92252 Federal Register / Vol. 89, No. 225 / Thursday, November 21, 2024 / Notices 

47 15 U.S.C. 78s(b)(3)(A). 

48 17 CFR 240.19b–4(f)(2). 

49 15 U.S.C. 78s(b)(2)(B). 

50 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. 99801 

(Mar. 20, 2024), 89 FR 21104. The Commission 

received only one comment on the proposed rule 

change, which is available at: https://www.sec.gov/ 

comments/sr-nysearca-2024-27/ 

srnysearca202427.htm. The comment letter was not 

germane to the proposed rule change and instead 

concerned voluntary carbon markets more broadly. 

See Letter from James D. Milas (Mar. 27, 2024). As 

stated below, the Exchange represents that the Fund 

will not provide exposure to voluntary carbon 

markets. 

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

5See Securities Exchange Act Release No. 

100050, 89 FR 38932 (May 8, 2024). 

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

7See Securities Exchange Act Release No. 

100390, 89 FR 53466 (June 26, 2024). 

8 15 U.S.C. 78s(b)(2). 

9See Securities Exchange Act Release No. 

100896, 89 FR 73135 (Sept. 9, 2024). The 

Commission, pursuant to Section 19(b)(2) of the 

Act, designated Nov. 21, 2024 as the date by which 

the Commission shall either approve or disapprove 

the proposed rule change. 

10Amendment No. 1 is available on the 

Commission’s website at: https://www.sec.gov/ 

comments/sr-nysearca-2024-27/srnysearca202427- 

527675-1515762.pdf. 

11Partial Amendment No. 2 is available on the 

Commission’s website at: https://www.sec.gov/ 

comments/sr-nysearca-2024-27/srnysearca202427- 

527695-1515782.pdf. 

12Amendment No. 3 is available on the 

Commission’s website at: https://www.sec.gov/ 

comments/sr-nysearca-2024-27/srnysearca202427- 

530955-1525482.pdf. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change is effective 

upon filing pursuant to Section 

19(b)(3)(A) 47 of the Act and 

subparagraph (f)(2) of Rule 19b–4 48

thereunder, because it establishes a due, 

fee, or other charge imposed by the 

Exchange. 

At any time within 60 days of the 

filing of such proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission shall institute proceedings 

under Section 19(b)(2)(B) 49 of the Act to 

determine whether the proposed rule 

change should be approved or 

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–2024–94 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–2024–94. 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–NYSEARCA–2024–94 and should be 

submitted on or before December 12, 

2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.50

Stephanie J. Fouse, 

Assistant Secretary. 

[FR Doc. 2024–27217 Filed 11–20–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–101641; File No. SR– 

NYSEARCA–2024–27] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing of 

Amendment No. 4 and Order Granting 

Accelerated Approval of a Proposed 

Rule Change, as Modified by 

Amendment No. 4, To List and Trade 

Shares of the 7RCC Spot Bitcoin and 

Carbon Credit Futures ETF Under 

NYSE Arca Rule 8.500–E (Trust Units) 

November 15, 2024. 

I. Introduction 

On March 13, 2024, NYSE Arca, Inc. 

(‘‘NYSE Arca’’ or ‘‘Exchange’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’), pursuant 

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

Exchange Act of 1934 (‘‘Act’’ or 

‘‘Exchange Act’’) 1 and Rule 19b–4 

thereunder,2 a proposed rule change to 

list and trade shares of the 7RCC Spot 

Bitcoin and Carbon Credit Futures ETF 

under NYSE Arca Rule 8.500–E (Trust 

Units). The proposed rule change was 

published for comment in the Federal 

Register on March 26, 2024.3

On May 2, 2024, 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 On June 20, 2024, the 

Commission instituted proceedings 

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

Act 6 to determine whether to approve 

or disapprove the proposed rule 

change.7 On September 3, 2024, 

pursuant to Section 19(b)(2) of the Act,8

the Commission designated a longer 

period for Commission action on the 

proposed rule change.9

On September 30, 2024, the Exchange 

filed Amendment No. 1 to the proposed 

rule change, which amended and 

replaced the proposed rule change in its 

entirety as originally filed.10 On October 

3, 2024, the Exchange filed Partial 

Amendment No. 2, which amended the 

proposed rule change, as modified by 

Amendment No. 1.11 On October 18, 

2024, the Exchange filed Amendment 

No. 3 to the proposed rule change, 

which amended and replaced the 

proposed rule change in its entirety, as 

modified by Amendment No. 1 and 

Partial Amendment No. 2.12 On October 

24, 2024, the Exchange filed 

Amendment No. 4 to the proposed rule 

change, which amended and replaced 


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13Amendment No. 4 is available on the 

Commission’s website at: https://www.sec.gov/ 

comments/sr-nysearca-2024-27/srnysearca202427- 

534335-1532242.pdf. 

14NYSE Arca Rule 8.500–E governs the listing 

and trading of Trust Units, which are securities 

issued by a trust or other similar entity that is 

constituted as a commodity pool that holds 

investments comprising or otherwise based on any 

combination of futures contracts, options on futures 

contracts, forward contracts, swap contracts, 

commodities, and/or securities. 

15On December 18, 2023, the Trust filed with the 

Commission a registration statement on Form S–1 

(File No. 333–276125) (the ‘‘Registration 

Statement’’) under the Securities Act of 1933 (15 

U.S.C. 77a) (the ‘‘Securities Act’’). On October 7, 

2024, the Trust filed Amendment No. 1 to the 

Registration Statement. The description of the 

operation of the Fund herein is based, in part, on 

the Registration Statement. The Registration 

Statement is not yet effective and the Shares will 

not trade on the Exchange until such time that the 

Registration Statement is effective. 

16 15 U.S.C. 80a–1. 

17 ‘‘Cash Equivalents’’ shall mean such 

investments that, in the view of the Sponsor, are of 

high credit quality and liquidity and can be 

converted to cash quickly. Such investments shall 

include: (a) cash; (b) debt securities issued or 

directly or indirectly fully guaranteed or insured by 

the United States or any agency or instrumentality 

thereof (such as U.S. Treasury Bills); (c) commercial 

paper or finance company paper of sufficient credit 

quality in the view of the Sponsor; or (d) money 

market mutual funds. Additionally, the Fund will 

implement foreign exchange dollarization using 

spot market or foreign exchange forwards and 

customary foreign exchange hedging instruments. 

the proposed rule change in its entirety, 

as modified by Amendment No. 3.13

The Commission is publishing this 

notice to solicit comments on 

Amendment No. 4 to the proposed rule 

change from interested persons, and is 

approving the proposed rule change, as 

modified by Amendment No. 4, on an 

accelerated basis. 

II. The Exchange’s Description of the 

Proposal, as Modified by Amendment 

No. 4 

In its filing with the Commission, the 

self-regulatory organization included 

statements concerning the purpose of, 

and basis for, the proposed rule change 

and discussed any comments it received 

on the proposed rule change. The text 

of those statements may be examined at 

the places specified in Item IV below. 

The Exchange has prepared summaries, 

set forth in sections A, B, and C below, 

of the most significant parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to list and 

trade shares (‘‘Shares’’) of the 7RCC 

Spot Bitcoin and Carbon Credit Futures 

ETF (the ‘‘Fund’’) under NYSE Arca 

Rule 8.500–E.14

The Fund is a series of the Tidal 

Commodities Trust I (the ‘‘Trust’’), a 

Delaware statutory trust organized on 

February 10, 2023.15 The Trust has no 

fixed termination date. The Trust will 

not be registered as an investment 

company under the Investment 

Company Act of 1940, as amended,16

and is not required to register under 

such act. 

The sponsor of the Trust is Tidal 

Investments LLC (the ‘‘Sponsor’’). The 

Sponsor is registered as a commodity 

pool operator and a commodity trading 

adviser with the Commodity Futures 

Trading Commission (the ‘‘CFTC’’) and 

is a member of the National Futures 

Association. 

The administrator of the Fund is Tidal 

ETF Services (the ‘‘Administrator’’). The 

custodian of the Fund’s bitcoin holdings 

is Gemini Trust Company, LLC (the 

‘‘Bitcoin Custodian’’). The Sponsor will 

appoint a non-digital custodian (the 

‘‘Non-Digital Custodian’’ and, together 

with the Bitcoin Custodian, the 

‘‘Custodians’’), who will serve as the 

Fund’s custodian with respect to its 

cash and cash equivalents,17 as well as 

any investments in connection with its 

exposure to Carbon Credit Futures, as 

defined below. 

The Fund’s Investment Objective and 

Strategy 

According to the Registration 

Statement, the Fund’s investment 

objective is to reflect the daily changes 

of the price of bitcoin and the value of 

carbon credit futures contracts (‘‘Carbon 

Credit Futures’’), as represented by the 

Vinter Bitcoin Carbon Credits Index (the 

‘‘Index’’), less expenses from the Fund’s 

operations. 

The Fund will pursue its investment 

objective by investing 80% of its assets 

in bitcoin and the remaining 20% of its 

assets in Carbon Credit Futures that 

provide exposure to Carbon Credit 

Futures represented by the Index. The 

Index seeks to provide exposure to both 

bitcoin and Carbon Credit Futures and 

is designed to track the performance of 

investing in a portfolio comprised of 

80% of bitcoin and 20% Carbon Credit 

Futures. The Index’s Carbon Credit 

Futures are linked to the value of 

emissions allowances issued under the 

following ‘‘cap-and-trade’’ regimes: the 

European Union Emissions Trading 

System (‘‘EU ETS’’), the California 

Carbon Allowance (‘‘CCA’’), and the 

Regional Greenhouse Gas Initiative 

(‘‘RGGI’’). The Fund will gain exposure 

to these Carbon Credit Futures only by 

investing directly in only such futures 

contracts. The Fund does not intend to 

invest in Carbon Credit Futures 

specifically linked to bitcoin mining or 

other related processes. As further 

discussed below, the Fund will not 

provide exposure to voluntary carbon 

markets. 

Carbon Credit Futures 

According to the Registration 

Statement, Carbon Credit Futures are 

futures contracts on emissions 

allowances issued by various ‘‘cap-andtrade’’ regulatory regimes that seek to 

reduce greenhouse gases over time. A 

cap-and-trade regime typically involves 

a regulator setting a limit on the total 

amount of specific greenhouse gases 

(‘‘GHG’’) (such as carbon dioxide 

(‘‘CO2’’)) that can be emitted by 

regulated entities. Capping and reducing 

the cap on GHGs is viewed as a key 

policy tool in reaching climate change 

objectives. The regime is designed to 

promote sustainable development by 

putting a price on carbon emissions. 

The regulator will then issue or sell 

‘‘emissions allowances’’ to regulated 

entities, which in turn may buy or sell 

the emissions allowances to the open 

market. To the extent that the regulator 

may then reduce the cap on emission 

allowances, regulated entities are 

incentivized to reduce their emissions; 

otherwise, they must purchase 

additional emission allowances on the 

open market, where the price of such 

allowances will likely be increasing as 

a result of demand, and regulated 

entities that reduce their emissions will 

be able to sell unneeded emission 

allowances for profit. An emission 

allowance or carbon credit is a unit of 

emissions (typically one ton of CO2) that 

the owner of the allowance or credit is 

permitted to emit. Futures contracts 

linked to the value of emission 

allowances are known as carbon credit 

futures. 

Overview of the Bitcoin Industry and 

Market 

Bitcoin 

According to the Registration 

Statement, bitcoin is the digital asset 

that is native to, and created and 

transmitted through the operations of, 

the peer-to-peer ‘‘Bitcoin Network,’’ a 

decentralized network of computers that 

operates on cryptographic protocols. No 

single entity owns or operates the 

Bitcoin Network, the infrastructure of 

which is collectively maintained by a 

decentralized user base. The Bitcoin 

Network allows people to exchange 

tokens of value, called bitcoin, which 

are recorded on a public transaction 

ledger known as the Blockchain. Bitcoin 


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can be used to pay for goods and 

services, or it can be converted to fiat 

currencies, such as the U.S. dollar, at 

rates determined on digital asset trading 

platforms or in individual end-user-toend-user transactions under a barter 

system. Although nascent in use, bitcoin 

may be used as a medium of exchange, 

unit of account or store of value. 

The Bitcoin Network is decentralized 

and does not require governmental 

authorities or financial institution 

intermediaries to create, transmit, or 

determine the value of bitcoin. In 

addition, no party may easily censor 

transactions on the Bitcoin Network. As 

a result, the Bitcoin Network is often 

referred to as decentralized and 

censorship resistant. 

The value of bitcoin is determined by 

the supply of and demand for bitcoin. 

New bitcoin are created and rewarded to 

the parties providing the Bitcoin 

Network’s infrastructure (‘‘miners’’) in 

exchange for their expending 

computational power to verifying 

transactions and add them to the 

‘‘Blockchain.’’ The Blockchain is 

effectively a decentralized database that 

includes all blocks that have been 

solved by miners and it is updated to 

include new blocks as they are solved. 

Each bitcoin transaction is broadcast to 

the Bitcoin Network and, when 

included in a block, recorded in the 

Blockchain. As each new block records 

outstanding bitcoin transactions, and 

outstanding transactions are settled and 

validated through such recording, the 

Blockchain represents a complete, 

transparent, and unbroken history of all 

transactions of the Bitcoin Network. 

Bitcoin Network 

Bitcoin was first described in a white 

paper released in 2008 and published 

under the pseudonym ‘‘Satoshi 

Nakamoto.’’ The protocol underlying 

Bitcoin was subsequently released in 

2009 as open-source software and 

currently operates on a worldwide 

network of computers. The Bitcoin 

Network and its software have been 

under active development since that 

time by a group of computer engineers 

known as ‘‘core developers,’’ each of 

whom operates under a volunteer basis 

and without strict hierarchical 

administration. 

The Bitcoin Network utilizes a digital 

asset known as ‘‘bitcoin,’’ which can be 

transferred among parties via the 

internet. Unlike other means of 

electronic payments such as credit card 

transactions, one of the advantages of 

bitcoin is that it can be transferred 

without the use of a central 

administrator or clearing agency. As a 

central party is not necessary to 

administer bitcoin transactions or 

maintain the bitcoin ledger, the term 

decentralized is often used in 

descriptions of bitcoin. Unless it is 

using a third-party service provider, a 

party transacting in bitcoin is generally 

not afforded some of the protections that 

may be offered by intermediaries. 

The first step in directly using the 

Bitcoin Network for transactions is to 

download specialized software referred 

to as a ‘‘bitcoin wallet.’’ A user’s bitcoin 

wallet can run on a computer or 

smartphone and can be used both to 

send and to receive bitcoin. Within a 

bitcoin wallet, a user can generate one 

or more unique ‘‘bitcoin addresses,’’ 

which are conceptually similar to bank 

account numbers. After establishing a 

bitcoin address, a user can send or 

receive bitcoin from his or her bitcoin 

address to or from another user’s bitcoin 

address. Sending bitcoin from one 

bitcoin address to another is similar in 

concept to sending a bank wire from one 

person’s bank account to another 

person’s bank account; however, such 

transactions are not managed by an 

intermediary and erroneous transactions 

generally may not be reversed or 

remedied once sent. 

The amount of bitcoin associated with 

each bitcoin address, as well as each 

bitcoin transaction to or from such 

bitcoin address, is transparently 

reflected in the Blockchain and can be 

viewed by websites that operate as 

‘‘blockchain explorers.’’ Copies of the 

Blockchain exist on thousands of 

computers on the Bitcoin Network 

throughout the internet. A user’s bitcoin 

wallet will either contain a copy of the 

blockchain or be able to connect with 

another computer that holds a copy of 

the blockchain. The innovative design 

of the Bitcoin Network protocol allows 

each Bitcoin user to trust that their copy 

of the Blockchain will generally be 

updated consistent with each other 

user’s copy. 

When a Bitcoin user wishes to 

transfer bitcoin to another user, the 

sender must first request a Bitcoin 

address from the recipient. The sender 

then uses his or her Bitcoin wallet 

software to create a proposed 

transaction that is confirmed and settled 

when included in the Blockchain. The 

transaction would reduce the amount of 

bitcoin allocated to the sender’s bitcoin 

address and increase the amount 

allocated to the recipient’s bitcoin 

address, in each case by the amount of 

bitcoin desired to be transferred. The 

transaction is completely digital in 

nature, similar to a file on a computer, 

and it can be sent to other computers 

participating in the Bitcoin Network; 

however, the use of cryptographic 

verification is believed to prevent the 

ability to duplicate or counterfeit 

bitcoin. 

Bitcoin Protocol 

The Bitcoin protocol is built using 

open-source software, meaning any 

developer can review the underlying 

code and suggest changes. There is no 

official company or group that is 

responsible for making modifications to 

Bitcoin. There are, however, a number 

of individual developers that regularly 

contribute to a specific distribution of 

Bitcoin software known as the ‘‘Bitcoin 

Core,’’ which is maintained in an opensource repository on the website Github. 

There are many other compatible 

versions of Bitcoin software, but Bitcoin 

Core provides the de-facto standard for 

the Bitcoin protocol, also known as the 

‘‘reference software.’’ The core 

developers for Bitcoin Core operate 

under a volunteer basis and without 

strict hierarchical administration. 

Significant changes to the Bitcoin 

protocol are typically accomplished 

through a so-called ‘‘Bitcoin 

Improvement Proposal’’ or ‘‘BIP.’’ Such 

proposals are generally posted on 

websites, and the proposals explain 

technical requirements for the protocol 

change as well as reasons why the 

change should be accepted. Upon its 

inclusion in the most recent version of 

Bitcoin Core, a new BIP becomes part of 

the reference software’s Bitcoin 

protocol. Several BIPs have been 

implemented since 2011 and have 

provided various new features and 

scaling improvements. 

Because Bitcoin has no central 

authority, updating the reference 

software’s Bitcoin protocol will not 

immediately change the Bitcoin 

Network’s operations. Instead, the 

implementation of a change is achieved 

by users and transaction validators 

(known as miners) downloading and 

running updated versions of Bitcoin 

Core or other Bitcoin software that 

abides by the new Bitcoin protocol. 

Users and miners must accept any 

changes made to the Bitcoin source code 

by downloading a version of their 

Bitcoin software that incorporates the 

proposed modification of the Bitcoin 

Network’s source code. A modification 

of the Bitcoin Network’s source code is 

only effective with respect to those 

Bitcoin users and miners who download 

it. If an incompatible modification is 

accepted by a less than overwhelming 

percentage of users and miners, a 

division in the Bitcoin Network will 

occur such that one network will run 

the pre-modification source code and 

the other network will run the modified 


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18The Fund may from time to time come into 

possession of Incidental Rights and/or IR Virtual 

Currency by virtue of its ownership of bitcoin, 

generally through a fork in the Blockchain, an 

airdrop offered to holders of bitcoin or other similar 

event. ‘‘Incidental Rights’’ are rights to acquire, or 

otherwise establish dominion and control over, any 

virtual currency or other asset or right, which rights 

are incident to the Fund’s ownership of bitcoin and 

arise without any action of the Fund, or of the 

Sponsor on behalf of the Fund. ‘‘IR Virtual 

Currency’’ is any virtual currency tokens, or other 

asset or right, acquired by the Fund through the 

exercise of any Incidental Right. Although the Fund 

may be permitted to take certain actions with 

respect to Incidental Rights and IR Virtual 

Currency, at this time the Fund will prospectively 

irrevocably abandon any Incidental Rights and IR 

Virtual Currency. In the event the Fund seeks to 

change this position, the Exchange would file a 

subsequent proposed rule change with the 

Commission. 

source code. Such a division is known 

as a ‘‘fork’’ in the Bitcoin Network. 

Such a fork in the Bitcoin Network 

occurred on August 1, 2017, when a 

group of developers and miners 

accepted certain changes to the Bitcoin 

Network software intended to increase 

transaction capacity. Blocks mined on 

this network now diverge from blocks 

mined on the Bitcoin Network, which 

has resulted in the creation of a new 

blockchain whose digital asset is 

referred to as ‘‘bitcoin cash.’’ Bitcoin 

and bitcoin cash now operate as 

separate, independent networks, and 

have distinct related assets (bitcoin and 

bitcoin cash). Additional forks have 

followed the bitcoin cash fork, and it is 

possible that additional ‘‘forks’’ will 

occur in the future.18

Bitcoin Transactions 

A bitcoin transaction is similar in 

concept to an irreversible digital check. 

The transaction contains the sender’s 

bitcoin address, the recipient’s bitcoin 

address, the amount of bitcoin to be 

sent, a transaction fee and the sender’s 

digital signature. Bitcoin transactions 

are secured by cryptography known as 

public-private key cryptography, 

represented by the bitcoin addresses 

and digital signature in a transaction’s 

data file. Each Bitcoin Network address, 

or ‘‘wallet,’’ is associated with a unique 

‘‘public key’’ and ‘‘private key’’ pair, 

both of which are lengthy alphanumeric 

codes, derived together and possessing 

a unique relationship. 

The use of key pairs is a cornerstone 

of the Bitcoin Network technology. This 

is because the use of a private key is the 

only mechanism by which a bitcoin 

transaction can be signed. If a private 

key is lost, the corresponding bitcoin is 

thereafter permanently non-transferable. 

Moreover, the theft of a private key 

provides the thief immediate and 

unfettered access to the corresponding 

bitcoin. Bitcoin users must therefore 

understand that in this regard, bitcoin is 

similar to cash: that is, the person or 

entity in control of the private key 

corresponding to a particular quantity of 

bitcoin has de facto control of the 

bitcoin. For large quantities of bitcoin, 

holders often embrace sophisticated 

security measures. 

The public key is visible to the public 

and analogous to the Bitcoin Network 

address. The private key is a secret and 

is used to digitally sign a transaction in 

a way that proves the transaction has 

been signed by the holder of the publicprivate key pair, without having to 

reveal the private key. A user’s private 

key must be kept safe in accordance 

with appropriate controls and 

procedures to ensure it is used only for 

legitimate and intended transactions. If 

an unauthorized third person learns of 

a user’s private key, that third person 

could apply the user’s digital signature 

without authorization and send the 

user’s bitcoin to their or another bitcoin 

address, thereby stealing the user’s 

bitcoin. Similarly, if a user loses his 

private key and cannot restore such 

access (e.g., through a backup), the user 

may permanently lose access to the 

bitcoin associated with that private key 

and bitcoin address. 

To prevent the possibility of doublespending bitcoin, each validated 

transaction is recorded, time stamped 

and publicly displayed in a ‘‘block’’ in 

the Blockchain, which is publicly 

available. Thus, the Bitcoin Network 

provides confirmation against doublespending by memorializing every 

transaction in the Blockchain, which is 

publicly accessible and downloaded in 

part or in whole by all users of the 

Bitcoin Network software program. Any 

user may validate, through their Bitcoin 

wallet or a blockchain explorer, that 

each transaction in the Bitcoin Network 

was authorized by the holder of the 

applicable private key, and Bitcoin 

Network mining software consistent 

with reference software requirements 

validates each such transaction before 

including it in the Blockchain. This 

cryptographic security ensures that 

bitcoin transactions may not generally 

be counterfeited, although it does not 

protect against the ‘‘real world’’ theft or 

coercion of use of a Bitcoin user’s 

private key, including the hacking of a 

Bitcoin user’s computer or a service 

provider’s systems. 

A Bitcoin transaction between two 

parties is recorded if such transaction is 

included in a valid block added to the 

Blockchain. A block is accepted as valid 

through consensus formation among 

Bitcoin Network participants. 

Validation of a block is achieved by 

confirming the cryptographic hash value 

included in the block’s data and by the 

block’s addition to the longest 

confirmed blockchain on the Bitcoin 

Network. For a transaction, inclusion in 

a block on the Blockchain constitutes a 

‘‘confirmation’’ of validity. As each 

block contains a reference to the 

immediately preceding block, additional 

blocks appended to and incorporated 

into the Blockchain constitute 

additional confirmations of the 

transactions in such prior blocks, and a 

transaction included in a block for the 

first time is confirmed once against 

double-spending. This layered 

confirmation process makes changing 

historical blocks (and reversing 

transactions) exponentially more 

difficult the further back one goes in the 

Blockchain. 


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Bitcoin Mining—Creation of New 

Bitcoins 

The process by which bitcoin are 

created and bitcoin transactions are 

verified is called ‘‘mining.’’ To begin 

mining, a user, or miner, can download 

and run a mining ‘‘client,’’ which, like 

regular Bitcoin Network software 

programs, turns the user’s computer into 

a ‘‘node’’ on the Bitcoin Network that 

validates blocks, and, in this case, gives 

such user the ability to validate 

transactions and add new blocks of 

transactions to the Blockchain. 

Miners, through the use of the bitcoin 

software program, engage in a set of 

prescribed complex mathematical 

calculations in order to verify 

transactions and compete for the right to 

add a block of verified transactions to 

the Blockchain and thereby confirm 

bitcoin transactions included in that 

block’s data. The miner who 

successfully ‘‘solves’’ the complex 

mathematical calculations has the right 

to add a block of transactions to the 

Blockchain and is then rewarded with 

new bitcoin, the amount of which is 

determined by the Bitcoin protocol, plus 

any transaction fees paid for the 

transactions included in such block. 

Confirmed and validated bitcoin 

transactions are recorded in blocks 

added to the Blockchain. Each block 

contains the details of some or all of the 

most recent transactions that are not 

memorialized in prior blocks, as well as 

a record of the award of bitcoin to the 

miner who added the new block. Each 

unique block can only be solved and 

added to the Blockchain by one miner; 

therefore, all individual miners and 

mining pools on the Bitcoin Network 

are engaged in a competitive process of 

constantly increasing their computing 

power to improve their likelihood of 

solving for new blocks. As more miners 

join the Bitcoin Network and its 

processing power increases, the Bitcoin 

Network adjusts the complexity of the 

block-solving equation to maintain a 

predetermined pace of adding a new 

block to the Blockchain approximately 

every ten minutes. 

Mathematically Controlled Supply 

The method for creating new bitcoin 

is mathematically controlled in a 

manner so that the supply of bitcoin 

grows at a limited rate pursuant to a preset schedule. The number of bitcoin 

awarded for solving a new block is 

automatically halved every 210,000 

blocks. Thus, the current fixed reward 

for solving a new block is 6.25 bitcoin 

per block; the reward decreased from 25 

bitcoin in July 2016 and 12.5 in May 

2020. It is estimated to halve again in 

April or May of 2024. This deliberately 

controlled rate of bitcoin creation means 

that the number of bitcoin in existence 

will never exceed 21 million and that 

bitcoin cannot be devalued through 

excessive production unless the Bitcoin 

Network’s source code (and the 

underlying protocol for bitcoin 

issuance) is altered. As of November 

2023, approximately 19.5 million 

bitcoin are outstanding. The date when 

the 21 million bitcoin limitation will be 

reached is estimated to be the year 2140. 

Bitcoin Market and Bitcoin Trading 

Platforms 

In addition to using bitcoin to engage 

in transactions, investors may purchase 

and sell bitcoin to speculate as to the 

value of bitcoin in the bitcoin market, or 

as a long-term investment to diversify 

their portfolio. The value of bitcoin 

within the market is determined, in 

part, by: (i) the supply of and demand 

for bitcoin in the bitcoin market; (ii) 

market expectations for the expansion of 

investor interest in bitcoin and the 

adoption of bitcoin by individuals; (iii), 

the number of merchants that accept 

bitcoin as a form of payment; and (iv) 

the volume of private end-user-to-enduser transactions. 

Although the value of bitcoin is 

determined by the value that two 

transacting market participants place on 

bitcoin through their transaction, the 

most common means of determining a 

reference value is by surveying one or 

more trading platforms where secondary 

markets for bitcoin exist. The most 

prominent digital asset trading 

platforms neither report trade 

information nor are they regulated in 

the same way as a national securities 

exchange. As such, there is some 

difference in the form, transparency, 

and reliability of trading data from 

digital asset trading platforms. Generally 

speaking, bitcoin data is available from 

these trading platforms with publicly 

disclosed valuations for each executed 

trade, measured by one or more fiat 

currencies such as the U.S. dollar or 

Euro or another digital asset such as 

ether. OTC dealers or market makers do 

not typically disclose their trade data. 

Currently, there are many digital asset 

trading platforms operating worldwide 

and trading platforms represent a 

substantial percentage of bitcoin buying 

and selling activity and, therefore, 

provide large data sets for market 

valuation of bitcoin. A digital asset 

trading platform provides investors with 

a way to purchase and sell bitcoin, 

similar to stock exchanges like the New 

York Stock Exchange or Nasdaq, which 

provide ways for investors to buy stocks 

and bonds in the ‘‘secondary market.’’ 

Unlike stock exchanges, which are 

regulated to monitor securities trading 

activity, digital asset trading platforms 

are largely regulated as money services 

businesses (or a foreign regulatory 

equivalent) and are required to monitor 

for and detect money-laundering and 

other illicit financing activities that may 

take place on the platform. Digital asset 

trading platforms operate websites 

designed to permit investors to open 

accounts with the trading platform and 

then purchase and sell bitcoin. 

As with conventional stock 

exchanges, an investor opening a 

trading account and wishing to transact 

at a digital asset trading platform must 

deposit an accepted government-issued 

currency into their account, or a 

previously acquired digital asset. The 

process of establishing an account with 

a digital asset trading platform and 

trading bitcoin is different from, and 

should not be confused with, the 

process of users sending bitcoin from 

one bitcoin address to another bitcoin 

address, such as to pay for goods and 

services. This latter process is an 

activity that occurs wholly within the 

confines of the Bitcoin network, while 

the former is an activity that occurs 

largely on private websites and 

databases owned by the digital asset 

trading platform. 

Overview of Commodity Futures 

Markets and Carbon Markets 

Futures Markets 

According to the Registration 

Statement, the Fund will invest in 

Carbon Credit Futures. A futures 

contract is a standardized contract 

traded on, or subject to the rules of, an 

exchange that calls for the future 

delivery of a specified quantity and type 

of a particular underlying asset at a 

specified time and place or alternatively 

may call for cash settlement. Futures 

contracts are traded on a wide variety of 

underlying assets, including bonds, 

interest rates, agricultural products, 

stock indexes, currencies, energy, 

metals, economic indicators and 

statistical measures. The notional size 

and calendar term futures contracts on 

a particular underlying asset are 

identical and are not subject to any 

negotiation, other than with respect to 

price and the number of contracts 

traded between the buyer and seller. 

Certain futures contracts settle in 

cash. The cash settlement amount 

reflects the difference between the 

contract purchase/sale price and the 

contract settlement price. The cash 

settlement mechanism avoids the 

potential for either side to have to 

deliver the underlying asset. For other 


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19The calculation of the Index will be based on 

the last traded price for each of the Carbon Credit 

Futures components, regardless of whether trading 

has been limited or suspended during a trading day. 

20The Fund will not provide any exposure to 

VCMs. 

21The Index includes front-month futures 

contracts that are rolled each month. The Index 

rolls over five business days into the new contract, 

with an expiration of December of the next calendar 

year. 

futures contracts, the contractual 

obligations of a buyer or seller may 

generally be satisfied by taking or 

making physical delivery of the 

underlying asset or by making an 

offsetting sale or purchase of an 

identical futures contract on the same or 

linked exchange before the designated 

date of delivery. The difference between 

the price at which the futures contract 

is purchased or sold and the price paid 

for the offsetting sale or purchase, after 

allowance for brokerage commissions 

and exchange fees, constitutes the profit 

or loss to the trader. 

Futures contracts involve, to varying 

degrees, elements of market risk. 

Additional risks associated with the use 

of futures contracts are imperfect 

correlation between movements in the 

price of the futures contracts and the 

level of the underlying benchmark and 

the possibility of an illiquid market for 

a futures contract. With futures 

contracts, there is minimal but some 

counterparty risk to a fund since futures 

contracts are exchange traded and the 

exchange’s clearing house, as 

counterparty to all exchange-traded 

futures contracts, effectively guarantees 

futures contracts against default. Many 

futures exchanges and boards of trade 

limit the amount of fluctuation 

permitted in futures contract prices 

during a single trading day. Once the 

daily limit has been reached in a 

particular contract, no trades may be 

made that day at a price beyond that 

limit or trading may be suspended for 

specified times during the trading day.19

Futures contracts prices could move to 

the limit for several consecutive trading 

days with little or no trading, thereby 

preventing prompt liquidation of futures 

positions. 

Carbon Markets 

Carbon markets are designed to 

reduce GHG emissions and promote 

sustainable development by putting a 

price on carbon. Carbon markets are 

markets where GHG emissions are 

commodified as a tradable unit either as 

an emission allowance in government 

compliance markets or as a verified 

emission reduction/removal credit in 

voluntary markets. There are two types 

of instruments that are traded in carbon 

markets: carbon credits (sometimes 

called ‘‘allowances’’) and carbon offsets. 

The two main types of carbon markets 

are compliance carbon markets 

(‘‘CCMs’’) and voluntary carbon markets 

(‘‘VCMs’’). Carbon Credit Futures are an 

expansion of the carbon market. Carbon 

Credit Futures are credit instruments 

where the buyer seeks to have exposure 

to CCMs or VCM carbon offset projects, 

but without directly buying or selling 

allowances or investing in any 

projects.20

CCMs are established by governments 

and operate under a cap-and-trade 

system. Cap-and-trade regimes set 

emission limits (i.e., the right to emit a 

certain quantity of GHG emissions), 

which can be allocated or auctioned to 

the parties in the mechanism up to the 

total emissions cap. In these types of 

markets, a regulator will define an 

allowed maximum level of GHG 

emissions (the ‘‘Cap’’) for a certain 

group of entities (e.g., countries, 

companies, or facilities). The Cap is 

then subdivided into distinct emission 

allowances, which are distributed by 

regulated entities. To stay in compliance 

with the regulator, the covered entities 

need to submit one allowance for each 

ton of carbon dioxide equivalent 

emitted during a compliance period 

(usually a year). The initial allocation of 

allowances to covered entities can be 

free of charge, partially free, and/or sold 

at auction by the regulator. 

The Index 

The Index is designed to track the 

performance of investing in a portfolio 

comprised of 80% bitcoin and 20% 

Carbon Credit Futures, which are linked 

to the value of emissions allowances 

issued under the following cap-andtrade regimes: the European Union 

Emissions Trading System, the 

California Carbon Allowance, and 

Regional Greenhouse Gas Initiative. The 

purpose of the Index is to obtain 

exposure to both bitcoin and Carbon 

Credit Futures. Because the Fund’s 

investment objective is to track the daily 

changes of the price of bitcoin and 

Carbon Credit Futures, changes in the 

price of the Shares will vary from 

changes in the spot price of bitcoin, 

carbon credits, and Carbon Credit 

Futures individually. 

Invierno AB (‘‘Vinter’’) administers 

and calculates the bitcoin portion of the 

Index. According to the Sponsor, Vinter 

is a trusted index provider with 

experience constructing and 

maintaining indexes relied upon by 

banks and exchange-traded products. 

Vinter is a registered benchmark 

administrator governed by the European 

Benchmarks Regulation (2016/1011) 

(‘‘BMR’’) and included in the European 

Securities and Markets Authority’s 

register over benchmark administrators. 

To calculate the value of bitcoin, 

Vinter selects bitcoin trading platforms 

based on the criteria described below in 

‘‘Valuation of Bitcoin’’ and takes the last 

price on each trading platform. Vinter 

then takes the median price across these 

trading platforms and calculates the 

time-weighted average price between 

3:00 p.m. to 4:00 p.m. Eastern Time 

(‘‘E.T.’’) to determine the value of 

bitcoin at 4:00 p.m. E.T. 

The Carbon Credit Futures component 

of the Index is calculated by Solactive 

and built with a combination of three 

Carbon Credit Futures indices, each of 

which is calculated and administered by 

a third party: (i) Solactive Carbon 

European Union Allowance Futures ER 

Index (SOCARBN), which tracks EU 

ETS futures; (ii) Solactive California 

Carbon Rolling Futures ER Index 

(SOCCAER), which tracks CCA futures; 

and (iii) Solactive Futures Series 

Regional Greenhouse Gas Rolling 

Futures Index, which tracks RGGI 

futures. The weights of the components 

are adjusted once per year (in 

November) and the weights are 

proportional to the trading volume over 

the last six months. As of the last 

quarterly rebalancing date, September 

10, 2024, the weighting of Carbon Credit 

Futures in the Index was, and the 

weighting of Carbon Credit Futures in 

the Fund would have been, 18% EU 

ETS futures; 2% CCA futures; and 0% 

RGGI futures. The combination of 

exposure to the three underlying indices 

provides the Index with returns tied to 

futures contracts on carbon credits 

connected to EU ETS, CCA, and RGGI. 

The value of the Carbon Credit Futures 

that comprise the Index will be based on 

market prices. The Index includes only 

Carbon Credit Futures that mature in 

December of the next one to two years.21

Although the Carbon Credit Futures in 

the Index are physically settled futures 

contracts, the Sponsor does not 

anticipate that the Fund will hold 

Carbon Futures until expiry or take or 

make delivery of any physical 

commodities. Instead, the Sponsor 

expects to roll Carbon Credit Futures in 

the Fund’s portfolio approximately two 

weeks prior to expiry. Thus, the 

Sponsor expects to sell near to expiry 

Carbon Credit Futures and reinvest the 

proceeds in new Carbon Credit Futures 

to achieve the Fund’s investment 

objective. 

Vinter is the benchmark administrator 

for the bitcoin portion of the Index. As 

benchmark administrator for the bitcoin 


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92258 Federal Register / Vol. 89, No. 225 / Thursday, November 21, 2024 / Notices 

22According to the Sponsor, Vinter does not 

require a minimum number of Index Pricing 

Sources comprising the Index. 

23According to the Sponsor, Vinter may, as 

permitted under BMR Article 12, change the 

eligibility requirements for Index Pricing Sources if, 

for example, market conditions evolved in such a 

way that the requirements no longer reflected the 

intended economic reality. Any material change to 

the eligibility requirements would be subject to the 

notification and consultation provisions detailed in 

Vinter’s Benchmark Statement. 

24Each Bitcoin Trading Counterparty must be 

approved by the Sponsor on behalf of the Fund 

before the Fund may engage in transactions with 

the entity. The Sponsor continuously reviews all 

approved Bitcoin Trading Counterparties and will 

reject the approval of any previously approved 

Bitcoin Trading Counterparty if new information 

arises regarding the entity that puts the 

appropriateness of that entity as an approved 

Bitcoin Trading Counterparty in doubt. The Bitcoin 

Trading Counterparties with which the Sponsor 

will engage in bitcoin transactions are unaffiliated 

third parties of the Trust and Sponsor and are not 

acting as agents of the Trust, the Sponsor, or any 

Authorized Purchaser (as defined below), and all 

transactions will be done on an arms-length basis. 

There will be no contractual relationship between 

each Bitcoin Trading Counterparty and the Trust, 

the Sponsor, or any Authorized Purchaser. When 

seeking to purchase bitcoin on behalf of the Fund, 

the Sponsor will seek to purchase bitcoin at 

commercially reasonable prices and terms from any 

of the approved Bitcoin Trading Counterparties. 

Once agreed upon, the transaction will generally 

occur on an ‘‘over-the-counter’’ basis. 

portion of the Index, Vinter is the 

central recipient of input data and 

evaluates the integrity and accuracy of 

input data on a consistent basis. 

Solactive is the benchmark 

administrator for the Carbon Credit 

Futures portion of the Index. Solactive 

calculates the value of the Carbon Credit 

Futures portion of the Index and the 

value of the overall Index. 

The Index is rebalanced quarterly, 

starting at the end of January. After a 

rebalance, the portfolio is updated so 

that its current weights per asset equal 

the rebalancing weights per asset. 

Valuation of Bitcoin 

The Fund uses the same methodology 

that the Index does to determine the 

value of bitcoin for purposes of 

calculating the NAV of the Fund. The 

Index requires each digital asset trading 

platform used to calculate the price of 

bitcoin to meet each of the following 

criteria: 

• Has had operating history as a 

digital asset trading platform for a 

minimum of two years; 

• Implemented trading, deposits, and 

withdrawal fees for a minimum of one 

month without interruption; 

• Met a minimum monthly volume 

threshold of $30 million with respect to 

total trading volume; 

• Provided reliable, continuous, and 

valid market data for a minimum of one 

month; 

• Offered the possibility to withdraw 

and deposit for a minimum of one 

month, settling in two to seven business 

days; 

• Chosen a jurisdiction of 

incorporation that offers sufficient 

investor protection, such as Financial 

Action Task Force (‘‘FATF’’), FATFstyle regional bodies (‘‘FSRBs’’), or 

Moneyval member states; 

• Complied with relevant anti-money 

laundering and know-your-customer 

regulations; 

• Cooperated with requests from 

Vinter and relevant regulatory bodies; 

• Has not been domiciled in a 

jurisdiction subject to EU restrictive 

measures (sanctions); 

• Provided information concerning 

ownership and corporate structure; and 

• Has not been declared unlawful by 

any governmental authority or agency 

with jurisdiction over the exchange. 

Digital asset trading platforms 

meeting these criteria are used to 

calculate the price of the bitcoin portion 

of the Index (the ‘‘Index Pricing 

Sources’’). Vinter reviews the eligibility 

of digital asset trading platforms for 

inclusion in the Index twice a year, and 

such platforms must meet Vinter’s 

criteria at the time of such review.22 The 

selection of Index Pricing Sources may 

evolve from time to time, and Vinter 

may make changes to the eligibility 

requirements.23 As of the date of this 

filing, the following digital asset trading 

platforms are used to calculate the Index 

price: Kraken, Coinbase, Bitstamp, Itbit, 

Gemini, Gate.io, and Crypto.com. 

Custody of the Fund’s Assets 

The Bitcoin Custodian will establish 

accounts that hold the bitcoins 

deposited with the Bitcoin Custodian on 

behalf of the Fund, pursuant to the 

agreement between the Trust, on behalf 

of the Fund, and the Bitcoin Custodian 

(the ‘‘Bitcoin Custody Agreement’’). The 

Non-Digital Custodian will custody the 

Fund’s investments in cash and cash 

equivalents in connection with its 

exposure to the returns of the Carbon 

Credit Futures portion of the Index. 

With respect to the settlement of 

Shares in response to the placement of 

creation orders and redemption orders 

from Authorized Purchasers (as defined 

below), the Sponsor will retain 

discretion to determine which 

Custodians, to the extent there are 

multiple custodians for Bitcoin or 

multiple custodians for cash and cash 

equivalents in connection with Carbon 

Credit Futures, are selected to facilitate 

the respective order. 

The Fund will maintain ownership 

and control of bitcoin in a manner 

consistent with good delivery 

requirements for spot commodity 

transactions. 

Custody of Bitcoin 

The Fund is responsible for acquiring 

bitcoin from a ‘‘Bitcoin Trading 

Counterparty.’’ 24 Once the bitcoin has 

been transferred to the Bitcoin 

Custodian, it will be stored pursuant to 

the terms of the Bitcoin Custody 

Agreement. 

Bitcoin private keys are stored in two 

different forms: ‘‘hot’’ storage, whereby 

the private keys are stored on secure, 

internet-connected devices, and ‘‘cold’’ 

storage, where digital currency private 

keys are stored completely offline. The 

Bitcoin Custody Agreement requires the 

Bitcoin Custodian to hold the Fund’s 

bitcoin in cold storage, unless required 

to facilitate withdrawals as a temporary 

measure. The Bitcoin Custodian will use 

segregated cold storage bitcoin 

addresses for the Fund which are 

separate from the bitcoin addresses that 

the Bitcoin Custodian uses for its other 

customers and which are directly 

verifiable via the Bitcoin Blockchain. 

The Bitcoin Custodian will at all times 

record and identify in its books and 

records that such bitcoins constitute the 

property of the Fund. The Bitcoin 

Custodian will not withdraw the Fund’s 

bitcoin from the Fund’s account with 

the Bitcoin Custodian, or loan, 

hypothecate, pledge or otherwise 

encumber the Fund’s bitcoin, without 

the Fund’s instruction. 

The Sponsor has evaluated the 

Bitcoin Custodian’s policies, 

procedures, and controls for 

safekeeping, exclusively possessing, and 

controlling the Fund’s bitcoin holdings 

and believes these are designed 

consistent with accepted industry 

practices to protect against theft, loss, 

and unauthorized and accidental use of 

the private keys. 

Net Asset Value (‘‘NAV’’) 

According to the Registration 

Statement, the Fund’s NAV per Share is 

calculated by taking the current market 

value of its total assets, subtracting any 

liabilities, and dividing that total by the 

total number of outstanding Shares. 

The Administrator will calculate the 

NAV of the Fund once each trading day 

as of the earlier of the close of trading 

on the Exchange or 4:00 p.m. E.T. The 

NAV for a normal trading day will be 

released after 4:00 p.m. E.T. 

In determining the NAV of the Fund, 

the Administrator ordinarily values the 

bitcoin held by the Fund based on the 

methodology used by the Index. If the 

Index is not available or the Sponsor in 


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Federal Register / Vol. 89, No. 225 / Thursday, November 21, 2024 / Notices 92259 

25The Sponsor does not anticipate that the need 

to ‘‘fair value’’ bitcoin will be a common 

occurrence. If the Sponsor determines in good faith 

that the Index does not reflect an accurate bitcoin 

price, then the Fund will cause to be employed an 

alternative method to determine the fair value of the 

Fund’s assets as reviewed and approved by the 

Sponsor’s valuation committee. If the Sponsor 

determines to use any alternative method other than 

on an ad hoc or temporary basis, such change to the 

calculation of the NAV would be subject to a 

proposed rule change under Section 19(b) filed with 

the Commission. 

26Several major market data vendors display and/ 

or make widely available IIVs taken from the 

Consolidated Tape Association (‘‘CTA’’) or other 

data feeds. 

27For purposes of processing creation and 

redemption orders, a ‘‘Business Day’’ means any 

day other than a day when the Exchange is closed 

for regular trading. 

its sole discretion determines that the 

price of bitcoin determined by the Index 

should not be used, the Fund’s holdings 

may be fair valued in accordance with 

the policy approved by the Sponsor.25

For purposes of determining the NAV of 

the Fund, Carbon Credit Futures held by 

the Fund will be valued based on 

market price as of the time the NAV is 

calculated on each trading day. 

Intraday Indicative Value 

According to the Registration 

Statement, in order to provide updated 

information relating to the Fund for use 

by shareholders and market 

professionals, an updated intraday 

indicative value (‘‘IIV’’) will be 

calculated and disseminated throughout 

the core trading session on each trading 

day. The IIV will be calculated by using 

the prior day’s closing NAV per Share 

of the Fund as a base and updating that 

value throughout the trading day to 

reflect changes in the most recently 

reported price level of the Fund’s assets. 

The IIV disseminated during the 

Exchange’s core trading session should 

not be viewed as an actual real time 

update of the NAV, because NAV per 

Share is calculated only once at the end 

of each trading day based upon the 

relevant end of day values of the Fund’s 

investments. The IIV will be 

disseminated on a per Share basis every 

15 seconds during the Exchange’s Core 

Trading Session and be widely 

disseminated by one or more major 

market data vendors during the 

Exchange’s Core Trading Session.26

Creation and Redemption of Shares 

According to the Registration 

Statement, when the Fund creates or 

redeems its Shares, it will do so only in 

‘‘Baskets’’ (blocks of 10,000 Shares) 

based on the NAV per Share. The 

allocation between Bitcoin and Carbon 

Credit Futures is fixed at 80% and 20%, 

respectively, for all creations and 

redemptions of Shares. ‘‘Authorized 

Purchasers’’ are the only persons that 

may place orders to create and redeem 

Baskets. Authorized Purchasers must be 

(1) registered broker-dealers or other 

securities market participants, such as 

banks and other financial institutions, 

that are not required to register as 

broker-dealers to engage in securities 

transactions described below, and (2) 

Depository Trust Company (‘‘DTC’’) 

participants. 

To become an Authorized Purchaser, 

a person must enter into an Authorized 

Purchaser Agreement. The Authorized 

Purchaser Agreement provides the 

procedures for the creation and 

redemption of Baskets and for the 

delivery of the cash or Shares required 

for such creation and redemptions. 

The ‘‘Basket Price’’ for the creation or 

redemption of Baskets is the NAV per 

Share (net of accrued but unpaid 

expenses and liabilities) multiplied by 

the number of Shares comprising a 

Basket. The Basket Price required to 

create each Basket changes from day to 

day. On each day that the Exchange is 

open for regular trading, the 

Administrator adjusts the Basket Price 

as appropriate to reflect accrued 

expenses and any loss in value of the 

assets that may occur. The computation 

is made by the Administrator each 

business day, prior to the 

commencement of trading on the 

Exchange. The Basket Price so 

determined is communicated to all 

Authorized Purchasers and made 

available on the Fund’s website for the 

Shares. 

The Authorized Purchasers will 

deliver only cash to create Shares and 

will receive only cash when redeeming 

Shares. Authorized Purchasers will 

deliver cash to the Non-Digital 

Custodian pursuant to Purchase Orders 

(as defined below) for Shares, and the 

Non-Digital Custodian will hold such 

cash until such time as it can be 

converted to bitcoin or Carbon Credit 

Futures. With respect to bitcoin 

transactions, the Non-Digital Custodian 

will transfer the cash received from the 

Authorized Purchaser to the Bitcoin 

Trading Counterparty upon the Bitcoin 

Custodian’s receipt of bitcoin from the 

Bitcoin Trading Counterparty. The Fund 

will acquire bitcoin from a Bitcoin 

Trading Counterparty and will purchase 

Carbon Credit Futures via a Futures 

Commission Merchant (‘‘FCM’’) to 

facilitate Purchase Orders. The Fund 

will sell bitcoin and Carbon Credit 

Futures in exchange for cash pursuant 

to Redemption Orders (as defined 

below) of its Shares, and the Non-Digital 

Custodian will hold such cash until it 

can be distributed to the redeeming 

Authorized Purchaser. In connection 

with such sales, the Non-Digital 

Custodian will receive cash from an 

approved Bitcoin Trading Counterparty 

for the sale of the Fund’s bitcoin and 

from an FCM for the sale of the Fund’s 

Carbon Credit Futures. With respect to 

bitcoin transactions, the Bitcoin 

Custodian will transfer the bitcoin to the 

Bitcoin Trading Counterparty upon the 

Non-Digital Custodian’s receipt of cash 

from the Bitcoin Trading Counterparty. 

Authorized Purchasers will not 

directly or indirectly purchase, hold, 

deliver, or receive bitcoin as part of the 

creation or redemption process or 

otherwise direct the Fund or a third 

party with respect to purchasing, 

holding, delivering, or receiving bitcoin 

as part of the creation or redemption 

process. The Fund will create shares by 

receiving bitcoin from a third party that 

is not the Authorized Purchaser and is 

not affiliated with the Sponsor or the 

Fund, and the Fund—not the 

Authorized Purchaser—is responsible 

for selecting the third party to deliver 

the bitcoin. Further, the third party will 

not be acting as an agent of the 

Authorized Purchaser with respect to 

the delivery of the bitcoin to the Fund 

or acting at the direction of the 

Authorized Purchaser with respect to 

the delivery of the bitcoin to the Fund. 

The Fund will redeem shares by 

delivering bitcoin to a third party that 

is not the Authorized Purchaser and is 

not affiliated with the Sponsor or the 

Fund, and the Fund—not the 

Authorized Purchaser—is responsible 

for selecting the third party to receive 

the bitcoin. Further, the third party will 

not be acting as an agent of the 

Authorized Purchaser with respect to 

the receipt of the bitcoin from the Fund 

or acting at the direction of the 

Authorized Purchaser with respect to 

the receipt of the bitcoin from the Fund. 

Creation Procedures 

According to the Registration 

Statement, on any Business Day,27 an 

Authorized Purchaser may create Shares 

by placing an order to purchase one or 

more Baskets with the transfer agent 

(‘‘Transfer Agent’’) through the 

marketing agent (‘‘Marketing Agent’’) in 

exchange for cash (a ‘‘Purchase Order’’). 

Purchase Orders must be placed by 2:00 

p.m. E.T., or the close of regular trading 

on the Exchange, whichever is earlier, 

or an earlier time as determined and 

communicated by the Sponsor and its 

agent. The day on which a Purchase 

Order is accepted by the Transfer Agent 

is considered the ‘‘Purchase Order 

Date.’’ 


lotter on DSK11XQN23PROD with NOTICES1
92260 Federal Register / Vol. 89, No. 225 / Thursday, November 21, 2024 / Notices 

28Securities Exchange Act Release No. 34–99306 

(January 10, 2024), 89 FR 3008 (January 17, 2024) 

(SR–NYSEARCA–2021–90; SR–NYSEARCA–2023– 

44; SRNYSEARCA–2023–58; SR–NASDAQ–2023– 

016; SR–NASDAQ–2023–019; SR–CboeBZX– 

2023028; SR–CboeBZX–2023–038; SR–CboeBZX– 

2023–040; SR–CboeBZX–2023–042; SRCboeBZX– 

2023–044; SR–CboeBZX–2023–072) (Order 

Granting Accelerated Approval of Proposed Rule 

Changes, as Modified by Amendments Thereto, to 

List and Trade Bitcoin-Based Commodity-Based 

Trust Shares and Trust Units) (the ‘‘Bitcoin ETP 

Approval Order’’). 

29Bitcoin ETP Approval Order, 89 FR at 3009–11. 

30 ICE Endex is regulated in the Netherlands by 

the Dutch Authority for the Financial Markets 

(‘‘AFM’’) as a RM, as defined in MIFID II, which 

is implemented in Dutch Act on Financial 

Supervision (‘‘DFSA’’). The license as a RM is 

obtained under Section 5:26(1) of the DFSA, 

resulting in an authorization by the Minister of 

Dutch Ministry of Finance to operate a RM and 

supervised by the AFM. In the UK, ICE Endex is 

a Recognized Overseas Investment Exchange by the 

Financial Conduct Authority. See https://

www.ice.com/endex/regulation#:∼:text=The%20

Dutch%20Authority%20for%20Consumers,

energy%20industry%20and%20

wholesale%20trading. ICE Endex is also recognized 

by the CFTC as an authorized Foreign Board of 

Trade. See https://www.cftc.gov/sites/default/files/ 

idc/groups/public/@otherif/documents/ifdocs/ 

orgiceeregorder170110.pdf. 

31 ICE Futures U.S. is a registered Designated 

Contract Market regulated by the CFTC and subject 

to the requirements of the Commodity Exchange 

Act (‘‘CEA’’), as amended, and the regulations 

issues by the CFTC pursuant to the CEA. See 

https://www.ice.com/futures-us. 

By placing a Purchase Order, an 

Authorized Purchaser agrees to deposit 

cash as determined by the Sponsor with 

the Fund’s Non-Digital Custodian. The 

total deposit required to create each 

basket will be an amount of cash that is 

in the same proportion to the total assets 

of the Fund (net of estimated accrued 

but unpaid fees, expenses and other 

liabilities) on the date the Purchase 

Order is properly received as the 

number of Shares to be created under 

the Purchase Order is in proportion to 

the total number of Shares outstanding 

on the date the Purchase Order is 

received. The Sponsor, through the 

Transfer Agent, shall notify the 

Authorized Purchaser of the amount of 

cash to be included in deposits to create 

Baskets by email or telephone 

correspondence and such amount will 

be available via the Fund’s website. 

An Authorized Purchaser who places 

a Purchase Order is responsible for 

transferring to the Fund’s account with 

the Non-Digital Custodian the required 

amount of cash by the end of the next 

Business Day following the Purchase 

Order Date or as agreed to by the 

Authorized Purchaser, Sponsor, 

Marketing Agent, and Transfer Agent in 

advance of when the Purchase Order is 

placed. Upon receipt of the deposit 

amount, the Administrator will cause 

DTC to credit the number of Baskets 

ordered to the Authorized Purchaser’s 

DTC account. 

Redemption Procedures 

On any business day, an Authorized 

Purchaser may place an order with the 

Transfer Agent to redeem one or more 

Baskets (a ‘‘Redemption Order’’). 

Redemption Orders must be placed by 

2:00 p.m. E.T., or the close of regular 

trading on the Exchange, whichever is 

earlier. A Redemption Order will be 

effective on the date it is accepted by 

the Transfer Agent (‘‘Redemption Order 

Date’’). 

By placing a Redemption Order, an 

Authorized Purchaser agrees to deliver 

the Redemption Basket to be redeemed 

through DTC’s book-entry system to the 

Fund’s account with the Non-Digital 

Custodian not later than the end of the 

next Business Day following the 

effective date of the Redemption Order 

(‘‘Redemption Distribution Date’’) or the 

end of such later Business Day as agreed 

to by the Authorized Purchaser and the 

Transfer Agent in advance of when the 

Redemption Order is placed. Failure to 

consummate such delivery shall result 

in the cancellation of the order. 

The redemption distribution due from 

the Fund is delivered to the Authorized 

Purchaser on the Redemption 

Distribution Date if the Fund’s DTC 

account has been credited with the 

Baskets to be redeemed pursuant to the 

terms of the Authorized Purchaser 

Agreement. 

Standard for Approval 

On January 10, 2024, the Commission 

approved the listing and trading of 

shares of Grayscale Bitcoin Trust (BTC) 

and Bitwise Bitcoin ETF under NYSE 

Arca Rule 8.201–E (Commodity-Based 

Trust Shares); the Hashdex Bitcoin ETF 

under NYSE Arca Rule 8.500–E (Trust 

Units); the iShares Bitcoin Trust and 

Valkyrie Bitcoin Fund under Nasdaq 

Rule 5711(d) (Commodity-Based Trust 

Shares); and the ARK 21Shares Bitcoin 

ETF, Invesco Galaxy Bitcoin ETF, 

VanEck Bitcoin Trust, the WisdomTree 

Bitcoin Fund, Fidelity Wise Origin 

Bitcoin Fund, and Franklin Bitcoin 

ETF under BZX Rule 14.11(e)(4) 

(Commodity-Based Trust Shares) 

(collectively, the ‘‘Bitcoin ETPs’’).28 In 

the Bitcoin ETP Approval Order, the 

Commission found that the proposed 

rule changes to list the Bitcoin ETPs 

demonstrated that there were ‘‘sufficient 

‘other means’ of preventing fraud and 

manipulation,’’ including that: 

[B]ased on the record before the 

Commission and the improved quality of the 

correlation analysis in the record, including 

the Commission’s own analysis, the 

Commission is able to conclude that fraud or 

manipulation that impacts prices in spot 

bitcoin markets would likely similarly 

impact CME bitcoin futures prices. And 

because the CME’s surveillance can assist in 

detecting those impacts on CME bitcoin 

futures prices, the Exchanges’ comprehensive 

surveillance-sharing agreement with the 

CME—a U.S. regulated market whose bitcoin 

futures market is consistently highly 

correlated to spot bitcoin, albeit not of 

‘‘significant size’’ related to spot bitcoin—can 

be reasonably expected to assist in 

surveilling for fraudulent and manipulative 

acts and practices in the specific context of 

the [Bitcoin ETPs].29

The Fund is structured and will 

operate in a manner materially the same 

as the Bitcoin ETPs. With respect to the 

Fund’s bitcoin holdings, the Sponsor 

believes that the Exchange’s ability to 

obtain information regarding trading in 

bitcoin futures from the CME, which, 

like the Exchange, is a member of the 

Intermarket Surveillance Group (‘‘ISG’’), 

would assist the Exchange in detecting 

potential fraud or manipulation with 

respect to trading in the Shares. In 

addition, with respect to the Fund’s 

Carbon Credit Futures holdings, the 

Sponsor believes that the Exchange 

would be able to obtain information 

regarding trading in Carbon Credit 

Futures that would similarly assist in 

surveilling for potential fraud or 

manipulation. As stated above, the Fund 

will hold only: (i) EU ETS futures which 

trade only on ICE Endex Markets B.V. 

(‘‘ICE Endex’’),30 with which the 

Exchange has entered into a 

comprehensive surveillance sharing 

agreement (‘‘CSSA’’); and (ii) CCA 

futures and RGGI futures which are 

traded only on ICE Futures U.S.,31

which, like the Exchange, is a member 

of the ISG. Accordingly, the Sponsor 

believes that the Exchange’s ability to 

share information with ICE Endex and 

ICE Futures U.S., pursuant to a CSSA or 

common ISG membership, would assist 

in surveilling for fraudulent and 

manipulative acts and practices. The 

Sponsor thus believes that, for reasons 

similar to those set forth in the Bitcoin 

ETP Approval Order, listing and trading 

Shares of the Fund would be consistent 

with the requirements of the Act. 

Availability of Information 

The NAV per Share will be 

disseminated daily to all market 

participants at the same time. Quotation 

and last-sale information regarding the 

Shares will be disseminated through the 

facilities of the CTA. The IIV will be 

calculated every 15 seconds throughout 

the core trading session each trading 

day. 

Quotation and last sale information 

for bitcoin will be widely disseminated 

through a variety of major market data 

vendors, including Bloomberg and 


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32See NYSE Arca Rule 7.12–E. 

Reuters. In addition, real-time price 

(and volume) data for bitcoin is 

available by subscription from Reuters 

and Bloomberg. The spot price of 

bitcoin is available on a 24-hour basis 

from major market data vendors, 

including Bloomberg and Reuters. The 

real-time version of the value of the 

Index will be disseminated once every 

15 seconds during the Core Trading 

Session. Information relating to trading, 

including price and volume 

information, in bitcoin will be available 

from major market data vendors and 

from the trading platforms on which 

bitcoin is traded. 

The intraday, closing prices, and 

settlement prices of the Carbon Credit 

Futures will be readily available from 

automated quotation systems, published 

or other public sources, or major market 

data vendors, such as ICE Data Services. 

Information regarding market price and 

trading volume of the Shares will be 

continually available on a real-time 

basis throughout the day on brokers’ 

computer screens and other electronic 

services. Information regarding the 

previous day’s closing price and trading 

volume information for the Shares will 

be published daily in the financial 

section of newspapers. 

Real-time data for Carbon Credit 

Futures will be available by 

subscription through on-line 

information services. Delayed futures 

and options on futures information on 

current and past trading sessions and 

market news will also be available. The 

specific contract specifications for 

Carbon Credit Futures will also be 

available on such websites, as well as 

other financial informational sources. 

On each business day, the Sponsor 

will publish the value of the Index, the 

Fund’s NAV, and the NAV per Share on 

the Fund’s website as soon as 

practicable after its determination. If the 

NAV and NAV per Share have been 

calculated using a price per bitcoin 

other than the price of bitcoin 

determined by the Index, the 

publication on the Fund’s website will 

note the valuation methodology used 

and the price per bitcoin resulting from 

such calculation. 

The Fund will provide website 

disclosure of its NAV and NAV per 

Share daily. The website disclosure of 

the Fund’s NAV and NAV per Share 

will occur at the same time as the 

disclosure by the Sponsor of the NAV 

and NAV per Share to Authorized 

Purchasers so that all market 

participants are provided such portfolio 

information at the same time. Therefore, 

the same portfolio information will be 

provided on the public website as well 

as in electronic files provided to 

Authorized Purchasers. Accordingly, 

each investor will have access to the 

current NAV and NAV per Share of the 

Fund through the Fund’s website, as 

well as from one or more major market 

data vendors. 

The value of the Index, as well as 

additional information regarding the 

Index, will be available on a continuous 

basis on the Fund’s website. 

Information regarding market price 

and trading volume of the Shares will be 

continually available on a real-time 

basis throughout the day on brokers’ 

computer screens and other electronic 

services. 

Information regarding the previous 

day’s closing price and trading volume 

information for the Shares will be 

published daily in the financial section 

of newspapers. 

The Sponsor will cause information 

about the Shares to be posted to the 

Fund’s website: (1) the NAV and NAV 

per Share for each Exchange trading 

day, posted at end of day; (2) the daily 

holdings of the Fund, before 9:30 a.m. 

E.T. on each Exchange trading day; (3) 

the Fund’s effective prospectus, in a 

form available for download; and (4) the 

Shares’ ticker and CUSIP information, 

along with additional quantitative 

information updated on a daily basis for 

the Fund. The Fund’s website will 

include (1) the prior Business Day’s 

trading volume, the prior Business Day’s 

reported NAV and closing price, and a 

calculation of the premium and 

discount of the closing price or midpoint of the bid/ask spread at the time 

of NAV calculation (‘‘Bid/Ask Price’’) 

against the NAV; and (2) data in chart 

format displaying the frequency 

distribution of discounts and premiums 

of the daily closing price or Bid/Ask 

Price against the NAV, within 

appropriate ranges, for at least each of 

the four previous calendar quarters. The 

website disclosure of portfolio holdings 

will be made daily and will include (i) 

the name, quantity, price, and market 

value of the Fund’s holdings and (ii) the 

total cash and cash equivalents held in 

the Fund’s portfolio, if applicable. 

The Fund’s website will be publicly 

available prior to the public offering of 

Shares and accessible at no charge. 

Trading Halts 

With respect to trading halts, the 

Exchange may consider all relevant 

factors in exercising its discretion to 

halt or suspend trading in the Shares of 

the Fund.32 Trading in Shares of the 

Fund will be halted if the circuit breaker 

parameters in NYSE Arca Rule 7.12–E 

have been reached. Trading also may be 

halted because of market conditions or 

for reasons that, in the view of the 

Exchange, make trading in the Shares 

inadvisable. 

The Exchange may halt trading during 

the day in which an interruption to the 

dissemination of the IIV or the value of 

the Index occurs. The real-time version 

of the value of the Index will be 

disseminated once every 15 seconds 

during the Core Trading Session. If the 

interruption to the dissemination of the 

IIV or to the value of the Index persists 

past the trading day in which it 

occurred, the Exchange will halt trading 

no later than the beginning of the 

trading day following the interruption. 

In addition, if the Exchange becomes 

aware that the NAV with respect to the 

Shares is not disseminated to all market 

participants at the same time, it will halt 

trading in the Shares until such time as 

the NAV is available to all market 

participants. 

Trading Rules 

The Exchange deems the Shares to be 

equity securities, thus rendering trading 

in the Shares subject to the Exchange’s 

existing rules governing the trading of 

equity securities. Shares will trade on 

the NYSE Arca Marketplace from 4:00 

a.m. to 8:00 p.m. E.T. in accordance 

with NYSE Arca Rule 7.34–E (Early, 

Core, and Late Trading Sessions). The 

Exchange has appropriate rules to 

facilitate transactions in the Shares 

during all trading sessions. As provided 

in NYSE Arca Rule 7.6–E, the minimum 

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

entry of orders in equity securities 

traded on the NYSE Arca Marketplace is 

$0.01, with the exception of securities 

that are priced less than $1.00 for which 

the MPV for order entry is $0.0001. 

The Shares will conform to the initial 

and continued listing criteria under 

NYSE Arca Rule 8.500–E. The trading of 

the Shares will be subject to NYSE Arca 

Rule 8.500–E(f), which sets forth certain 

restrictions on Equity Trading Permit 

Holders (‘‘ETP Holders’’) acting as 

registered market makers in Trust Units 

to facilitate surveillance. Pursuant to 

NYSE Arca Rule 8.500–E(f), an ETP 

Holder acting as a registered market 

maker in Trust Units must file with the 

Exchange in a manner prescribed by the 

Exchange and keep current a list 

identifying all accounts for trading in an 

underlying commodity, related 

commodity futures or options on 

commodity futures, or any other related 

commodity derivatives, which the 

market maker may have or over which 

it may exercise investment discretion. 

No market maker shall trade in an 

underlying commodity, related 

commodity futures or options on 


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33See Rule 10A–3(c)(7), 17 CFR 240.10A–3(c)(7) 

(stating that a listed issuer is not subject to the 

requirements of Rule 10A–3 if the issuer is 

organized as an unincorporated association that 

does not have a board of directors and the activities 

of the issuer are limited to passively owning or 

holding securities or other assets on behalf of or for 

the benefit of the holders of the listed securities). 

34FINRA conducts cross-market surveillances on 

behalf of the Exchange pursuant to a regulatory 

services agreement. The Exchange is responsible for 

FINRA’s performance under this regulatory services 

agreement. 

35For a list of the current members of ISG, see 

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

components of the Fund may trade on markets that 

are members of ISG or with which the Exchange has 

in place a CSSA. 

36See notes 29 & 30, supra. 

commodity futures, or any other related 

commodity derivatives, in an account in 

which a market maker, directly or 

indirectly, controls trading activities, or 

has a direct interest in the profits or 

losses thereof, which has not been 

reported to the Exchange as required by 

this Rule. In addition to the existing 

obligations under Exchange rules 

regarding the production of books and 

records, the ETP Holder acting as a 

market maker in Trust Units shall make 

available to the Exchange such books, 

records or other information pertaining 

to transactions by such entity or 

registered or non-registered employee 

affiliated with such entity for its or their 

own accounts for trading the underlying 

physical commodity, related commodity 

futures or options on commodity 

futures, or any other related commodity 

derivatives, as may be requested by the 

Exchange. 

For initial and continued listing as 

proposed herein, the Fund will be in 

compliance with Rule 10A–3 under the 

Act, and the Trust will rely on the 

exception contained in Rule 10A– 

3(c)(7).33 A minimum of 50,000 Shares 

of the Fund will be outstanding at the 

commencement of trading on the 

Exchange. 

Surveillance 

The Exchange represents that trading 

in the Shares of the Fund will be subject 

to the existing trading surveillances 

administered by the Exchange, as well 

as cross-market surveillances 

administered by FINRA on behalf of the 

Exchange, which are designed to detect 

violations of Exchange rules and 

applicable federal securities laws.34 The 

Exchange represents that these 

procedures are adequate to properly 

monitor Exchange trading of the Shares 

in all trading sessions and to deter and 

detect violations of Exchange rules and 

federal securities laws applicable to 

trading on the Exchange. 

The surveillances referred to above 

generally focus on detecting securities 

trading outside their normal patterns, 

which could be indicative of 

manipulative or other violative activity. 

When such situations are detected, 

surveillance analysis follows and 

investigations are opened, where 

appropriate, to review the behavior of 

all relevant parties for all relevant 

trading violations. 

The Exchange or FINRA, on behalf of 

the Exchange, or both, will 

communicate as needed regarding 

trading in the Shares and the Fund’s 

holdings with other markets and other 

entities that are members of the ISG, and 

the Exchange or FINRA, on behalf of the 

Exchange, or both, may obtain trading 

information regarding trading in the 

Shares and the Fund’s holdings from 

such markets and other entities. In 

addition, the Exchange may obtain 

information regarding trading in the 

Shares and the Fund’s holdings from 

markets and other entities that are 

members of ISG 35 or with which the 

Exchange has in place a CSSA. 

Specifically, the Exchange or FINRA, on 

behalf of the Exchange, may 

communicate as needed and may obtain 

information regarding trading in bitcoin 

futures from the CME, which is a 

member of the ISG. Also, the Exchange 

may communicate as needed and may 

obtain information regarding trading in 

Carbon Credit Futures from ICE Endex, 

with which the Exchange has in place 

a CSSA, and ICE Futures U.S., which is 

a member of the ISG. 

The Exchange believes that ICE Endex 

and ICE Futures U.S. are regulated 36

markets of significant size related to the 

Carbon Credit Futures held by the Fund 

and that it is reasonably likely that any 

bad actor trying to manipulate the price 

of the Fund would have to trade on 

those markets. As noted above, the EU 

ETS futures held by the Fund trade only 

on ICE Endex, and CCA futures and 

RGGI futures held by the Fund are 

traded only on ICE Futures U.S. 

Therefore, ICE Endex and ICE Futures 

U.S. are appropriate markets to surveil 

in order to detect and deter fraud and 

manipulation. 

The Exchange is also able to obtain 

information regarding trading in the 

Shares, the underlying bitcoin, Carbon 

Credit Futures, bitcoin futures contracts, 

options on bitcoin futures, or any other 

bitcoin derivative through ETP Holders, 

in connection with such ETP Holders’ 

proprietary or customer trades which 

they effect through ETP Holders on any 

relevant market. The Exchange can 

obtain market surveillance information, 

including customer identity 

information, with respect to transactions 

(including transactions in futures 

contracts) occurring on US futures 

exchanges, which are members of the 

ISG. In addition, the Exchange also has 

a general policy prohibiting the 

distribution of material, non-public 

information by its employees. 

Under NYSE Arca Rule 8.500–E(f), an 

ETP Holder acting as a registered market 

maker in the Shares is required to 

provide the Exchange with information 

relating to its accounts for trading in the 

underlying physical commodity, related 

commodity futures or options on 

commodity futures, or any other related 

commodity derivatives, and must 

provide any information concerning 

trading in those accounts that the 

Exchange may request. Commentary .04 

of NYSE Arca Rule 11.3–E requires an 

ETP Holder acting as a registered market 

maker, and its affiliates, in the Shares to 

establish, maintain and enforce written 

policies and procedures reasonably 

designed to prevent the misuse of any 

material nonpublic information with 

respect to such products, any 

components of the related products, any 

physical asset or commodity underlying 

the product, applicable currencies, 

underlying indexes, related futures or 

options on futures, and any related 

derivative instruments (including the 

Shares). As a general matter, the 

Exchange has regulatory jurisdiction 

over its ETP Holders and their 

associated persons, which include any 

person or entity controlling an ETP 

Holder. To the extent the Exchange may 

be found to lack jurisdiction over a 

subsidiary or affiliate of an ETP Holder 

that does business only in commodities 

or futures contracts, the Exchange could 

obtain information regarding the 

activities of such subsidiary or affiliate 

through surveillance sharing agreements 

with regulatory organizations to the 

extent the Exchange has such an 

agreement with an organization of 

which the subsidiary or affiliate is a 

member. 

All statements and representations 

made in this filing regarding (a) the 

description of the portfolio or reference 

asset, (b) limitations on portfolio 

holdings or reference assets, or (c) the 

applicability of Exchange listing rules 

specified in this rule filing shall 

constitute continued listing 

requirements for listing the Shares on 

the Exchange. 

The issuer has represented to the 

Exchange that it will advise the 

Exchange of any failure by the Fund to 

comply with the continued listing 

requirements, and, pursuant to its 

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

Act, the Exchange will monitor for 

compliance with the continued listing 

requirements. If the Fund is not in 


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Federal Register / Vol. 89, No. 225 / Thursday, November 21, 2024 / Notices 92263 

37 15 U.S.C. 78f(b)(5). 

compliance with the applicable listing 

requirements, the Exchange will 

commence delisting procedures under 

NYSE Arca Rule 5.5–E(m). 

Information Bulletin 

Prior to the commencement of trading 

of the Shares, the Exchange will inform 

its ETP Holders in an information 

bulletin (‘‘Information Bulletin’’) of the 

special characteristics and risks 

associated with trading the Shares. 

Specifically, the Information Bulletin 

will discuss the following: (1) the risks 

involved in trading the Shares during 

the Early and Late Trading Sessions 

when an updated IIV will not be 

calculated or publicly disseminated; (2) 

the procedures for purchases and 

redemptions of Shares in Creation 

Baskets and Redemption Baskets (and 

that Shares are not individually 

redeemable); (3) NYSE Arca Rule 9.2– 

E(a), which imposes a duty of due 

diligence on its ETP Holders to learn the 

essential facts relating to every customer 

prior to trading the Shares; (4) how 

information regarding the IIV is 

disseminated; (5) how information 

regarding portfolio holdings is 

disseminated; (6) the requirement that 

ETP Holders deliver a prospectus to 

investors purchasing newly issued 

Shares prior to or concurrently with the 

confirmation of a transaction; and (7) 

trading information. 

In addition, the Information Bulletin 

will advise ETP Holders, prior to the 

commencement of trading, of the 

prospectus delivery requirements 

applicable to the Fund. The Exchange 

notes that investors purchasing Shares 

directly from the Fund will receive a 

prospectus. ETP Holders purchasing 

Shares from the Fund for resale to 

investors will deliver a prospectus to 

such investors. The Information Bulletin 

will also discuss any exemptive, noaction, and interpretive relief granted by 

the Commission from any rules under 

the Act. In addition, the Information 

Bulletin will reference that the Fund is 

subject to various fees and expenses 

described in the Registration Statement. 

The Information Bulletin will also 

reference the fact that there is no 

regulated source of last sale information 

regarding bitcoin, that the Commission 

has no jurisdiction over the trading of 

Bitcoin as a commodity, and that the 

CFTC has regulatory jurisdiction over 

the trading of bitcoin futures contracts 

and options on bitcoin futures contracts. 

The Information Bulletin will also 

disclose the trading hours of the Shares 

and that the NAV for the Shares will be 

calculated after 4:00 p.m. E.T. each 

trading day. The Information Bulletin 

will disclose that information about the 

Shares will be publicly available on the 

Fund’s website. 

2. Statutory Basis 

The basis under the Act for this 

proposed rule change is the requirement 

under Section 6(b)(5) 37 that an 

exchange have rules that are designed to 

prevent fraudulent and manipulative 

acts and practices, to promote just and 

equitable principles of trade, to remove 

impediments to, and perfect the 

mechanism of a free and open market 

and, in general, to protect investors and 

the public interest. 

The Exchange believes that the 

proposed rule change is designed to 

prevent fraudulent and manipulative 

acts and practices and to protect 

investors and the public interest in that 

the Shares will be listed and traded on 

the Exchange pursuant to the initial and 

continued listing criteria in NYSE Arca 

Rule 8.500–E. The proposed rule change 

is also designed to prevent fraudulent 

and manipulative acts and practices 

because the Fund is structured similarly 

to and will operate in materially the 

same manner as the Bitcoin ETPs 

previously approved by the 

Commission. The Exchange further 

believes that the proposed rule change 

is designed to prevent fraudulent and 

manipulate acts and practices because, 

as noted by the Commission in the 

Bitcoin ETP Approval Order, the 

Exchange’s ability to obtain information 

regarding trading in the Shares and 

futures from markets and other entities 

that are members of the ISG (including 

the CME and ICE Futures U.S.) or with 

which the Exchange has in place a 

CSSA would assist the Exchange in 

detecting and deterring misconduct. 

The Exchange has in place 

surveillance procedures that are 

adequate to properly monitor Exchange 

trading in the Shares in all trading 

sessions and to deter and detect 

attempted manipulation of the Shares or 

other violations of Exchange rules and 

applicable federal securities laws. The 

Exchange or FINRA, on behalf of the 

Exchange, or both, will communicate as 

needed regarding trading in the Shares 

with other markets and other entities 

that are members of the ISG, and the 

Exchange or FINRA, on behalf of the 

Exchange, or both, may obtain trading 

information regarding trading in the 

Shares from such markets and other 

entities. In addition, the Exchange may 

obtain information regarding trading in 

the Shares from markets and other 

entities that are members of ISG or with 

which the Exchange has in place a 

CSSA. The Exchange is also able to 

obtain information regarding trading in 

the Shares and bitcoin futures or the 

underlying bitcoin through ETP 

Holders, in connection with such ETP 

Holders’ proprietary or customer trades 

which they effect through ETP Holders 

on any relevant market. 

Quotation and last-sale information 

regarding the Shares will be 

disseminated through the facilities of 

the CTA. The Fund’s website will also 

include a form of the prospectus for the 

Fund that may be downloaded. The 

website will include the Shares’ ticker 

and CUSIP information, along with 

additional quantitative information 

updated on a daily basis for the Fund. 

The Fund’s website will include (1) 

daily trading volume, the prior Business 

Day’s reported NAV and closing price, 

and a calculation of the premium and 

discount of the closing price or midpoint of the Bid/Ask Price against the 

NAV; and (ii) data in chart format 

displaying the frequency distribution of 

discounts and premiums of the daily 

closing price or Bid/Ask Price against 

the NAV, within appropriate ranges, for 

at least each of the four previous 

calendar quarters. The Fund’s website 

will be publicly available prior to the 

public offering of Shares and accessible 

at no charge. 

Trading in Shares of the Fund will be 

halted if the circuit breaker parameters 

in NYSE Arca Rule 7.12–E have been 

reached or because of market conditions 

or for reasons that, in the view of the 

Exchange, make trading in the Shares 

inadvisable. 

The proposed rule change is designed 

to perfect the mechanism of a free and 

open market and, in general, to protect 

investors and the public interest in that 

it will facilitate the listing and trading 

of a new type of exchange-traded 

product based on the price of bitcoin 

that will enhance competition among 

market participants, to the benefit of 

investors and the marketplace. As noted 

above, the Exchange has in place 

surveillance procedures that are 

adequate to properly monitor trading in 

the Shares in all trading sessions and to 

deter and detect violations of Exchange 

rules and applicable federal securities 

laws. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purpose of the Act. The Exchange 

notes that the proposed rule change will 

facilitate the listing and trading of the 

Shares, which are Trust Units based on 

bitcoin and Carbon Credit Futures and 


lotter on DSK11XQN23PROD with NOTICES1
92264 Federal Register / Vol. 89, No. 225 / Thursday, November 21, 2024 / Notices 

38 In approving this proposed rule change, the 

Commission has considered the proposed rule’s 

impact on efficiency, competition, and capital 

formation. See 15 U.S.C. 78c(f). 

39 15 U.S.C. 78f(b)(5). 

40 15 U.S.C. 78k–1(a)(1)(C)(iii). 

41See Order Granting Approval of a Proposed 

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

List and Trade Shares of the Grayscale Bitcoin Mini 

Trust and Granting Accelerated Approval of a 

Proposed Rule Change, as Modified by Amendment 

No. 1, to List and Trade Shares of the Pando Asset 

Spot Bitcoin Trust, Securities Exchange Act Release 

No. 100610 (July 26, 2024), 89 FR 62821 (Aug. 1, 

2024) (SR–NYSEARCA–2024–45; SR–CboeBZX– 

2023–101) (‘‘July 2024 Spot Bitcoin ETP Approval 

Order’’); Order Granting Accelerated Approval of 

Proposed Rule Changes, as Modified by 

Amendments Thereto, To List and Trade BitcoinBased Commodity-Based Trust Shares and Trust 

Units, Securities Exchange Act Release No. 99306 

(Jan. 10, 2024), 89 FR 3008 (Jan. 17, 2024) (SR– 

NYSEARCA–2021–90; SR–NYSEARCA–2023–44; 

SR–NYSEARCA–2023–58; SR–NASDAQ–2023–016; 

SR–NASDAQ–2023–019; SR–CboeBZX–2023–028; 

SR–CboeBZX–2023–038; SR–CboeBZX–2023–040; 

SR–CboeBZX–2023–042; SR–CboeBZX–2023–044; 

SR–CboeBZX–2023–072) (‘‘January 2024 Spot 

Bitcoin ETP Approval Order’’) (collectively, ‘‘Spot 

Bitcoin ETP Approval Orders’’). 

42See July 2024 Spot Bitcoin ETP Approval Order 

at 62822; January 2024 Spot Bitcoin ETP Approval 

Order at 3009. 

43See July 2024 Spot Bitcoin ETP Approval Order 

at 62822; January 2024 Spot Bitcoin ETP Approval 

Order at 3009. 

44See July 2024 Spot Bitcoin ETP Approval Order 

at 62822; January 2024 Spot Bitcoin ETP Approval 

Order at 3009–11. 

45The Commission stated that the ‘‘robustness’’ of 

its correlation analysis rested on the pre-requisites 

of (1) the correlations being calculated with respect 

to bitcoin futures that trade on the CME, a U.S. 

market regulated by the CFTC, (2) the lengthy 

sample period of price returns for both the CME 

bitcoin futures market and the spot bitcoin market, 

(3) the frequent intra-day trading data in both the 

CME bitcoin futures market and the spot bitcoin 

market over that lengthy sample period, and (4) the 

consistency of the correlation results throughout the 

lengthy sample period. See July 2024 Spot Bitcoin 

ETP Approval Order at 62822 n.17; January 2024 

Spot Bitcoin ETP Approval Order at 3010 n.38. 

46While the Fund uses ‘‘ETF’’ in its name, it is 

not registered under the Investment Company Act 

of 1940. 

47See also infra Section III.B. 

48The Commission examined correlation between 

the CME bitcoin futures market and the Coinbase 

and Kraken spot bitcoin trading platforms at hourly, 

five-minute, and one-minute intervals, using the 

same data sources and methodology as in the Spot 

Bitcoin ETP Approval Orders (see July 2024 Spot 

Bitcoin ETP Approval Order at 62822 n.19; January 

2024 Spot Bitcoin ETP Approval Order at 3010 

n.35), for the period from March 1, 2021, to August 

22, 2024. The correlation between the CME bitcoin 

futures market and this subset of spot bitcoin 

platforms for the full sample period is no less than 

98.9 percent using data at an hourly interval, 93.9 

percent using data at a five-minute interval, and 

83.1 percent using data at a one-minute interval. 

The rolling three-month correlation results range 

between 94.0 and 99.5 percent using data at an 

hourly interval, 79.9 and 96.2 percent using data at 

a five-minute interval, and 73.7 and 88.5 percent 

using data at a one-minute interval. 

that will enhance competition among 

market participants, to the benefit of 

investors and the marketplace. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were solicited 

or received with respect to the proposed 

rule change. 

III. Discussion and Commission 

Findings 

After careful review, the Commission 

finds that the proposed rule change, as 

modified by Amendment No. 4, is 

consistent with the Act and the rules 

and regulations thereunder applicable to 

a national securities exchange.38 In 

particular, the Commission finds that 

the proposed rule change is consistent 

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

Act,39 which requires, among other 

things, that the Exchange’s rules be 

designed to ‘‘prevent fraudulent and 

manipulative acts and practices’’ and, 

‘‘in general, to protect investors and the 

public interest’’; and with Section 

11A(a)(1)(C)(iii) of the Exchange Act,40

which sets forth Congress’ finding that 

it is in the public interest and 

appropriate for the protection of 

investors and the maintenance of fair 

and orderly markets to assure the 

availability to brokers, dealers, and 

investors of information with respect to 

quotations for and transactions in 

securities. 

A. Exchange Act Section 6(b)(5) 

In approving the listing and trading of 

shares of exchange-traded products 

(‘‘ETPs’’) that hold bitcoin, the 

Commission explained that one way an 

exchange that lists such ETPs can meet 

the obligation under Exchange Act 

Section 6(b)(5) that its rules be designed 

to prevent fraudulent and manipulative 

acts and practices is by demonstrating 

that the exchange has a comprehensive 

surveillance-sharing agreement with a 

regulated market of significant size 

related to the underlying or reference 

assets.41 Such an agreement would 

assist in detecting and deterring fraud 

and manipulation related to that 

underlying asset. 

The Commission also recognized, 

however, that this is not the exclusive 

means by which an ETP listing 

exchange can meet this statutory 

obligation.42 A listing exchange could, 

alternatively, demonstrate that ‘‘other 

means to prevent fraudulent and 

manipulative acts and practices will be 

sufficient’’ to justify dispensing with a 

surveillance-sharing agreement with a 

regulated market of significant size.43 In 

the Spot Bitcoin ETP Approval Orders, 

the Commission determined that having 

a comprehensive surveillance-sharing 

agreement with a U.S.-regulated market 

that, based on evidence from robust 

correlation analysis, is consistently 

highly correlated with the ETPs’ 

underlying assets (spot bitcoin) 

constituted ‘‘other means’’ sufficient to 

satisfy the Exchange Act Section 6(b)(5) 

standard.44 Specifically, given the 

consistently high correlation between 

the bitcoin futures market of the 

Chicago Mercantile Exchange (‘‘CME’’) 

and a sample of spot bitcoin markets— 

confirmed by the Commission through 

robust 45 correlation analysis using data 

at hourly, five-minute, and one-minute 

intervals—the Commission was able to 

conclude that fraud or manipulation 

that impacts prices in spot bitcoin 

markets would likely similarly impact 

CME bitcoin futures prices. And 

because the CME’s surveillance can 

assist in detecting those impacts on 

CME bitcoin futures prices, the 

Commission was able to conclude that 

the comprehensive surveillance-sharing 

agreement among the relevant listing 

exchanges and the CME can be 

reasonably expected to assist in 

surveilling for fraudulent and 

manipulative acts and practices in the 

specific context of the proposals 

considered in the Spot Bitcoin ETP 

Approval Orders. 

With respect to the bitcoin holdings of 

the Fund,46 the structure of the Fund, 

the terms of its operation and the 

trading of the Shares, and the 

representations in the proposed rule 

change, as modified by Amendment No. 

4, are substantially similar to those of 

the proposals considered in the Spot 

Bitcoin ETP Approval Orders.47 In 

addition, the Commission finds that the 

spot bitcoin market continues to be 

consistently highly correlated with the 

CME bitcoin futures market.48 In the 

proposal, as modified by Amendment 

No. 4, the Exchange represents that the 

Exchange or FINRA, on behalf of the 

Exchange, may communicate as needed 

and may obtain information regarding 

trading in CME bitcoin futures from the 

CME, which is a member of the ISG. As 

such, based on the record before the 

Commission, including the 

Commission’s correlation analysis, the 

Commission is able to conclude that the 

Exchange’s comprehensive surveillancesharing agreement with the CME can be 

reasonably expected to assist in 

surveilling for fraudulent and 

manipulative acts and practices with 

respect to the spot bitcoin proposed to 

be held by the Fund. 

With respect to the Carbon Credit 

Futures proposed to be held by the 

Fund, the Commission is able to 

conclude that the Exchange has CSSAs 

or shares ISG membership with 


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Federal Register / Vol. 89, No. 225 / Thursday, November 21, 2024 / Notices 92265 

49As the Commission has explained (see Order 

Setting Aside Action by Delegated Authority and 

Disapproving a Proposed Rule Change, as Modified 

by Amendments No. 1 and 2, To List and Trade 

Shares of the Winklevoss Bitcoin Trust, Securities 

Exchange Act Release No. 83723 (July 26, 2018), 83 

FR 37579 (Aug. 1, 2018) (SR–BatsBZX–2016–30) 

(‘‘Winklevoss Order’’)), an exchange that lists 

commodity-based ETPs can meet its obligations 

under Exchange Act Section 6(b)(5) by 

demonstrating that the exchange has a CSSA with 

a regulated market of significant size related to the 

underlying or reference assets. The Winklevoss 

Order applied this standard to a commodity-trust 

ETP based on spot bitcoin, and the Commission has 

found that this standard is also appropriate for, and 

has applied the standard to, proposed ETPs based 

on bitcoin futures. See, e.g., Order Granting 

Approval of a Proposed Rule Change, as Modified 

by Amendment No. 2, To List and Trade Shares of 

the Teucrium Bitcoin Futures Fund Under NYSE 

Arca Rule 8.200–E, Commentary .02 (Trust Issued 

Receipts), Securities Exchange Act Release No. 

94620 (Apr. 6, 2022), 87 FR 21676 (Apr. 12, 2022) 

(SR–NYSEArca–2021–053) (‘‘Teucrium Order’’). 

50See supra note 30. See also CFTC Order of 

Registration for ICE Endex at 

orgiceeregorder170110.pdf. 

51See supra note 31. 

52 In the Winklevoss Order, the Commission 

stated that the term ‘‘significant market’’ or ‘‘market 

of significant size’’ includes a market (or group of 

markets) as to which (1) there is a reasonable 

likelihood that a person attempting to manipulate 

the ETP would also have to trade on that market 

to successfully manipulate the ETP, so that a 

surveillance-sharing agreement would assist in 

detecting and deterring misconduct, and (2) it is 

unlikely that trading in the ETP would be the 

predominant influence on prices in that market. See 

Winklevoss Order, 83 FR at 37594. The Commission 

explained that this definition is illustrative and not 

exclusive, and that there could be other types of 

‘‘significant markets’’ and ‘‘markets of significant 

size. See id. 

53See Teucrium Order, 87 FR at 21679; Order 

Granting Approval of a Proposed Rule Change, as 

Modified by Amendment Nos. 1 and 2, To List and 

Trade Shares of the Valkyrie XBTO Bitcoin Futures 

Fund Under Nasdaq Rule 5711(g), Securities 

Exchange Act Release No. 94853 (May 5, 2022), 87 

FR 28848 (May11, 2022) (SR–NASDAQ–2021–066), 

at 28852. 

54For example, ICE Futures U.S. open interest in 

RGGI Futures were 77 million allowances in June 

2024. The next largest RGGI Futures exchange, 

Nodal, had only 15.6 million allowances open 

interest at that time. Report on the Secondary 

Market for RGGI CO2 Allowances: Second Quarter 

2024, Prepared for RGGI, Inc. by Potomac 

Economics (Aug. 2024), available at https://

www.rggi.org/sites/default/files/Uploads/MarketMonitor/Quarterly-Reports/MM_Secondary_

Market_Report_2024_Q2.pdf. Similarly, ICE 

Endex’s EU ETS futures reached record 

participation throughout 2023 and during the first 

quarter of 2024. See Press Release, Intercontinental 

Exchange, ICE Environmental Contracts Traded the 

Equivalent of $1 Trillion in Notional Value for the 

Third Consecutive Year (Apr. 22, 2024) available at 

https://s2.q4cdn.com/154085107/files/doc_news/ 

ICE-Environmental-Contracts-Traded-theEquivalent-of-1-Trillion-in-Notional-Value-for-theThird-Consecutive-Year-2024.pdf. 

55See Securities Exchange Act Release No. 88255 

(Feb. 20, 2020), 85 FR 11146, 11156 (Feb. 26, 2020) 

(SR–NYSEArca–2019–60) (Order Granting 

Accelerated Approval of a Proposed Rule Change, 

as Modified by Amendment No. 4, To List and 

Trade Shares of the KFA Global Carbon ETF under 

NYSE Arca Rule 8.600–E) (approving the listing and 

trading of an exchange-traded fund (‘‘ETF’’), 

registered under the Investment Company Act of 

1940, holding carbon credit futures). In 2021, EU 

ETS futures were transitioned from ICE Futures 

Europe to ICE Endex. See press release at 

Intercontinental Exchange—ICE to transition 

European Union Emission Allowance Contracts to 

ICE Endex in the Netherlands during the Second 

Quarter of 2021. 

56The Commission examined futures volume, 

open interest, price, and spread data provided by 

Bloomberg. 

57See, e.g., July 2024 Spot Bitcoin ETP Approval 

Order at 62822; January 2024 Spot Bitcoin ETP 

Approval Order at 3011; Securities Exchange Act 

Release No. 61220 (Dec. 22, 2009), 74 FR 68895 

(Dec. 29, 2009) (SR–NYSEARCA–2009–94) (Order 

Granting Approval of Proposed Rule Change 

Relating To Listing and Trading Shares of the ETFS 

Palladium Trust); Securities Exchange Act Release 

No. 94518 (Mar. 25, 2022), 87 FR 18837 (Mar. 31, 

2022) (SR–NYSEARCA–2021–65) (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); Securities Exchange Act Release No. 

100224 (May 23, 2024), 89 FR 46937 (May 30, 2024) 

(SR–NYSEARCA–2023–70; SR–NYSEARCA–2024– 

31; SR–NASDAQ–2023–045; SR–CboeBZX–2023– 

069; SR–CboeBZX–2023–070; SR–CboeBZX–2023– 

087; SR–CboeBZX–2023–095; SR–CboeBZX–2024– 

018) (Order Granting Accelerated Approval of 

Proposed Rule Changes, as Modified by 

Amendments Thereto, To List and Trade Shares of 

Ether-Based Exchange-Traded Products). 

significant, regulated markets related to 

such holdings, and, thus, that such 

CSSAs and ISG membership can be 

reasonably expected to assist in 

surveilling for fraudulent and 

manipulative acts and practices with 

respect to such holdings.49 The 

Exchange represents that the Fund will 

hold only: (i) EU ETS futures which 

trade only on ICE Endex, with which 

the Exchange has entered into a CSSA; 

and (ii) CCA futures and RGGI futures 

which are traded only on ICE Futures 

U.S., which, like the Exchange, is a 

member of the ISG. Further, each of ICE 

Endex and ICE Futures U.S. is 

‘‘regulated’’ because ICE Endex is 

regulated in the Netherlands by the 

Dutch Authority for the Financial 

Markets and is registered with the CFTC 

as an authorized Foreign Board of 

Trade,50 and ICE Futures U.S. is a 

registered Designated Contract Market 

regulated by the CFTC.51

Moreover, each of ICE Endex and ICE 

Futures U.S. is a ‘‘significant market’’ 52

in relation to the respective Carbon 

Credit Futures that trade thereon. 

Specifically, with respect to the first 

prong of the ‘‘significant market’’ 

analysis, as the Commission has 

previously recognized,53 because the 

Carbon Credit Futures that would be 

held by the Fund (i.e., EU ETS futures, 

CCA futures, and RGGI futures) are only 

traded on markets which are members 

of the ISG or with which the Exchange 

holds a CSSA, the ISG membership and 

CSSA can reasonably be relied upon to 

assist in detecting and deterring 

fraudulent or manipulative misconduct 

that affects those assets. 

With respect to the second prong of 

the ‘‘significant market’’ analysis, 

evidence supports the Commission’s 

conclusion that it is unlikely that 

trading in the Fund’s Shares would be 

the predominant influence on prices in 

the EU ETS futures market of ICE 

Endex, or the CCA or RGGI futures 

markets of ICE Futures U.S. ICE Endex 

and ICE Futures U.S., on which the 

Fund’s investments in Carbon Credit 

Futures exclusively trade, are currently 

the largest and most liquid carbon credit 

futures markets for these instruments.54

In addition, since the launch of the KFA 

Global Carbon ETF under the 

Investment Company Act of 1940,55

which holds CCA and RGGI futures 

traded on ICE Futures U.S., and EU ETS 

futures traded on ICE Endex, the 

Commission has neither observed any 

disruption to the ICE Futures U.S. or 

ICE Endex futures markets, nor any 

evidence that this ETF has exerted a 

dominant influence on CCA, RGGI, and/ 

or EU ETS futures’ prices. For example, 

based on ICE Futures U.S. and ICE 

Endex data,56 the Commission has not 

observed any disruption to, or dominant 

influence from this ETF on, settlement 

prices, spreads, or roll costs of the EU 

ETS, RGGI, or CCA futures contracts. 

For these reasons, the Commission is 

able to conclude that the Exchange’s ISG 

membership and comprehensive 

surveillance-sharing agreement with ICE 

Endex can be reasonably expected to 

assist in surveilling for fraudulent and 

manipulative acts and practices with 

respect to the Carbon Credit Futures 

proposed to be held by the Fund. 

B. Exchange Act Section 

11A(a)(1)(C)(iii) 

The proposed rule change, as 

modified by Amendment No. 4, sets 

forth aspects of the Fund, including the 

availability of pricing information, 

transparency of portfolio holdings, and 

types of surveillance procedures, that 

are consistent with other ETPs that the 

Commission has approved.57 This 

includes commitments regarding: the 

availability via the Consolidated Tape 

Association of quotation and last-sale 

information for the Shares; the 

availability on the Fund’s website of 

certain information related to the Fund, 

including net asset value; the 

dissemination of the intra-day 

indicative value by one or more major 

market data vendors, updated every 15 

seconds throughout the Exchange’s 

regular trading hours; the Exchange’ 

surveillance procedures and ability to 


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92266 Federal Register / Vol. 89, No. 225 / Thursday, November 21, 2024 / Notices 

58See NYSE Arca Rule 8.500–E(d)(2). 

59 15 U.S.C. 78s(b)(2). 

60 15 U.S.C. 78f(b)(5); 15 U.S.C. 78k– 

1(a)(1)(C)(iii). 

61 15 U.S.C. 78s(b)(2). 

62 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

obtain information regarding trading in 

the Shares of the Fund; the conditions 

under which the Exchange would 

implement trading halts and 

suspensions; and the requirements of 

registered market makers in the Shares 

of the Fund. In addition, the Exchange 

deems the Shares to be equity securities, 

thus rendering trading in the Shares 

subject to that Exchange’s rules 

governing the trading of equity 

securities. Further, the applicable listing 

rule of the Exchange requires that all 

statements and representations made in 

its filing regarding, among others, the 

description of the Fund’s holdings, 

limitations on such holdings, and the 

applicability of the Exchange’s listing 

rules specified in the filing, will 

constitute continued listing 

requirements.58 Moreover, the proposed 

rule change states that the Sponsor has 

represented to the Exchange that it will 

advise that Exchange of any failure to 

comply with the applicable continued 

listing requirements; pursuant to 

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

Exchange Act, the Exchange will 

monitor for compliance with the 

continued listing requirements; and if 

the Fund is not in compliance with the 

applicable listing requirements, that 

Exchange will commence delisting 

procedures. 

The Commission therefore finds that 

the proposed rule change, as modified 

by Amendment No. 4, is reasonably 

designed to promote fair disclosure of 

information that may be necessary to 

price the Shares appropriately, to 

prevent trading when a reasonable 

degree of transparency cannot be 

assured, to safeguard material nonpublic information relating to the 

Fund’s portfolio, and to ensure fair and 

orderly markets for the Shares of the 

Fund. 

IV. Solicitation of Comments on 

Amendment No. 4 to the Proposed Rule 

Change 

Interested persons are invited to 

submit written data, views and 

arguments concerning whether 

Amendment No. 4 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–2024–27 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–2024–27. 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–NYSEARCA–2024–27 and should be 

submitted on or before December 12, 

2024. 

V. Accelerated Approval of Proposed 

Rule Change, as Modified by 

Amendment No. 4 

The Commission finds good cause to 

approve the proposed rule change, as 

modified by Amendment No. 4, prior to 

the thirtieth day after the date of 

publication of notice of the filing of 

Amendment No. 4 in the Federal 

Register. Amendment No. 4 to the 

proposed rule change clarified the 

creation and redemptions procedures 

for the Shares and provided additional 

clarification relating to statements 

concerning the holdings of the Fund 

and the custody of cash and cash 

equivalents. The changes and additional 

information in Amendment No. 4 assist 

the Commission in evaluating the 

Exchange’s proposal and in determining 

that it is consistent with the Act. The 

amended filing is now substantially 

similar to other spot bitcoin ETPs that 

the Commission has approved with 

respect to the Fund’s spot bitcoin 

holdings, and as discussed above in 

Section III.A, the spot bitcoin market 

and the CME bitcoin futures market 

remain consistently highly correlated. 

Accordingly, the Commission finds 

good cause, pursuant to Section 19(b)(2) 

of the Act,59 to approve the proposed 

rule change, as modified by Amendment 

No. 4, on an accelerated basis. 

VI. Conclusion 

This approval order is based on all of 

the Exchange’s representations, 

including those set forth above and in 

Amendment No. 4. For the foregoing 

reasons, the Commission finds that the 

proposed rule change, as modified by 

Amendment No. 4, is consistent with 

the requirements of the Act and the 

rules and regulations thereunder 

applicable to a national securities 

exchange, and in particular, Section 

6(b)(5) and Section 11A(a)(1)(C)(iii) of 

the Act.60

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,61 that the 

proposed rule change (SR–NYSEARCA– 

2024–27), as modified by Amendment 

No. 4, be, and it hereby is, approved on 

an accelerated basis. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.62

Stephanie J. Fouse, 

Assistant Secretary. 

[FR Doc. 2024–27221 Filed 11–20–24; 8:45 am] 

BILLING CODE P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–101638; File No. SR– 

NASDAQ–2024–066] 

Self-Regulatory Organizations; The 

Nasdaq Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Amend Its 

Schedule of Credits at Equity 7, 

Section 118(a) 

November 15, 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 November 

1, 2024, The Nasdaq Stock Market LLC 


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