fraudulent and manipulative 

acts and practices and to protect 

investors and the public interest in that 

the Shares will be listed and traded on 

the Exchange pursuant to the initial and 

continued listing criteria in NYSE Arca 

Rule 8.200–E. The Exchange has in 

place surveillance procedures that are 

adequate to properly monitor trading in 

the Shares in all trading sessions and to 

deter and detect violations of Exchange 

rules and applicable federal securities 

laws. The Exchange or FINRA, on behalf 

of the Exchange, or both, will 

communicate as needed regarding 

trading in the Shares, Benchmark 

Component Futures Contracts and 

certain other futures, and options on 

futures 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, Benchmark Component Futures 

Contracts and certain other futures, and 

options on futures from such markets 

and other entities. In addition, the 

Exchange may obtain information 

regarding trading in the Shares, 

Benchmark Components Futures 

Contracts and certain other futures, and 

options on futures from markets and 

other entities that are members of ISG or 

with which the Exchange has in place 

a CSSA. The Exchange is also able to 

obtain information regarding trading in 

the Shares, the physical commodities 

underlying futures contracts through 

ETP Holders, in connection with such 

ETP Holders’ proprietary or customer 

trades which they effect through ETP 

Holders on any relevant market. The 

Exchange can obtain market 

surveillance information, including 

customer identity information, with 

respect to transactions (including 

transactions in Benchmark Component 

Futures Contracts) occurring on US 

futures exchanges, which are members 

of the ISG. Not more than 10% of the 

net assets of the Fund in the aggregate 

invested in exchange-traded futures 

contracts or exchange-traded options on 

futures shall consist of futures contracts 

or options on futures whose principal 

market is not a member of the ISG or is 

a market with which the Exchange does 

not have a CSSA. The intraday, closing 

prices, and settlement prices of the 

Benchmark Component Futures 

Contracts will be readily available from 

the applicable futures exchange 

websites, automated quotation systems, 

published or other public sources, or 


jbell on DSKJLSW7X2PROD with NOTICES
Federal Register / Vol. 85, No. 240 / Monday, December 14, 2020 / Notices 80859 

15 17 CFR 200.30–3(a)(12). 

major market data vendors website or 

online information services. 

Complete real-time data for the 

Benchmark Component Futures 

Contracts will be available by 

subscription from on-line information 

services. ICE Futures U.S. and CME also 

provide delayed futures information on 

current and past trading sessions and 

market news free of charge on the 

Fund’s website. The specific contract 

specifications for Benchmark 

Component Futures Contracts will also 

be available on such websites, as well as 

other financial informational sources. 

Information regarding options will be 

available from the applicable exchanges 

or major market data vendors. Quotation 

and last-sale information regarding the 

Shares will be disseminated through the 

facilities of the CTA. The IFV will be 

disseminated on a per Share basis every 

15 seconds during the Exchange’s Core 

Trading Session and be widely 

disseminated by one or more major 

market data vendors during the NYSE 

Arca Core Trading Session. The Fund’s 

website will also include a form of the 

prospectus for the Fund that may be 

downloaded. The website will include 

the Share’s ticker and CUSIP 

information along with additional 

quantitative information updated on a 

daily basis, including, for the Fund: (1) 

The prior business day’s reported NAV 

and closing price and a calculation of 

the premium and discount of the closing 

price or mid-point of the Bid/Ask Price 

against the NAV; and (2) data in chart 

format displaying the frequency 

distribution of discounts and premiums 

of the daily closing price or Bid/Ask 

Price against the NAV, within 

appropriate ranges, for at least each of 

the four previous calendar quarters. The 

website disclosure of portfolio holdings 

will be made daily and will include, as 

applicable, (i) the name, quantity, price, 

and market value of Benchmark 

Component Futures Contracts, (ii) the 

counterparty to and value of swap 

agreements and forward contracts, and 

(iii) other financial instruments, if any, 

and the characteristics of such 

instruments and cash equivalents, and 

amount of cash held in the Fund’s 

portfolio, if applicable. 

Trading in Shares of the Fund will be 

halted if the circuit breaker parameters 

in NYSE Arca Rule 7.12–E have been 

reached or because of market conditions 

or for reasons that, in the view of the 

Exchange, make trading in the Shares 

inadvisable. 

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 listing and trading 

of Trust Issued Receipts based on water 

that will enhance competition among 

market participants, to the benefit of 

investors and the marketplace. As noted 

above, the Exchange has in place 

surveillance procedures that are 

adequate to properly monitor trading in 

the Shares in all trading sessions and to 

deter and detect violations of Exchange 

rules and applicable federal securities 

laws. 

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 purpose of the Act. The Exchange 

notes that the proposed rule change will 

facilitate the listing and trading of Trust 

Issued Receipts based on water and that 

will enhance competition among market 

participants, to the benefit of investors 

and the marketplace. 

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 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or up to 90 days (i) as the 

Commission may designate if it finds 

such longer period to be appropriate 

and publishes its reasons for so finding 

or (ii) as to which the self-regulatory 

organization consents, the Commission 

will: 

(A) By order approve or disapprove 

the proposed rule change, or 

(B) institute proceedings to determine 

whether the proposed rule change 

should be 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 (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

NYSEArca–2020–105 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–NYSEArca2020–105. 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 (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549 on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of the 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–NYSEArca–2020–105, and 

should be submitted on or before 

January 4, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.15

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2020–27398 Filed 12–11–20; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Sunshine Act Meetings 

TIME AND DATE: 2:00 p.m. on Wednesday, 

December 16, 2020. 

PLACE: The meeting will be held via 

remote means and/or at the 

Commission’s headquarters, 100 F 

Street NE, Washington, DC 20549. 


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