30546 Federal Register / Vol. 87, No. 97 / Thursday, May 19, 2022 / Notices 

23 15 U.S.C. 78s(b)(2)(B). 

24 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. 94184 

(Feb. 8, 2022), 87 FR 8318 (‘‘Notice’’). The 

Commission has received no comments on the 

proposed rule change. 

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

5See Securities Exchange Act Release No. 94476, 

87 FR 16800 (Mar. 24, 2022). The Commission 

designated May 15, 2022, 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. 

8See id. at 8329. WisdomTree Digital Commodity 

Services, LLC (‘‘Sponsor’’) is the sponsor of the 

Trust, and Delaware Trust Company is the trustee. 

U.S. Bank, N.A. would serve as the custodian of the 

Trust (‘‘Custodian’’). U.S. Bancorp Fund Services, 

LLC dba U.S. Bank Global Fund Services would be 

the administrator and transfer agent 

(‘‘Administrator’’) of the Trust. Foreside Fund 

Services LLC would be the marketing agent in 

connection with the creation and redemption of 

Shares. See id. at 8318–19, 8329. 

9See id. at 8329–30. 

10See id. at 8329. 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission shall institute proceedings 

under Section 19(b)(2)(B) 23 of the Act 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 (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

C2–2022–011 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–C2–2022–011. 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; 

the Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR–C2– 

2022–011 and should be submitted on 

or before June 9, 2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.24

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–10737 Filed 5–18–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94907; File No. SR– 

CboeBZX–2022–006] 

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 

May 13, 2022. 

On January 25, 2022, 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 February 14, 2022.3

On March 18, 2022, 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 

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 US 

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 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 would represent a 

fractional undivided beneficial interest 

in and ownership of the Trust. The 

Trust’s assets would 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 would unexpectedly hold cash 

on a temporary basis.10

The Administrator would 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, each determined on the basis of 

generally accepted accounting 

principles. In determining the Trust’s 


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Federal Register / Vol. 87, No. 97 / Thursday, May 19, 2022 / Notices 30547 

11See id. at 8330. 

12See id. at 8334. 

13See id. at 8329. 

14See id. at 8323–24. 

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

16 Id. 

17 15 U.S.C. 78f(b)(5). 

18See Notice, supra note 3. 

19See id. at 8320–22. 

20See id. at 8325–27, 8327 n.62. 

21See id. at 8320. 

22See id. at 8328. 

23See id. at 8327 n.65. 

24See id. at 8328. 

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 would 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 would 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 would do so in ‘‘in-kind’’ 

transactions in blocks of 50,000 Shares 

at the Trust’s NAV. Authorized 

participants would 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, 

would deliver bitcoin to such 

authorized participants when they 

redeem Shares with the Trust.13

Although the Trust would not be an 

investment company registered under 

the Investment Company Act of 1940, as 

amended (‘‘1940 Act’’), the Exchange 

represents that: 

• The Trust would qualify as an 

investment company under Accounting 

Standards Update 2013–08 and, as such, 

the Sponsor would ensure that the 

Trust’s financial statements would be 

audited at least annually by an 

independent registered public 

accounting firm and, as part of such 

audit, the auditor would be expected to 

perform procedures similar to those 

used for exchange-traded funds 

registered under the 1940 Act (‘‘ETFs’’); 

• The Sponsor would facilitate the 

Trust’s compliance with the financial 

record keeping and reporting 

requirements under the Sarbanes-Oxley 

Act of 2002; 

• The Trust’s Custodian would 

qualify as a ‘‘custodian’’ under the 1940 

Act, and the Custodian would agree to 

exercise reasonable care, prudence, and 

diligence such as a person having 

responsibility for the safekeeping of 

property of the Trust would exercise; 

• The Trust would be subject to the 

transparency requirements of Rule 6c– 

11 under the 1940 Act; 

• The Sponsor would adopt 

procedures to ensure there are no 

transactions with affiliated persons that 

would be prohibited by Section 17 of 

1940 Act and the applicable rules and 

regulations thereunder; 

• The Trust would maintain a fidelity 

bond for the benefit of the Trust in the 

maximum amount required by Rule 

17g–1 of the 1940 Act; and 

• The Sponsor or applicable service 

provider of the Trust would maintain 

the books and records of the Trust in 

satisfaction of the requirements of 

Section 31 of the 1940 Act.14

II. Proceedings To Determine Whether 

To Approve or Disapprove SR– 

CboeBZX–2022–006 and Grounds for 

Disapproval Under Consideration 

The Commission is instituting 

proceedings pursuant to Section 

19(b)(2)(B) of the Act 15 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,16 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.’’ 17

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,18 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? 19 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. Based on data provided and the 

academic research cited by the 

Exchange,20 do commenters agree with 

the Exchange that CME now represents 

a regulated market of significant size 

related to bitcoin? 21 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? Do commenters 

agree with the Exchange’s assertion that 

the combination of (a) CME Bitcoin 

Futures acting as the predominant 

influence on 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? 22

4. The Exchange states 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 requirement 

to enter into a surveillance sharing 

agreement with a regulated market of 

significant size related to bitcoin.23 In 

support of its assertion, the Exchange 

states that ‘‘the 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.’’ 24 The 

Exchange further states that potential 

manipulation concerns are mitigated by 

‘‘the significant increase in trading 

volume in Bitcoin Futures[,] the 


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30548 Federal Register / Vol. 87, No. 97 / Thursday, May 19, 2022 / Notices 

25See id. at 8327; see also id. at 8332. 

26See id. at 8323. 

27See id. 

28See id. at 8325. 

29Section 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). 30 17 CFR 200.30–3(a)(57). 

growing body of evidence that the CME 

Bitcoin Futures market represents a 

regulated market of significant size . . . 

, the growth of liquidity at the inside in 

the spot market for bitcoin, and certain 

features of the Shares and the Reference 

Rate . . .’’ 25 What are commenters’ 

views regarding the Exchange’s 

argument? 

5. The Exchange states that ETFs that 

provide exposure to bitcoin through 

CME Bitcoin Futures (‘‘Bitcoin Futures 

ETFs’’) are ‘‘a sub-optimal’’ for U.S. 

investors looking for long-term exposure 

to bitcoin and that any proposal to list 

and trade a Spot Bitcoin ETP should be 

reviewed by the Commission with this 

in mind.26 The Exchange further states 

that it would be inconsistent to allow 

the listing and trading of Bitcoin 

Futures ETFs while simultaneously 

disapproving Spot Bitcoin ETPs on the 

basis that the CME Bitcoin Futures 

market is not a regulated market of 

significant size. According to the 

Exchange, this would be ‘‘particularly 

true for the Trust, which will use the 

[Reference Rate] as its price source to 

calculate its daily [NAV], with inputs 

from the same bitcoin trading platforms 

. . . and materially the same 

methodology as is used to price CME 

Bitcoin Futures.’’ 27 Do commenters 

agree or disagree and why? 

6. According to the Exchange, the 

Trust is structured ‘‘to operate as if 

certain 1940 Act provisions apply, 

providing transparency and investor 

protections such that a distinction 

between Bitcoin Futures ETFs and Spot 

Bitcoin ETPs is unwarranted.’’ 28 Does 

the representation that the Trust will 

‘‘operate as if certain 1940 Act 

provisions apply’’ help mitigate the 

concerns the Commission previously 

expressed, including concerns 

pertaining to fraud and manipulation? 

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.29

Interested persons are invited to 

submit written data, views, and 

arguments regarding whether the 

proposal should be approved or 

disapproved by June 9, 2022. Any 

person who wishes to file a rebuttal to 

any other person’s submission must file 

that rebuttal by June 23, 2022. 

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–2022–006 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–2022–006. 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–2022–006 and 

should be submitted by June 9, 2022. 

Rebuttal comments should be submitted 

by June 23, 2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.30

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–10733 Filed 5–18–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[SEC File No. 270–091, OMB Control No. 

3235–0088] 

Proposed Collection; Comment 

Request; Extension: Rule 15Ba2–5 

Upon Written Request, Copies Available 

From: Securities and Exchange 

Commission, Office of FOIA Services, 

100 F Street NE, Washington, DC 

20549–2736 

Notice is hereby given that pursuant 

to the Paperwork Reduction Act of 1995 

(‘‘PRA’’) (44 U.S.C. 3501 et seq.), the 

Securities and Exchange Commission 

(‘‘Commission’’) is soliciting comments 

on the collection of information 

provided for in Rule 15Ba2–5 (17 CFR 

240.15Ba2–5) under the Securities 

Exchange Act of 1934 (15 U.S.C. 78a et 

seq.) (‘‘Exchange Act’’). The 

Commission plans to submit this 

existing collection of information to the 

Office of Management and Budget 

(‘‘OMB’’) for extension and approval. 

On July 7, 1976, effective July 16, 

1976 (see 41 FR 28948, July 14, 1976), 

the Commission adopted Rule 15Ba2–5 

under the Exchange Act to permit a 

duly-appointed fiduciary to assume 

immediate responsibility for the 

operation of a municipal securities 

dealer’s business. Without the rule, the 

fiduciary would not be able to assume 

operation until it registered as a 

municipal securities dealer. Under the 

rule, the registration of a municipal 

securities dealer is deemed to be the 

registration of any executor, 

administrator, guardian, conservator, 

assignee for the benefit of creditors, 


jspears on DSK121TN23PROD with NOTICES1