Federal Register / Vol. 89, No. 17 / Thursday, January 25, 2024 / Notices 5029 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4The term ‘‘Commodity-Based Trust Shares’’ 

means a security (a) that is issued by a trust 

(‘‘Trust’’) that holds (1) a specified commodity 

deposited with the Trust, or (2) a specified 

commodity and, in addition to such specified 

commodity, cash; (b) that is issued by such Trust 

in a specified aggregate minimum number in return 

for a deposit of a quantity of the underlying 

commodity and/or cash; and (c) that, when 

aggregated in the same specified minimum number, 

may be redeemed at a holder’s request by such 

Trust which will deliver to the redeeming holder 

the quantity of the underlying commodity and/or 

cash. See NYSE Arca Rule 8.201–E(c)(1). 

[FR Doc. 2024–01369 Filed 1–24–24; 8:45 am] 

BILLING CODE 8011–01–C 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–99398; File No. SR– 

NYSEARCA–2024–06] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing of a 

Proposed Rule Change To Amend Rule 

5.3–O To Permit the Listing and 

Trading of Options on CommodityBased Trust Shares 

January 19, 2024. 

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

Securities Exchange Act of 1934 

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

notice is hereby given that, on January 

16, 2024, NYSE Arca, Inc. (‘‘NYSE 

Arca’’ or ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III below, which Items have been 

prepared by the self-regulatory 

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 amend 

Rule 5.3–O to permit the listing and 

trading of options on Commodity-Based 

Trust Shares. The proposed rule 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 

NYSE Arca Rule 5.3–O, Criteria for 

Underlying Securities, provides for 

Exchange listing and trading of option 

contracts. The rule sets forth the criteria 

to be met by underlying securities with 

respect to which put or call option 

contracts are approved for listing and 

trading on the Exchange. The purpose of 

this filing is to amend NYSE Arca Rule 

5.3–O, and more specifically, NYSE 

Arca Rule 5.3–O(g) to permit the listing 

and trading of options on CommodityBased Trust Shares.4

Currently, Rule 5.3–O(g) deems 

appropriate for options trading 

Exchange-Traded Fund Shares (‘‘ETFs’’ 

or ‘‘Fund Shares’’) that are traded on a 

national securities exchange and are 

defined as an ‘‘NMS stock’’ in Rule 

600(b)(55) of Regulation NMS, and that 

(i) represent an interest in a registered 

investment company organized as openend management investment company, 

a unit investment trust or a similar 

entity which holds securities and/or 

financial instruments, options on 

securities and indices, equity caps, 

collars and floors, swap agreements, 

forward contracts, repurchase 

agreements and reverse purchase 

agreements (the ‘‘Financial 

Instruments’’), and money market 

instruments, including, but not limited 

to, U.S. government securities and 

repurchase agreements (the ‘‘Money 

Market Instruments’’) constituting or 

otherwise based on or representing an 

investment in an index or portfolio of 

securities and/or Financial Instruments 

and Money Market Instruments; or (ii) 

represent interests in a trust or similar 

entity that holds a specified non-U.S. 

currency deposited with the trust or 

similar entity when aggregated in some 

specified minimum number may be 

surrendered to the trust by the 

beneficial owner to receive the specified 

non-U.S. currency and pays the 

beneficial owner interest and other 

distributions on the deposited non-U.S. 

currency, if any, declared and paid by 

the trust; or (iii) represent commodity 

pool interests principally engaged, 

directly or indirectly, in holding and/or 

managing portfolios or baskets of 

securities, commodity futures contracts, 

options on commodity futures contracts, 

swaps, forward contracts and/or options 


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5030 Federal Register / Vol. 89, No. 17 / Thursday, January 25, 2024 / Notices 

5See NYSE Arca Rule 5.3–O(g). 

6See NYSE Arca Rule 8.201–E(c)(1). 

7 15 U.S.C. 78s(b). 

8See NYSE Arca Rule 5.3–O(a) which sets forth 

minimum requirements for the underlying security 

which include, but are not limited to, 7,000,000 

underlying shares, 2,000 shareholders, and trading 

volume of 2,400,000 shares over the preceding 

twelve months. Additionally, the rule requires that 

the market price per share of the underlying 

security must be at least $7.50 for the majority of 

business days during the three calendar months 

preceding the date of selection of an option class. 

For underlying securities that are deemed Covered 

Securities, as defined under Section 18(b)(1)(A) of 

the Securities Act of 1933, the closing market price 

of the underlying security must be at least $3.00 per 

share for the previous three consecutive business 

days prior to the date of selection of an option class. 

9See NYSE Arca Rule 5.3–O(b) which states that 

the underlying securities shall be registered and be 

an ‘‘NMS Stock’’ as defined in Rule 600 of 

Regulation NMS under the Act. 

10See NYSE Arca Rule 8.201–E(c)(1). 

11See e.g. Securities Exchange Act Release Nos. 

94518 (March 25, 2022), 87 FR 18837 (March 31, 

2022) (Notice of Filing of Amendment No. 1 and 

Order Granting Accelerated Approval of a Proposed 

Rule Change, as Modified by Amendment No. 1, To 

List and Trade Shares of the Sprott ESG Gold ETF 

Under NYSE Arca Rule 8.201–E (Commodity-Based 

Trust Shares) (SR–NYSEArca–2021–65); 82249 

(December 8, 2017), 82 FR 58884 (December 14, 

2017) (Notice of Filing of Amendment No. 2 and 

Order Approving on an Accelerated Basis a 

Proposed Rule Change, as Modified by Amendment 

No. 2, To List and Trade Shares of the 

GraniteShares Platinum Trust Under NYSE Arca 

Rule 8.201–E) (SR–NYSEArca–2017–110); 68430 

(December 13, 2012), 77 FR 75239 (December 19, 

2012) (Order Approving a Proposed Rule Change, 

as Modified by Amendment No. 1, To List and 

Trade Units of the Sprott Physical Platinum and 

Palladium Trust Pursuant to NYSE Arca Equities 

Rule 8.201) (SR–NYSEArca–2012–111); and 63043 

(October 5, 2010), 75 FR 62615 (Notice of Filing and 

Order Granting Accelerated Approval of a Proposed 

Rule Change To List and Trade Shares of the Sprott 

Physical Silver Trust) (SR–NYSEArca–2010–84). 

12See NYSE Arca Rule 5.3–O(g)(iv) which 

permits the listing and trading of options on the 

SPDR Gold Trust; NYSE Arca Rule 5.3–O(g)(v) 

which permits the listing and trading of options on 

the iShares COMEX Gold Trust; NYSE Arca Rule 

5.3–O(g)(vi) which permits the listing and trading 

of options on the iShares Silver Trust; NYSE Arca 

Rule 5.3–O(g)(viii) which permits the listing and 

trading of options on the ETFS Silver Trust or ETFS 

Gold Trust; and NYSE Arca Rule 5.3–O(g)(ix) which 

permits the listing and trading of options on the 

ETFS Palladium Trust or ETFS Platinum Trust. 

on physical commodities and/or nonU.S. currency (‘‘Commodity Pool 

Units’’), or (iv) represent interests in the 

SPDR Gold Trust, or (v) represent 

interests in the iShares COMEX Gold 

Trust, or (vi) represent interests in the 

iShares Silver Trust, or, (vii) represents 

an interest in a registered investment 

company (‘‘Investment Company’’) 

organized as an open-end management 

investment company or similar entity, 

that invests in a portfolio of securities 

selected by the Investment Company’s 

investment adviser consistent with the 

Investment Company’s investment 

objectives and policies, which is issued 

in a specified aggregate minimum 

number in return for a deposit of a 

specified portfolio of securities and/or a 

cash amount with a value equal to the 

next determined net asset value 

(‘‘NAV’’), and when aggregated in the 

same specified minimum number, may 

be redeemed at a holder’s request, 

which holder will be paid a specified 

portfolio of securities and/or cash with 

a value equal to the next determined 

NAV (‘‘Managed Fund Share’’) or, (viii) 

represents interest in the ETFS Silver 

Trust or the ETFS Gold Trust, or (ix) 

represents interests in the ETFS 

Palladium Trust or ETFS Platinum 

Trust.5 This rule change proposes to 

expand the type of ETFs that may be 

approved for options trading on the 

Exchange to include Commodity-Based 

Trust Shares 6 without requiring a rule 

filing under Section 19(b) of the Act.7

Apart from allowing CommodityBased Trust Shares to be an underlying 

for options traded on the Exchange as 

described above, the listing standards 

for ETFs will remain unchanged from 

those that apply under current Exchange 

rules. ETFs on which options may be 

listed and traded must still be listed and 

traded on a national securities exchange 

and must satisfy the current listing 

standards set forth in NYSE Arca Rule 

5.3–O. 

Commodity-Based Trust Shares are 

securities issued by a trust that 

represents investors’ discrete 

identifiable and undivided beneficial 

ownership interest in the commodities 

deposited into the Trust. CommodityBased Trust Shares, although based 

upon a publicly disclosed portfolio of 

securities, each trade as a single 

exchange-listed equity security. 

Accordingly, rules pertaining to the 

listing and trading of standard equity 

options will apply to options on 

Commodity-Based Trust Shares. 

Listing Criteria 

The Exchange will consider listing 

and trading options on CommodityBased Trust Shares provided the 

Commodity-Based Trust Shares meet (1) 

the criteria for underlying securities set 

forth in NYSE Arca Rule 5.3–O(a) 8

–(b),9 or (2) the Commodity-Based Trust 

Shares are available for creation and 

redemption each business day as set 

forth in NYSE Arca Rule 5.3–O(g)(1)(B). 

The Exchange proposes that 

Commodity-Based Trust Shares deemed 

appropriate for options trading 

represent an interest in a trust, as 

described below: 

• Commodity-Based Trust Shares are 

securities (a) that are issued by a trust 

(‘‘Trust’’) that holds (1) a specified 

commodity deposited with the Trust, or 

(2) a specified commodity and, in 

addition to such specified commodity, 

cash; (b) that is issued by such Trust in 

a specified aggregate minimum number 

in return for a deposit of a quantity of 

the underlying commodity and/or cash; 

and (c) that, when aggregated in the 

same specified minimum number, may 

be redeemed at a holder’s request by 

such Trust which will deliver to the 

redeeming holder the quantity of the 

underlying commodity and/or cash.10

Additionally, the Exchange proposes 

that options on Commodity-Based Trust 

Shares may only be listed and traded on 

the Exchange if the underlying security 

has been reviewed and approved by the 

Securities and Exchange Commission 

under Section 19(b)(2) of the Act or 

noticed for immediate effectiveness 

under Section 19(b)(3)(A) of the Act, as 

applicable. Pursuant to Commission 

approval, the Exchange currently lists 

and trades 18 Commodity-Based Trust 

Shares.11 While the Exchange’s rules 

currently provide for the listing of 

options on a limited number of such 

Commodity-Based Trust Shares,12 this 

proposed rule change would permit 

listing options on any CommodityBased Trust Share, including the 11 

Commodity-Based Trust Shares that 

have been approved for listing and 

trading by the Commission but are not 

currently eligible for options trading. 

Continued Listing Requirements 

The Exchange represents that the 

current continued listing standards for 

options on Exchange-Traded Fund 

Shares will apply to options on 

Commodity-Based Trust Shares. 

Specifically, under NYSE Arca Rule 

5.4–O(k), options on Exchange-Traded 

Fund Shares may be subject to the 

suspension of opening transactions as 

follows: (1) the Commodity-Based Trust 

Share no longer meets the terms of 

paragraphs 1 through 4 of Rule 5.4–O(b); 

(2) following the initial twelve-month 

period beginning upon the 

commencement of trading of the 

Exchange-Traded Fund Shares, there are 

fewer than 50 record and/or beneficial 

holders of the Exchange-Traded Fund 

Shares for 30 or more consecutive 

trading days; (3) the value of the 

underlying commodity is no longer 

calculated or available; or (4) such other 

event occurs or condition exists that in 

the opinion of the Exchange makes 

further dealing on the Exchange 

inadvisable. Additionally, CommodityBased Trust Shares shall not be deemed 

to meet the requirements for continued 

approval, and the Exchange shall not 

open for trading any additional series of 

option contracts covering CommodityVerDate Sep<11>2014 17:22 Jan 24, 2024 Jkt 262001 PO 00000 Frm 00140 Fmt 4703 Sfmt 4703 E:\FR\FM\25JAN1.SGM 25JAN1

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13See NYSE Arca Rule 5.4–O(k). 

14Pursuant to NYSE Arca Rule 6.8–O, 

Commentary .05 and .06, Commodity-Based Trust 

Shares are subject to the same position limits 

applicable to options on stocks and ExchangeTraded Fund Shares. NYSE Arca Rule 6.9–O 

stipulates that exercise limits for options on stocks 

and other securities, including Commodity-Based 

Trust Shares, shall be the same as the position 

limits applicable under NYSE Arca Rule 6.8–O. 

15See NYSE Arca Rules 4.15–O(a)—4.16–O(d), 

the Exchange’s rules governing margin. 

16OPRA is a securities information processor 

registered in accordance with Section 11A(b) of the 

Exchange Act. OPRA’s members consist of the 

national securities exchanges that have been 

approved by the Commission to provide markets for 

the listing and trading of exchange-traded securities 

options. 

17See NYSE Arca Rule 5.3–O(g)(2), the 

Exchange’s rule governing the applicable CSSA 

requirements for options on exchange-traded funds. 

The Exchange notes that any non-U.S. component 

securities (including fixed-income) in an index or 

portfolio of securities on which Exchange-Traded 

Fund Shares are based that are not subject to 

comprehensive surveillance agreements may in the 

aggregate represent an amount equal to 50% of the 

weight of the index or portfolio. 

18A complete list of the current members of the 

ISG, is available at http://www.isgportal.org. 

19Last sale reports and quotations are the core of 

the information that OPRA disseminates. OPRA 

also disseminates certain other types of information 

with respect to the trading of options on the 

markets of the OPRA participants, such as the 

number of options contracts traded, open interest 

and end of day summaries. OPRA also disseminates 

certain kinds of administrative messages. 

20 17 CFR 240.19b–4(e). 

21See Securities Exchange Act Release No. 54739 

(November 9, 2006), 71 FR 66993 (November 17, 

2006) (SR–AMEX–2006–78) (approval order relating 

to generic listing standards for ETFs based on 

international or global indexes). 

22See, e.g., Securities Exchange Act Release Nos. 

56778 (November 9, 2007), 72 FR 65113 (November 

19, 2007) (SR–AMEX–2007–100) (approval order to 

list and trade options on iShares MSCI Mexico 

Index Fund; and 55648 (April 19, 2007), 72 FR 

20902 (April 26, 2007) (SR–AMEX–2007–09) 

(approval order to list and trade options on 

Vanguard Emerging Markets ETF). See also 

Securities Exchange Act Release Nos. 50189 

(August 12, 2004), 69 FR 51723 (August 20, 2004) 

(SR–AMEX–2001–05) (approving the listing and 

trading of certain Vanguard International Equity 

Index Funds); and 44700 (August 14, 2001), 66 FR 

43927 (August 21, 2001) (SR–2001–34) (approving 

the listing and trading of series of the iShares Trust 

based on foreign stock indexes). 

23 17 CFR 240.19b–4(e). 24 Id. 25 15 U.S.C. 78s(b)(2). 

Based Trust Shares if such security 

ceases to be an ‘‘NMS stock’’ as 

provided for in NYSE Arca Rule 5.4– 

O(b)(5) or the Commodity-Based Trust 

Share is halted from trading on its 

primary market.13

Finally, all options on CommodityBased Trust Shares listed pursuant to 

proposed Rule 5.3–O(g)(x) would be 

included within the definition of 

securities as such terms are used in the 

Exchange’s rules and, as such, would be 

subject to Exchange rules and 

procedures that currently govern the 

trading of securities on the Exchange, 

including Exchange rules governing the 

trading of equity options. Furthermore, 

the Exchange’s rules pertaining to 

position and exercise limits 14 or 

margin 15 shall apply to options on 

Commodity-Based Trust Shares. 

The Exchange notes that options on 

Commodity-Based Trust Shares would 

not be available for trading until The 

Options Clearing Corporation (‘‘OCC’’) 

represents to the Exchange that it is 

fully able to clear and settle such 

options. The Exchange has also 

analyzed its capacity and represents that 

it and The Options Price Reporting 

Authority (‘‘OPRA’’) have the necessary 

systems capacity to handle the 

additional traffic associated with the 

listing of options on Commodity-Based 

Trust Shares.16 The Exchange believes 

any additional traffic that would be 

generated from the trading of options on 

Commodity-Based Trust Shares would 

be manageable. The Exchange 

represents that Exchange members will 

not have a capacity issue as a result of 

this proposed rule change. 

The Exchange believes that its 

surveillance procedures are adequate to 

properly monitor the trading of options 

on Commodity-Based Trust Shares in all 

trading sessions and to deter and detect 

violations of Exchange rules. The 

Exchange will utilize its existing 

surveillance procedures applicable to 

options on exchange traded funds 

(which will include Commodity-Based 

Trust Shares) to monitor such trading. 

In addition, the Exchange will 

implement any new surveillance 

procedures it deems necessary to 

effectively monitor the trading of 

options on Commodity-Based Trust 

Shares, including adequate 

comprehensive surveillance sharing 

agreements (‘‘CSSA’’) with markets 

trading in non-U.S. components,17 as 

applicable. Also, the Exchange may 

obtain trading information via the 

Intermarket Surveillance Group 

(‘‘ISG’’) 18 from other exchanges who are 

members or affiliates of the ISG. The 

Exchange represents that these 

procedures will be adequate to properly 

monitor Exchange trading of options on 

Commodity-Based Trust Shares and to 

deter and detect violations of Exchange 

rules. 

Finally, quotation and last sale 

information for Commodity-Based Trust 

Shares is available via the Consolidated 

Tape Association (‘‘CTA’’) high speed 

line. Quotation and last sale information 

for such securities is also available from 

the exchange on which such securities 

are listed. Quotation and last sale 

information for options on CommodityBased Trust Shares will be available via 

OPRA 19 and major market data vendors. 

The Exchange notes that the 

Commission has previously approved 

generic listing standards pursuant to 

Rule 19b–4(e) of the Act 20 for ETFs 

based on indexes that consist of stocks 

listed on U.S. exchanges.21 In addition, 

the Commission has previously 

approved proposals for the listing and 

trading of options on ETFs based on 

international indexes as well as global 

indexes (e.g., based on non-U.S. and 

U.S. component stocks).22 In approving 

Commodity-Based Trust Shares for 

equities exchange trading, the 

Commission thoroughly considered the 

structure of the Commodity-Based Trust 

Shares, their usefulness to investors and 

to the markets, and SRO rules that 

govern their trading. The Exchange 

believes that allowing the listing of 

options overlying Commodity-Based 

Trust Shares that are listed pursuant to 

Commission approval on equities 

exchanges and applying Rule 19b– 

4(e) 23 should fulfill the intended 

objective of that rule by allowing 

options on those Commodity-Based 

Trust Shares that have satisfied the 

generic listing standards to commence 

trading, without the need for the public 

comment period and Commission 

approval. The proposed rule change has 

the potential to significantly reduce the 

time frame and costs associated with 

bringing options on Commodity-Based 

Trust Shares to market, thereby 

reducing the burden on issuers and 

other market participants, while also 

promoting competition among options 

exchanges, to the benefit of the 

investing public. The failure of a 

particular Commodity-Based Trust 

Share to comply with the generic listing 

standards under Rule 19b–4(e) 24 would 

not, however, preclude the Exchange 

from submitting a separate filing 

pursuant to Section 19(b)(2),25

requesting Commission approval to list 

and trade options on a particular 

Commodity-Based Trust Share. 

The Exchange believes that the 

proposed rule change would promote 

transparency surrounding the listing 

process for options on CommodityBased Trust Shares. Exchange listing 

standards play a critical role in ensuring 

transparency in the market. Adopting 

objective criteria, such as those that 

would be applicable for the listing and 

trading of options on Commodity-Based 

Trust Shares would help investors to 

make informed decisions about which 

options to invest in and would provide 

a level of transparency that is essential 

for a well-functioning market. 

The Exchange also believes that the 

standards for listing and trading options 


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5032 Federal Register / Vol. 89, No. 17 / Thursday, January 25, 2024 / Notices 

26 15 U.S.C. 78f(b). 

27 15 U.S.C. 78f(b)(5). 

28 15 U.S.C. 78s(b). 

on Commodity-Based Trust Shares are 

reasonably designed to promote a fair 

and orderly market for such securities. 

As ETFs have grown in popularity, so 

has the ability to trade options on them. 

The Exchange believes the proposed 

rule change will benefit investors and 

market participants generally by 

shortening the time to list and trade 

options on Commodity-Based Trust 

Shares that have been approved by the 

Commission by not requiring the 

Exchange to submit a separate proposed 

rule change. The Exchange believes that 

the proposed rule change will facilitate 

the listing and trading of options on 

additional ETFs that will enhance 

competition among market participants, 

to the benefit of investors and the 

marketplace. 

2. Statutory Basis 

The Exchange believes that its 

proposed rule change is consistent with 

Section 6(b) of the Act 26 in general, and 

furthers the objectives of Section 6(b)(5) 

of the Act 27 in particular, in that it is 

designed to promote just and equitable 

principles of trade, to remove 

impediments to and perfect the 

mechanisms of a free and open market 

and a national market system. In 

particular, the proposed rule change has 

the potential to reduce the time frame 

for bringing options on CommodityBased Trust Shares to market, thereby 

reducing the burdens on issuers and 

other market participants, while also 

promoting competition among options 

exchanges, to the benefit of the 

investing public. The Exchange believes 

that enabling the listing and trading of 

options on Commodity-Based Trust 

Shares without requiring a rule filing 

under Section 19(b) of the Act 28 would 

remove impediments to and perfect the 

mechanism of a free and open market 

and a national market system. 

The Exchange believes the proposed 

rule change will also result in increased 

competition as other exchanges will 

likely adopt an identical rule to the one 

proposed by the Exchange that would 

allow the listing and trading of options 

on Commodity-Based Trust Shares that 

are approved for trading on those other 

markets. Multiple listing of ETFs, 

options and other securities and 

competition are some of the central 

features of the national market system. 

The Exchange believes that the proposal 

would encourage a more open market 

and national market system based on 

competition and multiple listing. 

The proposed rule change adds an 

additional listing mechanism for certain 

qualifying options on ETFs to be listed 

on the Exchange in a manner that is 

designed to prevent fraudulent and 

manipulative acts and practices, to 

promote just and equitable principles of 

trade, to remove impediments to and 

perfect the mechanisms of a free and 

open market and a national market 

system and, in general, to protect 

investors and the general public. 

The Exchange further believes that the 

proposed rules applicable to trading 

pursuant to generic listing and trading 

criteria, together with the Exchange’s 

surveillance procedures applicable to 

trading in the securities covered by the 

proposed rules, serve to remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system. 

The Exchange has an adequate 

surveillance program in place to detect 

manipulative trading in options on 

Commodity-Based Trust Shares. The 

Exchange represents that it and OPRA 

have the necessary systems capacity to 

support new options series that would 

be listed and traded pursuant to this 

proposed rule change. 

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. To the 

contrary, the Exchange believes that the 

proposal is, as discussed, procompetitive and is a competitive 

response to the Exchange’s inability to 

list options on Commodity-Based Trust 

Shares without submitting a separate 

proposed rule change. The Exchange 

believes the proposed rule change will 

result in additional investment options 

and opportunities to achieve the 

investment objectives of market 

participants seeking efficient trading 

and hedging vehicles, to the benefit of 

investors, market participants, and the 

marketplace in general. Competition is 

one of the principal features of the 

national market system. The Exchange 

believes that this proposal will expand 

competitive opportunities to list and 

trade products on the Exchange as 

noted. 

The Exchange does not believe the 

proposal will impose any burden on 

intra-market competition, as all market 

participants will be treated in the same 

manner under this proposal. 

Additionally, the Exchange does not 

believe the proposal will impose any 

burden on inter-market competition, as 

nothing prevents the other options 

exchanges from proposing similar rules 

to list and trade options on CommodityBased Trust Shares. In fact, the 

Exchange believes other options 

exchanges will adopt an identical rule 

so that they may also list and trade 

options on Commodity-Based Trust 

Shares without submitting a separate 

proposed rule change. 

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 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 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 (https://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

NYSEARCA–2024–06 on the subject 

line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to file 

number SR–NYSEARCA–2024–06. 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 


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Federal Register / Vol. 89, No. 17 / Thursday, January 25, 2024 / Notices 5033 

29 17 CFR 200.30–3(a)(12). 1 44 U.S.C. 3501 et seq. 

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–NYSEARCA–2024–06 and should be 

submitted on or before February 15, 

2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.29

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–01391 Filed 1–24–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[SEC File No. 270–385, OMB Control No. 

3235–0441] 

Submission for OMB Review; 

Comment Request; Extension: Rule 

18f–3 

Upon Written Request, Copies Available 

From: Securities and Exchange 

Commission, Office of FOIA 

Services, 100 F Street NE, 

Washington, DC 20549–2736 

Notice is hereby given that, pursuant 

to the Paperwork Reduction Act of 1995 

(44 U.S.C. 3501 et seq.) (‘‘Paperwork 

Reduction Act’’), the Securities and 

Exchange Commission (‘‘the 

Commission’’) has submitted to the 

Office of Management and Budget 

(‘‘OMB’’) a request for extension of the 

previously approved collection of 

information discussed below. 

Rule 18f–3 (17 CFR 270.18f–3) under 

the Investment Company Act of 1940 

(15 U.S.C. 80a–1 et seq.) exempts from 

section 18(f)(1) and 18 (f)(i) a fund that 

issues multiple classes of shares 

representing interests in the same 

portfolio of securities (a ‘‘multiple class 

fund’’) if the fund satisfies the 

conditions of the rule. In general, each 

class must differ in its arrangement for 

shareholder services or distribution or 

both, must pay the related expenses of 

that different arrangement, and must 

satisfy certain voting rights provisions. 

The rule includes one requirement for 

the collection of information. A 

multiple class fund must prepare, and 

fund directors must approve, a written 

plan setting forth the separate 

arrangement and expense allocation of 

each class, and any related conversion 

features or exchange privileges (‘‘rule 

18f–3 plan’’). Approval of the plan must 

occur before the fund issues any shares 

of multiple classes and whenever the 

fund materially amends the plan. In 

approving the plan, the fund board, 

including a majority of the independent 

directors, must determine that the plan 

is in the best interests of each class and 

the fund as a whole. 

The requirement that the fund prepare 

and directors approve a written rule 

18f–3 plan is intended to ensure that the 

fund compiles information relevant to 

the fairness of the separate arrangement 

and expense allocation for each class, 

and that directors review and approve 

the information. Without a blueprint 

that highlights material differences 

among classes, directors might not 

perceive potential conflicts of interests 

when they determine whether the plan 

is in the best interests of each class and 

the fund. In addition, the plan may be 

useful to Commission staff in reviewing 

the fund’s compliance with the rule. 

The following estimates of average 

burden hours are made solely for 

purposes of the Paperwork Reduction 

Act of 1995 1 and are not derived from 

a comprehensive or even representative 

survey or study of the cost of 

Commission rules and forms. 

Compliance with the information 

collection requirements of rule 18f–3 is 

necessary to obtain the benefit of the 

rule’s exemption. The collection of 

information under rule 18f–3 is 

mandatory. Responses to the collection 

of information requirements will not be 

kept confidential. 

TABLE 1—RULE 18f–3 PRA ESTIMATES

Internal annual 

burden Wage rate 1 Internal time costs 

ESTIMATES FOR RULE 18F–3 

Prepare and approve a written 18f–3 plan 2 ... 6 hours 3.

Average number of responses annually per 

registrant.

0.5 responses 3.

Total number of hours per registrant per 

year 4.

3 hours 3 .................. $484 (in-house attorney). $4,770 (fund board 

of directors) 6

$936,056 (in-house attorney). $4,612,590 

(board of directors) 7. 

Total number of registrants ............................. 967 4.

Total annual hour burden ......................... 2,901 hours 5 ........... .......................................................................... $5,548,646 8. 

Notes: 

1. The Commission’s estimates of the relevant wage rates are based on salary information for the securities industry compiled by the Securities Industry and Financial Markets Association’s Office Salaries in the Securities Industry 2013; the estimated figures are modified by firm size, employee benefits, overhead, and adjusted 

to account for the effects of inflation; see Securities Industry and Financial Markets Association, Report on Management & Professional Earnings in the Securities Industry 2013. 

2. The Commission estimates that each registrant prepares and approves a rule 18f–3 plan every two years when issuing a new fund or class or amending a plan 

(or that 484 of all 967 registrants prepare and approve a plan each year). 

3. This estimate assumes that each response will take 6 hours, requiring 3 hours per registrant per year (0.5 responses per registrant × 6 hours per response = 3 

hours per registrant). 

4. The Commission estimates that there are approximately 6,733 multiple class funds offered by 967 registrants. 

5. 967 registrants × 3 hours = 2,901 hours. 

6. The estimate for the cost of board time is derived from estimates made by the staff regarding typical board size and compensation that is based on information 

received from fund representatives and publicly available sources; the $4,770 per hour estimate for a fund board of directors was last adjusted for inflation through 

2019,and assumes an average of 9 board members per board. 


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