106648 Federal Register / Vol. 89, No. 249 / Monday, December 30, 2024 / Notices 

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

23 17 CFR 240.19b–4(f). 

24 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

can continue to buy the less expensive 

1 Gb physical port (which cost is not 

changing) or may choose to obtain 

access via a third-party re-seller. While 

pricing may be increased for the larger 

capacity physical ports, such options 

provide far more capacity and are 

purchased by those that consume more 

resources from the network. 

Accordingly, the proposed connectivity 

fees do not favor certain categories of 

market participants in a manner that 

would impose a burden on competition; 

rather, the allocation reflects the 

network resources consumed by the 

various size of market participants— 

lowest bandwidth consuming members 

pay the least, and highest bandwidth 

consuming members pays the most. 

The proposed fee change also does 

not impose a burden on competition or 

on other Self-Regulatory Organizations 

that is not necessary or appropriate. As 

described above, the Exchange 

evaluated its proposed fee change using 

objective and stable metric with limited 

volatility. Utilizing Data Processing PPI 

over a specified period of time is a 

reasonable means of recouping a portion 

of the Exchange’s investment in 

maintaining and enhancing the 

connectivity service identified above. 

The Exchange believes utilizing Data 

Processing PPI, a tailored measure of 

inflation, to increase certain 

connectivity fees to recoup the 

Exchange’s investment in maintaining 

and enhancing its services and products 

would not impose a burden on 

competition. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

The Exchange neither solicited nor 

received comments on the proposed 

rule change. 

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) 

of the Act 22 and paragraph (f) of Rule 

19b–4 23 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 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 will institute proceedings 

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– 

CboeBYX–2024–049 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-CboeBYX–2024–049. 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-CboeBYX–2024–049 and should be 

submitted on or before January 21, 2025. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.24

Vanessa A. Countryman, 

Secretary. 

[FR Doc. 2024–30912 Filed 12–27–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–102003; File No. SR– 

CboeBZX–2024–126] 

Self-Regulatory Organizations; Cboe 

BZX Exchange, Inc.; Notice of Filing of 

a Proposed Rule Change to List and 

Trade Shares of the BondBloxx Private 

Credit Trust Under BZX Rule 14.11(f), 

Trust Issued Receipts 

December 19, 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 December 

17, 2024, Cboe BZX Exchange, Inc. 

(‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III below, which Items have been 

prepared by the Exchange. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

Cboe BZX Exchange, Inc. (‘‘BZX’’ or 

the ‘‘Exchange’’) is filing with the 

Securities and Exchange Commission 

(‘‘Commission’’ or ‘‘SEC’’) a proposed 

rule change to list and trade shares of 

the BondBloxx Private Credit Trust (the 

‘‘Trust’’), under BZX Rule 14.11(f), Trust 

Issued Receipts. 

The text of the proposed rule change 

is also available on the Exchange’s 

website (http://markets.cboe.com/us/ 

equities/regulation/rule_filings/bzx/), at 

the Exchange’s Office of the Secretary, 

and at the Commission’s Public 

Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 


ddrumheller on DSK120RN23PROD with NOTICES1
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3Rule 14.11(f)(4) applies to Trust Issued Receipts 

that invest in ‘‘Investment Shares’’ or ‘‘Financial 

Instruments’’. The term ‘‘Investment Shares,’’ as 

defined in Rule 14.11(f)(4)(A)(i), means a security 

(a) that is issued by a trust, partnership, commodity 

pool or other similar entity that invests in any 

combination of futures contracts, options on futures 

contracts, forward contracts, commodities, swaps or 

high credit quality short-term fixed income 

securities or other securities; and (b) issued and 

redeemed daily at net asset value in amounts 

correlating to the number of receipts created and 

redeemed in a specified aggregate minimum 

number. The term ‘‘Financial Instruments,’’ as 

defined in Rule 14.11(f)(4)(A)(iv), means any 

combination of investments, including cash; 

securities; options on securities and indices; futures 

contracts; options on futures contracts; forward 

contracts; equity caps, collars and floors; and swap 

agreements. 

4The Commission approved BZX Rule 14.11(f)(4) 

in Securities Exchange Act Release No. 68619 

(January 10, 2013), 78 FR 3489 (January 16, 2013) 

(SR–BZX–2012–044). 

5The Trust has filed a registration statement on 

Form S–1 under the Securities Act of 1933, dated 

December 13, 2024 (File No. 333–283852) 

(‘‘Registration Statement’’). The description of the 

Trust and the Shares contained herein are based on 

the Registration Statement. The Registration 

Statement for the Trust is not yet effective, and the 

Trust will not trade on the Exchange until such 

time that the Registration Statement is effective. 

6The Trust intends to operate its business so that 

it is falls outside of the definition of an investment 

company under the Investment Company Act of 

1940 (the ‘‘1940 Act’’). Section 3(a)(1)(C) of the 

1940 Act generally defines an investment company 

as an entity primarily engaged in investing, 

reinvesting, or trading in securities and holds 

investment securities exceeding 40% of its total 

assets (exclusive of U.S. federal government 

securities and cash items) on a non-consolidated 

basis, which the Trust refers to as the 40% test. 

Excluded from the term ‘‘investment securities,’’ 

among other things, are securities issued by 

majority-owned subsidiaries that are not themselves 

investment companies and are not relying on the 

exclusions from the definition of investment 

company set forth in Section 3(c)(1) or Section 

3(c)(7) of the 1940 Act. The Trust intends to comply 

with this 40% test by primarily conducting its 

business through its majority-owned subsidiaries, 

which are not classified as investment companies 

and not relying on either the Section 3(c)(1) or 

Section 3(c)(7) exclusions from registration under 

the 1940 Act. 

The Trust anticipates that its subsidiaries will 

primarily qualify for exclusions under Section 

3(c)(5)(A) of the 1940 Act, which applies to issuers 

primarily engaged in the business of purchasing or 

otherwise acquiring notes, drafts, acceptances, open 

accounts receivable, and other obligations 

representing part or all of the sales price of 

merchandise, insurance and services, or Section 

3(c)(5)(B) of the 1940 Act, which is available to 

entities primarily engaged in the business of making 

loans to manufacturers, wholesalers, and retailers 

of, and to prospective purchasers of, specified 

merchandise, insurance and services. These 

exceptions require that at least 55% of the 

subsidiaries’ portfolios consist of qualifying assets 

that meet the requirements of the relevant 

exception. 

7Cash equivalents are short-term instruments 

with maturities of less than 3 months, specifically 

including U.S. Government securities, certificates of 

deposit, bankers’ acceptances, repurchase and 

reverse repurchase agreements, bank time deposits, 

commercial paper, and money market funds. This 

definition is consistent with the definition of cash 

and cash equivalents in Exchange Rule 

14.11(i)(4)(C)(iii). 

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 

The Exchange proposes to list and 

trade the Shares of the Trust under BZX 

Rule 14.11(f)(4), which governs the 

listing and trading of Trust Issued 

Receipts 3 on the Exchange.4 The Trust 

seeks to provide attractive risk-adjusted 

returns primarily through distributions 

of current income from the Trust’s 

portfolio, as further described below. 

The Trust has filed a registration 

statement on Form S–1 under the 

Securities Act of 1933.5 6

Description of the Trust 

BondBloxx Investment Management 

Corporation (the ‘‘Advisor’’) is the 

advisor to the Trust and is responsible 

for the overall management of the 

Trust’s business activities. HCG Fund 

Management LP (the ‘‘Sub-Advisor’’) 

will assist in the day-to-day 

management of the Trust’s assets. 

Brown Brothers Harriman & Co. serves 

as the administrator (the 

‘‘Administrator’’), custodian (the 

‘‘Custodian’’), and the transfer agent (the 

‘‘Transfer Agent’’). CSC Delaware Trust 

Company, a Delaware trust company, is 

the sole trustee of the Trust. 

If the Advisor to the Trust issuing the 

Trust Issued Receipts is affiliated with 

a broker-dealer, such Advisor to the 

Trust shall erect and maintain a ‘‘fire 

wall’’ between the Advisor and the 

broker-dealer with respect to access to 

information concerning the composition 

and/or changes to the Trust’s portfolio. 

The Advisor is not a broker-dealer or 

affiliated with a broker-dealer. In the 

event that (a) the Advisor becomes a 

broker-dealer or newly affiliated with a 

broker-dealer, or (b) any new Advisor is 

a broker-dealer or becomes affiliated 

with a broker-dealer, it will implement 

and maintain a fire wall with respect to 

its relevant personnel or such brokerdealer affiliate, as applicable, regarding 

access to information concerning the 

composition and/or changes to the 

portfolio, and will be subject to 

procedures designed to prevent the use 

and dissemination of material nonpublic information regarding the 

portfolio. 

The Trust seeks to provide attractive 

risk-adjusted returns to Shareholders 

primarily through distributions of 

current income from the Trust’s 

portfolio. The Trust intends to achieve 

this objective by constructing a 

diversified portfolio of consumer and 

small business private credit assets. The 

Trust intends to target primarily whole 

loans that the Advisor believes will offer 

stable and predictable cash flows. The 

Trust generally intends to focus on 

loans that have short and medium terms 

(e.g., less than 60 months) which, 

through principal amortization, tend to 

have low duration (e.g., less than 30 

months). The Trust believes that 

targeting assets with a combination of 

short duration and high cash yields will 

enhance the liquidity of the Trust’s 

portfolio and provide the Trust the 

opportunity to earn attractive returns 

while managing the risk of losses in 

market value that can result from 

increases in interest rates. The Trust 

expects to acquire its initial portfolio of 

assets using the net proceeds of this 

offering. 

Investable Instruments and Trust 

Liquidity 

The Trust intends to hold the 

following instruments: personal 

installment loans, small business loans, 

student loans, point of sale loans, and 

asset backed securities that are backed 

by such loans (collectively ‘‘Private 

Credit Assets’’), investment grade 

bonds, U.S. Treasuries, shares of certain 

exchange traded funds that invest in 

U.S. Treasuries or other short-term, 

interest bearing assets and cash and 

cash equivalents,7 including funds of an 

affiliated Trust for which the Advisor 

acts as the investment adviser. 

The Trust plans to participate in the 

rapidly growing market for small 

balance, short duration, amortizing 

loans enabled by Fintech lending 

platforms. The Advisor believes 

consumer and small business loans 

sourced through Fintech lending 

platforms offer investors attractive value 

propositions that have primarily been 

available to institutional investors. 

However, there is limited sell-side 

liquidity available in the market for 

Private Credit Assets. As such, the 

Advisor is proposing to utilize the 

following strategy to facilitate 

redemptions in the Trust: 

1. The Trust will maintain a portion 

of the portfolio in cash and cash 

equivalents (the ‘‘Liquidity Sleeve’’). 

Under normal circumstances, the Trust 

expects to hold approximately 20% of 

the portfolio in these liquid assets. The 

Advisor expects that it will generally be 


ddrumheller on DSK120RN23PROD with NOTICES1
106650 Federal Register / Vol. 89, No. 249 / Monday, December 30, 2024 / Notices 

8Authorized participants have a cut-off time of 

2:00 p.m. ET to place creation and redemption 

orders and orders received after 2:00 p.m. will not 

be deemed to be received until the following 

business day. 

9NAV means the total assets of the Trust 

including, but not limited to, all cash and cash 

equivalents and private credit assets, less any 

liabilities, divided by the total number of Shares 

outstanding. The Trust’s NAV is generally 

calculated at 4 p.m. ET. 

able to fulfill redemption orders using 

this position. The Advisor may also 

strategically increase the size of the 

Liquidity Sleeve in order to better 

facilitate anticipated redemptions by 

retaining, rather than distributing the 

paydowns from Private Credit Assets as 

further described below. 

2. The remaining 80% of the Trust’s 

holdings will consist of Private Credit 

Assets. These are short duration, high 

yielding products that are underwritten 

to pay a weighted average of 8% of the 

total Trust AUM per month or 10% of 

the private credit AUM per month. The 

underwritten yields are currently 10% 

and at origination typically have an 

underwritten average duration limit of 3 

years, with a target for the initial 

portfolio of less than 1 year. The 

monthly cash flows, which are received 

throughout the month, may be 

reinvested to the extent necessary to 

maintain the approximate 20/80 

allocation between the Liquidity Sleeve 

and Private Credit Assets described 

above. The Trust will consider the 

current level of the Liquidity Sleeve, 

among other factors, in determining its 

distribution policy, and may determine 

to use accumulated cash received from 

payments of interest and principal on its 

Private Credit Assets as well as cash 

proceeds from loan repayments to 

replenish or increase the Liquidity 

Sleeve before distributing such amounts 

to shareholders. 

3. In the event that the cash and cash 

equivalents required to accommodate a 

series of redemptions or a single large 

redemption approaches the size of the 

Trust’s Liquidity Sleeve, the Trust may: 

a. Sell Private Credit Assets in the 

secondary market to raise cash; 

b. Arrange a line of credit or other 

financing facility with a bank or broker 

dealer, using the portfolio of Private 

Credit Assets as collateral. 

These options will likely come at a 

cost to the Trust or may not be available 

to the Trust depending on market 

conditions. 

4. In the event that items 1–3 above 

do not provide sufficient cash and cash 

equivalents to the Liquidity Sleeve to 

accommodate redemptions in the Trust, 

redemptions may be suspended until 

the Trust accumulates enough cash to 

facilitate additional redemptions, which 

the Advisor does not expect to last for 

longer than approximately 2.5 months. 

In the event that the Advisor 

implements a restriction on 

redemptions, the Shares on the 

secondary market may trade at deep 

discount. The discount could 

potentially serve to prompt investors to 

buy shares and potentially trigger 

primary market activity. 

The Advisor believes that the 

liquidity strategy laid out above will be 

sufficient to address concerns that may 

arise from the relative illiquidity of the 

secondary market for selling Private 

Credit Assets. Specifically, the Advisor 

believes that the 20% Liquidity Sleeve 

(with the flexibility to increase the 

sleeve during times of potentially high 

redemptions) will provide the Trust 

with sufficient liquidity to manage 

redemptions under the vast majority of 

market conditions. Additionally, 

because the Trust will target shorter 

duration loans that are underwritten to 

generate cash payments of interest and 

principal amortization of approximately 

8% of the Trust’s AUM per month, even 

in the event that the Trust’s Liquidity 

Sleeve is exhausted, it is expected to be 

replenished by the cash payments 

generated by the Private Credit Assets. 

In the event that the cash generated by 

the Private Credit Assets is insufficient 

to satisfy incoming redemptions the 

Trust would then have the ability to 

facilitate additional redemptions by 

selling certain of the Private Credit 

Assets and/or using the Private Credit 

Assets as collateral for a cash loan from 

a bank or broker dealer. In a worst case 

scenario, the Trust would temporarily 

suspend redemptions. However, as 

noted above, the Advisor does not 

expect such a suspension to last for 

longer than approximately 2.5 months 

because of the cash expected to be 

generated by the Private Credit Assets. 

In addition to the specific liquidity 

strategy described above, the Advisor 

also notes that the small size of loans 

sourced through Fintech lending 

platforms will enable the Trust to hold 

a portfolio that is diversified by sector, 

source, vintage, count and geography, 

which will help to manage idiosyncratic 

risk and ensure a diverse universe of 

lenders. Further to this point, the small 

loan size means that the Trust will need 

to hold a significant number of Private 

Credit Assets, further ensuring diversity 

and minimizing the risk that any single 

Private Credit Assets would have on the 

portfolio. The Advisor further believes 

that the cash yields and short duration 

through regular principal amortization 

will, in addition to enhancing the 

liquidity of the Trust, help manage 

volatility of returns. 

Purchases and Redemptions of Creation 

Unites 

The Trust will create and redeem 

Shares from time to time only in large 

blocks of a specified number of Shares 

or multiples thereof (‘‘Creation Units’’). 

A Creation Unit is a block of at least 

50,000 Shares. Except when aggregated 

in Creation Units, the Shares are not 

redeemable securities. Creation Units 

are only redeemable by authorized 

participants. 

On any Business Day, an authorized 

participant may place an order with the 

Advisor to create one or more Creation 

Units.8 The total cash payment required 

to create each Creation Unit is the NAV 

of at least 50,000 Shares on the purchase 

order date plus the applicable 

transaction fee. 

The procedures by which an 

authorized participant can redeem one 

or more Creation Units mirror the 

procedures for the purchase of Creation 

Units. On any Business Day, an 

authorized participant may place an 

order with the Transfer Agent] to 

redeem one or more Creation Units. The 

redemption proceeds from the Trust 

consist of the cash redemption amount. 

The cash redemption amount is equal to 

the NAV of the number of Creation 

Unit(s) of the Trust requested in the 

authorized participant’s redemption 

order on the business day the 

redemption order is received by the 

Transfer Agent, less transaction fees. 

Availability of Information 

The NAV for the Trust will be 

calculated by an independent third 

party once each Business Day and will 

be disseminated daily to all market 

participants at the same time.9 Pricing 

information will be available on the 

Advisor’s website including: (1) the 

prior Business Day’s reported NAV, the 

closing market price or the bid/ask 

price, daily trading volume, and a 

calculation of the premium and 

discount of the closing market price or 

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 

against the NAV, within appropriate 

ranges, for each of the four previous 

calendar quarters. The Trust will also 

disclose its portfolio holdings on a daily 

basis on its website. The 

aforementioned information will be 

published as of the close of business 

and available on the Advisor’s website 

at www.bondbloxxetf.com. 

Generally, the Trust values its assets 

using market quotations when they are 

readily available. Whole loans, asset 

backed securities and certain other 


ddrumheller on DSK120RN23PROD with NOTICES1
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10Specifically, in part, Interpretation and Policy 

.01 of Rule 3.7 states ‘‘[n]o Member shall 

recommend to a customer a transaction in any such 

product unless the Member has a reasonable basis 

for believing at the time of making the 

recommendation that the customer has such 

knowledge and experience in financial matters that 

he may reasonably be expected to be capable of 

evaluating the risks of the recommended 

transaction and is financially able to bear the risks 

of the recommended position.’’ 

11The Pre-Opening Session is from 8:00 a.m. to 

9:30 a.m. ET. 

12The After Hours Trading Session is from 4 p.m. 

to 8:00 p.m. ET. 

types of private credit assets that Trust 

may hold may not have readily available 

market quotations and typically are fair 

valued based on prices provided by a 

third-party pricing service. Each loan 

and fractional loan is valued using 

inputs that factor in individual borrower 

performance data (e.g. payment history) 

that is updated as often as the NAV is 

calculated to reflect new information 

about the borrower or loan. Generally, 

fair value represents the amount that the 

Trust could reasonably expect to receive 

if its assets were sold at the time of 

valuation, based on information 

reasonably available at the time the 

valuation is made and that the Advisor 

and the Sub-Advisor believe to be 

reliable. Fair valuation involves 

subjective judgments, and it is possible 

that the fair value determined for an 

asset may differ materially from the 

value that could be realized upon the 

sale of such asset. 

Quotation and last-sale information 

regarding the Shares will be 

disseminated through the facilities of 

the Consolidated Tape Association 

(‘‘CTA’’). Pricing information regarding 

cash equivalents in which the Trust will 

invest is generally available through 

nationally recognized data services 

providers, such as Reuters and 

Bloomberg, through subscription 

agreements. 

Additional information regarding the 

Trust and the Shares, including 

investment strategies, risks, creation and 

redemption procedures, fees, portfolio 

holdings, disclosure policies, 

distributions and taxes will be included 

in the registration statement. 

The Intraday Indicative Value (‘‘IIV’’) 

will be updated during Regular Trading 

Hours to reflect changes in the value of 

the Trust’s holdings during the trading 

day. The IIV disseminated during 

Regular Trading Hours should not be 

viewed as an actual real-time update of 

the NAV, which will be calculated only 

once at the end of each trading day. The 

IIV will be updated every 15 seconds, as 

calculated by the Exchange or a thirdparty financial data provider during the 

Exchange’s Regular Trading Hours (9:30 

a.m. to 4:00 p.m. Eastern time). The IIV 

will be widely disseminated on a per 

Share basis every 15 seconds during the 

Exchange’s Regular Trading Hours 

through the facilities of the consolidated 

tape association (CTA) and 

Consolidated Quotation System (CQS) 

high speed lines. In addition, the IIV 

will be available through on-line 

information services such as Bloomberg 

and Reuters. 

Initial and Continued Listing 

The Shares will conform to the initial 

and continued listing criteria under 

BZX Rule 14.11(f)(4). A minimum of 

100,000 Shares will be outstanding at 

the commencement of trading on the 

Exchange. The Exchange will obtain a 

representation from the Advisor of the 

Shares that the NAV per Share for the 

Trust will be calculated daily and will 

be made available to all market 

participants at the same time. 

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. 

The Exchange will halt trading in the 

Shares under the conditions specified in 

BZX Rule 11.18. Trading may be halted 

because of market conditions or for 

reasons that, in the view of the 

Exchange, make trading in the Shares 

inadvisable. These may include: (1) the 

extent to which trading is not occurring 

in the securities and/or the financial 

instruments composing the daily 

disclosed portfolio of the Trust; or (2) 

whether other unusual conditions or 

circumstances detrimental to the 

maintenance of a fair and orderly 

market are present. 

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. The Exchange will 

allow trading in the Shares from 8:00 

a.m. until 8:00 p.m. ET and has the 

appropriate rules to facilitate 

transactions in the Shares during all 

trading sessions. As provided in BZX 

Rule 11.11(a), the minimum price 

variation for quoting and entry of orders 

in securities traded on the Exchange is 

$0.01, with the exception of securities 

that are priced less than $1.00, for 

which the minimum price variation for 

order entry is $0.0001. 

Surveillance 

Trading of the Shares through the 

Exchange will be subject to the 

Exchange’s existing surveillance for 

securities traded on the Exchange. The 

Exchange also has a general policy 

prohibiting the distribution of material, 

non-public information by its 

employees. 

All statements and representations 

made in this filing regarding (a) the 

description of the portfolio, reference 

assets, and index, (b) limitations on 

portfolio holdings or reference assets, or 

(c) the applicability of Exchange rules 

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 Trust or the Shares to comply with 

the continued listing requirements, and, 

pursuant to its obligations under 

Section 19(g)(1) of the Act, the Exchange 

will surveil for compliance with the 

continued listing requirements. If the 

Trust or the Shares are not in 

compliance with the applicable listing 

requirements, the Exchange will 

commence delisting procedures under 

Exchange Rule 14.12. 

Information Circular 

Prior to the commencement of 

trading, the Exchange will inform its 

members in an Information Circular of 

the special characteristics and risks 

associated with trading the Shares. 

Specifically, the Information Circular 

will discuss the following: (1) the 

procedures for purchases and 

redemptions of Shares in Creation Units 

(and that Shares are not individually 

redeemable); (2) BZX Rule 3.7, which 

imposes suitability obligations on 

Exchange members with respect to 

recommending transactions in the 

Shares to customers; (3) Interpretation 

and Policy .01 of BZX Rule 3.7 which 

imposes a duty of due diligence on its 

Members to learn the essential facts 

relating to every customer prior to 

trading the Shares; 10 (4) how 

information regarding the IIV and the 

Trust’s holdings is disseminated; (5) the 

risks involved in trading the Shares 

during the Pre-Opening 11 and After 

Hours Trading Sessions 12 when an 

updated IIV will not be calculated or 

publicly disseminated; (6) the 

requirement that members 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 Circular 

will advise members, prior to the 

commencement of trading, of the 

prospectus delivery requirements 

applicable to the Trust. Members 

purchasing Shares from the Trust for 


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106652 Federal Register / Vol. 89, No. 249 / Monday, December 30, 2024 / Notices 

13 15 U.S.C. 78f(b). 

14 15 U.S.C. 78f(b)(5). 

15 Id. 

16See Exchange Rule 14.11(f). 

17See ‘‘First Private-Credit ETFs Launch,’’ 

December 3, 2024, https://www.wsj.com/ 

livecoverage/stock-market-today-dow-sp500- 

nasdaq-live-12-03-2024/card/first-private-creditetfs-launch-s0032D60wa2zgI2uy7pY. 

resale to investors will deliver a 

prospectus to such investors. The 

Information Circular will also discuss 

any exemptive, no-action and 

interpretive relief granted by the 

Commission from any rules under the 

Act. In addition, the Information 

Circular will reference that the Trust is 

subject to various fees and expenses 

described in the Trust’s registration 

statement. The Information Circular will 

also disclose the trading hours of the 

Shares and the applicable NAV 

calculation time for the Shares. The 

Information Circular will disclose that 

information about the Shares will be 

publicly available on the Advisor’s 

website. 

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with the Act 

and the rules and regulations 

thereunder applicable to the Exchange 

and, in particular, the requirements of 

Section 6(b) of the Act.13 Specifically, 

the Exchange believes the proposed rule 

change is consistent with the Section 

6(b)(5) 14 requirements that the rules of 

an exchange be designed to prevent 

fraudulent and manipulative acts and 

practices, to promote just and equitable 

principles of trade, to foster cooperation 

and coordination with persons engaged 

in regulating, clearing, settling, 

processing information with respect to, 

and facilitating transactions in 

securities, to remove impediments to 

and perfect the mechanism of a free and 

open market and a national market 

system, and, in general, to protect 

investors and the public interest. 

Additionally, the Exchange believes the 

proposed rule change is consistent with 

the Section 6(b)(5) 15 requirement that 

the rules of an exchange not be designed 

to permit unfair discrimination between 

customers, issuers, brokers, or dealers. 

The Exchange notes that the 

Commission has approved numerous 

series of Trust Issued Receipts 16 to be 

listed on U.S. national securities 

exchanges and several other vehicles 

holding private credit instruments have 

recently launched.17

Trust Issued Receipts 

Trading of the Shares through the 

Exchange will be subject to the 

Exchange’s existing surveillance for 

securities traded on the Exchange. The 

Exchange also has a general policy 

prohibiting the distribution of material, 

non-public information by its 

employees. All statements and 

representations made in this filing 

regarding (a) the description of the 

portfolio, reference assets, and index, (b) 

limitations on portfolio holdings or 

reference assets, or (c) the applicability 

of Exchange rules 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 Trust or the Shares to 

comply with the continued listing 

requirements, and, pursuant to its 

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

Act, the Exchange will surveil for 

compliance with the continued listing 

requirements. If the Trust or the Shares 

are not in compliance with the 

applicable listing requirements, the 

Exchange will commence delisting 

procedures under Exchange Rule 14.12. 

The Sponsor has represented to the 

Exchange that it will advise the 

Exchange of any failure by the Trust or 

the Shares to comply with the 

continued listing requirements, and, 

pursuant to its obligations under 

Section 19(g)(1) of the Exchange Act, the 

Exchange will surveil for compliance 

with the continued listing requirements. 

If the Trust or the Shares are not in 

compliance with the applicable listing 

requirements, the Exchange will 

commence delisting procedures under 

Exchange Rule 14.12. 

Investable Instruments and Trust 

Liquidity 

The Trust intends to hold Private 

Credit Assets, investment grade bonds, 

U.S. Treasuries, shares of certain 

exchange traded funds that invest in 

U.S. Treasuries or other short-term, 

interest bearing assets and cash and 

cash equivalents, including funds of an 

affiliated Trust for which the Advisor 

acts as the investment adviser. 

The Trust plans to participate in the 

rapidly growing market for small 

balance, short duration, amortizing 

loans enabled by Fintech lending 

platforms. The Advisor believes 

consumer and small business loans 

sourced through Fintech lending 

platforms offer investors attractive value 

propositions that have primarily been 

available to institutional investors. 

However, there is limited sell-side 

liquidity available in the market for 

Private Credit Assets. As such, the 

Advisor is proposing to utilize the 

following strategy to facilitate 

redemptions in the Trust: 

1. The Trust will maintain a portion 

of the portfolio in its Liquidity Sleeve. 

Under normal circumstances, the Trust 

expects to hold approximately 20% of 

the portfolio in these liquid assets. The 

Advisor expects that it will generally be 

able to fulfill redemption orders using 

this position. The Advisor may also 

strategically increase the size of the 

Liquidity Sleeve in order to better 

facilitate anticipated redemptions by 

retaining, rather than distributing the 

paydowns from Private Credit Assets as 

further described below. 

2. The remaining 80% of the Trust’s 

holdings will consist of Private Credit 

Assets. These are short duration, high 

yielding products that are underwritten 

to pay a weighted average of 8% of the 

total Trust AUM per month or 10% of 

the private credit AUM per month. The 

underwritten yields are currently 10% 

and at origination typically have an 

underwritten average duration limit of 3 

years, with a target for the initial 

portfolio of less than 1 year. The 

monthly cash flows, which are received 

throughout the month, may be 

reinvested to the extent necessary to 

maintain the approximate 20/80 

allocation between the Liquidity Sleeve 

and Private Credit Assets described 

above. The Trust will consider the 

current level of the Liquidity Sleeve, 

among other factors, in determining its 

distribution policy, and may determine 

to use accumulated cash received from 

payments of interest and principal on its 

Private Credit Assets as well as cash 

proceeds from loan repayments to 

replenish or increase the Liquidity 

Sleeve before distributing such amounts 

to shareholders. 

3. In the event that the cash and cash 

equivalents required to accommodate a 

series of redemptions or a single large 

redemption approaches the size of the 

Trust’s Liquidity Sleeve, the Trust may: 

a. Sell Private Credit Assets in the 

secondary market to raise cash; 

b. Arrange a line of credit or other 

financing facility with a bank or broker 

dealer, using the portfolio of Private 

Credit Assets as collateral. 

These options will likely come at a 

cost to the Trust or may not be available 

to the Trust depending on market 

conditions. 

4. In the event that items 1–3 above 

do not provide sufficient cash and cash 

equivalents to the Liquidity Sleeve to 

accommodate redemptions in the Trust, 

redemptions may be suspended until 

the Trust accumulates enough cash to 

facilitate additional redemptions, which 

the Advisor does not expect to last for 

longer than approximately 2.5 months. 

In the event that the Advisor 

implements a restriction on 


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18For a list of the current members and affiliate 

members of ISG, see www.isgportal.com. 

redemptions, the Shares on the 

secondary market may trade at deep 

discount. The discount could 

potentially serve to prompt investors to 

buy shares and potentially trigger 

primary market activity. 

The Advisor believes that the 

liquidity strategy laid out above will be 

sufficient to address concerns that may 

arise from the relative illiquidity of the 

secondary market for selling Private 

Credit Assets. Specifically, the Advisor 

believes that the 20% Liquidity Sleeve 

(with the flexibility to increase the 

sleeve during times of potentially high 

redemptions) will provide the Trust 

with sufficient liquidity to manage 

redemptions under the vast majority of 

market conditions. Additionally, 

because the Trust will target shorter 

duration loans that are underwritten to 

generate cash payments of interest and 

principal amortization of approximately 

8% of the Trust’s AUM per month, even 

in the event that the Trust’s Liquidity 

Sleeve is exhausted, it is expected to be 

replenished by the cash payments 

generated by the Private Credit Assets. 

In the event that the cash generated by 

the Private Credit Assets is insufficient 

to satisfy incoming redemptions the 

Trust would then have the ability to 

facilitate additional redemptions by 

selling certain of the Private Credit 

Assets and/or using the Private Credit 

Assets as collateral for a cash loan from 

a bank or broker dealer. In a worst case 

scenario, the Trust would temporarily 

suspend redemptions. However, as 

noted above, the Advisor does not 

expect such a suspension to last for 

longer than approximately 2.5 months 

because of the cash expected to be 

generated by the Private Credit Assets. 

In addition to the specific liquidity 

strategy described above, the Advisor 

also notes that the small size of loans 

sourced through Fintech lending 

platforms will enable the Trust to hold 

a portfolio that is diversified by sector, 

source, vintage, count and geography, 

which will help to manage idiosyncratic 

risk and ensure a diverse universe of 

lenders. Further to this point, the small 

loan size means that the Trust will need 

to hold a significant number of Private 

Credit Assets, further ensuring diversity 

and minimizing the risk that any single 

Private Credit Assets would have on the 

portfolio. The Advisor further believes 

that the cash yields and short duration 

through regular principal amortization 

will, in addition to enhancing the 

liquidity of the Trust, help manage 

volatility of returns. 

Availability of Information 

The NAV for the Trust will be 

calculated by an independent third 

party once each Business Day and will 

be disseminated daily to all market 

participants at the same time. Pricing 

information will be available on the 

Advisor’s website including: (1) the 

prior Business Day’s reported NAV, the 

closing market price or the bid/ask 

price, daily trading volume, and a 

calculation of the premium and 

discount of the closing market price or 

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 

against the NAV, within appropriate 

ranges, for each of the four previous 

calendar quarters. The Trust will also 

disclose its portfolio holdings on a daily 

basis on its website. The 

aforementioned information will be 

published as of the close of business 

and available on the Advisor’s website 

at www.bondbloxxetf.com. 

Generally, the Trust values its assets 

using market quotations when they are 

readily available. Whole loans, asset 

backed securities and certain other 

types of private credit assets that Trust 

may hold may not have readily available 

market quotations and typically are fair 

valued based on prices provided by a 

third-party pricing service. Each loan 

and fractional loan is valued using 

inputs that factor in individual borrower 

performance data (e.g. payment history) 

that is updated as often as the NAV is 

calculated to reflect new information 

about the borrower or loan. Generally, 

fair value represents the amount that the 

Trust could reasonably expect to receive 

if its assets were sold at the time of 

valuation, based on information 

reasonably available at the time the 

valuation is made and that the Advisor 

and the Sub-Advisor believe to be 

reliable. Fair valuation involves 

subjective judgments, and it is possible 

that the fair value determined for an 

asset may differ materially from the 

value that could be realized upon the 

sale of such asset. 

Quotation and last-sale information 

regarding the Shares will be 

disseminated through the facilities of 

the CTA. Pricing information regarding 

cash equivalents in which the Trust will 

invest is generally available through 

nationally recognized data services 

providers, such as Reuters and 

Bloomberg, through subscription 

agreements. 

Additional information regarding the 

Trust and the Shares, including 

investment strategies, risks, creation and 

redemption procedures, fees, portfolio 

holdings, disclosure policies, 

distributions and taxes will be included 

in the registration statement. 

The IIV will be updated during 

Regular Trading Hours to reflect 

changes in the value of the Trust’s 

holdings during the trading day. The IIV 

disseminated during Regular Trading 

Hours should not be viewed as an actual 

real-time update of the NAV, which will 

be calculated only once at the end of 

each trading day. The IIV will be 

updated every 15 seconds, as calculated 

by the Exchange or a third-party 

financial data provider during the 

Exchange’s Regular Trading Hours (9:30 

a.m. to 4:00 p.m. Eastern time). The IIV 

will be widely disseminated on a per 

Share basis every 15 seconds during the 

Exchange’s Regular Trading Hours 

through the facilities of the consolidated 

tape association (CTA) and 

Consolidated Quotation System (CQS) 

high speed lines. In addition, the IIV 

will be available through on-line 

information services such as Bloomberg 

and Reuters. 

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 an additional type of exchange-traded 

product 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 relating to 

trading in the Shares and may obtain 

information via ISG from other 

exchanges that are members of ISG or 

with which the Exchange has entered 

into a surveillance sharing agreement. 

The Exchange or FINRA, on behalf of 

the Exchange, or both, will 

communicate as needed regarding 

trading in the Shares. The Exchange 

may obtain information regarding 

trading in the Shares from other 

exchanges who are members or affiliates 

of the ISG,18 or with which the 

Exchange has entered into a 

comprehensive surveillance sharing 

agreement. 

For the above reasons, the Exchange 

believes that the proposed rule change 

is consistent with the requirements of 

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

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. The 

Exchange notes that the proposed rule 

change, rather will facilitate the listing 

and trading of an additional exchangeVerDate Sep<11>2014 23:58 Dec 27, 2024 Jkt 265001 PO 00000 Frm 00248 Fmt 4703 Sfmt 4703 E:\FR\FM\30DEN1.SGM 30DEN1

ddrumheller on DSK120RN23PROD with NOTICES1
106654 Federal Register / Vol. 89, No. 249 / Monday, December 30, 2024 / Notices 

19 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The Exchange initially filed the proposed fee 

changes on December 2, 2024 (SR–CBOE–2024– 

054). On December 11, 2024, the Exchange 

withdrew that filing and submitted this proposal. 

traded product that will enhance 

competition among both market 

participants and listing venues, 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 

The Exchange neither solicited nor 

received comments on the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period 

up to 90 days (i) as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding or (ii) as to which 

the Exchange consents, the Commission 

will: 

A. by order approve or disapprove 

such proposed rule change, or 

B. institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (https://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

CboeBZX–2024–126 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to file 

number SR–CboeBZX–2024–126. This 

file number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

internet website (https://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549, on official 

business days between the hours of 10 

a.m. and 3 p.m. Copies of the filing also 

will be available for inspection and 

copying at the principal office of the 

Exchange. Do not include personal 

identifiable information in submissions; 

you should submit only information 

that you wish to make available 

publicly. We may redact in part or 

withhold entirely from publication 

submitted material that is obscene or 

subject to copyright protection. All 

submissions should refer to file number 

SR–CboeBZX–2024–126 and should be 

submitted on or before January 21, 2025. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.19

Vanessa A. Countryman, 

Secretary. 

[FR Doc. 2024–30915 Filed 12–27–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–101983; File No. SR– 

CBOE–2024–055] 

Self-Regulatory Organizations; Cboe 

Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Update its Fees 

Schedule in Connection With the 

Exchange’s Plans To List and Trade 

Options That Overlie the Cboe Bitcoin 

U.S. ETF Index and the Cboe Mini 

Bitcoin U.S. ETF Index 

December 19, 2024. 

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

Securities Exchange Act of 1934 (the 

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

notice is hereby given that on December 

11, 2024, Cboe Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘Cboe Options’’) filed 

with the Securities and Exchange 

Commission (the ‘‘Commission’’) the 

proposed rule change as described in 

Items I, II, and III below, which Items 

have been prepared by the Exchange. 

The Commission is publishing this 

notice to solicit comments on the 

proposed rule change from interested 

persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

Cboe Exchange, Inc. (the ‘‘Exchange’’ 

or ‘‘Cboe Options’’) proposes to update 

its Fees Schedule in connection with 

the Exchange’s plans to list and trade 

options that overlie the Cboe Bitcoin 

U.S. ETF Index and the Cboe Mini 

Bitcoin U.S. ETF Index. The text of the 

proposed rule change is provided in 

Exhibit 5. 

The text of the proposed rule change 

is also available on the Exchange’s 

website (http://www.cboe.com/ 

AboutCBOE/ 

CBOELegalRegulatoryHome.aspx), at 

the Exchange’s Office of the Secretary, 

and at the Commission’s Public 

Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

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 

The Exchange proposes to amend its 

Fees Schedule in connection with its 

plans to list and trade options that 

overlie the Cboe Bitcoin U.S. ETF Index 

(‘‘CBTX options’’) and the Cboe Mini 

Bitcoin U.S. ETF Index (‘‘MBTX 

options’’).3 By way of background, the 

Cboe Bitcoin U.S. ETF Index is a 

modified market capitalizationweighted index that is designed to track 

the performance of a basket of spot 

Bitcoin ETFs listed on U.S. exchanges. 

CBTX options are cash-settled options 

based on the Cboe Bitcoin U.S. ETF 

Index. MBTX options are cash-settled 

options on the Cboe Mini Bitcoin U.S. 

ETF Index, which is a reduced value 

index based on 1/10th the value of the 

Cboe Bitcoin U.S. ETF Index. 

The Exchange proposes to amend its 

Fees Schedule to accommodate the 


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