68768 Federal Register / Vol. 88, No. 191 / Wednesday, October 4, 2023 / Notices 

36 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 97905 

(July 13, 2023), 88 FR 46342 (‘‘Notice’’). Comments 

on the proposed rule change are available at: 

https://www.sec.gov/comments/sr-nasdaq-2023- 

016/srnasdaq2023016.htm. 

4 15 U.S.C. 78s(b)(2). 

5See Securities Exchange Act Release No. 98267, 

88 FR 61652 (Sept. 7, 2023). The Commission 

designated October 17, 2023, as the date by which 

the Commission shall approve or disapprove, or 

institute proceedings to determine whether to 

disapprove, the proposed rule change. 

6 15 U.S.C. 78s(b)(2)(B). 

7See Notice, supra note 3. 

8See id. at 46342. iShares Delaware Trust 

Sponsor LLC (‘‘Sponsor’’), a Delaware limited 

liability company and an indirect subsidiary of 

BlackRock, Inc., is the sponsor of the Trust. 

9See id. 

10See id. at 46343. 

11See id. 

12 15 U.S.C. 78s(b)(2)(B). 

13 Id. 

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

All submissions should refer to file 

number SR–MEMX–2023–26. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

internet website (https://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

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

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549, on official 

business days between the hours of 10 

a.m. and 3 p.m. Copies of the filing also 

will be available for inspection and 

copying at the principal office of the 

Exchange. Do not include personal 

identifiable information in submissions; 

you should submit only information 

that you wish to make available 

publicly. We may redact in part or 

withhold entirely from publication 

submitted material that is obscene or 

subject to copyright protection. All 

submissions should refer to file number 

SR–MEMX–2023–26 and should be 

submitted on or before October 25, 

2023. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.36

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–22011 Filed 10–3–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–98610; File No. SR– 

NASDAQ–2023–016] 

Self-Regulatory Organizations; The 

Nasdaq Stock Market LLC; Order 

Instituting Proceedings To Determine 

Whether To Approve or Disapprove a 

Proposed Rule Change To List and 

Trade Shares of the iShares Bitcoin 

Trust Under Nasdaq Rule 5711(d), 

Commodity-Based Trust Shares 

September 28, 2023. 

On June 29, 2023, The Nasdaq Stock 

Market LLC (‘‘Nasdaq’’ or ‘‘Exchange’’) 

filed with the Securities and Exchange 

Commission (‘‘Commission’’), pursuant 

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

Exchange Act of 1934 (‘‘Act’’) 1 and Rule 

19b–4 thereunder,2 a proposed rule 

change to list and trade shares 

(‘‘Shares’’) of the iShares Bitcoin Trust 

(‘‘Trust’’) under Nasdaq Rule 5711(d), 

Commodity-Based Trust Shares. The 

proposed rule change was published for 

comment in the Federal Register on July 

19, 2023.3

On August 31, 2023, pursuant to 

Section 19(b)(2) of the Act,4 the 

Commission designated a longer period 

within which to approve the proposed 

rule change, disapprove the proposed 

rule change, or institute proceedings to 

determine whether to disapprove the 

proposed rule change.5 This order 

institutes proceedings under Section 

19(b)(2)(B) of the Act 6 to determine 

whether to approve or disapprove the 

proposed rule change. 

I. Summary of the Proposal 

As described in more detail in the 

Notice,7 the Exchange proposes to list 

and trade the Shares of the Trust under 

Nasdaq Rule 5711(d), which governs the 

listing and trading of Commodity-Based 

Trust Shares on the Exchange. 

The investment objective of the Trust 

is to reflect generally the performance of 

the price of bitcoin before payment of 

the Trust’s expenses and liabilities.8

The assets of the Trust will consist 

primarily of bitcoin held by a custodian 

on behalf of the Trust.9 On each 

Business Day, as soon as practicable 

after 4:00 p.m. Eastern Time, the 

administrator of the Trust will evaluate 

the bitcoin held by the Trust as reflected 

by the CF Benchmarks Index and 

determine the net asset value of the 

Trust.10 The Trust will issue and 

redeem baskets of Shares on a 

continuous basis only in exchange for 

an amount of bitcoin determined by the 

trustee of the Trust.11

II. Proceedings To Determine Whether 

To Approve or Disapprove SR– 

NASDAQ–2023–016 and Grounds for 

Disapproval Under Consideration 

The Commission is instituting 

proceedings pursuant to Section 

19(b)(2)(B) of the Act 12 to determine 

whether the proposed rule change 

should be approved or disapproved. 

Institution of proceedings is appropriate 

at this time in view of the legal and 

policy issues raised by the proposed 

rule change, as discussed below. 

Institution of proceedings does not 

indicate that the Commission has 

reached any conclusions with respect to 

any of the issues involved. Rather, as 

described below, the Commission seeks 

and encourages interested persons to 

provide comments on the proposed rule 

change. 

Pursuant to Section 19(b)(2)(B) of the 

Act,13 the Commission is providing 

notice of the grounds for disapproval 

under consideration. The Commission is 

instituting proceedings to allow for 

additional analysis of the proposed rule 

change’s consistency with Section 

6(b)(5) of the Act, which requires, 

among other things, that the rules of a 

national securities exchange be 

‘‘designed to prevent fraudulent and 

manipulative acts and practices’’ and 

‘‘to protect investors and the public 

interest.’’ 14

The Commission asks that 

commenters address the sufficiency of 

the Exchange’s statements in support of 

the proposal, which are set forth in the 

Notice, in addition to any other 

comments they may wish to submit 

about the proposed rule change. In 

particular, the Commission seeks 

comment on the following questions 

and asks commenters to submit data 


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Federal Register / Vol. 88, No. 191 / Wednesday, October 4, 2023 / Notices 68769 

15See Notice, 88 FR at 46349–53. 

16See id. at 46352. 

17See id. at 46352–53. 

18See id. at 46353. 

19See id. at 46352 n.23. 

20See id. 

21See id. at 46353. 

22See id. 

23See id. The Exchange states that ‘‘[t]his means 

that the Exchange expects to receive market data for 

orders and trades from Coinbase, which it will 

utilize in surveillance of the trading of CommodityBased Trust Shares.’’ Id. 

24See id. 

25See, e.g. Notice of Filing of Amendment No. 3 

to, and Order Instituting Proceedings to Determine 

Whether to Approve or Disapprove, a Proposed 

Rule Change to List and Trade Shares of the ARK 

21Shares Bitcoin ETF under BZX Rule 14.11(e)(4), 

Commodity-Based Trust Shares, Securities 

Exchange Act Release No. 98112 (Aug. 11, 2023), 

88 FR 55743 (Aug. 16, 2023) (including data from 

sponsor 21Shares US LLC that purports to show 

correlations of returns across the two-year period 

from January 20, 2021, to February 1, 2023, of no 

less than 92% among certain spot bitcoin platforms 

and between the CME bitcoin futures market and 

such spot bitcoin platforms on an hourly basis, and 

no less than 78% on a minutely basis). 

26Section 19(b)(2) of the Act, as amended by the 

Securities Acts Amendments of 1975, Public Law 

94–29 (June 4, 1975), grants the Commission 

flexibility to determine what type of proceeding— 

either oral or notice and opportunity for written 

comments—is appropriate for consideration of a 

particular proposal by a self-regulatory 

organization. See Securities Acts Amendments of 

1975, Senate Comm. on Banking, Housing & Urban 

Affairs, S. Rep. No. 75, 94th Cong., 1st Sess. 30 

(1975). 

where appropriate to support their 

views: 

1. What are commenters’ views on 

whether the proposed Trust and Shares 

would be susceptible to manipulation? 

What are commenters’ views generally 

on whether the Exchange’s proposal is 

designed to prevent fraudulent and 

manipulative acts and practices? What 

are commenters’ views generally with 

respect to the liquidity and transparency 

of the bitcoin markets and the bitcoin 

markets’ susceptibility to manipulation? 

2. Based on data and analysis 

provided by the Exchange,15 do 

commenters agree with the Exchange 

that the Chicago Mercantile Exchange 

(‘‘CME’’), on which CME bitcoin futures 

trade, represents a regulated market of 

significant size related to spot bitcoin? 16

What are commenters’ views on 

whether there is a reasonable likelihood 

that a person attempting to manipulate 

the Shares would also have to trade on 

the CME to manipulate the Shares? 17 Do 

commenters agree with the Exchange 

that trading in the Shares would not be 

the predominant influence on prices in 

the CME bitcoin futures market? 18

3. The Exchange states that bitcoin is 

resistant to price manipulation and that 

other means to prevent fraudulent and 

manipulative acts and practices ‘‘exist 

to justify dispensing with the requisite 

surveillance sharing agreement’’ with a 

regulated market of significant size 

related to spot bitcoin.19 In support, the 

Exchange states, among other things, 

that the geographically diverse and 

continuous nature of bitcoin trading 

make it difficult and prohibitively costly 

to manipulate the price of bitcoin, and 

that the fragmentation across bitcoin 

platforms, the relatively slow speed of 

transactions, and the capital necessary 

to maintain a significant presence on 

each trading platform make 

manipulation of bitcoin prices through 

continuous trading activity 

challenging.20 The Exchange also states 

that offering only in-kind creations and 

redemptions provides ‘‘unique 

protections against potential attempts to 

manipulate the Shares’’ and that the 

price the Sponsor uses to value the 

Trust’s bitcoin ‘‘is not particularly 

important.’’ 21 Do commenters agree 

with the Exchange’s statements 

regarding the bitcoin market’s resistance 

to price manipulation? 

4. The Exchange also states that it will 

execute a surveillance-sharing 

agreement with Coinbase, Inc. 

(‘‘Coinbase’’) that is intended to 

supplement the Exchange’s market 

surveillance program.22 According to 

the Exchange, the agreement is 

‘‘expected to have the hallmarks of a 

surveillance-sharing agreement between 

two members of the [Intermarket 

Surveillance Group], which would give 

the Exchange supplemental access to 

data regarding spot [b]itcoin trades on 

Coinbase where the Exchange 

determines it is necessary as part of its 

surveillance program for the 

Commodity-Based Trust Shares.’’ 23

Based on the description of the 

surveillance-sharing agreement as 

provided by the Exchange, what are 

commenters’ views of such an 

agreement if finalized and executed? Do 

commenters agree with the Exchange 

that such an agreement with Coinbase 

would be ‘‘helpful in detecting, 

investigating, and deterring fraud and 

manipulation in the Commodity-Based 

Trust Shares’’? 24

5. Some sponsors of proposed spot 

bitcoin exchange-traded products have 

also provided data regarding the 

correlation between certain bitcoin spot 

markets and the CME bitcoin futures 

market.25 What are commenters’ views 

on the correlation between the bitcoin 

spot market and the CME bitcoin futures 

market? What are commenters’ views on 

the extent to which that correlation 

provides evidence that the CME bitcoin 

futures market is ‘‘significant’’ related to 

spot bitcoin? 

III. Procedure: Request for Written 

Comments 

The Commission requests that 

interested persons provide written 

submissions of their views, data, and 

arguments with respect to the issues 

identified above, as well as any other 

concerns they may have with the 

proposal. In particular, the Commission 

invites the written views of interested 

persons concerning whether the 

proposal is consistent with Section 

6(b)(5) or any other provision of the Act, 

and the rules and regulations 

thereunder. Although there do not 

appear to be any issues relevant to 

approval or disapproval that would be 

facilitated by an oral presentation of 

views, data, and arguments, the 

Commission will consider, pursuant to 

Rule 19b–4, any request for an 

opportunity to make an oral 

presentation.26

Interested persons are invited to 

submit written data, views, and 

arguments regarding whether the 

proposed rule change should be 

approved or disapproved by October 25, 

2023. Any person who wishes to file a 

rebuttal to any other person’s 

submission must file that rebuttal by 

November 8, 2023. 

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 rule-comments@

sec.gov. Please include file number SR– 

NASDAQ–2023–016 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–NASDAQ–2023–016. 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 


lotter on DSK11XQN23PROD with NOTICES1
68770 Federal Register / Vol. 88, No. 191 / Wednesday, October 4, 2023 / Notices 

27 17 CFR 200.30–3(a)(57). 

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

2 17 CFR 240.19b–4. 

3 15 U.S.C. 78s(b)(3)(A). A proposed rule change 

may take effect upon filing with the Commission if 

it is designated by the exchange as ‘‘establishing or 

changing a due, fee, or other charge imposed by the 

self-regulatory organization on any person, whether 

or not the person is a member of the self-regulatory 

organization.’’ 15 U.S.C. 78s(b)(3)(A)(ii). 

4See Securities Exchange Act Release No. 98180 

(August 21, 2023), 88 FR 58404 (SR–PEARL–2023– 

35) (‘‘Notice’’). Comment on the proposed rule 

change can be found at: https://www.sec.gov/ 

comments/sr-pearl-2023-35/srpearl202335.htm. 

5 15 U.S.C. 78s(b)(3)(C). 

6The term ‘‘Member’’ means an individual or 

organization approved to exercise the trading rights 

associated with a Trading Permit. Members are 

deemed ‘‘members’’ under the Exchange Act. See 

Exchange Rule 100. 

7See Notice, supra note 4, at 58408. 

8On January 23, 2023, the Exchange bifurcated 

the Exchange and MIAX’s 10Gb ULL network and 

stated that this bifurcation was due to everincreasing capacity constraints and anticipated 

access needs for Members and market participants. 

See Securities Exchange Act Release Nos. 96545 

(December 20, 2022), 87 FR 79393 (December 27, 

2022) (SR–MIAX–2022–48); and 96553 (December 

20, 2022), 87 FR 79379 (December 27, 2022) (SR– 

PEARL–2022–60). The instant filing would amend 

provisions in the Fee Schedule to reflect the 

bifurcation of the 10Gb ULL network and specify 

that only the 1Gb network provides access to both 

the Exchange and MIAX. See Notice, supra note 4, 

at 58408. 

9The term ‘‘MEO Interface’’ or ‘‘MEO’’ means a 

binary order interface for certain order types as set 

forth in Rule 516 into the MIAX Pearl System. See 

the Definitions Section of the Exchange Fee 

Schedule and Exchange Rule 100. 

10See Notice, supra note 4, at 58409–10. The 

Exchange initially filed the proposed fee change on 

December 30, 2022, with an effective date of 

January 1, 2023. See Securities Exchange Act 

Release No. 96632 (January 10, 2023), 88 FR 2707 

(January 17, 2023) (SR–PEARL–2022–62). That 

filing was withdrawn by the Exchange and the 

Exchange filed a new proposed fee change with 

additional justification (SR–PEARL–2023–05) on 

February 23, 2023. See Securities Exchange Act 

Release No. 97082 (March 8, 2023), 88 FR 15825 

(March 14, 2023). The Exchange subsequently 

withdrew that filing and replaced it with SR– 

PEARL–2023–19 on April 20, 2023. See Securities 

Exchange Act Release No. 97420 (May 2, 2023), 88 

FR 29701 (May 8, 2023). The Exchange 

subsequently withdrew that filing and replaced it 

with SR–PEARL–2023–27 on June 16, 2023. See 

Securities Exchange Act Release No. 97815 (June 

27, 2023), 88 FR 42759 (July 3, 2023). The Exchange 

subsequently withdrew that filing and replaced it 

with the instant filing to provide additional 

information and a revised justification for the 

proposal, which is discussed herein. See Notice, 

supra note 4, at 58405. 

11Full Service MEO Port (Bulk) means an MEO 

port that supports all MEO input message types and 

binary bulk order entry. See the Definitions Section 

of the Exchange Fee Schedule. 12Full Service MEO Port (Single) means an MEO 

port that supports all MEO input message types and 

binary order entry on a single order-by-order basis, 

but not bulk orders. See the Definitions Section of 

the Exchange Fee Schedule. 13See Notice, supra note 4, at 58409. A 

‘‘Matching Engine’’ is a part of the Exchange’s 

electronic system that processes options orders and 

trades on a symbol-by-symbol basis. See the 

Definitions Section of the Fee Schedule. 14See id. 15See id. at 58409, 58411. 

16See id. at 58409. 

17The term ‘‘Market Maker’’ means a Member 

registered with the Exchange for the purpose of 

making markets in options contracts traded on the 

Exchange and that is vested with the rights and 

responsibilities specified in Chapter VI of Exchange 

Rules. See the Definitions Section of the Exchange 

Fee Schedule and Exchange Rule 100. 

18See Notice, supra note 4, at 58409. The term 

‘‘Electronic Exchange Member’’ or ‘‘EEM’’ means 

the holder of a Trading Permit who is a Member 

representing as agent Public Customer Orders or 

Non-Customer Orders on the Exchange and those 

non-Market Maker Members conducting proprietary 

trading. Electronic Exchange Members are deemed 

‘‘members’’ under the Exchange Act. See the 

Definitions Section of the Exchange Fee Schedule 

and Exchange Rule 100. 

19See Notice, supra note 4, at 58409. 

public in accordance with the 

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

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549, on official 

business days between the hours of 10 

a.m. and 3 p.m. Copies of the filing also 

will be available for inspection and 

copying at the principal office of the 

Exchange. Do not include personal 

identifiable information in submissions; 

you should submit only information 

that you wish to make available 

publicly. We may redact in part or 

withhold entirely from publication 

submitted material that is obscene or 

subject to copyright protection. All 

submissions should refer to file number 

SR–NASDAQ–2023–016 and should be 

submitted on or before October 25, 

2023. Rebuttal comments should be 

submitted by November 8, 2023. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.27

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–21948 Filed 10–3–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–98658; File No. SR– 

PEARL–2023–35] 

Self-Regulatory Organizations; MIAX 

PEARL, LLC; Suspension of and Order 

Instituting Proceedings To Determine 

Whether To Approve or Disapprove 

Proposed Rule Change To Amend the 

Fee Schedule To Modify Certain 

Connectivity and Port Fees 

September 29, 2023. 

I. Introduction 

On August 8, 2023, MIAX PEARL LLC 

(‘‘MIAX Pearl Options’’ or ‘‘Exchange’’) 

filed with the Securities and Exchange 

Commission (‘‘Commission’’), pursuant 

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

Exchange Act of 1934 (‘‘Act’’),1 and 

Rule 19b–4 thereunder,2 a proposed rule 

change (File No. SR–PEARL–2023–35) 

to amend certain connectivity and port 

fees. The proposed rule change was 

immediately effective upon filing with 

the Commission pursuant to Section 

19(b)(3)(A) of the Act.3 The proposed 

rule change was published for comment 

in the Federal Register on August 25, 

2023.4 Pursuant to Section 19(b)(3)(C) of 

the Act,5 the Commission is hereby: (1) 

temporarily suspending the proposed 

rule change; and (2) instituting 

proceedings to determine whether to 

approve or disapprove the proposed 

rule change. 

II. Background and Description of the 

Proposed Rule Change 

As described in more detail in the 

Notice, the Exchange proposes to: (1) 

increase fees for a 10 gigabit (‘‘Gb’’) 

ultra-low latency (‘‘ULL’’) fiber 

connection for Members 6 and nonMembers from $10,000 to $13,500 per 

month; 7 (2) remove provisions in the 

Exchange’s Fee Schedule that provide 

for a shared 10Gb ULL network with the 

Exchange’s affiliate Miami International 

Securities Exchange, LLC (‘‘MIAX’’); 8

and (3) amend the calculation method 

and increase the amount of fees for 

MIAX Express Network Full Service 9

(‘‘MEO’’) Ports.10

The Exchange currently offers two 

types of Full Service MEO Ports— 

Bulk 11 and Single 12—and, for one 

monthly price, a Member may be 

allocated two Full-Service MEO Ports of 

either type per Matching Engine.13 The 

Exchange now proposes to modify both 

the calculation method and amount of 

fees for each type of Full Service MEO 

Port.14 Notwithstanding these changes 

to the calculation method and amount 

of fees, all Members will continue to be 

entitled to two Full Service MEO Ports 

(Bulk or Single) for each Matching 

Engine for the applicable fee.15

With respect to the Full Service MEO 

Ports (Bulk), prior to the proposed fee 

change, all Members were charged a 

monthly fee pursuant to a volume tierbased fee structure with fees ranging 

from $3,000 to $5,000.16 The Exchange 

now proposes to amend the calculation 

and amount of Full Service MEO Port 

(Bulk) fees for all Members, with 

different fee structures depending on 

whether the Member is a Market 

Maker 17 or an Electronic Exchange 

Member (‘‘EEM’’).18 The Exchange 

proposes to charge all EEMs that utilize 

MIAX Pearl Full Service MEO Ports 

(Bulk) a flat monthly fee of $7,500.19 For 

Market Makers, the Exchange proposes 


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