3866 Federal Register / Vol. 87, No. 16 / Tuesday, January 25, 2022 / Notices 

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

2 17 CFR 240.19b–4. 

3A ‘‘Priority Customer’’ is a person or entity that 

is not a broker/dealer in securities, and does not 

place more than 390 orders in listed options per day 

on average during a calendar month for its own 

beneficial account(s), as defined in Nasdaq GEMX 

Options 1, Section 1(a)(36). Unless otherwise noted, 

when used in this Pricing Schedule the term 

‘‘Priority Customer’’ includes ‘‘Retail’’ as defined 

below. See Options 7, Section 1. 

4 ‘‘Penny Symbols’’ are options overlying all 

symbols listed on Nasdaq GEMX that are in the 

Penny Interval Program. See Options 7, Section 1. 

5 ‘‘Non-Penny Symbols’’ are options overlying all 

symbols excluding Penny Symbols. See Options 7, 

Section 1. 

6The term ‘‘Market Makers’’ refers to 

‘‘Competitive Market Makers’’ and ‘‘Primary Market 

Makers’’ collectively. See Options 1, Section 

1(a)(21). 

7A ‘‘Non-Nasdaq GEMX Market Maker’’ is a 

market maker as defined in Section 3(a)(38) of the 

Securities Exchange Act of 1934, as amended, 

registered in the same options class on another 

options exchange. See GEMX Options 7, Section 1. 

8Non-Priority Customer orders are charged the 

Taker Fee for trades executed during the Opening 

Process. Priority Customer orders executed during 

the Opening Process receive the applicable Maker 

Rebate based on the tier achieved. Non-Priority 

Customers who execute less than 4.0% of Customer 

Total Consolidated Volume are charged a Taker Fee 

of $0.50 per contract for trades executed against a 

Priority Customer. Non-Priority Customers who 

execute 4.0% or greater of Customer Total 

Consolidated Volume are charged a Taker Fee of 

$0.47 per contract for trades executed against a 

Priority Customer. All Priority Customer orders are 

charged a Taker Fee of $0.49 per contract for trades 

executed against a Priority Customer. For purposes 

of note 13 within Options 7, Section 3, Customer 

Total Consolidated Volume means the total volume 

cleared at The Options Clearing Corporation in the 

Customer range in equity and ETF options in that 

month. See notes 4 and 16 of Options 7, Section 3. 

9A ‘‘Firm Proprietary’’ order is an order 

submitted by a member for its own proprietary 

account. See GEMX Options 7, Section 1. 

10A ‘‘Broker-Dealer’’ order is an order submitted 

by a member for a broker-dealer account that is not 

its own proprietary account. See GEMX Options 7, 

Section 1. 

11A ‘‘Professional Customer’’ is a person or entity 

that is not a broker/dealer and is not a Priority 

Customer. See GEMX Options 7, Section 1. 

12See note 8 above. 

13See note 5 of Options 7, Section 3. 

14See note 8 above. 

15See note 8 above. 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–93999; File No. SR–GEMX– 

2022–01] 

Self-Regulatory Organizations; Nasdaq 

GEMX, LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend GEMX’s 

Pricing Schedule at Options 7, Section 

3 

January 19, 2022. 

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 January 4, 

2022, Nasdaq GEMX, LLC (‘‘GEMX’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission (‘‘SEC’’ or 

‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the Exchange. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend 

GEMX’s Pricing Schedule at Options 7, 

Section 3, titled ‘‘Regular Order Fees 

and Rebates.’’ 

The text of the proposed rule change 

is available on the Exchange’s website at 

https://listingcenter.nasdaq.com/ 

rulebook/gemx/rules, at the principal 

office of the Exchange, and at the 

Commission’s Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

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

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

GEMX proposes to amend its Regular 

Order Fees and Rebates within Options 

7, Section 3. Specifically, the Exchange 

proposes to: (1) Decrease the Priority 

Customer 3 Tier 1 Taker Fee in Penny 

Symbols; 4 and (2) eliminate the Tier 5 

Maker Rebates and Taker Fees in Penny 

Symbols and Non-Penny Symbols.5

Each amendment is described below. 

Priority Customer Taker Fee 

Currently, Priority Customers are 

assessed Penny Symbol Taker Fees as 

follows: A Tier 1 Taker Fee of $0.49 per 

contract; a Tier 2 Taker Fee of $0.48 per 

contract; a Tier 3 Taker Fee of $0.48 per 

contract; a Tier 4 Taker Fee of $0.43 per 

contract; and a Tier 5 Taker Fee of $0.42 

per contract. Other GEMX market 

participants are assessed higher Penny 

Symbol Taker Fees as compared to 

Priority Customers. Market Makers 6 and 

Non-Nasdaq GEMX Market Makers 

(FarMM) 7 are assessed Tier 1 through 

Tier 3 Penny Symbol Taker Fee of $0.50 

per contract and a Tier 4 and Tier 5 

Penny Symbol Taker Fee of $0.48 per 

contract.8 Firm Proprietary 9/Broker 

Dealers 10 and Professional Customers 11

are assessed Tier 1 through Tier 3 Penny 

Symbol Taker Fee of $0.50 per contract 

and a Tier 4 and Tier 5 Penny Symbol 

Taker Fee of $0.49 per contract.12

At this time, the Exchange proposes to 

decrease the current Tier 1 Priority 

Customer Penny Symbol Taker Fee from 

$0.49 to $0.48 per contract. The 

Exchange believes that lowering the Tier 

1 Priority Customer Penny Symbol 

Taker Fee will attract additional order 

flow to the Exchange. With this 

proposal, Priority Customers continue to 

be assessed the lowest Penny Symbol 

Taker Fees. 

Tier 5 Maker Rebates and Taker Fees 

Today, GEMX pays the following Tier 

5 Penny Symbol Maker Rebates: $0.45 

per contract to Market Makers and $0.53 

per contract to Priority Customers. NonNasdaq GEMX Market Makers (FarMM), 

Firm Proprietary/Broker Dealers and 

Professional Customers are not eligible 

for Tier 5 Penny Symbol Maker Rebates. 

Today, GEMX pays the following Tier 5 

Non-Penny Symbol Maker Rebates: 

$0.75 per contract to Market Makers and 

$1.05 per contract to Priority Customers. 

Non-Nasdaq GEMX Market Makers 

(FarMM), Firm Proprietary/Broker 

Dealers and Professional Customers are 

not eligible for Tier 5 Non-Penny 

Symbol Maker Rebates. Market Maker 

and Priority Customer orders are eligible 

for higher Penny and Non-Penny 

Symbol Maker Rebates based on 

achieving volume thresholds in Table 1 

within Options 7, Section 3.13

Today, GEMX assesses the following 

Tier 5 Penny Symbol Taker Fees: $0.48 

per contract to Market Makers and NonNasdaq GEMX Market Makers (FarMM), 

$0.49 per contract to Firm Proprietary/ 

Broker Dealers and Professional 

Customers, and $0.42 per contract to 

Priority Customers.14 Today, GEMX 

assesses the following Tier 5 Non-Penny 

Symbol Taker Fees: $0.94 per contract 

to Market Makers, Non-Nasdaq GEMX 

Market Makers (FarMM), Firm 

Proprietary/Broker Dealers, and 

Professional Customers, and $0.82 per 

contract to Priority Customers.15

At this time, the Exchange proposes to 

eliminate Penny and Non-Penny 

Symbol Tier 5 Maker Rebates and Taker 


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Federal Register / Vol. 87, No. 16 / Tuesday, January 25, 2022 / Notices 3867 

16 15 U.S.C. 78f(b). 

17 15 U.S.C. 78f(b)(4) and (5). 

18Securities Exchange Act Release No. 51808 

(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005) 

(‘‘Regulation NMS Adopting Release’’). 19NetCoalition v. SEC, 615 F.3d 525 (D.C. Cir. 

2010). 20See NetCoalition, at 534–535. 21 Id. at 537. 22 Id. at 539 (quoting Securities Exchange Act 

Release No. 59039 (December 2, 2008), 73 FR 

74770, 74782–83 (December 9, 2008) (SR– 

NYSEArca–2006–21)). 

Fees. The Exchange also proposes to 

amend the criteria for Tier 4 of the 

Qualifying Tier Thresholds, within 

Table 1 of Options 7, Section 3, so that 

volume that is 2.5% or greater of 

Customer Total Consolidated Volume 

and Priority Customer Maker Percentage 

of Customer Total Consolidated Volume 

of 1.20% or greater would qualify a 

GEMX Member for the Tier 4 Penny and 

Non-Penny Symbol Maker Rebates and 

Taker Fees. 

The elimination of the Tier 5 Penny 

Symbol Maker Rebates would result in 

no change as the same Tier 5 Penny 

Symbol Maker Rebates exist for Tier 4 

Penny Symbol Maker Rebates, with the 

exception of the Penny Symbol Market 

Maker Rebate. The Tier 5 Penny Symbol 

Market Maker Rebate is $0.45 per 

contract, while the Tier 4 Penny Symbol 

Market Maker Rebate is $0.41 per 

contract. With this proposal, the highest 

Penny Symbol Market Maker Rebate 

that can be achieved would now be 

$0.41 per contract. 

The elimination of the Tier 5 Penny 

Symbol Taker Fees would result in no 

change as the same Tier 5 Penny 

Symbol Taker Fees exist for Tier 4 

Penny Symbol Taker Fees, with the 

exception of the Priority Customer 

Penny Symbol Taker Fee. The Tier 5 

Penny Symbol Priority Customer Taker 

Fee is $0.42 per contract, while the Tier 

4 Penny Symbol Priority Customer 

Taker Fee is $0.43 per contract. With 

this proposal, the lowest Penny Symbol 

Priority Customer Taker Fee that would 

be assessed would now be $0.43 per 

contract. 

The elimination of the Tier 5 NonPenny Symbol Maker Rebates and Taker 

Fees would result in no change as the 

same Tier 5 Non-Penny Symbol Maker 

Rebates and Taker Fees exist for Tier 4 

Non-Penny Symbol Maker Rebates and 

Taker Fees. As noted, with the amended 

Tier 4 criteria, a GEMX Member would 

continue to be able to achieve the same 

Non-Penny Symbol Maker Rebates and 

Taker Fees that are currently offered for 

Tier 4 Non-Penny Symbol Maker 

Rebates and Taker Fees. 

With these proposed changes, Priority 

Customers would continue to be paid 

the highest Market Rebates and be 

assessed the lowest Taker Fees in both 

Penny and Non-Penny Symbols. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,16 in general, and furthers the 

objectives of Sections 6(b)(4) and 6(b)(5) 

of the Act,17 in particular, in that it 

provides for the equitable allocation of 

reasonable dues, fees and other charges 

among members and issuers and other 

persons using any facility, and is not 

designed to permit unfair 

discrimination between customers, 

issuers, brokers, or dealers. 

The Commission and the courts have 

repeatedly expressed their preference 

for competition over regulatory 

intervention in determining prices, 

products, and services in the securities 

markets. In Regulation NMS, while 

adopting a series of steps to improve the 

current market model, the Commission 

highlighted the importance of market 

forces in determining prices and SRO 

revenues and, also, recognized that 

current regulation of the market system 

‘‘has been remarkably successful in 

promoting market competition in its 

broader forms that are most important to 

investors and listed companies.’’ 18

Likewise, in NetCoalition v. Securities 

and Exchange Commission 19

(‘‘NetCoalition’’) the D.C. Circuit upheld 

the Commission’s use of a market-based 

approach in evaluating the fairness of 

market data fees against a challenge 

claiming that Congress mandated a costbased approach.20 As the court 

emphasized, the Commission ‘‘intended 

in Regulation NMS that ‘market forces, 

rather than regulatory requirements’ 

play a role in determining the market 

data . . . to be made available to 

investors and at what cost.’’ 21

Further, ‘‘[n]o one disputes that 

competition for order flow is ‘fierce.’ 

. . . As the SEC explained, ‘[i]n the U.S. 

national market system, buyers and 

sellers of securities, and the brokerdealers that act as their order-routing 

agents, have a wide range of choices of 

where to route orders for execution’; 

[and] ‘no exchange can afford to take its 

market share percentages for granted’ 

because ‘no exchange possesses a 

monopoly, regulatory or otherwise, in 

the execution of order flow from broker 

dealers’ . . . .’’ 22 Although the court 

and the SEC were discussing the cash 

equities markets, the Exchange believes 

that these views apply with equal force 

to the options markets. 

Priority Customer Taker Fee 

The Exchange’s proposal to decrease 

the current Tier 1 Priority Customer 

Penny Symbol Taker Fee from $0.49 to 

$0.48 per contract is reasonable as this 

decrease would result in a lower Tier 1 

Priority Customer Penny Symbol Taker 

Fee. The Exchange believes that 

lowering the Tier 1 Priority Customer 

Penny Symbol Taker Fee will attract 

additional order flow to the Exchange. 

With this proposal, Priority Customers 

continue to be assessed the lowest 

Penny Symbol Taker Fees. 

The Exchange’s proposal to decrease 

the current Tier 1 Priority Customer 

Penny Symbol Taker Fee from $0.49 to 

$0.48 per contract is equitable and not 

unfairly discriminatory. Priority 

Customers continue to be assessed the 

lowest Penny Symbol Taker Fees. 

Priority Customer liquidity benefits all 

market participants by providing more 

trading opportunities, which attracts 

Market Makers. An increase in the 

activity of these market participants in 

turn facilitates tighter spreads, which 

may cause an additional corresponding 

increase in order flow from other market 

participants. 

Tier 5 Maker Rebates and Taker Fees 

The Exchange’s proposal to eliminate 

Penny and Non-Penny Symbol Tier 5 

Maker Rebates and Taker Fees is 

reasonable. The elimination of the Tier 

5 Penny Symbol Maker Rebates would 

result in no change as the same Tier 5 

Penny Symbol Maker Rebates exist for 

Tier 4 Penny Symbol Maker Rebates, 

with the exception of the Penny Symbol 

Market Maker Rebate. The Tier 5 Penny 

Symbol Market Maker Rebate is $0.45 

per contract, while the Tier 4 Penny 

Symbol Market Maker Rebate is $0.41 

per contract. With this proposal, the 

highest Penny Symbol Market Maker 

Rebate that can be achieved would now 

be $0.41 per contract. The elimination 

of the Tier 5 Penny Symbol Taker Fees 

would result in no change as the same 

Tier 5 Penny Symbol Taker Fees exist 

for Tier 4 Penny Symbol Taker Fees, 

with the exception of the Priority 

Customer Penny Symbol Taker Fee. The 

Tier 5 Penny Symbol Priority Customer 

Taker Fee is $0.42 per contract, while 

the Tier 4 Penny Symbol Priority 

Customer Taker Fee is $0.43 per 

contract. With this proposal, the lowest 

Priority Customer Penny Symbol Taker 

Fee that would be assessed would now 

be $0.43 per contract. Notwithstanding, 

the decreased Penny Symbol Market 

Maker Rebate of $0.45 per contract and 

the increased Priority Customer Penny 

Symbol Taker Fee of $0.43 per contract, 

the Exchange believes that the Market 

and Taker Tier 4 pricing in Penny 

Symbols will continue to attract order 

flow to GEMX. The elimination of the 

Tier 5 Non-Penny Symbol Maker 


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3868 Federal Register / Vol. 87, No. 16 / Tuesday, January 25, 2022 / Notices 

23For purposes of measuring Total Affiliated 

Member % of Customer Total Consolidated 

Volume, Customer Total Consolidated Volume 

means the total volume cleared at The Options 

Clearing Corporation in the Customer range in 

equity and ETF options in that month. 

24The Priority Customer Maker % of Customer 

Total Consolidated Volume category includes all 

Priority Customer volume that adds liquidity in all 

symbols. 

25 15 U.S.C. 78s(b)(3)(A)(ii). 

26 17 CFR 240.19b–4(f)(2). 

Rebates and Taker Fees would result in 

no change as the same Tier 5 Non-Penny 

Symbol Maker Rebates and Taker Fees 

exist for Tier 4 Non-Penny Symbol 

Maker Rebates and Taker Fees. As 

noted, with the amended Tier 4 criteria 

a GEMX Member would continue to be 

able to achieve the same Non-Penny 

Symbol Maker Rebates and Taker Fees 

that are currently offered for Tier 4 NonPenny Symbol Maker Rebates and Taker 

Fees. With these proposed changes, 

Priority Customers would continue to be 

paid the highest Market Rebates and be 

assessed the lowest Taker Fees in Penny 

and Non-Penny Symbols. 

The Exchange’s proposal to eliminate 

the Penny and Non-Penny Symbol Tier 

5 Maker Rebates and Taker Fees is 

equitable and not unfairly 

discriminatory. All Members that meet 

the qualifications of the Tier 1 through 

Tier 4 Qualifying Tier Thresholds 

would continue to be eligible, 

uniformly, to receive the corresponding 

rebates and fees. 

Qualifying Tier Thresholds 

The Exchange’s proposal to amend 

the description of Tier 4 of the 

Qualifying Tier Thresholds, within 

Table 1 of Options 7, Section 3, with 

respect to the Total Affiliated Member 

% of Customer Total Consolidated 

Volume,23 to require that a member 

execute 2.5% or greater of Customer 

Total Consolidated Volume is 

reasonable, equitable and not unfairly 

discriminatory. Also, the Exchange’s 

proposal to amend the description of the 

Tier 4 of Qualifying Tier Threshold with 

respect to the Priority Customer Maker 

% of Customer Total Consolidated 

Volume,24 to require that a member 

executes Priority Customer Maker 

volume of 1.20% or greater of Customer 

Total Consolidated Volume is 

reasonable, equitable and not unfairly 

discriminatory. With the elimination of 

Tier 5 Penny and Non-Penny Symbol 

Maker Rebates and Taker Fees, the Tier 

4 Penny and Non-Penny Symbol Maker 

Rebates and Taker Fees would be the 

highest Maker Rebate and lowest Taker 

Fee. All Members that meet the 

qualifications of the Tier 4 Qualifying 

Tier Threshold would be eligible, 

uniformly, to receive the corresponding 

rebates and fees. 

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 not 

necessary or appropriate in furtherance 

of the purposes of the Act. 

Inter-Market Competition 

The proposal does not impose an 

undue burden on inter-market 

competition. The Exchange believes its 

proposal remains competitive with 

other options markets and will offer 

market participants with another choice 

of where to transact options. The 

Exchange notes that it operates in a 

highly competitive market in which 

market participants can readily favor 

competing venues if they deem fee 

levels at a particular venue to be 

excessive, or rebate opportunities 

available at other venues to be more 

favorable. In such an environment, the 

Exchange must continually adjust its 

fees to remain competitive with other 

exchanges that have been exempted 

from compliance with the statutory 

standards applicable to exchanges. 

Because competitors are free to modify 

their own fees in response, and because 

market participants may readily adjust 

their order routing practices, the 

Exchange believes that the degree to 

which fee changes in this market may 

impose any burden on competition is 

extremely limited. 

Intra-Market Competition 

The proposed amendments do not 

impose an undue burden on intramarket competition. 

Priority Customer Taker Fee 

The Exchange’s proposal to decrease 

the current Tier 1 Priority Customer 

Penny Symbol Taker Fee from $0.49 to 

$0.48 per contract does not impose an 

undue burden on competition. Priority 

Customers continue to be assessed the 

lowest Penny Symbol Taker Fees. 

Priority Customer liquidity benefits all 

market participants by providing more 

trading opportunities, which attracts 

Market Makers. An increase in the 

activity of these market participants in 

turn facilitates tighter spreads, which 

may cause an additional corresponding 

increase in order flow from other market 

participants. 

Tier 5 Maker Rebates and Taker Fees 

The Exchange’s proposal to eliminate 

Penny and Non-Penny Symbol Tier 5 

Maker Rebates and Taker Fees does not 

impose an undue burden on 

competition. Exchange’s proposal to 

eliminate the Penny and Non-Penny 

Symbol Tier 5 Maker Rebates and Taker 

Fees is equitable and not unfairly 

discriminatory. All Members that meet 

the qualifications of the Tier 1 through 

Tier 4 Qualifying Tier Thresholds 

would continue to be eligible, 

uniformly, to receive the corresponding 

rebates and fees. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were either 

solicited or received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to Section 

19(b)(3)(A)(ii) of the Act,25 and Rule 

19b–4(f)(2) 26 thereunder. At any time 

within 60 days of the filing of the 

proposed rule change, the Commission 

summarily may temporarily suspend 

such rule change if it appears to the 

Commission that such action is: (i) 

Necessary or appropriate in the public 

interest; (ii) for the protection of 

investors; or (iii) otherwise in 

furtherance of the purposes of the Act. 

If the Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

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 (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

GEMX–2022–01 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–GEMX–2022–01. 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 


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Federal Register / Vol. 87, No. 16 / Tuesday, January 25, 2022 / Notices 3869 

27 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. 91962 

(May 21, 2021), 86 FR 28646 (May 27, 2021) 

(‘‘Notice’’). Comments on the proposed rule change 

can be found at: https://www.sec.gov/comments/srnysearca-2021-37/srnysearca202137.htm. 

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

5See Securities Exchange Act Release No. 92333, 

86 FR 36826 (July 13, 2021). 

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

7See Securities Exchange Act Release No. 92714, 

86 FR 47662 (Aug. 26, 2021). 

8See Securities Exchange Act Release No. 93570, 

86 FR 64975 (Nov. 19, 2021). 

9 15 U.S.C. 78f(b)(5). 

10Bitcoins are digital assets that are issued and 

transferred via a decentralized, open-source 

protocol used by a peer-to-peer computer network 

through which transactions are recorded on a 

public transaction ledger known as the ‘‘bitcoin 

blockchain.’’ The bitcoin protocol governs the 

creation of new bitcoins and the cryptographic 

system that secures and verifies bitcoin 

transactions. See, e.g., Notice, 86 FR at 28646–47. 

11See 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’’); Order 

Disapproving a Proposed Rule Change, as Modified 

by Amendment No. 1, To Amend NYSE Arca Rule 

8.201–E (Commodity-Based Trust Shares) and To 

List and Trade Shares of the United States Bitcoin 

and Treasury Investment Trust Under NYSE Arca 

Rule 8.201–E, Securities Exchange Act Release No. 

88284 (Feb. 26, 2020), 85 FR 12595 (Mar. 3, 2020) 

(SR–NYSEArca–2019–39) (‘‘USBT Order’’); Order 

Disapproving a Proposed Rule Change To List and 

Trade Shares of the WisdomTree Bitcoin Trust 

Under BZX Rule 14.11(e)(4), Commodity-Based 

Trust Shares, Securities Exchange Act Release No. 

93700 (Dec. 1, 2021), 86 FR 69322 (Dec. 7, 2021) 

(SR–CboeBZX–2021–024) (‘‘WisdomTree Order’’); 

Order Disapproving a Proposed Rule Change to List 

and Trade Shares of the Valkyrie Bitcoin Fund 

under NYSE Arca Rule 8.201–E (Commodity-Based 

Trust Shares), Securities Exchange Act Release No. 

93859 (Dec. 22, 2021), 86 FR74156 (Dec. 29, 2021) 

(SR–NYSEArca–2021–31) (‘‘Valkyrie Order’’); Order 

Disapproving a Proposed Rule Change to List and 

Trade Shares of the Kryptoin Bitcoin ETF Trust 

under BZX Rule 14.11(e)(4), Commodity-Based 

Trust Shares, Securities Exchange Act Release No. 

93860 (Dec. 22, 2021), 86 FR 74166 (Dec. 29, 2021) 

(SR–CboeBZX–2021–029) (‘‘Kryptoin Order’’). See 

also Order Disapproving a Proposed Rule Change, 

as Modified by Amendment No. 1, Relating to the 

Listing and Trading of Shares of the SolidX Bitcoin 

Trust Under NYSE Arca Equities Rule 8.201, 

Securities Exchange Act Release No. 80319 (Mar. 

28, 2017), 82 FR 16247 (Apr. 3, 2017) (SR– 

NYSEArca–2016–101) (‘‘SolidX Order’’). The 

Commission also notes that orders were issued by 

delegated authority on the following matters: Order 

Disapproving a Proposed Rule Change To List and 

Trade the Shares of the ProShares Bitcoin ETF and 

the ProShares Short Bitcoin ETF, Securities 

Exchange Act Release No. 83904 (Aug. 22, 2018), 

83 FR 43934 (Aug. 28, 2018) (SR–NYSEArca–2017– 

139) (‘‘ProShares Order’’); Order Disapproving a 

Proposed Rule Change To List and Trade the Shares 

of the GraniteShares Bitcoin ETF and the 

GraniteShares Short Bitcoin ETF, Securities 

Exchange Act Release No. 83913 (Aug. 22, 2018), 

83 FR 43923 (Aug. 28, 2018) (SR–CboeBZX–2018– 

001) (‘‘GraniteShares Order’’); Order Disapproving a 

Proposed Rule Change To List and Trade Shares of 

the VanEck Bitcoin Trust Under BZX Rule 

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

Securities Exchange Act Release No. 93559 (Nov. 

12, 2021), 86 FR 64539 (Nov. 18, 2021) (SR– 

CboeBZX–2021–019). 

12See USBT Order, 85 FR at 12596. See also 

Winklevoss Order, 83 FR at 37592 n.202 and 

accompanying text (discussing previous 

Commission approvals of commodity-trust ETPs); 

GraniteShares Order, 83 FR at 43925–27 nn.35–39 

and accompanying text (discussing previous 

Commission approvals of commodity-futures ETPs). 

internet website (http://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 

10:00 a.m. and 3:00 p.m. Copies of the 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–GEMX–2022–01 and 

should be submitted on or before 

February 15, 2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.27

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–01325 Filed 1–24–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94006; File No. SR– 

NYSEArca–2021–37] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Order Disapproving a 

Proposed Rule Change To List and 

Trade Shares of the First Trust 

SkyBridge Bitcoin ETF Trust Under 

NYSE Arca Rule 8.201–E 

January 20, 2022. 

I. Introduction 

On May 6, 2021, 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 (‘‘Exchange 

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

proposed rule change to list and trade 

shares (‘‘Shares’’) of the First Trust 

SkyBridge Bitcoin ETF Trust (‘‘Trust’’) 

under NYSE Arca Rule 8.201–E 

(Commodity-Based Trust Shares). The 

proposed rule change was published for 

comment in the Federal Register on 

May 27, 2021.3

On July 7, 2021, pursuant to Section 

19(b)(2) of the Exchange 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 August 20, 

2021, the Commission instituted 

proceedings under Section 19(b)(2)(B) of 

the Exchange Act 6 to determine 

whether to approve or disapprove the 

proposed rule change.7 On November 

15, 2021, the Commission designated a 

longer period for Commission action on 

the proposed rule change.8

This order disapproves the proposed 

rule change. The Commission concludes 

that NYSE Arca has not met its burden 

under the Exchange Act and the 

Commission’s Rules of Practice to 

demonstrate that its proposal is 

consistent with the requirements of 

Exchange Act Section 6(b)(5), and in 

particular, the requirement that the 

rules of a national securities exchange 

be ‘‘designed to prevent fraudulent and 

manipulative acts and practices’’ and 

‘‘to protect investors and the public 

interest.’’ 9

When considering whether NYSE 

Arca’s proposal to list and trade the 

Shares is designed to prevent fraudulent 

and manipulative acts and practices, the 

Commission applies the same standard 

used in its orders considering previous 

proposals to list bitcoin 10-based 

commodity trusts and bitcoin-based 

trust issued receipts.11 As the 

Commission has explained, an exchange 

that lists bitcoin-based exchange-traded 

products (‘‘ETPs’’) can meet its 

obligations under Exchange Act Section 

6(b)(5) by demonstrating that the 

exchange has a comprehensive 

surveillance-sharing agreement with a 

regulated market of significant size 

related to the underlying or reference 

bitcoin assets.12

The standard requires such 

surveillance-sharing agreements since 

they ‘‘provide a necessary deterrent to 

manipulation because they facilitate the 

availability of information needed to 

fully investigate a manipulation if it 


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