38154 Federal Register / Vol. 86, No. 135 / Monday, July 19, 2021 / Notices 

29 15 U.S.C. 78s(b)(3)(A). 

30 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6)(iii) requires the Exchange to give the 

Commission written notice of its intent to file the 

proposed rule change, along with a brief description 

and text of the proposed rule change, at least five 

business days prior to the date of filing of the 

proposed rule change, or such shorter time as 

designated by the Commission. The Exchange has 

satisfied this requirement. 

31 17 CFR 240.19b–4(f)(6). 

32 17 CFR 240.19b–4(f)(6)(iii). 

33For purposes only of waiving the 30-day 

operative delay, the Commission has also 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

15 U.S.C. 78c(f). 34 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. 91521 

(April 9, 2021), 86 FR 19917 (April 15, 2021) 

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

can be found at: https://www.sec.gov/comments/srcboebzx-2021-024/srcboebzx2021024.htm. 

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

5See Securities Exchange Act Release No. 92032, 

86 FR 29611 (June 2, 2021). The Commission 

designated July 14, 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. 

8WisdomTree Digital Commodity Services, LLC 

(‘‘Sponsor’’) is the sponsor of the Trust, and 

19(b)(3)(A) of the Act 29 and Rule 19b– 

4(f)(6) thereunder.30

A proposed rule change filed under 

Rule 19b–4(f)(6) 31 normally does not 

become operative for 30 days after the 

date of filing. However, pursuant to 

Rule 19b–4(f)(6)(iii),32 the Commission 

may designate a shorter time if such 

action is consistent with the protection 

of investors and the public interest. The 

Exchange has asked the Commission to 

waive the 30-day operative delay so that 

the proposal may become operative 

upon filing. Waiving the operative delay 

will allow the Exchange to amend, 

without delay, its rules regarding 

Market Maker quoting obligations to 

ensure that member organizations 

assigned in an options series as both the 

Lead Market Maker and Market Maker 

would have the same quoting 

obligations as member organizations 

who are assigned solely as either Lead 

Market Maker or Market Maker in an 

option series. The Commission believes 

that waiving the 30-day operative delay 

is consistent with the protection of 

investors and the public interest and 

hereby designates the proposed rule 

change to be operative upon filing.33

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. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

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

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

Phlx–2021–38 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–Phlx–2021–38. 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 20549–1090, 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–Phlx–2021–38 and should 

be submitted on or before August 9, 

2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.34

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–15195 Filed 7–16–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92392; File No. SR– 

CboeBZX–2021–024] 

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 WisdomTree Bitcoin Trust Under 

BZX Rule 14.11(e)(4), CommodityBased Trust Shares 

July 13, 2021. 

On March 26, 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 WisdomTree 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 April 15, 2021.3

On May 26, 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 to gain exposure to the price 

of bitcoin, less expenses and liabilities 

of the Trust’s operation.8 The Trust 


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Federal Register / Vol. 86, No. 135 / Monday, July 19, 2021 / Notices 38155 

Delaware Trust Company is the trustee. A thirdparty regulated custodian (‘‘Bitcoin Custodian’’) 

will be responsible for custody of the Trust’s 

bitcoin. The Sponsor is responsible for selecting the 

Bitcoin Custodian as well as an administrator, a 

transfer agent, a marketing agent, and an auditor for 

the Trust. See id. at 19925–26. 

9See id. at 19926. 

10See id. at 19925. 

11See id. at 19927. 

12See id. at 19926. 

13See id. at 19925–26. 

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

15 Id. 

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

17See Notice, supra note 3. 

18See id. at 19919. 

19See id. at 19920. 

20See id. at 19924. 

21See id. at 19922. 

22See id. at 19924. 

would hold bitcoin and it would 

calculate the Trust’s net asset value 

(‘‘NAV’’) daily based on the value of 

bitcoin as reflected by the CF Bitcoin 

U.S. Settlement Price (‘‘Reference 

Rate’’). The Reference Rate was created, 

and is administered, by CF Benchmarks 

Ltd., an independent entity. The 

Reference Rate aggregates the trade flow 

of several bitcoin platforms. The current 

platform composition of the Reference 

Rate is Bitstamp, Coinbase, Gemini, itBit 

and Kraken. In calculating the Reference 

Rate, the methodology creates a joint list 

of the trade prices and sizes from the 

constituent platforms between 3:00 p.m. 

E.T. and 4:00 p.m. E.T. The 

methodology then divides this list into 

12 equally-sized time intervals of 5 

minutes and it calculates the volumeweighted median trade price for each of 

those time intervals. The Reference Rate 

is the arithmetic mean of these 12 

volume-weighted median trade 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 Bitcoin 

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

(often by 5:30 p.m. E.T. and almost 

always by 8:00 p.m. E.T.). The NAV of 

the Trust is the aggregate value of the 

Trust’s assets less total liabilities of the 

Trust. In determining the Trust’s NAV, 

the administrator values the bitcoin 

held by the Trust based on the price set 

by the Reference Rate 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 large blocks of 

aggregations of Shares. Authorized 

participants will deliver, or facilitate the 

delivery of, bitcoin to the Trust’s 

account with the Bitcoin Custodian in 

exchange for Shares when they 

purchase Shares, and the Trust, through 

the Bitcoin 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–2021–024 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? 

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 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’ views 

regarding such assertions? 

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 


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38156 Federal Register / Vol. 86, No. 135 / Monday, July 19, 2021 / Notices 

23See id. at 19930. 

24See id. at 19924 n.58. 

25See id. at 19925. 

26See id. 

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

Securities Act Amendments of 1975, Public Law 

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). 

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

2 17 CFR 240.19b–4. 

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 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 August 9, 2021. Any 

person who wishes to file a rebuttal to 

any other person’s submission must file 

that rebuttal by August 23, 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–2021–024 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–2021–024. 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–2021–024 and 

should be submitted by August 9, 2021. 

Rebuttal comments should be submitted 

by August 23, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.28

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–15194 Filed 7–16–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92394; File No. SR–ISE– 

2021–15] 

Self-Regulatory Organizations; Nasdaq 

ISE, LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend Options 2, 

Section 5, Market Maker Quotations 

July 13, 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 30, 

2021, Nasdaq ISE, LLC (‘‘ISE’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘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 

Options 2, Section 5, Market Maker 

Quotations. 

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. 


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