[Federal Register Volume 88, Number 169 (Friday, September 1, 2023)]
[Notices]
[Pages 60516-60521]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-18896]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-98231; File No. SR-CboeBZX-2023-062]


Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of 
Filing of a Proposed Rule Change To Amend the Initial Period After 
Commencement of Trading of a Series of ETF Shares on the Exchange as It 
Relates to the Holders of Record and/or Beneficial Holders, as Provided 
in Exchange Rule 14.11(l)

August 28, 2023.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on August 14, 2023, Cboe BZX Exchange, Inc. (the ``Exchange'' or 
``BZX'') 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 Exchange. The 
Commission is publishing this notice to

[[Page 60517]]

solicit comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 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

    Cboe BZX Exchange, Inc. (the ``Exchange'' or ``Cboe'') is filing 
with the Securities and Exchange Commission (``Commission'') a proposed 
rule change to Exchange Rule 14.11(l), Exchange-Traded Fund Shares 
(``ETF Shares''), to amend the initial period after commencement of 
trading of a series of ETF Shares on the Exchange as it specifically 
relates to holders of record and/or beneficial holders. The text of the 
proposed rule change is provided in Exhibit 5.
    The text of the proposed rule change is also available on the 
Exchange's website (http://markets.cboe.com/us/equities/regulation/rule_filings/bzx/), at the Exchange's Office of the Secretary, 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 Exchange 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 these 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 aspects of such 
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to change to Rule 14.11(l)(4)(B)(i)(c) (the 
``Beneficial Holders Rule'') in order to amend the continued listing 
standard applicable to ETF Shares \3\ listed on the Exchange. 
Specifically, the Exchange is proposing to amend the Beneficial Holders 
Rule such that it would provide additional time for a series of ETF 
Shares to meet the Beneficial Holders \4\ standards.<SUP>5 6</SUP>
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    \3\ The term ``ETF Shares'' means shares of stock issued by an 
Exchange-Traded Fund. See Exchange Rule 14.11(l)(3)(A). The term 
``Exchange-Traded Fund'' has the same meaning as the term 
``exchange-traded fund'' as defined in Rule 6c-11 under the 
Investment Act of 1940. See Exchange Rule 14.11(l)(3)(B).
    \4\ As it relates to this filing, ``Beneficial Holders'' shall 
mean beneficial holders and, where applicable in a particular 
continued listing standard, record holders.
    \5\ The Exchange notes that its Rules related to the listing and 
trading of other product types (that is, products that are not ETF 
Shares as defined above) have similar requirements related to 
Beneficial Holders which the Exchange is not proposing to change at 
this time. Specifically, the Exchange is only proposing to amend the 
Beneficial Holders Rules as it pertains to ETF Shares because such 
product type represents the vast majority of products listed on the 
Exchange. The Exchange may consider proposing to amend the 
Beneficial Holders standards for other product types in a future 
proposal.
    \6\ The Exchange notes that a different proposal to modify the 
Beneficial Holders Rules was disapproved by the Commission on 
December 29, 2020. See Securities Exchange Act No. 90819 (December 
29, 2020) 86 FR 332 (January 5, 2021) (SR-CboeBZX-2020-036) (the 
``Prior Disapproval'').
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    Currently, the Exchange's continued listing standard for ETF Shares 
under the Beneficial Holders Rule requires that, following the initial 
12-month period after commencement of trading on the Exchange, the 
Exchange shall consider the suspension of trading in and will commence 
delisting proceedings under Rule 14.12 for a series of ETF Shares for 
which there are fewer than 50 Beneficial Holders for 30 or more 
consecutive trading days. The Exchange is proposing to change the date 
at which a series of ETF Shares would need to have at least 50 
Beneficial Holders or be subject to delisting proceedings under Rule 
14.12 from 12 months after commencement of trading on the Exchange to 
36 months after commencement of trading on the Exchange.
    As further described below, the Exchange believes it is appropriate 
to increase the period of time for a series of ETF Shares to comply 
with the Beneficial Holders Rule from 12 months to 36 months because: 
(i) it would bring the rule more in line with the life cycle of an ETP; 
(ii) the economic and competitive structures in place in the ETP 
ecosystem naturally incentivize issuers to de-list products rather than 
continuing to list products that do not garner investor interest; and 
(iii) extending the period from 12 to 36 months will not meaningfully 
impact the manipulation concerns that the Beneficial Holders Rule is 
intended to address.
    First, the Exchange-Traded Product (``ETP'') \7\ space generally is 
more competitive than it has ever been--with more than 2,000 ETPs 
listed on U.S. national securities exchanges competing for investor 
assets, the natural cycle for an average ETP to gain traction in the 
market is growing longer and longer. As more and more ETPs have come to 
market, many distribution platforms have become more restrictive about 
the ETPs that they allow on their systems, often requiring a minimum 
existing track record (e.g., at least 12 months) and meeting certain 
thresholds for assets under management (e.g., at least $100 million) 
for an ETP to be added. Similarly, many larger entities are unwilling 
to invest in ETPs that do not have at least one calendar year track 
record. All of these factors have contributed to the natural slowing of 
the average ETP's growth cycle and, unsurprisingly, the Exchange has 
seen a significant number of deficiencies based on a failure to meet 
the Beneficial Holders standards over the last several years.
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    \7\ The Exchange notes that ETF Shares is a type of ETP.
---------------------------------------------------------------------------

    The Exchange has issued deficiency notifications to 39 ETPs for 
non-compliance with the Beneficial Holders standards since 2015. Of 
those 39 ETPs, 30 attained compliance with the Beneficial Holder 
standards after the deficiency notice was issued. This means that more 
than three quarters of these ETPs had to go through the process of 
requesting and justifying an extension,\8\ dealing with shareholder 
uncertainty, waste of internal resources, potentially engage outside 
counsel, etc. all to end up remaining listed on the Exchange. This 
false positive rate is unnecessarily high and makes clear that a 12-
month threshold is an inappropriately short time frame for the 
Beneficial Holder standards. It only served as regulatory and 
administrative burdens for impacted issuers, which makes it more 
difficult for smaller issuers to compete because they have limited 
resources to overcome legal, marketing, or other obstacles that arise 
from the Beneficial Holders standards.
---------------------------------------------------------------------------

    \8\ Exchange Rule 14.12(f)(2) provides that the Listings 
Qualifications Department may accept and review a plan to regain 
compliance when a Company is deficient with respect to certain 
listing standards, including a failure to meet a continued listing 
requirement contained in Rule 14.11. Generally, Exchange staff may 
grant up to 180 calendar days from the date of the staff's initial 
deficiency notification.
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    Changing the timeline for meeting the Beneficial Holders Rule from 
12 months to 36 months would provide ETF Shares with a more reasonable 
runway to establish a track record and grow assets under management, 
both of which generally precede the accumulation of Beneficial Holders. 
Further, the Exchange believes that extending that runway will 
encourage smaller issuers to make the necessary capital expenditures to 
launch additional ETF

[[Page 60518]]

Shares, as well as help both large and small issuers by allowing them 
to continue to list and promote products that they believe can succeed 
and that they are willing to continue paying for, all of which will 
help to foster competition and innovation in the ETP marketplace.
    Second, the economic and competitive structures in place in the ETP 
ecosystem naturally incentivize issuers to de-list products rather than 
continuing to list products that do not garner investor interest, 
meaning that the rule does not provide any meaningful ``pruning'' 
function for the industry.\9\ Rather, the Exchange has found that, as 
currently constructed, the 12 month Beneficial Holders standards have 
instead resulted in the forced termination of ETPs that issuers 
believed were still economically viable. While some observers might 
argue that forced delisting of an ETP based on a failure to meet the 
Beneficial Holders standards is a good way to reduce the number of ETPs 
in the marketplace that have not drawn meaningful market interest, the 
Exchange disagrees with this sentiment. First, there are significant 
costs associated with both the initial launch and continued operation 
of an ETP and the Exchange has found that the ecosystem tends to prune 
itself of ETPs without meaningful investor interest. In fact, the 
Exchange has had 148 products that have voluntarily delisted since 
2018,\10\ creating meaningful turnover in products which issuers 
believe are not economically viable. Second, the Exchange contests the 
underlying assumption that the number of Beneficial Holders is even a 
meaningful measure of market interest in an ETP. While a very high 
Beneficial Holder count would most certainly indicate an ETP's success, 
the absence of Beneficial Holders is not necessarily a good measure of 
market interest or the amount of assets held by the ETP.
---------------------------------------------------------------------------

    \9\ Approximately 43 ETPs have voluntarily delisted within their 
first year listed on the Exchange since 2015. The Exchange notes 
that a subset of this group might also include those who didn't want 
to spend the extra funds to get an extension to the requirement.
    \10\ There are currently 613 ETPs listed on the Exchange and 777 
have been listed on the Exchange for at least some period since 
2018, meaning that there's been a nearly 19% voluntary turnover of 
ETPs listed on the Exchange since 2018.
---------------------------------------------------------------------------

    Further to this point, the Beneficial Holders standards are not 
rules that an ETP issuer is incentivized to cut close or exceed by the 
smallest amount possible. Unlike many other quantitative or disclosure 
based listing requirements, an ETP issuer is incentivized to have as 
many Beneficial Holders as possible and would almost certainly prefer 
that they were able to meet and exceed the applicable Beneficial 
Holders standard as soon as possible after beginning trading on the 
Exchange. As such, extending the time period from 12 months to 36 
months will not provide issuers of ETF Shares with a longer window to 
intentionally keep the number of Beneficial Holders lower, but, rather, 
will only extend the period during which a series of ETF Shares could 
have fewer than 50 Beneficial Holders in specific instances where an 
issuer is unable to meet the 50 Beneficial Holders threshold but still 
believes that the series of ETF Shares is viable and worth the cost of 
continued operation. Again, it takes money and resources to launch and 
operate an ETP and where an issuer does not believe that an ETP is 
economically viable, both common sense and prior experience point to 
issuers delisting these products.
    Finally, the Exchange believes that making this change does not 
create any significant change in the risk of manipulation for ETF 
Shares listed on the Exchange for several reasons. First, a time 
extension to meet the requirement would present no new issues because 
the Exchange already has no Beneficial Holder requirement for the first 
12 months of trading ETF Shares on the Exchange. Any risk that is 
present during months 12 through 36 of initial listing would also be 
present during the first 12 months as provided under current rules. The 
Exchange believes that the Beneficial Holders standards are generally 
intended to ensure that products that do not have broad ownership and 
could be susceptible to manipulation by a few parties are not able to 
list on the Exchange after they've had sufficient time to diversify 
their ownership base. Leaving aside the issue of whether an open-ended 
ETP with creation and redemption processes would really be subject to 
manipulation by virtue of narrow ownership, the Exchange believes that, 
for all of the reasons explained above, 36 months is a more appropriate 
amount of time to consider sufficient time to diversify a series of ETF 
Shares ownership base.
    Further to this point, the Exchange has in place a robust 
surveillance program for ETPs that allows it to monitor trading of 
ETPs, including ETF Shares, during all trading sessions on the Exchange 
and it believes are sufficient to deter and detect violations of 
Exchange rules and the applicable federal securities laws. These 
surveillances generally focus on detecting securities trading outside 
of 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. Further, the Exchange or the Financial 
Industry Regulatory Authority (``FINRA''),\11\ on behalf of the 
Exchange, or both, communicate as needed regarding trading in ETPs with 
other markets and other entities that are members of the Intermarket 
Surveillance Group (``ISG''). The Exchange believes these robust 
surveillance procedures have successfully mitigated manipulation 
concerns during an ETPs first 12 months of listing on the Exchange, 
during which there is currently no Beneficial Holder requirement, and 
further believes that these surveillance procedures will act to 
mitigate any manipulation concerns that arise from extending the 
compliance period for the Beneficial Holders Rules from 12 months to 36 
months.
---------------------------------------------------------------------------

    \11\ FINRA 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.
---------------------------------------------------------------------------

    The Exchange also believes that the other continued listing 
standards in the Exchange's rules or representations that constitute 
continued listing standards in Exchange rule filings (the disclosure 
obligations applicable under Rule 6c-11 of the Investment Company Act 
of 1940 for series of ETF Shares) are generally sufficient to mitigate 
manipulation concerns associated with ETF Shares. During the first 12 
months of trading on the Exchange when the Beneficial Holders standards 
do not apply, these disclosure obligations, in conjunction with the 
Exchange's surveillance program (as discussed above), are generally 
deemed sufficient to prevent any manipulation concerns in Exchange-
listed ETPs. As such, the Exchange believes that extending the period 
from 12 months to 36 months does not significantly increase any risk of 
manipulation that wasn't already generally deemed acceptable for the 
first 12 months that an ETP was listed. Again, the Exchange is not 
proposing to eliminate the Beneficial Holders Rule, but merely to 
extend the period for a series of ETF Shares to meet the 50 Beneficial 
Holder requirement.
2. Statutory Basis
    The Exchange believes that the proposal is consistent with section 
6(b) of the Act \12\ in general and section 6(b)(5) of the Act \13\ in 
particular in that it is designed to promote just and

[[Page 60519]]

equitable principles of trade, to remove impediments to and perfect the 
mechanism of a free and open market and a national market system and, 
in general, to protect investors and the public interest.
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78f.
    \13\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The proposed rule changes are designed 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 because it would prevent the 
premature delisting of ETF Shares that have not had sufficient time to 
build up to 50 Beneficial Holders without significantly impacting the 
manipulation concerns that the Beneficial Holders Rule is intended to 
address.
    The Exchange believes it is appropriate to increase the period of 
time for a series of ETF Shares to comply with the applicable 
Beneficial Holders Rule from 12 months to 36 months because: (i) it 
would bring the rule more in line with the life cycle of an ETP; (ii) 
the economic and competitive structures in place in the ETP ecosystem 
naturally incentivize issuers to de-list products rather than 
continuing to list products that do not garner investor interest; and 
(iii) extending the period from 12 to 36 months will not meaningfully 
impact the manipulation concerns that the Beneficial Holders Rule is 
intended to address.
    First, the ETP space is more competitive than it has ever been--
with more than 2,000 ETPs listed on U.S. national securities exchanges 
competing for investor assets, the natural cycle for an average ETP to 
gain traction in the market is growing longer and longer. As more and 
more ETPs have come to market, many distribution platforms have become 
more restrictive about the ETPs that they allow on their systems, often 
requiring a minimum existing track record (e.g., at least 12 months) 
and meeting certain thresholds for assets under management (e.g., at 
least $100 million) for an ETP to be added. Similarly, many larger 
entities are unwilling to invest in ETPs that do not have at least one 
calendar year track record. All of these factors have contributed to 
the natural slowing of the average ETP's growth cycle and, 
unsurprisingly, the Exchange has seen a significant number of 
deficiencies based on a failure to meet the applicable Beneficial 
Holders standards over the last several years.
    The Exchange has issued deficiency notifications to 39 ETPs for 
non-compliance with the Beneficial Holders standards since 2015. Of 
those 39 ETPs, 30 attained compliance with the Beneficial Holder 
standards after the deficiency notice was issued. This means that more 
than three quarters of these ETPs had to go through the process of 
requesting and justifying an extension,\14\ dealing with shareholder 
uncertainty, waste of internal resources, potentially engage outside 
counsel, etc. all to end up remaining listed on the Exchange. This 
false positive rate is unnecessarily high and makes clear that a 12-
month threshold is an inappropriately short time frame for the 
Beneficial Holder standards. It only served as regulatory and 
administrative burdens for impacted issuers, which makes it more 
difficult for smaller issuers to compete because they have limited 
resources to overcome legal, marketing, or other obstacles that arise 
from the Beneficial Holders requirement.
---------------------------------------------------------------------------

    \14\ Exchange Rule 14.12(f)(2) provides that the Listings 
Qualifications Department may accept and review a plan to regain 
compliance when a Company is deficient with respect to certain 
listing standards, including a failure to meet a continued listing 
requirement contained in Rule 14.11. Generally, Exchange staff may 
grant up to 180 calendar days from the date of the staff's initial 
deficiency notification.
---------------------------------------------------------------------------

    Changing the timeline for meeting the Beneficial Holders Rules from 
12 months to 36 months would provide ETF Shares with a more reasonable 
runway to establish a track record and grow assets under management, 
both of which generally precede the accumulation of Beneficial Holders. 
Further, the Exchange believes that extending that runway will 
encourage smaller issuers to make the necessary capital expenditures to 
launch additional ETF Shares, as well as help both large and small 
issuers by allowing them to continue to list and promote products that 
they believe can succeed and that they are willing to continue paying 
for, all of which will help to foster competition and innovation in the 
ETP marketplace.
    Second, the economic and competitive structures in place in the ETP 
ecosystem naturally incentivize issuers to de-list products rather than 
continuing to list products that do not garner investor interest, 
meaning that the rule does not provide any meaningful ``pruning'' 
function for the industry.\15\ Rather, the Exchange has found that, as 
currently constructed, the 12 month Beneficial Holders Rule has instead 
resulted in the forced termination of ETPs that issuers believed were 
still economically viable. While some observers might argue that forced 
delisting of an ETP based on a failure to meet the Beneficial Holders 
Rule is a good way to reduce the number of ETPs in the marketplace that 
have not drawn meaningful market interest, the Exchange disagrees with 
this sentiment. First, there are significant costs associated with both 
the initial launch and continued operation of an ETP and the Exchange 
has found that the ecosystem tends to prune itself of ETPs without 
meaningful investor interest. In fact, the Exchange has had 148 
products that have voluntarily delisted since 2018,\16\ creating 
meaningful turnover in products which issuers believe are not 
economically viable. Second, the Exchange contests the underlying 
assumption that the number of Beneficial Holders is even a meaningful 
measure of market interest in an ETP. While a very high Beneficial 
Holder count would most certainly indicate an ETP's success, the 
absence of Beneficial Holders is not necessarily a good measure of 
market interest or the amount of assets held by the ETP.
---------------------------------------------------------------------------

    \15\ Approximately 43 ETPs have voluntarily delisted within 
their first year listed on the Exchange since 2015. The Exchange 
notes that a subset of this group might also include those who 
didn't want to spend the extra funds to get an extension to the 
requirement.
    \16\ There are currently 613 ETPs listed on the Exchange and 777 
have been listed on the Exchange for at least some period since 
2018, meaning that there's been a nearly 19% voluntary turnover of 
ETPs listed on the Exchange since 2018.
---------------------------------------------------------------------------

    Further to this point, the Beneficial Holders Rule is not a rule 
that an ETP issuer is incentivized to cut close or exceed by the 
smallest amount possible. Unlike many other quantitative or disclosure 
based listing requirements, an ETP issuer is incentivized to have as 
many Beneficial Holders as possible and would almost certainly prefer 
that they were able to meet and exceed the Beneficial Holders Rule as 
soon as possible after beginning trading on the Exchange. As such, 
extending the time period from 12 months to 36 months will not provide 
issuers with a longer window to intentionally keep the number of 
Beneficial Holders lower, but, rather, will only extend the period 
during which a series of ETF Shares could have fewer than 50 Beneficial 
Holders in specific instances where an issuer is unable to meet the 50 
Beneficial Holders threshold but still believes that the ETP is viable 
and worth the cost of continued operation. Again, it takes money and 
resources to launch and operate an ETP and where an issuer does not 
believe that an ETP is economically viable, both common sense and prior 
experience point to issuers delisting these products.
    Finally, the Exchange believes that making this change does not 
create any

[[Page 60520]]

significant change in the risk of manipulation for ETF Shares listed on 
the Exchange for several reasons. First, a time extension to meet the 
requirement would present no new issues because the Exchange already 
has no Beneficial Holder requirement for the first 12 months of trading 
ETF Shares on the Exchange. Any risk that is present during months 12 
through 36 of initial listing would also be present during the first 12 
months as provided under current rules. The Exchange believes that the 
rule is generally intended to ensure that products that do not have 
broad ownership and could be susceptible to manipulation by a few 
parties are not able to list on the Exchange after they've had 
sufficient time to diversify their ownership base. Leaving aside the 
issue of whether an open-ended ETP with creation and redemption 
processes would really be subject to manipulation by virtue of narrow 
ownership, the Exchange believes that, for all of the reasons explained 
above, 36 months is a more appropriate amount of time to consider 
sufficient time to diversify an ETP's ownership base.
    Further to this point, the Exchange has in place a robust 
surveillance program for ETPs that allows it to monitor trading of ETPs 
during all trading sessions on the Exchange and it believes are 
sufficient to deter and detect violations of Exchange rules and the 
applicable federal securities laws. These surveillances generally focus 
on detecting securities trading outside of 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. Further, the 
Exchange or the FINRA,\17\ on behalf of the Exchange, or both, 
communicate as needed regarding trading in ETPs with other markets and 
other entities that are members of the ISG. The Exchange believes these 
robust surveillance procedures have successfully mitigated manipulation 
concerns during an ETPs first 12 months of listing on the Exchange, 
during which there is currently no Beneficial Holder requirement, and 
further believes that these surveillance procedures will act to 
mitigate any manipulation concerns that arise from extending the 
compliance period for the Beneficial Holders Rule from 12 months to 36 
months.
---------------------------------------------------------------------------

    \17\ FINRA 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.
---------------------------------------------------------------------------

    The Exchange also believes that the other continued listing 
standards in the Exchange's rules or representations that constitute 
continued listing standards in Exchange rule filings (the disclosure 
obligations applicable under Rule 6c-11 of the Investment Company Act 
of 1940 for series of ETF Shares) are generally sufficient to mitigate 
manipulation concerns associated with the ETF Shares. During the first 
12 months of trading on the Exchange when the Beneficial Holders Rule 
does not apply, these disclosure obligations, in conjunction with the 
Exchange's surveillance program (as discussed above), are generally 
deemed sufficient to prevent any manipulation concerns in Exchange-
listed ETF Shares. As such, the Exchange believes that extending the 
period from 12 months to 36 months will not significantly increase any 
risk of manipulation that wasn't already generally deemed acceptable 
for the first 12 months that a series of ETF Shares was listed. Again, 
the Exchange is not proposing to eliminate the Beneficial Holders Rule, 
but merely to extend the period for a series ETF Shares to meet the 50 
Beneficial Holder requirement.
    The proposed rule change is also designed to protect investors and 
the public interest because the Exchange is only proposing to amend the 
continued listing requirement related to Beneficial Holders and all 
ETPs listed on the Exchange would continue to be subject to the full 
panoply of Exchange rules and procedures that currently govern the 
trading of equity securities on the Exchange.
    For the above reasons, the Exchange believes that the proposed rule 
change is consistent with the requirements of section 6(b)(5) of the 
Act.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. Instead, the Exchange 
believes that the proposed rule change would help to encourage smaller 
issuers to make the necessary capital expenditures to launch additional 
ETF Shares, as well as help both large and small issuers by allowing 
them to continue to list and promote products that they believe can 
succeed and that they are willing to continue paying for, which 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

    The Exchange neither solicited nor received comments on 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 within such longer period 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 Exchange consents, the Commission will:
    A. by order approve or disapprove such 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

    <bullet> Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
    <bullet> Send an email to <a href="/cdn-cgi/l/email-protection#fc8e899099d19f9391919992888fbc8f999fd29b938a"><span class="__cf_email__" data-cfemail="5e2c2b323b733d3133333b302a2d1e2d3b3d70393128">[email protected]</span></a>. Please include 
file number SR-CboeBZX-2023-062 on the subject line.

Paper Comments

    <bullet> Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to file number SR-CboeBZX-2023-062. This 
file number should be included on the subject line if email is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's internet website (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the

[[Page 60521]]

provisions of 5 U.S.C. 552, will be available for website viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE, 
Washington, DC 20549, on official business days between the hours of 10 
a.m. and 3 p.m. Copies of the filing also will be available for 
inspection and copying at the principal office of the Exchange. Do not 
include personal identifiable information in submissions; you should 
submit only information that you wish to make available publicly. We 
may redact in part or withhold entirely from publication submitted 
material that is obscene or subject to copyright protection. All 
submissions should refer to file number SR-CboeBZX-2023-062 and should 
be submitted on or before September 22, 2023.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\18\
---------------------------------------------------------------------------

    \18\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-18896 Filed 8-31-23; 8:45 am]
BILLING CODE 8011-01-P


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