5524 Federal Register / Vol. 87, No. 21 / Tuesday, February 1, 2022 / Notices 

5 Id. 

6 17 CFR 200.30–3(a)(31). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 92577 

(August 5, 2021), 86 FR 44092 (August 11, 2021) 

(SR–ISE–2021–16) (Notice of Filing and Immediate 

Effectiveness of Proposed Rule Change to Amend 

ISE’s Options Regulatory Fee) (‘‘Waiver Filing’’). 

4 Id. at 44094. 

5Prior to the Waiver Filing, the Exchange 

similarly collected ORF as described herein. 

6Participants must record the appropriate 

account origin code on all orders at the time of 

entry of the order. The Exchange represents that it 

has surveillances in place to verify that members 

mark orders with the correct account origin code. 

7The Exchange uses reports from OCC when 

assessing and collecting the ORF. 

8CMTA or Clearing Member Trade Assignment is 

a form of ‘‘give-up’’ whereby the position will be 

assigned to a specific clearing firm at OCC. 

9By way of example, if Broker A, an ISE Member, 

routes a customer order to CBOE and the 

transaction executes on CBOE and clears in Broker 

A’s OCC Clearing account, ORF will be collected by 

ISE from Broker A’s clearing account at OCC via 

direct debit. While this transaction was executed on 

a market other than ISE, it was cleared by an ISE 

Member in the member’s OCC clearing account in 

the customer range, therefore there is a regulatory 

nexus between ISE and the transaction. If Broker A 

was not an ISE Member, then no ORF should be 

assessed and collected because there is no nexus; 

the transaction did not execute on ISE nor was it 

cleared by an ISE Member. 

to 90 days as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding or as to which the 

self-regulatory organization consents, 

the Commission shall either approve the 

proposed rule change, disapprove the 

proposed rule change, or institute 

proceedings to determine whether the 

proposed rule change should be 

disapproved. The 45th day after 

publication of the notice for the 

Proposed Rule Change is February 12, 

2022. 

The Commission is extending the 45- 

day period for Commission action on 

the Proposed Rule Change. The 

Commission finds that it is appropriate 

to designate a longer period within 

which to take action on the Proposed 

Rule Change so that it has sufficient 

time to consider and take action on the 

Proposed Rule Change. 

Accordingly, pursuant to Section 

19(b)(2) of the Act 5 and for the reasons 

stated above, the Commission 

designates March 29, 2022 as the date 

by which the Commission shall either 

approve, disapprove, or institute 

proceedings to determine whether to 

disapprove proposed rule change SR– 

FICC–2021–009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.6

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–01964 Filed 1–31–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94070; File No. SR–ISE– 

2022–02] 

Self-Regulatory Organizations; Nasdaq 

ISE, LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Reduce ISE’s Options 

Regulatory Fee 

January 26, 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 

20, 2022, Nasdaq ISE, LLC (‘‘ISE’’ 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 

ISE’s Pricing Schedule at Options 7, 

Section 9, Part C, to reduce the ISE 

Options Regulatory Fee or ‘‘ORF’’. 

While the changes proposed herein 

are effective upon filing, the Exchange 

has designated the amendments become 

operative on February 1, 2022. 

The text of the proposed rule change 

is available on the Exchange’s website at 

https://listingcenter.nasdaq.com/ 

rulebook/ise/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 

ISE previously filed to waive its ORF 

from October 1, 2021 through January 

31, 2022.3 The Waiver Filing provided 

that ISE would continue monitoring the 

amount of revenue collected from the 

ORF to determine if regulatory revenues 

would exceed regulatory costs when it 

recommenced assessing ORF on 

February 1, 2022. If so, the Exchange 

committed to adjust its ORF.4 At this 

time, after a review of its regulatory 

revenues and regulatory costs, the 

Exchange proposes to reduce the ORF 

from $0.0018 (the amount of the ORF 

prior to the waiver) to $0.0014 per 

contract side as of February 1, 2022, to 

ensure that revenue collected from the 

ORF, in combination with other 

regulatory fees and fines, does not 

exceed the Exchange’s total regulatory 

costs. 

The options industry continues to 

experience high options trading 

volumes and volatility. At this time, ISE 

believes that the options volume it 

experienced in the second half of 2021 

is likely to persist into 2022. The 

anticipated options volume would 

impact ISE’s ORF collection which, in 

turn, has caused ISE to propose 

reducing the ORF to ensure that revenue 

collected from the ORF, in combination 

with other regulatory fees and fines, 

would not exceed the Exchange’s total 

regulatory costs. 

Collection of ORF 

Upon recommencement of the ORF on 

February 1, 2022,5 ISE will assess its 

ORF for each customer option 

transaction that is either: (1) Executed 

by a Member on ISE; or (2) cleared by 

an ISE Member at The Options Clearing 

Corporation (‘‘OCC’’) in the customer 

range,6 even if the transaction was 

executed by a non-Member of ISE, 

regardless of the exchange on which the 

transaction occurs.7 If the OCC clearing 

member is a ISE Member, ORF is 

assessed and collected on all cleared 

customer contracts (after adjustment for 

CMTA 8); and (2) if the OCC clearing 

member is not a ISE Member, ORF is 

collected only on the cleared customer 

contracts executed at ISE, taking into 

account any CMTA instructions which 

may result in collecting the ORF from a 

non-Member.9

In the case where a Member both 

executes a transaction and clears the 

transaction, the ORF will be assessed to 

and collected from that Member. In the 

case where a Member executes a 

transaction and a different Member 


tkelley on DSK125TN23PROD with NOTICE 
Federal Register / Vol. 87, No. 21 / Tuesday, February 1, 2022 / Notices 5525 

10The Exchange will set a 2022 Regulatory 

Budget in the first quarter of 2022. 

11See Options Trader Alert 2021–63. 

12The OCC data from December 2021 numbers 

reflect only 13 trading days as this information is 

through December 17, 2021. Volume data in the 

table represents numbers of contracts; each contract 

has two sides. 

13See data from OCC at: https://www.theocc.com/ 

Market-Data/Market-Data-Reports/Volume-andOpen-Interest/Volume-by-Account-Type. 

clears the transaction, the ORF will be 

assessed to and collected from the 

Member who clears the transaction and 

not the Member who executes the 

transaction. In the case where a nonMember executes a transaction at an 

away market and a Member clears the 

transaction, the ORF will be assessed to 

and collected from the Member who 

clears the transaction. In the case where 

a Member executes a transaction on ISE 

and a non-Member clears the 

transaction, the ORF will be assessed to 

the Member that executed the 

transaction on ISE and collected from 

the non-Member who cleared the 

transaction. In the case where a Member 

executes a transaction at an away 

market and a non-Member clears the 

transaction, the ORF will not be 

assessed to the Member who executed 

the transaction or collected from the 

non-Member who cleared the 

transaction because the Exchange does 

not have access to the data to make 

absolutely certain that ORF should 

apply. Further, the data does not allow 

the Exchange to identify the Member 

executing the trade at an away market. 

ORF Revenue and Monitoring of ORF 

The Exchange monitors the amount of 

revenue collected from the ORF to 

ensure that it, in combination with other 

regulatory fees and fines, does not 

exceed regulatory costs. In determining 

whether an expense is considered a 

regulatory cost, the Exchange reviews 

all costs and makes determinations if 

there is a nexus between the expense 

and a regulatory function. The Exchange 

notes that fines collected by the 

Exchange in connection with a 

disciplinary matter offset ORF. 

Revenue generated from ORF, when 

combined with all of the Exchange’s 

other regulatory fees and fines, is 

designed to recover a material portion of 

the regulatory costs to the Exchange of 

the supervision and regulation of 

member customer options business 

including performing routine 

surveillances, investigations, 

examinations, financial monitoring, and 

policy, rulemaking, interpretive, and 

enforcement activities. Regulatory costs 

include direct regulatory expenses and 

certain indirect expenses in support of 

the regulatory function. The direct 

expenses include in-house and thirdparty service provider costs to support 

the day-to-day regulatory work such as 

surveillances, investigations and 

examinations. The indirect expenses 

include support from such areas as 

Office of the General Counsel, 

technology, and internal audit. Indirect 

expenses were approximately 38% of 

the total regulatory costs for 2021. Thus, 

direct expenses were approximately 

62% of total regulatory costs for 2021.10

The ORF is designed to recover a 

material portion of the costs to the 

Exchange of the supervision and 

regulation of its Members, including 

performing routine surveillances, 

investigations, examinations, financial 

monitoring, and policy, rulemaking, 

interpretive, and enforcement activities. 

Proposal 

Based on the Exchange’s most recent 

review, the Exchange is proposing to 

reduce the amount of ORF that will be 

collected by the Exchange from $0.0018 

per contract side to $0.0014 per contract 

side. The Exchange issued an Options 

Trader Alert on December 31, 2021 

indicating the proposed rate change for 

February 1, 2022.11

The proposed reduction is based on a 

sustained high level of options volume 

in 2021. The below table displays 

average daily volume for 2021.12

To date, fourth quarter options average 

daily volume in 2021 has been higher 

than options average daily volume in 

any of the prior three quarters of 2021. 

With respect to customer options 

volume across the industry, total 

customer options contract average daily 

volume, to date, in 2021 is 36,565,398 

as compared to total customer options 

contract average daily volume in 2020 

which was 27,002,511.13

There can be no assurance that the 

Exchange’s costs for 2022 will not differ 

materially from these expectations and 

prior practice, nor can the Exchange 

predict with certainty whether options 

volume will remain at the current level 

going forward. The Exchange notes 

however, that when combined with 

regulatory fees and fines, the revenue 

that may be generated utilizing an ORF 

rate of $0.0018 per contract side may 

result in revenue which exceeds the 

Exchange’s estimated regulatory costs 

for 2022 if options volume persists. In 

2021, options volume remained high, 

due in large part to the extreme 

volatility in the marketplace as a result 

of the COVID–19 pandemic. The 

Exchange therefore proposes to reduce 

its ORF to $0.0014 per contract side to 

ensure that revenue does not exceed the 

Exchange’s estimated regulatory costs in 

2022. Particularly, the Exchange 

believes that reducing the ORF when 


tkelley on DSK125TN23PROD with NOTICE EN01FE22.003</GPH>

Date Total Contracts Customer Sides Trading Days Quarter Contracts Quarter CUst Sides 9!:l!rter AOC Quarter Cust ADS 

Jan2021 838,339,790 784,399,878 19 

Feb2021 823,413,002 782,113,450 19 

Mar2021 898,653,388 837,247,~ 23 2,560,406,180 2,403,760,387 41,973,IU 39,405,908 

Apr2021 711,388,828 667,208,963 21 

May2021 718,368,993 659,913,862 20 

Jun2021 866,099,522 809,242,842 22 2,295,857,343 2,136,365,667 36,442,UIO 33,910,566 

Jul2021 790,038,364 729,239,647 21 

Aug2021 801,578,079 741,111,748 22 

Sep2021 811,458,905 744,936,837 21 2,403,075,348 2,215,288,232 37,548,052 34,613,819 

Od2021 821,102,002 760,524,395 21 

Nov2021 944,355,975 866,102,667 21 

Dec2021 561,154,417 503,350,470 13 2,326,612,394 2,129,977,532 42,304044 38,U6,864 
5526 Federal Register / Vol. 87, No. 21 / Tuesday, February 1, 2022 / Notices 

14The Exchange notes that its regulatory 

responsibilities with respect to Member compliance 

with options sales practice rules have largely been 

allocated to FINRA under a 17d–2 agreement. The 

ORF is not designed to cover the cost of that options 

sales practice regulation. 

15The Exchange will provide Members with such 

notice at least 30 calendar days prior to the effective 

date of the change. 

16The Exchange notes that in connection with 

this proposal, it provided the Commission 

confidential details regarding the Exchange’s 

projected regulatory revenue, including projected 

revenue from ORF, along with a projected 

regulatory expenses. 

17 15 U.S.C. 78f(b). 

18 15 U.S.C. 78f(b)(4). 

19 15 U.S.C. 78f(b)(5). 

20 If the OCC clearing member is an ISE member, 

ORF is assessed and collected on all cleared 

customer contracts (after adjustment for CMTA); 

and (2) if the OCC clearing member is not an ISE 

member, ORF is collected only on the cleared 

customer contracts executed at ISE, taking into 

account any CMTA instructions which may result 

in collecting the ORF from a non-member. 

21 ISG is an industry organization formed in 1983 

to coordinate intermarket surveillance among the 

SROs by cooperatively sharing regulatory 

information pursuant to a written agreement 

between the parties. The goal of the ISG’s 

information sharing is to coordinate regulatory 

efforts to address potential intermarket trading 

abuses and manipulations. 

combined with all of the Exchange’s 

other regulatory fees and fines, would 

allow the Exchange to continue covering 

a material portion of its regulatory costs, 

while lessening the potential for 

generating excess revenue that may 

otherwise occur using the rate of 

$0.0018 per contract side.14

The Exchange will continue to 

monitor the amount of revenue 

collected from the ORF to ensure that it, 

in combination with its other regulatory 

fees and fines, does not exceed 

regulatory costs. If the Exchange 

determines regulatory revenues exceed 

regulatory costs, the Exchange will 

adjust the ORF by submitting a fee 

change filing to the Commission and 

notifying 15 its Members via an Options 

Trader Alert.16

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with the 

Securities Exchange Act of 1934 (the 

‘‘Act’’) and the rules and regulations 

thereunder applicable to the Exchange 

and, in particular, the requirements of 

Section 6(b) of the Act.17 Specifically, 

the Exchange believes the proposed rule 

change is consistent with Section 6(b)(4) 

of the Act 18, which provides that 

Exchange rules may provide for the 

equitable allocation of reasonable dues, 

fees, and other charges among its 

members, and other persons using its 

facilities. Additionally, the Exchange 

believes the proposed rule change is 

consistent with the Section 6(b)(5) 19

requirement that the rules of an 

exchange not be designed to permit 

unfair discrimination between 

customers, issuers, brokers, or dealers. 

The Exchange believes the proposed 

fee change is reasonable because 

customer transactions will be subject to 

a lower ORF fee than the rate that would 

otherwise be in effect on February 1, 

2022. Moreover, the proposed reduction 

is necessary for the Exchange to avoid 

collecting revenue, in combination with 

other regulatory fees and fines, that 

would be in excess of its anticipated 

regulatory costs which is consistent 

with the Exchange’s practices. 

The Exchange designed the ORF to 

generate revenues that would be less 

than the amount of the Exchange’s 

regulatory costs to ensure that it, in 

combination with its other regulatory 

fees and fines, does not exceed 

regulatory costs, which is consistent 

with the view of the Commission that 

regulatory fees be used for regulatory 

purposes and not to support the 

Exchange’s business operations. As 

discussed above, however, after review 

of its regulatory costs and regulatory 

revenues, which includes revenues from 

ORF and other regulatory fees and fines, 

the Exchange determined that absent a 

reduction in ORF, it may collect 

revenue which would exceed its 

regulatory costs. Indeed, the Exchange 

notes that when taking into account the 

potential that recent options volume 

persists, it estimates the ORF may 

generate revenues that would cover 

more than the approximated Exchange’s 

projected regulatory costs. As such, the 

Exchange believes it’s reasonable and 

appropriate to reduce the ORF amount 

from $0.0018 to $0.0014 per contract 

side. 

The Exchange also believes the 

proposed fee change is equitable and 

not unfairly discriminatory in that it is 

charged to all Members on all their 

transactions that clear in the customer 

range at OCC.20 The Exchange believes 

the ORF ensures fairness by assessing 

higher fees to those Members that 

require more Exchange regulatory 

services based on the amount of 

customer options business they 

conduct. Regulating customer trading 

activity is much more labor intensive 

and requires greater expenditure of 

human and technical resources than 

regulating non-customer trading 

activity, which tends to be more 

automated and less labor-intensive. For 

example, there are costs associated with 

main office and branch office 

examinations (e.g., staff expenses), as 

well as investigations into customer 

complaints and the terminations of 

registered persons. As a result, the costs 

associated with administering the 

customer component of the Exchange’s 

overall regulatory program are 

materially higher than the costs 

associated with administering the noncustomer component (e.g., Member 

proprietary transactions) of its 

regulatory program. Moreover, the 

Exchange notes that it has broad 

regulatory responsibilities with respect 

to activities of its Members, irrespective 

of where their transactions take place. 

Many of the Exchange’s surveillance 

programs for customer trading activity 

may require the Exchange to look at 

activity across all markets, such as 

reviews related to position limit 

violations and manipulation. Indeed, 

the Exchange cannot effectively review 

for such conduct without looking at and 

evaluating activity regardless of where it 

transpires. In addition to its own 

surveillance programs, the Exchange 

also works with other SROs and 

exchanges on intermarket surveillance 

related issues. Through its participation 

in the Intermarket Surveillance Group 

(‘‘ISG’’) 21 the Exchange shares 

information and coordinates inquiries 

and investigations with other exchanges 

designed to address potential 

intermarket manipulation and trading 

abuses. Accordingly, there is a strong 

nexus between the ORF and the 

Exchange’s regulatory activities with 

respect to customer trading activity of 

its Members. 

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. This 

proposal does not create an unnecessary 

or inappropriate intra-market burden on 

competition because the ORF applies to 

all customer activity, thereby raising 

regulatory revenue to offset regulatory 

expenses. It also supplements the 

regulatory revenue derived from noncustomer activity. The Exchange notes, 

however, the proposed change is not 

designed to address any competitive 

issues. Indeed, this proposal does not 

create an unnecessary or inappropriate 

inter-market burden on competition 

because it is a regulatory fee that 

supports regulation in furtherance of the 

purposes of the Act. The Exchange is 

obligated to ensure that the amount of 

regulatory revenue collected from the 

ORF, in combination with its other 

regulatory fees and fines, does not 

exceed regulatory costs. 


tkelley on DSK125TN23PROD with NOTICE 
Federal Register / Vol. 87, No. 21 / Tuesday, February 1, 2022 / Notices 5527 

22 15 U.S.C. 78s(b)(3)(A). 

23 17 CFR 240.19b–4(f)(2). 

24 15 U.S.C. 78s(b)(2)(B). 

25 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. 91994 

(May 25, 2021), 86 FR 29321 (‘‘Notice’’). Comments 

on the proposed rule change can be found at: 

https://www.sec.gov/comments/sr-cboebzx-2021- 

039/srcboebzx2021039.htm. 

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

5See Securities Exchange Act Release No. 92388, 

86 FR 38163 (July 19, 2021). 

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

7See Securities Exchange Act Release No. 92721, 

86 FR 48272 (Aug. 27, 2021). 

8See Securities Exchange Act Release No. 93571, 

86 FR 64979 (Nov. 19, 2021). On December 27, 

2021, the Exchange filed Amendment No. 1 to the 

proposal. As discussed below, however, see Section 

III.E, infra, the Commission views this amendment 

as untimely. Furthermore, even if this amendment 

had been timely filed, it would not alter the 

Commission’s conclusion that the Exchange’s 

proposal is not consistent with the Exchange Act. 

See Section III.E. 

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 29321. 

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 is effective 

upon filing pursuant to Section 

19(b)(3)(A) 22 of the Act and 

subparagraph (f)(2) of Rule 19b–4 23

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) 24 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 (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File No. SR–ISE– 

2022–02 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 No. 

SR–ISE–2022–02. 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 (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 No. 

SR–ISE–2022–02, and should be 

submitted on or before February 22, 

2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.25

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–01968 Filed 1–31–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94080; File No. SR– 

CboeBZX–2021–039] 

Self-Regulatory Organizations; Cboe 

BZX Exchange, Inc.; Order 

Disapproving a Proposed Rule Change 

To List and Trade Shares of the Wise 

Origin Bitcoin Trust Under BZX Rule 

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

Shares 

January 27, 2022. 

I. Introduction 

On May 10, 2021, Cboe BZX 

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

filed with the Securities and Exchange 

Commission (‘‘Commission’’), pursuant 

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

Exchange Act of 1934 (‘‘Exchange 

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

proposed rule change to list and trade 

shares (‘‘Shares’’) of the Wise Origin 

Bitcoin Trust (‘‘Trust’’) under BZX Rule 

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

Shares. The proposed rule change was 

published for comment in the Federal 

Register on June 1, 2021.3

On July 13, 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 23, 

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 BZX 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 BZX’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 


tkelley on DSK125TN23PROD with NOTICE