Federal Register / Vol. 86, No. 154 / Friday, August 13, 2021 / Notices 44763 

12 17 CFR 200.30–3(a)(12); 17 CFR 200.30– 

3(a)(57). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 91771 

(May 6, 2021), 86 FR 26073 (May 12, 2021) 

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

can be found at: https://www.sec.gov/comments/srnysearca-2021-31/srnysearca202131.htm. 

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

5See Securities Exchange Act Release No. 92233 

(June 22, 2021), 86 FR 34107 (June 28, 2021). The 

Commission designated August 10, 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 Valkyrie Digital Assets LLC is the sponsor of the 

Trust (‘‘Sponsor’’) and Delaware Trust Company is 

the trustee. Coinbase Custody Trust Company, LLC 

(‘‘Custodian’’) will act as custodian for the Trust’s 

bitcoins. U.S. Bancorp Fund Services, LLC 

(‘‘Administrator’’) will act as the transfer agent and 

administrator of the Trust. See Notice, supra note 

3, 86 FR at 26073. 

9The Index is not affiliated with the Sponsor and 

is administered by CF Benchmarks Ltd. 

(‘‘Benchmark Administrator’’). See Notice, supra 

note 3, 86 FR at 26076. 

10See id. 

11See id. at 26073. 

12See id. at 26076. 

13See id. at 26081. 

14The BRTI is calculated in real time based on 

the universe of the currently unmatched limit 

orders to buy or sell in the BTC/USD pair of all 

Constituent Bitcoin Exchanges. See id. at 26076. 

to the Proposed Rule Change, as 

modified by Amendment No. 1, 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 such 

filing also will be available for 

inspection and copying at the principal 

office of FINRA. 

All comments received will be posted 

without change. Persons submitting 

comments are cautioned that we do not 

redact or edit personal identifying 

information from comment submissions. 

You should submit only information 

that you wish to make available 

publicly. 

All submissions should refer to File 

No. SR–FINRA–2021–008 and should be 

submitted on or before August 30, 2021. 

If comments are received, any rebuttal 

comments should be submitted on or 

before September 3, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–17307 Filed 8–12–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92610; File No. SR– 

NYSEArca–2021–31] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Order Instituting 

Proceedings To Determine Whether To 

Approve or Disapprove a Proposed 

Rule Change To List and Trade Shares 

of the Valkyrie Bitcoin Fund Under 

NYSE Arca Rule 8.201–E 

August 9, 2021. 

On April 23, 2021, NYSE Arca, Inc. 

(‘‘NYSE Arca’’ or ‘‘Exchange’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’), pursuant 

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

Exchange Act of 1934 (‘‘Act’’) 1 and Rule 

19b–4 thereunder,2 a proposed rule 

change to list and trade shares 

(‘‘Shares’’) of the Valkyrie Bitcoin Fund 

(‘‘Trust’’) under NYSE Arca Rule 8.201– 

E (Commodity-Based Trust Shares). The 

proposed rule change was published for 

comment in the Federal Register on 

May 12, 2021.3

On June 22, 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 

NYSE Arca Rule 8.201–E, which 

governs the listing and trading of 

Commodity-Based Trust Shares on the 

Exchange. 

The investment objective of the Trust 

will be for the Shares to reflect the 

performance of the value of a bitcoin as 

represented by the CF Bitcoin US 

Settlement Price (‘‘Index’’), less the 

Trust’s liabilities and expenses.8 The 

Fund will use the Index to calculate the 

Trust’s net asset value (‘‘NAV’’).9 The 

Index serves as a once-a-day benchmark 

rate of the U.S. dollar price of bitcoin 

(USD/BTC), calculated as of 4:00 p.m., 

E.T. The Index aggregates the trade flow 

of several bitcoin exchanges, during an 

observation window between 3:00 p.m. 

and 4:00 p.m., E.T., into the U.S. dollar 

price of one bitcoin at 4:00 p.m., E.T. 

The current constituent bitcoin 

exchanges of the Index are Bitstamp, 

Coinbase, Gemini, itBit, and Kraken 

(‘‘Constituent Bitcoin Exchanges’’). In 

calculating the Index, the methodology 

creates a joint list of certain trade prices 

and sizes from the Constituent Bitcoin 

Exchanges between 3:00 p.m. 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 volume-weighted median 

trade price for each of those time 

intervals. The Index is the arithmetic 

mean of these 12 volume-weighted 

median trade prices.10

The Shares of the Trust represent 

units of fractional undivided beneficial 

interest in, and ownership of, the Trust. 

The Trust will only hold bitcoin. The 

Custodian will establish accounts that 

hold the bitcoins deposited with the 

Custodian on behalf of the Trust.11

The Administrator will calculate the 

NAV of the Trust once each Exchange 

trading day. The Sponsor will publish 

the NAV and NAV per Share as soon as 

practicable after their determination and 

availability, and the NAV will be 

released after the end of the Core 

Trading Session (4:00 p.m., E.T.). The 

NAV of the Trust is not officially struck 

until later in the day (often by 5:30 p.m., 

E.T, and usually by 8:00 p.m., E.T.). The 

Trust’s NAV per Share is calculated by 

taking the current market value of its 

total assets, less any liabilities of the 

Trust, and dividing that total by the 

total number of outstanding Shares. The 

bitcoin held by the Trust will be valued 

based on the price set by the Index.12

The Trust will provide website 

disclosure of its bitcoin holdings 

daily.13 The Trust will also disseminate 

an intraday indicative value (‘‘IIV’’) per 

Share updated every 15 seconds by one 

of more major market data vendors 

during the Exchange’s Core Trading 

Session (normally 9:30 a.m. to 4:00 

p.m., E.T.). The IIV will be calculated by 

a third-party financial data provider 

using the prior day’s closing NAV per 

Share of the Trust as a base and 

updating that value throughout the 

trading day to reflect changes in the 

most recently reported price level of the 

CME CF Bitcoin Real-Time Index 

(‘‘BRTI’’), as reported by CME Group, 

Inc., Bloomberg, L.P., or another 

reporting service.14

The Trust will issue and redeem 

Shares to authorized participants on an 

ongoing basis in one or more ‘‘Baskets’’ 

of 50,000 Shares. The creation and 

redemption of a Basket requires the 

delivery to the Trust, or the distribution 

by the Trust, of the number of whole 

and fractional bitcoins represented by 


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44764 Federal Register / Vol. 86, No. 154 / Friday, August 13, 2021 / Notices 

15See id. at 26076–77. 16The Conversion Procedures will be facilitated 

by a single liquidity provider, which will be 

selected by the Sponsor on an order-by-order basis. 

In the event that an order cannot be filled in its 

entirety by a single liquidity provider, additional 

liquidity provider(s) will be selected by the Sponsor 

to fill the remaining amount. See id. at 26076–78. 

17 15 U.S.C. 78s(b)(2)(B). 

18 Id. 

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

20See Notice, supra note 3. 

21See id. at 26078. 

22See id. at 26078–79. 

23See id. at 26079. 

24See id. 

25See id. at 26080. 

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). 

each Basket being created or 

redeemed.15 Creation orders and 

redemption orders may be placed either 

‘‘in-kind’’ or ‘‘in-cash.’’ Although the 

Trust will create Baskets only upon the 

receipt of bitcoins, and will redeem 

Baskets only by distributing bitcoins, an 

authorized participant may deposit cash 

with the Administrator, which will 

facilitate the purchase or sale of bitcoins 

through a liquidity provider on behalf of 

an authorized participant (‘‘Conversion 

Procedures’’).16

II. Proceedings To Determine Whether 

To Approve or Disapprove SR– 

NYSEArca–2021–31 and Grounds for 

Disapproval Under Consideration 

The Commission is instituting 

proceedings pursuant to Section 

19(b)(2)(B) of the Act 17 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,18 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.’’ 19

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,20 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 the bitcoin 

ecosystem has matured considerably 

since the last time the Commission 

reviewed a proposal for a bitcoin 

exchange-traded product? 21 Are the 

changes that the Exchange identifies 

sufficient to support the determination 

that the proposed listing and trading of 

the Shares is consistent with the Act? 

3. The Exchange states that the design 

choices within the methodology and 

framework of the Index are sufficiently 

resistant to market manipulation and 

that, to date, there has been no evidence 

that the Index has been subject to 

manipulation.22 What are commenters’ 

views on these assertions regarding the 

Index, including the relevance of such 

assertions in determining whether the 

proposed listing and trading of the 

Shares is consistent with the Act? 

4. The Exchange states that the 

Chicago Mercantile Exchange (‘‘CME’’) 

participates in the oversight committee 

of the Index.23 The Exchange further 

states that the Constituent Bitcoin 

Exchanges ‘‘(1) must enter into a data 

sharing agreement with the CME, (2) 

must cooperate with inquiries and 

investigations of regulators and the 

Benchmark Administrator and (3) must 

submit each of its clients to its KnowYour-Customer (‘‘KYC’’) procedures; 

therefore, the CME would be able, in the 

case of any suspicious trades, to 

discover all material trade information 

including the identities of the customers 

placing the trades.’’ 24 What are 

commenters’ views on these assertions 

regarding the Index, including the 

relevance of such assertions in 

determining whether the proposed 

listing and trading of the Shares is 

consistent with the Act? 

5. The Exchange states that the 

‘‘proposed rule change is designed to 

prevent fraudulent and manipulative 

acts and practices because, although the 

global Bitcoin market is not inherently 

resistant to fraud and manipulation, the 

Index used by the Trust to determine 

the value of its bitcoin assets and its 

NAV, serves as a benchmark mechanism 

sufficient to mitigate the impact of 

instances of fraud and manipulation on 

a reference price for Bitcoin.’’ 25 The 

Exchange further states that ‘‘use of the 

Index would mitigate the effects of 

potential manipulation of the bitcoin 

market.’’ 26 What are commenters’ views 

regarding such assertions? 

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 September 3, 2021. Any 

person who wishes to file a rebuttal to 

any other person’s submission must file 

that rebuttal by September 17, 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– 

NYSEArca–2021–31 on the subject line. 


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Federal Register / Vol. 86, No. 154 / Friday, August 13, 2021 / Notices 44765 

28 17 CFR 200.30–3(a)(57). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4See Securities Exchange Act Release Nos. 88596 

(April 8, 2020), 85 FR 20796 (April 14, 2020) (SR– 

NYSEArca–2020–29); 88812 (May 5, 2020), 85 FR 

27787 (May 11, 2020) (SR–NYSEArca–2020–38). 

5See Securities Exchange Act Release Nos. 89038 

(June 10, 2020), 85 FR 36447 (June 16, 2020) (SR– 

NYSEArca–2020–52); 89242 (June 7, 2020), 85 FR 

42037 (July 13, 2020) (SR–NYSEArca–2020–60); 

89480 (August 5, 2020), 85 FR 48591 (August 11, 

2020) (SR–NYSEArca–2020–69); 89694 (August 27, 

2020), 85 FR 54608 (September 2, 2020) 

(SRNYSEArca–2020–76); 90191 (October 15, 2020), 

85 FR 67032 (October 21, 2020) (SRNYSEArca– 

2020–90); 90838 (December 31, 2020), 86 FR 657 

(January 6, 2021) (SRNYSEArca–2020–115), 91372 

(March 18, 2021) 86 FR 15980 (March 25, 2021) 

(SR–NYSEArca–2021–18). 

6See Exchange Act Release No. 91936 (May 19, 

2021) 86 FR 28178 (May 25, 2021) (SR–NYSEArca– 

2021–41). 

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–NYSEArca–2021–31. 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–NYSEArca–2021–31 and 

should be submitted by September 3, 

2021. Rebuttal comments should be 

submitted by September 17, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.28

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–17305 Filed 8–12–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92614; No. SR–NYSEArca– 

2021–69] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Modify the NYSE Arca 

Options Fee Schedule 

August 9, 2021. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that, on August 

4, 2021, NYSE Arca, Inc. (‘‘NYSE Arca’’ 

or the ‘‘Exchange’’) 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 self-regulatory 

organization. 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 modify the 

NYSE Arca Options Fee Schedule (‘‘Fee 

Schedule’’). The Exchange proposes to 

implement the fee change effective 

August 4, 2021. The proposed rule 

change is available on the Exchange’s 

website at www.nyse.com, 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 

self-regulatory organization 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 those 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 parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The purpose of this filing is to amend 

the Fee Schedule to remove language 

associated with a fee waiver and a credit 

that expired at the close of business on 

June 30, 2021. 

On March 18, 2020, the Exchange 

announced that it would temporarily 

close the Trading Floor, effective March 

23, 2020, as a precautionary measure to 

prevent the potential spread of COVID– 

19. Following the temporary closure of 

the Trading Floor, the Exchange waived 

certain Floor-based fixed fees for April 

and May 2020.4 Although the Trading 

Floor partially reopened on May 4, 2020 

and Floor-based open outcry activity 

was supported, certain participants 

were unable to resume pre-Floor closure 

levels of operations. As a result, the 

Exchange extended the fee waiver 

through June 2021, but only for Floor 

Broker firms that were unable to operate 

at more than 50% of their March 2020 

on-Floor staffing levels and for Market 

Maker firms that had vacant or 

‘‘unmanned’’ Podia for the entire month 

due to COVID–19 related considerations 

(the ‘‘Qualifying Firms’’).5

Because the Trading Floor continued 

to operate with reduced capacity, the 

Exchange extended the fee waiver for 

Qualifying Firms through ‘‘the earlier of 

the first full month of a full reopening 

of the Trading Floor facilities to Floor 

personnel or June 2021’’. The Trading 

Floor re-opened without social 

distancing requirements for vaccinated 

personnel on May 12, 2021. 

Additionally, in May 2021, the 

Exchange implemented an incentive to 

encourage Floor Brokers to increase 

their Professional Customer billable 

volume.6 Specifically, the Exchange 

offered Floor Brokers a credit of $0.13 

per contract for each billable 


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