Federal Register / Vol. 86, No. 118 / Wednesday, June 23, 2021 / Notices 32985 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 91326 

(March 15, 2021), 86 FR 14987 (‘‘Notice’’). 

Comments on the proposed rule change can be 

found at: https://www.sec.gov/comments/srcboebzx-2021-019/srcboebzx2021019.htm. 

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

5See Securities Exchange Act Release No. 91695, 

86 FR 24066 (May 5, 2021). The Commission 

designated June 17, 2021, as the date by which it 

should approve, disapprove, or institute 

proceedings to determine whether to disapprove the 

proposed rule change. 

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

7See Notice, supra note 3. 

8 VanEck Digital Assets, LLC is the sponsor of the 

Trust, and Delaware Trust Company is the trustee. 

The State Street Bank and Trust Company will be 

the administrator (‘‘Administrator’’) and transfer 

agent. Van Eck Securities Corporation will be the 

marketing agent in connection with the creation 

and redemption of Shares. Van Eck Securities 

Corporation provides assistance in the marketing of 

the Shares. A third-party regulated custodian 

(‘‘Custodian’’) will be responsible for custody of the 

Trust’s bitcoin. See Notice, supra note 3, 86 FR at 

14995. 

9See id. at 14995–996. 

10See id. at 14995. 

11See id. at 14996. 

12See id. 

13See id. at 14995. 

14 15 U.S.C. 78s(b)(2)(B). 

15 Id. 

16 15 U.S.C. 78f(b)(5). 

17See Notice, supra note 3. 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92196; File No. SR– 

CboeBZX–2021–019] 

Self-Regulatory Organizations; Cboe 

BZX Exchange, Inc.; Order Instituting 

Proceedings To Determine Whether To 

Approve or Disapprove 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 

June 16, 2021. 

On March 1, 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 (‘‘Act’’) 1 and Rule 

19b–4 thereunder,2 a proposed rule 

change to list and trade shares 

(‘‘Shares’’) of the VanEck 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 

March 19, 2021.3

On April 28, 2021, pursuant to 

Section 19(b)(2) of the Act,4 the 

Commission designated a longer period 

within which to approve the proposed 

rule change, disapprove the proposed 

rule change, or institute proceedings to 

determine whether to disapprove the 

proposed rule change.5 This order 

institutes proceedings under Section 

19(b)(2)(B) of the Act 6 to determine 

whether to approve or disapprove the 

proposed rule change. 

I. Summary of the Proposal 

As described in more detail in the 

Notice,7 the Exchange proposes to list 

and trade the Shares of the Trust under 

BZX Rule 14.11(e)(4), which governs the 

listing and trading of Commodity-Based 

Trust Shares on the Exchange. 

The investment objective of the Trust 

would be for the Shares to reflect the 

performance of the MVIS®

CryptoCompare Bitcoin Benchmark Rate 

(‘‘Benchmark’’), less the expenses of the 

Trust’s operations.8 The Benchmark will 

be used to calculate the Trust’s net asset 

value (‘‘NAV’’). The Benchmark is 

designed to be a price for bitcoin in USD 

and there is no component other than 

bitcoin in the Benchmark. The current 

platform composition of the Benchmark 

is Bitstamp, Coinbase, Gemini, itBit and 

Kraken. In calculating the Benchmark, 

the methodology captures trade prices 

and sizes from platforms and examines 

twenty three-minute periods leading up 

to 4:00 p.m. E.T. It then calculates an 

equal-weighted average of the volumeweighted median price of these twenty 

three-minute periods, removing the 

highest and lowest contributed prices.9

Each Share will represent a fractional 

undivided beneficial interest in the 

Trust’s net assets. The Trust’s assets will 

consist of bitcoin held by the Custodian 

on behalf of the Trust. The Trust 

generally does not intend to hold cash 

or cash equivalents. However, there may 

be situations where the Trust will 

unexpectedly hold cash on a temporary 

basis.10

The Administrator will determine the 

NAV and NAV per Share of the Trust on 

each day that the Exchange is open for 

regular trading, as promptly as practical 

after 4:00 p.m. E.T. The NAV of the 

Trust is the aggregate value of the 

Trust’s assets less its estimated accrued 

but unpaid liabilities (which include 

accrued expenses). In determining the 

Trust’s NAV, the Administrator values 

the bitcoin held by the Trust based on 

the price set by the Benchmark as of 

4:00 p.m. E.T.11

The Trust will provide information 

regarding the Trust’s bitcoin holdings, 

as well as an Intraday Indicative Value 

(‘‘IIV’’) per Share 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. E.T.). The 

IIV will be calculated by using the prior 

day’s closing NAV per Share as a base 

and updating that value during Regular 

Trading Hours to reflect changes in the 

value of the Trust’s bitcoin holdings 

during the trading day.12

When the Trust sells or redeems its 

Shares, it will do so in ‘‘in-kind’’ 

transactions in blocks of 50,000 Shares 

at the Trust’s NAV. Authorized 

participants will deliver, or facilitate the 

delivery of, bitcoin to the Trust’s 

account with the Custodian in exchange 

for Shares when they purchase Shares, 

and the Trust, through the Custodian, 

will deliver bitcoin to such authorized 

participants when they redeem Shares 

with the Trust.13

II. Proceedings To Determine Whether 

To Approve or Disapprove SR– 

CboeBZX–2021–019 and Grounds for 

Disapproval Under Consideration 

The Commission is instituting 

proceedings pursuant to Section 

19(b)(2)(B) of the Act 14 to determine 

whether the proposed rule change 

should be approved or disapproved. 

Institution of proceedings is appropriate 

at this time in view of the legal and 

policy issues raised by the proposed 

rule change, as discussed below. 

Institution of proceedings does not 

indicate that the Commission has 

reached any conclusions with respect to 

any of the issues involved. Rather, as 

described below, the Commission seeks 

and encourages interested persons to 

provide comments on the proposed rule 

change. 

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

Act,15 the Commission is providing 

notice of the grounds for disapproval 

under consideration. The Commission is 

instituting proceedings to allow for 

additional analysis of the proposed rule 

change’s consistency with Section 

6(b)(5) of the Act, which requires, 

among other things, 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.’’ 16

The Commission asks that 

commenters address the sufficiency of 

the Exchange’s statements in support of 

the proposal, which are set forth in the 

Notice,17 in addition to any other 

comments they may wish to submit 

about the proposed rule change. In 

particular, the Commission seeks 

comment on the following questions 

and asks commenters to submit data 

where appropriate to support their 

views: 

1. What are commenters’ views on 

whether the proposed Trust and Shares 

would be susceptible to manipulation? 


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32986 Federal Register / Vol. 86, No. 118 / Wednesday, June 23, 2021 / Notices 

18See id. at 14989. 

19See id. at 14990. 

20See id. at 14994. 

21See id. at 14991. 

22See id. at 14989. 

23See id. at 14995. 

24See id. at 14994 n.54. 

25See id. at 14995. 

26See id. at 14999. 

27Section 19(b)(2) of the Act, as amended by the 

Securities Act Amendments of 1975, Pub. L. 94–29 

(June 4, 1975), grants the Commission flexibility to 

determine what type of proceeding—either oral or 

notice and opportunity for written comments—is 

appropriate for consideration of a particular 

proposal by a self-regulatory organization. See 

Securities Act Amendments of 1975, Senate Comm. 

on Banking, Housing & Urban Affairs, S. Rep. No. 

75, 94th Cong., 1st Sess. 30 (1975). 28 17 CFR 200.30–3(a)(57). 

What are commenters’ views generally 

on whether the Exchange’s proposal is 

designed to prevent fraudulent and 

manipulative acts and practices? What 

are commenters’ views generally with 

respect to the liquidity and transparency 

of the bitcoin markets, the bitcoin 

markets’ susceptibility to manipulation, 

and thus the suitability of bitcoin as an 

underlying asset for an exchange-traded 

product? 

2. What are commenters’ views of the 

Exchange’s assertion that regulatory and 

financial landscapes relating to bitcoin 

and other digital assets have changed 

significantly since 2016? 18 Are the 

changes that the Exchange identifies 

sufficient to support the determination 

that the proposed listing and trading of 

the Shares are consistent with the Act? 

3. The Exchange states that 

‘‘approving this proposal . . . [would] 

allow U.S. investors with access to 

bitcoin in a regulated and transparent 

exchange-traded vehicle that would act 

to limit risk’’ associated with retail 

exposure through other means.19

Further, the Exchange asserts that ‘‘the 

manipulation concerns previously 

articulated by the Commission are 

sufficiently mitigated to the point that 

they are outweighed by quantifiable 

investor protection issues.’’ 20 What are 

commenters’ view regarding such an 

assertion? 

4. According to the Exchange, 

‘‘[n]early every measurable metric 

related to [Chicago Mercantile 

Exchange’s] Bitcoin Futures has trended 

consistently up since launch and/or 

accelerated upward in the past year.’’ 21

Based on data provided and the 

academic research cited by the 

Exchange, do commenters agree that the 

Chicago Mercantile Exchange (‘‘CME’’) 

now represents a regulated market of 

significant size? 22 What are 

commenters’ views on whether there is 

a reasonable likelihood that a person 

attempting to manipulate the Shares 

would also have to trade on CME to 

manipulate the Shares? What of the 

Exchange’s assertion that the 

combination of (a) CME bitcoin futures 

leading price discovery; (b) the overall 

size of the bitcoin market; and (c) the 

ability for market participants to buy or 

sell large amounts of bitcoin without 

significant market impact helps to 

prevent the Shares from becoming the 

predominant force on pricing in either 

the bitcoin spot or CME bitcoin futures 

markets? 23

5. What are commenters’ views on the 

Exchange’s statement, generally, that 

bitcoin is resistant to price 

manipulation and that other means to 

prevent fraudulent and manipulative 

acts and practices exist to justify 

dispensing with the requisite 

surveillance sharing agreement with a 

regulated market of significant size 

related to bitcoin? 24 What of the 

Exchange’s assertion in support of such 

statement that significant liquidity in 

the spot market and the decreasing 

impact of market orders on the overall 

price of bitcoin mean that attempting to 

move the price of bitcoin is costly? 25

What of the assertion that offering only 

in-kind creations and redemptions 

provides unique protections against 

potential attempts to manipulate the 

Shares and that the price the Sponsor 

uses to value the Trust’s bitcoin ‘‘is not 

particularly important’’? 26

III. Procedure: Request for Written 

Comments 

The Commission requests that 

interested persons provide written 

submissions of their views, data, and 

arguments with respect to the issues 

identified above, as well as any other 

concerns they may have with the 

proposal. In particular, the Commission 

invites the written views of interested 

persons concerning whether the 

proposal is consistent with Section 

6(b)(5) or any other provision of the Act, 

and the rules and regulations 

thereunder. Although there do not 

appear to be any issues relevant to 

approval or disapproval that would be 

facilitated by an oral presentation of 

views, data, and arguments, the 

Commission will consider, pursuant to 

Rule 19b–4, any request for an 

opportunity to make an oral 

presentation.27

Interested persons are invited to 

submit written data, views, and 

arguments regarding whether the 

proposal should be approved or 

disapproved by July 14, 2021. Any 

person who wishes to file a rebuttal to 

any other person’s submission must file 

that rebuttal by July 28, 2021. 

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– 

CboeBZX–2021–019 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–2021–019. 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 

Number SR–CboeBZX–2021–019 and 

should be submitted by July 14, 2021. 

Rebuttal comments should be submitted 

by July 28, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.28

J. Matthew DeLesDernier, 

Assistant Secretary. 


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Federal Register / Vol. 86, No. 118 / Wednesday, June 23, 2021 / Notices 32987 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(4). 

5Each capitalized term not otherwise defined 

herein has its respective meaning as set forth in the 

Rules, By-Laws and Organization Certificate of DTC 

(the ‘‘Rules’’), the Canadian Link Service Guide, 

ClaimConnect Service Guide, Custody Service 

Guide, Deposits Service Guide, Distributions 

Service Guide, Redemptions Service Guide, 

Reorganizations Service Guide, Settlement Service 

Guide, and Underwriting Service Guide 

(collectively, the ‘‘Service Guides’’) and the DTC 

Operational Arrangements (Necessary for Securities 

to Become and Remain Eligible for DTC Services) 

(‘‘Operational Arrangements’’ or ‘‘OA’’), available at 

http://www.dtcc.com/legal/rules-andprocedures.aspx. 

6Stakeholders include issuers, agents (as defined 

in the OA), underwriters (as defined in the OA), 

and other parties, as context requires. 

7For example, the OA requires that, in order for 

DTC to make a same day allocation of funds, the 

agent must provide DTC with CUSIP-specific 

details for the payment before 2:50 p.m. on payable 

date, and that the details must match the amount 

of funds that are received by DTC no later than 3:00 

p.m. See OA, supra note 5, at 27. 

8For example, the Settlement Service Guide 

indicates that at 1:30 p.m. on a settlement day, DTC 

releases all pending delivery account positions and 

reverts to default recycle processing. See Settlement 

Service Guide, supra note 5, at 26. 

[FR Doc. 2021–13101 Filed 6–22–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92198; File No. SR–DTC– 

2021–009] 

Self-Regulatory Organizations; The 

Depository Trust Company; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Provide 

Enhanced Clarity for Deadlines and 

Processing Times 

June 16, 2021. 

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 June 8, 

2021, The Depository Trust Company 

(‘‘DTC’’) 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 clearing 

agency. DTC filed the proposed rule 

change pursuant to Section 19(b)(3)(A) 

of the Act 3 and Rule 19b–4(f)(4) 

thereunder.4 The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Clearing Agency’s Statement of the 

Terms of Substance of the Proposed 

Rule Change 

The proposed rule change of DTC is 

attached hereto as Exhibit 5,5 as 

described in greater detail below. 

II. Clearing Agency’s Statement of the 

Purpose of, and Statutory Basis for, the 

Proposed Rule Change 

In its filing with the Commission, the 

clearing agency 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 

clearing agency has prepared 

summaries, set forth in sections A, B, 

and C below, of the most significant 

aspects of such statements. 

(A) Clearing Agency’s Statement of the 

Purpose of, and Statutory Basis for, the 

Proposed Rule Change 

1. Purpose 

The proposed rule change would 

amend the Service Guides and the OA 

to provide enhanced clarity around (i) 

deadlines, timeframes, and cutoffs 

established by DTC in connection with 

DTC services (‘‘DTC-established 

Stakeholder Deadlines’’), and (ii) the 

times and timeframes for DTC actions 

and processes relating to DTC services 

(‘‘DTC Processing Times’’). In particular, 

the proposed rule change would 

enhance the transparency around the 

ability of DTC to extend DTCestablished Stakeholder Deadlines, and 

around DTC Processing Times, which 

are standards, rather than deadlines, as 

further described below. 

(i) DTC-established Stakeholder 

Deadlines 

The Service Guides provide 

Participants with procedures and 

information pertaining to DTC 

settlement and asset services. The 

procedures and information include, 

among other things, descriptions of 

DTC-established Stakeholder Deadlines 

for Participant and stakeholder 6 action 

relating to DTC services. The OA is 

designed to provide Participants and 

other stakeholders with information and 

procedures related to DTC eligibility for 

securities, and to provide the 

requirements for, among other things, 

the orderly processing of securities, 

corporate actions, and distributions. The 

OA includes descriptions of DTCestablished Stakeholder Deadlines in 

connection with the requirements and 

services.7

The purpose of DTC-established 

Stakeholder Deadlines is to help DTC 

efficiently and effectively manage its 

services and systems, in order to timely 

process instructions and securities 

transactions at DTC. However, there are 

times when, due to the facts and 

circumstances of a particular situation, 

DTC determines to extend a DTCestablished Stakeholder Deadline. The 

situations can include, but are not 

limited to, a Participant operational 

issue or a change to a different deadline 

(whether DTC or external) that could 

affect the ability of one or more 

Participants to meet the DTCestablished Stakeholder Deadline. 

(ii) DTC Processing Times 

The Service Guides and the OA also 

describe DTC Processing Times in 

connection with certain services.8 The 

purpose of describing these DTC 

Processing Times is to provide 

Participants and other stakeholders with 

information about the typical timing or 

timeframe of a DTC action or process, in 

order to help Participants and other 

stakeholders to more efficiently and 

effectively use and understand DTC’s 

services and processes. For example, if 

a Service Guide states that the 

processing time for a particular service 

is typically two business days, the 

Participant will understand that it is 

unlikely that it would get same-day 

turnaround from DTC and can plan 

accordingly, for instance, by ensuring 

that it submits its transaction with 

adequate lead-time. 

(iii) Overview of Proposed Rule Change 

DTC believes that Participants and 

other stakeholders benefit from clear 

information about their rights and 

obligations relating to DTC-established 

Stakeholder Deadlines and DTC 

Processing Times so that they are able 

to plan and conduct their business and 

securities transactions more effectively. 

Recent events, such as the COVID–19 

pandemic and market volatility, have 

emphasized the need for flexibility in 

times of stress and the importance of 

transparency with respect to deadlines 

and timeframes. Accordingly, after 

reviewing the Service Guides and the 

OA, DTC is proposing to enhance the 

transparency around the DTCestablished Stakeholder Deadlines and 

DTC Processing Times that are 

described in the Service Guides and the 

OA. 

Therefore, DTC is proposing to amend 

the Service Guides and the OA to clarify 

that (i) DTC may extend any DTCestablished Stakeholder Deadline, 

including, without limitation, to (x) 

address operational or other delays that 

could reasonably affect the ability of 

DTC, a Participant, or other stakeholder 

from meeting the DTC-established 


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