83724 Federal Register / Vol. 89, No. 201 / Thursday, October 17, 2024 / Notices 

6 Id. 

7 17 CFR 200.30–3(a)(31). 

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

2 17 CFR 240.19b–4. 

3 15 U.S.C. 80a–1 et seq. 

4See Securities Exchange Act Release No. 100473 

(July 9, 2024), 89 FR 57491 (‘‘Notice’’). Comments 

on the proposed rule change are available at: 

https://www.sec.gov/comments/sr-cboebzx-2024- 

055/srcboebzx2024055.htm. 

5 15 U.S.C. 78s(b)(2). 

6See Securities Exchange Act Release No. 

100867, 89 FR 71944 (Sept. 4, 2024). The 

Commission designated October 13, 2024, as the 

date by which the Commission shall approve or 

disapprove, or institute proceedings to determine 

whether to disapprove, the proposed rule change, 

as modified by Amendment No. 1. 

7 15 U.S.C. 78s(b)(2)(B). 

8See BZX Rules 14.8(e) and (i). The Exchange 

states that the only products currently listed on the 

Exchange that are registered under the 1940 Act are 

those that fall within the definition of Derivative 

Securities (as defined below), and that there are 

currently no CEFs listed on the Exchange. See 

Notice, supra note 4, at 57493 n.15. 

9The term ‘‘Company’’ means the issuer of a 

security listed or applying to list on the Exchange. 

See BZX Rule 14.1(a)(3). 

10The term ‘‘Shareholder’’ means a record or 

beneficial owner of a security listed or applying to 

list. See BZX Rule 14.1(a)(28). 

11Specifically, BZX Rule 14.10(e)(1)(F)(i) 

exempts from this annual shareholder meeting 

requirement issuers whose only securities listed on 

the Exchange are nonvoting preferred securities, 

debt securities or Derivative Securities. BZX Rule 

14.10(e)(1)(F)(ii) defines ‘‘Derivative Securities’’ as 

Commodity Futures Trust Shares (Rule 14.11(e)(7)), 

Commodity Index Trust Shares (Rule 14.11(e)(6)), 

Commodity-Based Trust Shares (Rule 14.11(e)(4)), 

Commodity-Linked Securities (Rule 14.11(d)(K)(ii)), 

Currency Trust Shares (Rule 14.11(e)(5)), Equity 

Gold Shares (Rule 14.11(e)(2)), Equity Index-Linked 

Securities (Rule 14.11(d)(K)(i)), ETF Shares (Rule 

14.11(l)), Fixed Income Index-Linked Securities 

(Rule 14.11(d)(K)(iii)), Futures-Linked Securities 

(Rule 14.11(d)(K)(iv)), Index Fund Shares (Rule 

14.11(c)), Index-Linked Exchangeable Notes (Rule 

14.11(e)(1)), Managed Fund Shares (Rule 14.11(i)), 

Managed Portfolio Shares (Rule 14.11(k)), Managed 

Trust Securities (Rule 14.11(e)(10)), Multifactor 

Index-Linked Securities (Rule 14.11(d)(K)(v)), 

Partnership Units (Rule 14.11(e)(8)), Portfolio 

Depository Receipts (Rule 14.11(b)), SEEDS (Rule 

14.11(e)(12)), Tracking Fund Shares (Rule 

14.11(m)), Trust Certificates (Rule 14.11(e)(3)), and 

Trust Issued Receipts (Rule 14.11(f)). 

12Business development companies, which the 

Exchange states are a type of closed-end 

management investment company defined in 

Section 2(a)(48) of the 1940 Act that are not 

registered under the 1940 Act, will still be required 

to comply with all of the provisions of BZX Rule 

14.10. See Interpretations and Policies .13 to BZX 

Rule 14.10. 

13 15 U.S.C. 78s(b)(2)(B). 

14 Id. 

proposed rule change should be 

disapproved. The 45th day after 

publication of the notice for this 

proposed rule change is October 19, 

2024. The Commission is extending this 

45-day time period. 

The Commission finds it appropriate 

to designate a longer period within 

which to take action on the proposed 

rule change so that it has sufficient time 

to consider the proposed rule change. 

Accordingly, the Commission, pursuant 

to Section 19(b)(2) of the Act,6

designates December 3, 2024 as the date 

by which the Commission shall either 

approve or disapprove, or institute 

proceedings to determine whether to 

disapprove, the proposed rule change 

(File No. SR–CBOE–2024–036). 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.7

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–23982 Filed 10–16–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–101322; File No. SR– 

CboeBZX–2024–055] 

Self-Regulatory Organizations; Cboe 

BZX Exchange, Inc.; Order Instituting 

Proceedings To Determine Whether To 

Approve or Disapprove a Proposed 

Rule Change, as Modified by 

Amendment No. 1, To Exempt ClosedEnd Management Investment 

Companies Registered Under the 

Investment Company Act of 1940 From 

the Annual Meeting of Shareholders 

Requirement Set Forth in Exchange 

Rule 14.10(f) 

October 11, 2024. 

I. Introduction 

On June 25, 2024, Cboe BZX 

Exchange, Inc. (‘‘BZX’’ or ‘‘Exchange’’) 

filed with the Securities and Exchange 

Commission (‘‘Commission’’), pursuant 

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

Exchange Act of 1934 (‘‘Exchange 

Act’’) 1 and Rule 19b–4 thereunder,2 a 

proposed rule change to exempt closedend management investment companies 

registered under the Investment 

Company Act of 1940 (‘‘1940 Act’’) 3

from the annual meeting of shareholders 

requirement set forth in Exchange Rule 

14.10(f). On July 2, 2024, the Exchange 

filed Amendment No. 1 to the proposed 

rule change, which replaced and 

superseded the proposed rule change in 

its entirety. The proposed rule change, 

as modified by Amendment No. 1, was 

published for comment in the Federal 

Register on July 15, 2024.4 On August 

28, 2024, pursuant to Section 19(b)(2) of 

the Exchange Act,5 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, as modified by Amendment 

No. 1.6 The Commission is instituting 

proceedings pursuant to Section 

19(b)(2)(B) of the Exchange Act 7 to 

determine whether to approve or 

disapprove the proposed rule change, as 

modified by Amendment No. 1. 

II. Description of the Proposed Rule 

Change, as Modified by Amendment 

No. 1 

BZX Rule 14.8 (General Listing 

Requirements—Tier I) sets forth listing 

requirements for closed-end 

management investment companies 

registered under the 1940 Act 

(‘‘CEFs’’).8 BZX Rule 14.10(f) generally 

requires that each Company 9 listing 

common stock or voting preferred stock, 

and their equivalents, shall hold an 

annual meeting of Shareholders 10 no 

later than one year after the end of the 

Company’s fiscal year-end. BZX Rule 

14.10(e) sets forth certain exemptions 

from certain corporate governance 

requirements, including certain 

exemptions to the annual shareholder 

meeting requirement in BZX Rule 

14.10(f).11 Any CEF that would be listed 

on the Exchange would be required to 

comply with the annual shareholder 

meeting requirement set forth in BZX 

Rule 14.10(f) and would not be subject 

to an exemption. The Exchange 

proposes to amend BZX Rule 

14.10(e)(1)(E) to exempt CEFs from the 

BZX Rule 14.10(f) requirement to hold 

annual shareholder meetings. The 

Exchange also proposes to amend 

Interpretations and Policies .13 

(Management Investment Companies) 

and .15 (Meetings of Shareholders or 

Partners) to BZX Rule 14.10 to specify 

that CEFs are exempt from the annual 

shareholder meeting requirement set 

forth in BZX Rule 14.10(f).12

III. Proceedings To Determine Whether 

To Approve or Disapprove SR– 

CboeBZX–2024–055 and Grounds for 

Disapproval Under Consideration 

The Commission is instituting 

proceedings pursuant to Section 

19(b)(2)(B) of the Exchange Act 13 to 

determine whether the proposed rule 

change, as modified by Amendment No. 

1, 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. Institution of proceedings 

does not indicate that the Commission 

has reached any conclusions with 

respect to any of the issues involved. 

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

Exchange Act,14 the Commission is 

providing notice of the grounds for 

disapproval under consideration. The 

Commission is instituting proceedings 

to allow for additional analysis of the 


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

16See, e.g., Securities Exchange Act Release Nos. 

99238 (Dec. 26, 2023), 89 FR 113, 116 n.21 and 

accompanying text (Jan. 2, 2024) (SR–NYSE–2023– 

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

Order Granting Accelerated Approval of Proposed 

Rule Change, as Modified by Amendment No. 1, 

Amending Sections 312.03(b) and 312.04 of the 

NYSE Listed Company Manual To Modify the 

Circumstances Under Which a Listed Company 

Must Obtain Shareholder Approval of a Sale of 

Securities Below the Minimum Price to a 

Substantial Security Holder of the Company); 

100816 (Aug. 26, 2024), 89 FR 70674, 70677–78 

nn.46–48 and accompanying text (Aug. 30, 2024) 

(SR–NASDAQ–2024–019) (Order Granting 

Approval of a Proposed Rule Change, to Rules 5605, 

5615 and 5810 To Amend Phase-In Schedules for 

Certain Corporate Governance Requirements and 

Applicability of Certain Cure Periods). 

17See id. 

18The Commission has stated that the right of 

shareholders to vote at an annual meeting is an 

essential and important one. See, e.g., Securities 

Exchange Act Release Nos. 86406 (July 18, 2019), 

84 FR 35431, 35432 (July 23, 2019) (SR–NYSE– 

2019–20) (Order Granting Approval of a Proposed 

Rule Change Amending Section 302 of the Listed 

Company Manual To Provide Exemptions for the 

Issuers of Certain Categories of Securities From the 

Obligation To Hold Annual Shareholders’ Meetings) 

(‘‘NYSE Order’’); 57268 (Feb. 4, 2008), 73 FR 7614, 

7616 (Feb. 8, 2008) (SR–Amex–2006–31) (Order 

Approving Proposed Rule Change, as Modified by 

Amendment Nos. 1, 2, and 3 Thereto, Relating to 

Annual Shareholder Meeting Requirements) 

(‘‘Amex Order’’). 

19See, e.g., Amex Order at 7614; Securities 

Exchange Act Release No. 53578 (Mar. 30, 2006), 71 

FR 17532 (Apr. 6, 2006) (SR–NASD–2005–073) 

(Order Granting Approval of a Proposed Rule 

Change and Amendment Nos. 1 and 2 Thereto and 

Notice of Filing and Order Granting Accelerated 

Approval of Amendment No. 3 Thereto Relating to 

Rule 4350(e) To Amend the Annual Shareholder 

Meeting Requirement). 

20See NYSE Order at 35432; Amex Order at 7616. 

The Commission has also stated that where an 

exchange has exempted issuers of certain categories 

of securities from the exchange requirement to hold 

an annual meeting, such issuers would remain 

subject to any applicable state and federal securities 

laws that relate to annual meetings and may still be 

required to hold annual shareholder meetings in 

accordance with such state and federal securities 

laws. See id. In addition, such issuers would remain 

subject to state and federal securities laws that may 

require other types of shareholder meetings, such as 

special meetings of shareholders. See NYSE Order 

at 35432. The Commission has also stated that the 

exemptions apply only with respect to particular 

securities, and that if a company also lists other 

common stock or voting preferred stock, or their 

equivalent, such company must nevertheless hold 

an annual meeting for the holders of such securities 

during each fiscal year. See id. at 35433. 

21See NYSE Order at 35433 n.20. See also infra 

note 28. 

22See Notice, supra note 4, at 57494. 

23See id. at 57492. 

24According to the Exchange, an ‘‘independent 

director’’ is a director that is not an ‘‘interested 

person’’ as defined in Section 2(a)(19) of the 1940 

Act. See id. at 57492 n.9. 

25See id. at 57492–93. 

26See id. at 57493. 

27See id. at 57494. 

28See id. When justifying its prior proposal to 

exempt BZX-Listed ETFs from the annual 

shareholder meeting requirement of BZX Rule 

14.10(f), the Exchange stated, among other things, 

that such securities are issued by an open-end 

investment company registered under the 1940 Act 

that are available for creation and redemption on a 

continuous basis, and require dissemination of an 

intraday portfolio value; that these requirements 

provide important investor protections and ensure 

that the net asset value (‘‘NAV’’) and the market 

price remain closely tied to one another while 

maintaining a liquid market for the security; and 

that these protections, along with the disclosure 

documents regularly received by investors, allow 

their shareholders to value their holdings on an 

ongoing basis and lessen the need for such 

shareholders to directly deal with management at 

an annual meeting. See Securities Exchange Act 

Release No. 99524 (Feb. 13, 2024), 89 FR 12919, 

12930 (Feb. 20, 2024) (CboeBZX–2024–010) (Notice 

of Filing and Immediate Effectiveness of a Proposed 

Rule Change To Amend Its Corporate Governance 

Requirements, as Provided Under Exchange Rule 

14.10 and Make Certain Other Changes to Its Listing 

Rules as Provided Under Exchange Rules 14.3, 14.6, 

14.7, and 14.12) (‘‘BZX Prior Filing’’). 

29See, e.g., Letters from Paul G. Cellupica, 

General Counsel, and Kevin Ercoline, Assistant 

General Counsel, Investment Company Institute, 

dated Aug. 2, 2024 (‘‘ICI Letter’’); Investment 

Adviser Association, Securities Industry and 

Financial Markets Association (‘‘SIFMA’’), SIFMA’s 

Asset Management Group, and Insured Retirement 

Institute, dated Aug. 5, 2024 (‘‘SIFMA et al. 

Letter’’); Bruce Leto and Sara Crovitz, Stradley 

Ronon Stevens & Young, LLP, dated Aug. 13, 2024 

(‘‘Stradley Ronon Letter’’); Joseph V. Amato, 

President and Chief Investment Officer, Equities, 

Neuberger Berman Group LLC, dated Aug. 5, 2024 

(‘‘Neuberger Berman Letter’’). 

30See, e.g., ICI Letter at 7–9; SIFMA et al. Letter 

at 2–3. 

31See, e.g., ICI Letter at 9–13; Letter Type A at 

https://www.sec.gov/comments/sr-cboebzx-2024- 

055/srcboebzx2024055.htm. 

32See, e.g., ICI Letter at 1 and 9; SIFMA et al. 

Letter at 2; Stradley Ronon Letter at 3. 

proposed rule change’s consistency with 

the Exchange Act and, in particular, 

with Section 6(b)(5) of the Exchange 

Act, which requires, among other 

things, that the rules of a national 

securities exchange be designed to 

prevent fraudulent and manipulative 

acts and practices, to promote just and 

equitable principles of trade, to remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system, and, in 

general, to protect investors and the 

public interest, and not be designed to 

permit unfair discrimination between 

customers, issuers, brokers, or dealers.15

The development and enforcement of 

meaningful corporate governance 

exchange listing standards is of 

substantial importance to financial 

markets and the investing public, 

especially given investor expectations 

regarding the nature of companies that 

have achieved an exchange listing for 

their securities and the role of an 

exchange in overseeing its market and 

ensuring compliance with its listing 

standards.16 The corporate governance 

standards embodied in exchange listing 

standards play an important role in 

assuring that listed companies observe 

good governance practices.17

In particular, the Commission has 

consistently recognized the importance 

of the annual shareholder meeting 

requirement to the protection of 

investors and the public interest.18

Among other things, annual shareholder 

meetings allow the shareholders of a 

company the opportunity to elect 

directors and meet with, and engage, 

management to discuss company 

affairs.19 The Commission has 

recognized that, in limited 

circumstances, the exchange 

requirement to hold an annual 

shareholder meeting may not be 

necessary for certain issuers of specific 

types of securities where the holders of 

such securities do not directly 

participate as equity holders or vote in 

the annual election of directors or 

generally on the operations or policies 

of the listed company.20 However, when 

approving a prior exchange proposal for 

specific exemptions from the annual 

shareholder meeting requirement, 

which included an exemption for 

exchange-traded funds (‘‘ETFs’’), the 

Commission expressly stated that CEFs 

are still required to hold annual 

meetings under that exchange’s rules.21

The Exchange states in support of its 

proposal that it believes the 

‘‘burdensome’’ annual shareholder 

meeting requirement is unnecessary for 

CEFs given the investor protections 

afforded under the 1940 Act.22

Specifically, the Exchange states that it 

believes that because the 1940 Act 

preserves shareholder ability to elect 

directors,23 requires ‘‘independent 

directors’’ 24 to approve significant 

actions,25 and requires a shareholder 

vote on material governance and policy 

changes,26 the Exchange’s requirement 

to hold an annual shareholder meeting 

is unnecessary for CEF shareholders.27

The Exchange further states that it 

believes that because no other registered 

investment companies listed on the 

Exchange are required to hold an annual 

shareholder meeting (such exempted 

investment companies, ‘‘BZX-Listed 

ETFs’’), there is not a compelling reason 

for CEFs to be subject to such a 

requirement.28

The Commission received comments 

supporting the proposal.29 Some 

commenters stated that Congress 

adopted the 1940 Act protections 

referenced by BZX in lieu of an annual 

shareholder meeting requirement.30

Some commenters agreed with BZX that 

1940 Act requirements, such as those 

pertaining to director elections, 

independent directors, and matters that 

require shareholder vote, protect CEF 

investors; 31 and some stated that the 

1940 Act requirements rendered BZX’s 

annual shareholder meeting 

requirement ‘‘superfluous.’’ 32 Some 


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33See, e.g., ICI Letter at 2–3, 5–7, 17–24; 

Neuberger Berman Letter at 1–2; Stradley Ronon 

Letter at 1–2. 

34See, e.g., ICI Letter at 13–14; Neuberger Berman 

Letter at 1–2; Stradley Ronon Letter at 2. 

35See, e.g., ICI Letter at 14–15; Letter from George 

W. Morriss, dated Aug. 5, 2024. 

36See, e.g., Letters from Paul N. Roth, Founding 

Partner Emeritus, Of Counsel, Schulte Roth & Zabel 

LLP, dated Aug. 9, 2024 (‘‘Schulte Letter’’); Michael 

D’Angelo, Saba Capital Management, LP, dated 

Aug. 5, 2024 (‘‘Saba Letter’’); Profs. Lucian A. 

Bebchuk, Harvard Law School, and Robert J. 

Jackson, Jr., NYU School of Law, dated July 30, 

2024 (‘‘Bebchuk & Jackson Letter’’); Profs. Daniel J. 

Taylor, The Wharton School, Edwin Hu, UVA 

School of Law, Robert Bishop, Duke School of Law, 

Bradford Levy, Chicago Booth School of Business, 

Shiva Rajgopal, Columbia Business School, and 

Jonathan Zytnick, Georgetown University Law 

Center, on behalf of the Working Group on Market 

Efficiency and Investor Protection in Closed-End 

Funds, dated July 30, 2024 (‘‘Working Group 

Letter’’). 

37See, e.g., Schulte Letter at 3. 

38See, e.g., Saba Letter at 9–10. 

39See, e.g., Bebchuk & Jackson Letter at 5–7. 

40See, e.g., Working Group Letter at 3; Schulte 

Letter at 5. 

41See, e.g., Bebchuk & Jackson Letter at 5–6. 

42See, e.g., Bebchuk & Jackson Letter at 7–8; 

Working Group Letter at 3. 43A commenter stated that the current annual 

shareholder meeting mechanism has both a direct 

effect (e.g., replacing existing fund directors) and 

indirect effect (e.g., the fear of potential 

replacement gives incumbent CEF directors 

incentive to avoid underperformance altogether); 

and that approval of BZX’s proposal would produce 

two types of entrenchment costs from the 

elimination of these direct and indirect effects. See 

Bebchuk & Jackson Letter at 7–8 and 10–11. 

44See, e.g., Working Group Letter at 5. 45See, e.g., Working Group Letter at 6; Saba Letter 

at 1, 2, and 7 n.25. 46See, e.g., Bebchuk & Jackson Letter at 8–9. 47See, e.g., Working Group Letter at 5; Schulte 

Letter at 6–7 and n.31; Saba Letter at 2. 48Schulte Letter at 6. In a similar proposal from 

the New York Stock Exchange to exempt CEFs from 

that exchange’s annual shareholder meeting 

requirement, opposing commenters described other 

benefits of annual shareholder meetings to CEF 

investors, such as providing accountability, 

transparency, and a forum for shareholders to voice 

concerns. See Securities Exchange Act Release No. 

101257 (Oct. 4, 2024), 89 FR 82277, 82280 n.47 

(Oct. 10, 2024) (SR–NYSE–2024–35) (Order 

Instituting Proceedings to Determine Whether to 

Approve or Disapprove a Proposed Rule Change to 

Amend Section 302.00 of the NYSE Listed 

Company Manual to Exempt Closed-End Funds 

Registered Under the Investment Company Act of 

1940 From the Requirement to Hold Annual 

Shareholder Meetings). 

49See, e.g., Schulte Letter at 4; Saba Letter at 2; 

Bebchuk & Jackson Letter at 12. 

50 15 U.S.C. 78f(b)(5). 

51See BZX Prior Filing, supra note 28. 

52See Securities Act Release No. 10695, 

Investment Company Act Release No. 33646, S7– 

15–18 (Sept. 25, 2019), 84 FR 57162, 57165 (Oct. 

24, 2019) (Exchange-Traded Funds Final Rule) 

(‘‘The combination of the creation and redemption 

process with secondary market trading in ETF 

shares and underlying securities provides arbitrage 

opportunities that are designed to help keep the 

market price of ETF shares at or close to the NAV 

per share of the ETF.’’). See also supra note 28. 

53Under the Commission’s Rules of Practice, the 

‘‘burden to demonstrate that a proposed rule change 

is consistent with the Exchange Act and the rules 

and regulations issued thereunder . . . is on the 

self-regulatory organization that proposed the rule 

change.’’ 17 CFR 201.700(b)(3). The description of 

a proposed rule change, its purpose and operation, 

its effect, and a legal analysis of its consistency with 

applicable requirements must all be sufficiently 

detailed and specific to support an affirmative 

Commission finding, and any failure of a selfregulatory organization to provide this information 

may result in the Commission not having a 

sufficient basis to make an affirmative finding that 

a proposed rule change is consistent with the 

Exchange Act and the applicable rules and 

regulations. Id. 

commenters also claimed that certain 

investors exploit the current annual 

shareholder meeting requirement for 

their own gain—for example, by 

launching a proxy campaign to change 

a CEF’s management and/or investment 

strategy, to conduct tender offers, or to 

liquidate the CEF altogether.33 These 

commenters stated that annual meetings 

allow a minority investor to have an 

outsized influence over the CEF that 

results in harm to long-term retail 

investors in the CEF and disincentivizes 

the creation of new listed CEFs.34 Some 

commenters also stated that annual 

shareholder meetings are costly to CEFs 

and that retail investor engagement at 

such meetings is limited, and concluded 

that the burden of the annual 

shareholder meeting requirement 

outweighs any potential benefits.35

The Commission also received 

comments opposing the proposal.36

Some commenters stated that the 1940 

Act requirements referenced by the 

Exchange were adopted in addition to 

the pre-existing annual shareholder 

meeting requirement of the New York 

Stock Exchange, rather than in lieu of 

it,37 and some stated that the 1940 Act 

requirements are not a substitute for 

annual shareholder meetings.38 Some 

commenters stated that CEFs are 

fundamentally different from other 

registered investment companies, 

including BZX-Listed ETFs.39 In 

particular, commenters stated that CEFs 

commonly trade at a discount to NAV,40

and claimed that the inability of CEF 

investors to redeem shares at NAV 

makes CEF investors more vulnerable to 

actions by CEF management.41

Commenters stated that, in light of these 

unique features of CEFs, annual 

meetings are an important tool to 

discipline CEF management.42

Commenters also stated that elimination 

of BZX’s annual shareholder meeting 

requirement would harm CEF investors 

by reducing opportunities for 

shareholder activism (or the threat of 

such activism); 43 further entrenching 

CEF management; 44 potentially 

increasing CEFs’ discounts to NAV; 45

and effectively disenfranchising CEF 

investors due to the infrequency with 

which shareholder meetings would be 

required under the 1940 Act 46 and the 

difficulty for shareholders to requisition 

special meetings.47 A commenter stated 

that CEF shareholders ‘‘are constantly 

engaging with management and boards 

in an effort to close NAV discounts and 

recoup lost shareholder value’’ and that 

the proposal is ‘‘seeking to remove the 

primary avenue used by CEF 

shareholders[] to engage with CEF 

management and the board,’’ 48 and 

commenters expressed concern with the 

removal of a right (required annual 

shareholder meetings) that shareholders 

may have relied upon when investing in 

CEFs.49

The Commission has concerns about 

whether BZX’s proposal to exempt CEFs 

from the annual shareholder meeting 

requirement set forth in BZX Rule 

14.10(f) is designed to protect investors 

and the public interest, as required by 

Section 6(b)(5) of the Exchange Act.50

Although BZX’s rules provide a similar 

exemption for BZX-Listed ETFs,51 there 

are important differences between CEFs 

and ETFs. Shares of CEFs often trade at 

prices that are less than, or at a 

‘‘discount’’ to, the funds’ NAV per 

share. In contrast, while ETFs may trade 

at a discount, it is often to a much lesser 

degree than CEFs.52 Due to these 

circumstances, shareholders of CEFs 

may have an interest in expressing their 

views at annual shareholder meetings. 

Moreover, the Commission has 

concerns with the sufficiency of the 

Exchange’s analysis and whether the 

Exchange has met its burden to 

demonstrate that its proposal is 

consistent with the Exchange Act.53 The 

Exchange states that BZX-Listed ETFs 

are already exempt from the annual 

shareholder meeting requirement of 

BZX Rule 14.10(f). However, the 

Exchange does not discuss or explain 

the differences between BZX-Listed 

ETFs and CEFs, which differences, as 

discussed above, may result in investor 

protection concerns for CEF 

shareholders with respect to eliminating 

the right to an annual shareholder 

meeting that may not be present for 

BZX-Listed ETFs’ shareholders. For 

example, the Exchange does not discuss 

whether the fact that CEF shares may 

trade at a large discount to NAV would 

raise any investor protection concerns 

with eliminating the annual shareholder 

meeting requirement. The Exchange also 

does not discuss the extent to which 

CEF investors participate in, and benefit 

from, annual shareholder meetings, 

such that eliminating the annual 

shareholder meeting requirement may 

raise investor protection concerns. In 

addition, while the Exchange discusses 

how certain requirements set forth in 


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54 15 U.S.C. 78f(b)(5). 

55 15 U.S.C. 78s(b)(2)(B). 

56 15 U.S.C. 78f(b)(5). 

57 17 CFR 240.19b–4. 

58Section 19(b)(2) of the Exchange Act, as 

amended by the Securities Acts Amendments of 

1975, Public Law 94–29 (June 4, 1975), grants to 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 selfregulatory organization. See Securities Acts 

Amendments of 1975, Senate Comm. on Banking, 

Housing & Urban Affairs, S. Rep. No. 75, 94th 

Cong., 1st Sess. 30 (1975). 

59 17 CFR 200.30–3(a)(57). 

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

2 17 CFR 240.19b–4. 

the 1940 Act are designed to protect 

CEF investors and the public interest, 

the Exchange does not discuss how its 

specific proposal to exempt CEFs from 

the longstanding annual shareholder 

meeting requirement—and any resulting 

loss of benefits to CEF investors of 

annual shareholder meetings—would be 

designed to protect CEF investors and 

the public interest. 

As a result, the Commission believes 

there are questions as to whether the 

proposal is consistent with Section 

6(b)(5) of the Exchange Act 54 and its 

requirement, among other things, that 

the rules of a national securities 

exchange be designed to protect 

investors and the public interest. For 

this reason, it is appropriate to institute 

proceedings pursuant to Section 

19(b)(2)(B) of the Exchange Act 55 to 

determine whether the proposal should 

be approved or disapproved. 

IV. Procedure: Request for Written 

Comments 

The Commission requests that 

interested persons provide written 

submissions of their data, views, 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 

proposed rule change, as modified by 

Amendment No. 1, is consistent with 

Section 6(b)(5) of the Exchange Act 56 or 

any other provision of the Exchange 

Act, or 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 

data, views, and arguments, the 

Commission will consider, pursuant to 

Rule 19b–4 under the Exchange Act,57

any request for an opportunity to make 

an oral presentation.58

Interested persons are invited to 

submit written data, views, and 

arguments regarding whether the 

proposed rule change, as modified by 

Amendment No. 1, should be approved 

or disapproved by November 7, 2024. 

Any person who wishes to file a rebuttal 

to any other person’s submission must 

file that rebuttal by November 21, 2024. 

The Commission asks that commenters 

address the sufficiency of the 

Exchange’s statements in support of the 

proposal, in addition to any other 

comments they may wish to submit 

about the proposed rule change. 

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– 

CboeBZX–2024–055 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–CboeBZX–2024–055. 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–CboeBZX–2024–055 and should be 

submitted on or before November 7, 

2024. Rebuttal comments should be 

submitted by November 21, 2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.59

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–23979 Filed 10–16–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–101302; File No. SR– 

CboeBZX–2024–094] 

Self-Regulatory Organizations; Cboe 

BZX Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of a 

Proposed Rule Change To Amend Its 

Fees Schedule Regarding Dedicated 

Cores 

October 10, 2024 

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

Securities Exchange Act of 1934 

(‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on 

September 30, 2024, Cboe BZX 

Exchange, Inc. (the ‘‘Exchange’’ or 

‘‘BZX’’) 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 Exchange. 

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 

Cboe BZX Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘BZX Equities’’) 

proposes to amend its Fees Schedule. 

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 


ddrumheller on DSK120RN23PROD with NOTICES1