48272 Federal Register / Vol. 86, No. 164 / Friday, August 27, 2021 / Notices 

21 15 U.S.C. 78s(b)(3)(A)(ii). 

22 17 CFR 240.19b–4(f)(2). 

23 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 91994 

(May 25, 2021), 86 FR 29321 (June 1, 2021) 

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

can be found at: https://www.sec.gov/comments/srcboebzx-2021-039/srcboebzx2021039.htm. 

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

5See Securities Exchange Act Release No. 92388 

(July 13, 2021), 86 FR 38163 (July 19, 2021). The 

Commission designated August 30, 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. 

8FD Funds Management LLC (‘‘Sponsor’’) is the 

sponsor of the Trust, Delaware Trust Company is 

the trustee, and Fidelity Service Company, Inc. will 

be the administrator (‘‘Administrator’’). A thirdparty transfer agent will facilitate the issuance and 

redemption of Shares of the Trust, respond to 

correspondence by Trust shareholders and others 

relating to its duties, maintain shareholder 

accounts, and make periodic reports to the Trust. 

An affiliate of the Sponsor, Fidelity Distributors 

Corporation, will be the marketing agent in 

connection with the creation and redemption of 

‘‘baskets’’ of Shares, and the Sponsor will provide 

assistance in the marketing of the Shares. Fidelity 

Digital Asset Services, LLC will serve as the Trust’s 

custodian (‘‘Custodian’’). The Index methodology 

was developed by Fidelity Product Services, LLC 

and is administered by the Fidelity Index 

Committee. Coin Metrics, Inc. is the third-party 

calculation agent for the Index. The Sponsor’s 

affiliates have an ownership interest in Coin 

Metrics, Inc. See id. at 29321, 29327 n.57, 29328– 

29. 

obligated to ensure that the amount of 

regulatory revenue collected from the 

ORF, in combination with its other 

regulatory fees and fines, does not 

exceed regulatory costs. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

Written comments were neither 

solicited nor received. 

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)(ii) of the Act,21 and Rule 

19b–4(f)(2) 22 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 shall 

institute proceedings to determine 

whether the proposed rule should be 

approved or disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

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

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File No. SR– 

EMERALD–2021–27 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to File No. 

SR–EMERALD–2021–27. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

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

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

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

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549, on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of the 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File No. 

SR–EMERALD–2021–27, and should be 

submitted on or before September 17, 

2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.23

Jill M. Peterson, 

Assistant Secretary. 

[FR Doc. 2021–18462 Filed 8–26–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92721; File No. SR– 

CboeBZX–2021–039] 

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 Wise Origin Bitcoin Trust Under 

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

August 23, 2021. 

On May 10, 2021, Cboe BZX 

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

filed with the Securities and Exchange 

Commission (‘‘Commission’’), pursuant 

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

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

19b–4 thereunder,2 a proposed rule 

change to list and trade shares 

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

Trust (‘‘Trust’’) under BZX Rule 

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

Shares. The proposed rule change was 

published for comment in the Federal 

Register on June 1, 2021.3

On July 13, 2021, pursuant to Section 

19(b)(2) of the 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 seek to track the 

performance of bitcoin, as measured by 

the Fidelity Bitcoin Index PR (‘‘Index’’), 

adjusted for the Trust’s expenses and 

other liabilities.8 Each Share will 

represent a fractional undivided 

beneficial interest in and ownership of 

the Trust. 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 


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Federal Register / Vol. 86, No. 164 / Friday, August 27, 2021 / Notices 48273 

9See id. at 29328. 

10See id. at 29329. 

11See id. at 29329–30. 

12See id. at 29329. 

13See id. at 29328–29. 

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 29322–23. 

19See id. at 29324. 

20See id. at 29327. 

21See id. at 29325. 

22See id. at 29322. 

23See id. at 29332. 

unexpectedly hold cash on a temporary 

basis.9

In seeking to achieve its investment 

objective, the Trust will hold bitcoin 

and will value its Shares daily as of 4:00 

p.m. E.T. using the same methodology 

used to calculate the Index. The Index 

is designed to reflect the performance of 

bitcoin in U.S. dollars. The Index is 

calculated using bitcoin price feeds 

from eligible bitcoin spot platforms. The 

current platform composition of the 

Index is Bitstamp, Coinbase, Gemini, 

itBit and Kraken. The Index market 

value is the volume-weighted median 

price of bitcoin in U.S. dollars over the 

previous five minutes, which is 

calculated by (1) ordering all individual 

transactions on eligible spot platforms 

over the previous five minutes by price, 

and then (2) selecting the price 

associated with the 50th percentile of 

total volume.10

The Net Asset Value (‘‘NAV’’) of the 

Trust means the total assets of the Trust 

including, but not limited to, all bitcoin 

and cash, if any, less total liabilities of 

the Trust, each determined on the basis 

of generally accepted accounting 

principles. The NAV of the Trust is 

calculated by taking the fair market 

value of its total assets based on the 

volume-weighted median price of 

bitcoin used for the calculation of the 

Index, subtracting any liabilities (which 

include accrued expenses), and dividing 

that total by the total number of 

outstanding Shares. The Administrator 

calculates the NAV of the Trust once 

each Exchange trading day. The NAV 

for a normal trading day will be released 

after 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 Shares. 

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–2021–039 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 the 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 proposal to list and trade the 

Shares is designed to protect investors 

and the public interest and is consistent 

with the other applicable requirements 

of Section 6(b)(5) of 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 reduce risk’’ associated with exposure 

through other means.19 Further, the 

Exchange asserts that ‘‘the manipulation 

concerns previously articulated by the 

Commission are sufficiently 

mitigated.’’ 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’’)’s 

bitcoin futures market 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 

are commenters’ views on 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 


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48274 Federal Register / Vol. 86, No. 164 / Friday, August 27, 2021 / Notices 

24See id. at 29327 n.51. 

25See id. at 29328. 

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. 

surveillance sharing agreement with a 

regulated market of significant size 

related to bitcoin? 24 What are 

commenters’ views on 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 are commenters’ 

views on 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 September 17, 2021. 

Any person who wishes to file a rebuttal 

to any other person’s submission must 

file that rebuttal by October 1, 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–2021–039 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–2021–039. 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–2021–039 and 

should be submitted by September 17, 

2021. Rebuttal comments should be 

submitted by October 1, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.28

Jill M. Peterson, 

Assistant Secretary. 

[FR Doc. 2021–18457 Filed 8–26–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92724; File No. SR–BOX– 

2021–17] 

Self-Regulatory Organizations; BOX 

Exchange LLC; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Amend the Response 

Time Period in the Facilitation and 

Solicitation Auction Mechanisms 

August 23, 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 August 

10, 2021, BOX Exchange LLC (the 

‘‘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 self-regulatory organization. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend the 

time period allowed for Participant 

submission of Responses in the 

Facilitation and Solicitation auction 

mechanisms from one (1) second to a 

time period designated by the Exchange 

of no less than 100 milliseconds and no 

more than one (1) second. The text of 

the proposed rule change is available 

from the principal office of the 

Exchange, at the Commission’s Public 

Reference Room and also on the 

Exchange’s internet website at http://

boxoptions.com. 

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 these statements may be examined at 

the places specified in Item IV below. 

The self-regulatory organization has 

prepared summaries, set forth in 

Sections A, B, and C below, of the most 

significant aspects of such statements. 


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