Document ID: SEC-2020-1696-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc.
Posted Date: 2020-10-22T04:00Z

[Federal Register Volume 85, Number 205 (Thursday, October 22, 2020)]
[Notices]
[Pages 67401-67410]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-23362]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-90216; File No. SR-NYSEArca-2020-59]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
of Amendment No. 3 and Order Granting Accelerated Approval of a 
Proposed Rule Change, as Modified by Amendment No. 3, To Amend NYSE 
Arca Rule 8.201-E (Commodity-Based Trust Shares) and To Permit the 
Listing and Trading of Shares of the Wilshire wShares Enhanced Gold 
Trust Under Amended NYSE Arca Rule 8.201-E

October 16, 2020.

I. Introduction

    On June 30, 2020, 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: 
(1) Amend NYSE Arca Rule 8.201-E to (a) permit a trust to hold (i) a 
specified commodity or (ii) a specified commodity and cash; (b) permit 
a trust that holds a specified commodity deposited with the trust to 
issue and redeem shares for such commodity and/or cash; and (c) state 
that the term ``commodity'' is defined in Section 1a(9) of the 
Commodity Exchange Act; and (2) list and trade shares of the Wilshire 
wShares Enhanced Gold Trust under NYSE Arca Rule 8.201-E, as proposed 
to be amended. The proposed rule change was published for comment in 
the Federal Register on July 20, 2020.\3\
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 89310 (July 14, 
2020), 85 FR 43932 (``Notice'').
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    On August 17, 2020, the Exchange filed Amendment No. 1 to the 
proposed rule change, and, on August 18, 2020, the Exchange withdrew 
Amendment No. 1 to the proposed rule change. On September 1, 2020, 
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 the proposed rule change should be disapproved.\5\ On 
September 21, 2020, the Exchange filed Amendment No. 2 to the proposed 
rule change.\6\ On October 13, 2020, the Exchange filed Amendment No. 3 
to the proposed rule change.\7\ The Commission has received no comment 
letters on the proposal. The Commission is publishing this notice to 
solicit comments on the proposed rule change, as modified by Amendment 
No. 3, from interested persons, and is approving the proposed rule 
change, as modified by Amendment No. 3, on an accelerated basis.
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    \4\ 15 U.S.C. 78s(b)(2).
    \5\ See Securities Exchange Act Release No. 89724, 85 FR 55535 
(September 8, 2020). The Commission designated October 18, 2020, as 
the date by which it should approve, disapprove, or institute 
proceedings to determine whether to disapprove the proposed rule 
change.
    \6\ Amendment No. 2, which amended and replaced the proposed 
rule change in its entirety, is available at: https://www.sec.gov/comments/sr-nysearca-2020-59/srnysearca202059-7801813-223658.pdf.
    \7\ Amendment No. 3 amended and replaced the proposed rule 
change, as modified by Amendment No. 2, in its entirety. When the 
Exchange filed Amendment No. 3 with the Commission, it also 
submitted Amendment No. 3 as a comment letter to the filing, which 
is publicly available on the Commission's website.
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II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change, as Modified by Amendment 
No. 3

    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 Exchange proposes (1) to amend NYSE Arca Rule 8.201-E 
(``Commodity-Based Trust Shares'') to permit a trust to hold (a) a 
specified commodity deposited with the Trust (defined below), or (b) a 
specified commodity and, in addition to such specified commodity, cash; 
(2) to list and trade shares (``Shares'') of the Wilshire wShares 
Enhanced Gold Trust (``Trust'') under NYSE Arca Rule 8.201-E as 
proposed to be amended; and (3) to amend Rule 8.201-E(c)(2) to state 
that

[[Page 67402]]

the term ``commodity'' is defined in Section 1a(9) of the Commodity 
Exchange Act.\8\
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    \8\ On September 10, 2020, the Trust filed pre-effective 
Amendment No. 2 to its registration statement on Form S-1 under the 
Securities Act of 1933 (15 U.S.C. 77a) (File No. 333-235913) (the 
``Registration Statement''). The description of the operation of the 
Trust and the Shares herein is based, in part, on the Registration 
Statement. The Shares will not begin trading until the Securities 
and Exchange Commission (``Commission'') declares the Registration 
Statement effective.
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    The Trust will not be registered as an investment company under the 
Investment Company Act of 1940, as amended.\9\ The Trust is not a 
commodity pool for purposes of the Commodity Exchange Act, as 
amended.\10\
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    \9\ 15 U.S.C. 80a-1.
    \10\ 17 U.S.C. 1.
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    The sponsor of the Trust is Wilshire Phoenix Funds LLC 
(``Sponsor''). The ``Trustee'' is Delaware Trust Company and the ``Gold 
Custodian'' is JPMorgan Chase Bank, N.A. The Bank of New York Mellon 
will be the administrator (``Administrator''), transfer agent 
(``Transfer Agent'') and cash custodian (``Cash Custodian'') of the 
Trust. Foreside Fund Services, LLC will be the Trust's marketing agent 
(``Marketing Agent'').
    The Commission has previously approved listing on the Exchange 
under NYSE Arca Rules 5.2-E(j)(5) and 8.201-E of other precious metals 
and gold-based commodity trusts, including the GraniteShares Gold 
MiniBAR Trust; \11\ GraniteShares Gold Trust; \12\ Merk Gold Trust; 
\13\ ETFS Gold Trust; \14\ Sprott Gold Trust; \15\ SPDR Gold Trust 
(formerly, streetTRACKS Gold Trust); iShares Silver Trust; \16\ iShares 
COMEX Gold Trust; \17\ and the Gold Trust.\18\ Prior to their listing 
on the Exchange, the Commission approved listing of the streetTRACKS 
Gold Trust on the New York Stock Exchange (``NYSE'') \19\ and listing 
of iShares COMEX Gold Trust and iShares Silver Trust on the American 
Stock Exchange LLC.\20\ In addition, the Commission has approved 
trading of the streetTRACKS Gold Trust and iShares Silver Trust on the 
Exchange pursuant to unlisted trading privileges (``UTP'').\21\
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    \11\ Securities Exchange Act Release No. 84257 (September 21, 
2018), 83 FR 48877 (September 27, 2018) (SR-NYSEArca-2018-55) (order 
approving listing and trading of shares of the GraniteShares Gold 
MiniBAR Trust Pursuant to NYSE Arca Rule 8.201-E).
    \12\ Securities Exchange Act Release No. 81077 (July 5, 2017) 
(SR-NYSEArca-2017-55) (order approving listing and trading shares of 
the GraniteShares Gold Trust under NYSE Arca Equities Rule 8.201).
    \13\ Securities Exchange Act Release No. 71378 (January 23, 
2014), 79 FR 4786 (January 29, 2014) (SR-NYSEArca-2013-137).
    \14\ Securities Exchange Act Release No. 59895 (May 8, 2009), 74 
FR 22993 (May 15, 2009) (SR-NYSEArca-2009-40).
    \15\ Securities Exchange Act Release No. 61496 (February 4, 
2010), 75 FR 6758 (February 10, 2010) (SR-NYSEArca-2009-113).
    \16\ See Securities Exchange Act Release No. 58956 (November 14, 
2008), 73 FR 71074 (November 24, 2008) (SR-NYSEArca-2008-124) 
(approving listing on the Exchange of the iShares Silver Trust).
    \17\ See Securities Exchange Act Release No. 56224 (August 8, 
2007), 72 FR 45850 (August 15, 2007) (SR-NYSEArca-2007-76) 
(approving listing on the Exchange of the street TRACKS Gold Trust); 
Securities Exchange Act Release No. 56041 (July 11, 2007), 72 FR 
39114 (July 17, 2007) (SR-NYSEArca-2007-43) (order approving listing 
on the Exchange of iShares COMEX Gold Trust).
    \18\ See Securities Exchange Act Release No. 81918 (October 23, 
2017), 82 FR 49884 (October 27, 2017) (SR-NYSEArca-2017-98) (Order 
Approving a Proposed Rule Change, as Modified by Amendment No. 1 
Thereto, to List and Trade Shares of The Gold Trust under NYSE Arca 
Rule 8.201-E).
    \19\ See Securities Exchange Act Release No. 50603 (October 28, 
2004), 69 FR 64614 (November 5, 2004) (SR-NYSE-2004-22) (order 
approving listing of streetTRACKS Gold Trust on NYSE).
    \20\ See Securities Exchange Act Release Nos. 51058 (January 19, 
2005), 70 FR 3749 (January 26, 2005) (SR-Amex-2004-38) (order 
approving listing of iShares COMEX Gold Trust on the American Stock 
Exchange LLC); 53521 (March 20, 2006), 71 FR 14967 (March 24, 2006) 
(SR-Amex-2005-72) (approving listing on the American Stock Exchange 
LLC of the iShares Silver Trust).
    \21\ See Securities Exchange Act Release Nos. 53520 (March 20, 
2006), 71 FR 14977 (March 24, 2006) (SR-PCX-2005-117) (approving 
trading on the Exchange pursuant to UTP of the iShares Silver 
Trust); 51245 (February 23, 2005), 70 FR 10731 (March 4, 2005) (SR-
PCX-2004-117) (approving trading on the Exchange of the streetTRACKS 
Gold Trust pursuant to UTP).
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Proposed Amendment to NYSE Arca Rule 8.201-E
    Under NYSE Arca Rule 8.201-E, the Exchange may propose to list and/
or trade pursuant to UTP ``Commodity-Based Trust Shares.'' \22\ Rule 
8.201-E(c)(1) currently states that such securities are issued by a 
trust in a specified aggregate minimum number in return for a deposit 
of a quantity of the underlying commodity, and that, when aggregated in 
the same specified minimum number, may be redeemed at a holder's 
request by such trust which will deliver to the redeeming holder the 
quantity of the underlying commodity.
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    \22\ Commodity-Based Trust Shares are securities issued by a 
trust that represents investors' discrete identifiable and undivided 
beneficial ownership interest in the commodities deposited into the 
Trust. Rule 8.201-E (c)(1) defines the term ``Commodity-Based Trust 
Shares'' as follows: ``The term ``Commodity-Based Trust Shares'' 
means a security (a) that is issued by a trust (``Trust'') that 
holds a specified commodity deposited with the Trust; (b) that is 
issued by such Trust in a specified aggregate minimum number in 
return for a deposit of a quantity of the underlying commodity; and 
(c) that, when aggregated in the same specified minimum number, may 
be redeemed at a holder's request by such Trust which will deliver 
to the redeeming holder the quantity of the underlying commodity.''
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    The Exchange proposes to amend Rule 8.201-E(c)(1) to provide as 
follows: The term ``Commodity-Based Trust Shares'' means a security (a) 
that is issued by a trust (``Trust'') that holds (1) a specified 
commodity deposited with the Trust, or (2) a specified commodity and, 
in addition to such specified commodity, cash; (b) that is issued by 
such Trust in a specified aggregate minimum number in return for a 
deposit of a quantity of the underlying commodity and/or cash; and (c) 
that, when aggregated in the same specified minimum number, may be 
redeemed at a holder's request by such Trust which will deliver to the 
redeeming holder the quantity of the underlying commodity and/or 
cash.''
    The Commission has previously approved listing and trading on the 
Exchange of Commodity-Based Trust Shares that permit issuance and 
redemption of shares for cash in whole or part.\23\ The Exchange 
believes the proposed change will provide a trust issuing Commodity-
Based Trust Shares and holding a specified commodity with the 
flexibility to issue or redeem shares partially or wholly for cash. 
Such alternative would allow a trust to structure the procedures for 
issuance and redemption of shares in manner that as determined by the 
issuer, may provide operational efficiencies and accommodate investors 
who may wish to deliver or receive cash rather than, or in addition to, 
the underlying commodity upon requesting the

[[Page 67403]]

issuance or redemption of shares. In addition, the proposed change will 
accommodate a trust's holding cash in addition to a specified commodity 
in order to achieve its investment objective. The Exchange, therefore, 
believes the proposed change will facilitate the listing and trading of 
additional types of exchange-traded derivative securities products that 
will enhance competition among market participants, to the benefit of 
investors and the marketplace.
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    \23\ See, e.g., Securities Exchange Act Release Nos. 61496 
(February 4, 2010), 75 FR 6758 (February 10, 2010) (SR-NYSEArca-
2009-113) (approving listing on the Exchange of Sprott Physical Gold 
Trust); 63043 (October 5, 2010), 75 FR 62615 (October 12, 2010) (SR-
NYSEArca-2010-84) (approving listing on the Exchange of the Sprott 
Physical Silver Trust); 68430 (December 13, 2012), 77 FR 75239 
(December 19, 2012) (SR-NYSEArca-2012-111) (Order Approving a 
Proposed Rule Change, as Modified by Amendment No. 1, to List and 
Trade Units of the Sprott Physical Platinum and Palladium Trust 
Pursuant to NYSE Arca Equities Rule 8.201; 82448 (January 5, 2018), 
83 FR 1428 (January 11, 2018) (SR-NYSEArca-2017-131) (Notice of 
Filing of Amendment No. 2 and Order Approving on an Accelerated 
Basis a Proposed Rule Change, as Modified by Amendment No. 2, to 
List and Trade Shares of the Sprott Physical Gold and Silver Trust 
under NYSE Arca Rule 8.201-E); 66930 (May 7, 2012), 77 FR 27817 (May 
11, 2012) (SR-NYSEArca-2012-18) (order approving listing and trading 
shares of the APMEX Physical-1 oz. Gold Redeemable Trust); 50603 
(October 28, 2004), 69 FR 64614 (November 5, 2004) (SR-NYSE-2004-22) 
(Order Granting Approval of Proposed Rule Change and Notice of 
Filing and Order Granting Accelerated Approval to Amendments No. 1 
and No. 2 Thereto to the Proposed Rule Change by the New York Stock 
Exchange, Inc. Regarding Listing and Trading of streetTRACKS[supreg] 
Gold Shares).
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    The Exchange further proposes to amend Rule 8.201-E(c)(2) to state 
that the term ``commodity'' is defined in Section 1a(9) of the 
Commodity Exchange Act (rather than Section 1(a)(4) as currently 
referenced in Rule 8.201-E(c)(2)) to reflect an amendment to the 
Commodity Exchange Act included in the Dodd-Frank Wall Street Reform 
and Consumer Protection Act of 2010.\24\
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    \24\ Public Law 111-203, 124 Stat. 1900 (2010).
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Operation of the Trust \25\
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    \25\ The description of the operation of the Trust, the Shares 
and the gold market contained herein is based, in part, on the 
Registration Statement. See note 8, supra.
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    According to the Registration Statement, the Trust will have no 
assets other than (a) physical gold bullion (``Physical Gold'') in 
proportions that seek to closely replicate the Wilshire Gold Index (the 
``Index'') and (b) cash, as described below. The Trust will also hold 
U.S. dollars for short periods of time in connection with (i) the 
purchase and sale of Physical Gold, (ii) creations and redemptions of 
Shares (as described below), and (iii) to pay fees and expenses of the 
Trust.
    The investment objective of the Trust is for the Shares to closely 
reflect the Index, which will be published by Solactive AG (the ``Index 
Calculation Agent''), less the Trust's liabilities and expenses.\26\ 
The amount of Physical Gold and cash held by the Trust will be 
determined by the methodology of the Index. On the last business day of 
each month (the ``Rebalance Date''), the Index will dynamically 
calculate its weighting of Physical Gold based on the realized 
volatility of gold and the realized volatility of the S&P 500 Index 
according to a mathematically derived passive rule-based methodology as 
discussed further below. The Trust, to closely replicate the Index, 
will rebalance its holdings in Physical Gold in tandem with the Index 
on a monthly basis for consistency with the Index weights and will hold 
the remainder of its assets in cash.\27\
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    \26\ The Index Calculation Agent is not affiliated with the 
Sponsor and has represented that it has established and maintains 
processes and procedures to prevent the use and dissemination of 
material nonpublic information regarding the Index. The Index 
Calculation Agent is not registered as an investment adviser or 
broker-dealer and is not affiliated with any broker-dealers.
    \27\ With respect to the application of Rule 10A-3 (17 CFR 
240.10A-3) under the Act, the Trust relies on the exemption 
contained in Rule 10A-3(c)(7).
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The Wilshire Gold Index
    The Index, which is calculated and published by the Index 
Calculation Agent, will be publicly available from various information 
service providers, such as Reuters and Bloomberg, on or prior to the 
date that the Registration Statement is declared effective. The Index 
value using the London Bullion Market Association (``LBMA'') Gold Price 
PM (defined below) \28\ will be calculated and published daily each 
business day at approximately 5:00 p.m. (Eastern time (``E.T.'')) on 
the Trust's website. The current Index value will be disseminated by 
one or more major market vendors at least every 15 seconds during the 
Exchange's Core Trading Session (normally 9:30 a.m. to 4:00 p.m. E.T.).
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    \28\ See note 37, infra.
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    The Exchange, the Index Calculation Agent or a third party 
financial data provider will calculate an intraday indicative value for 
the Shares (``IIV'') every fifteen seconds during the Exchange's Core 
Trading Session, which will be available from one or more major market 
data vendors.\29\
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    \29\ For purposes of this filing, the IIV is the value 
referenced in NYSE Arca Rule 8.201-E(e)(2)(v).
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    According to the Registration Statement, the Index has a notional 
component representing Physical Gold (the ``Physical Gold Component'') 
and a cash weighting to the extent that less than 100% of the Index is 
comprised of the Physical Gold Component (the ``Cash Weighting''). In 
seeking to track the Cash Weighting portion of the Index, the Trust 
will hold cash.
    On each Rebalance Date, the Index rebalances its weighting of the 
Physical Gold Component and the Cash Weighting according to a 
mathematically derived, non-discretionary, objective and passive rules-
based methodology. This methodology employs a non-discretionary rules-
based system that takes into account realized volatility of the LBMA 
Gold Price PM \30\ and the realized volatility of the S&P 500 Index, 
utilizing a look-back period, among other parameters, each calculated 
by the Index Calculation Agent. At the end of each month, the Index 
Calculation Agent, based solely on the application of the non-
discretionary rules included in the Index methodology, calculates the 
Index's new weighting for the Physical Gold Component based on the 
immediately preceding period's LBMA Gold Price PM (defined below) \31\ 
and realized volatility of the S&P 500 Index.\32\
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    \30\ See note 37, infra.
    \31\ According to the Registration Statement, if the Index 
Calculation Agent, in consultation with the Trust, determines that 
the LBMA PM Fix has been discontinued, the Index Calculation Agent 
will substitute for the LBMA Gold Price PM an industry-accepted 
substitute source for gold prices. If such successor gold price 
source is substituted in accordance with the foregoing, the Index 
Calculation Agent, in consultation with the Trust, will make any 
necessary adjustments to the successor gold prices in a manner 
consistent with industry practices.
    \32\ According to the Registration Statement, the Sponsor may 
use a different reference rate for equity prices (i.e., other than 
the S&P 500 Index) if the sponsor of the S&P 500 Index discontinues 
publication of the S&P 500 Index and such sponsor or another entity 
publishes a successor or substitute index that the Trust determines, 
in consultation with the Index Calculation Agent, to be a broad-
based equity index comparable to the S&P 500 Index (such index being 
referred to herein as a ``Successor Index''). Such Successor Index 
must be a broad-based equity index similar to the S&P 500 Index in 
price and volatility history, with similar characteristics and 
tracking principally the performance of the U.S. equities market.
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    According to the Registration Statement, as a result of the 
application of the non-discretionary rules-based methodology discussed 
above, the new weighting for the Physical Gold Component will generally 
be lower than the prior month if realized volatility of Physical Gold 
is higher than during the previous calculation, and vice versa. In 
addition, during increased realized volatility within the S&P 500 
Index, the Index may calculate a higher weighting for the overall 
exposure to gold. The weighting of the Physical Gold Component and the 
Cash Weighting will never be negative. The weighting for the Physical 
Gold Component will not exceed 100%.\33\ The combined weights of the 
Physical Gold Component and the Cash Weighting will always sum to 100%, 
and if the weighting of the Physical Gold Component is 100%, then the 
weighting of the Cash Weighting will be zero.
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    \33\ Based on the non-discretionary passive rules-based 
methodology, the calculated weighting for the Physical Gold 
Component on each Rebalance Date will not be less than 50%.
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    On each Rebalance Date, the changes to the weighting of the 
Physical Gold Component and the Cash Weighting, as calculated by the 
Index Calculation Agent based solely on the application of the rules 
included in the Index methodology, will be effective for the Index, and 
the Trust will rebalance its assets in order to closely replicate the 
new weightings of the Index. The Index's weighting for the Physical 
Gold

[[Page 67404]]

Component is always positive and therefore represents a long position 
in Physical Gold to the extent of the percentage of Physical Gold 
represented in the Index.
    The following table illustrates the hypothetical weighting for the 
Physical Gold Component at a given Rebalance Date under three different 
scenarios reflecting different assumptions for realized volatility of 
the LBMA Gold Price PM and S&P 500 Index as indicated below.

----------------------------------------------------------------------------------------------------------------
                                                                     Realized        Realized        Weight of
                                                                   volatility of   volatility of   physical gold
                                                                     LBMA gold     S&P 500 index   component for
                                                                   price PM (%)         (%)       next month (%)
----------------------------------------------------------------------------------------------------------------
Scenario 1......................................................            15.0            12.0           100.0
Scenario 2......................................................            20.0            12.0            75.0
Scenario 3......................................................            20.0            15.0            90.0
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Index Components
Physical Gold Component
    The Physical Gold Component of the Index is a notional component 
representing Physical Gold. The price of Physical Gold used to 
determine the weighting of the Physical Gold Component of the Index 
according to the rules-based methodology, as well as the value of 
Physical Gold held by the Trust, will be based on the LBMA Gold Price 
PM. If such day's LBMA Gold Price PM is not available, the LBMA Gold 
Price AM (defined below) is used.\34\ If no LBMA Gold Price (defined 
below) is available for the day, the Administrator will value the 
Trust's gold based on the most recently announced LBMA Gold Price PM or 
LBMA Gold Price AM.
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    \34\ See note 37, infra.
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Cash Weighting
    The Cash Weighting of the Index is intended to represent cash. The 
Trust will hold cash in proportions represented by the Cash Weighting.
The Trust's Net Asset Value (``NAV'') and the NAV per Share
    According to the Registration Statement, the Trust's NAV will be 
equal to the sum of the value of the ``Physical Gold Holdings'' \35\ 
and the ``Cash Holdings,'' \36\ less the expenses and liabilities of 
the Trust. The NAV per Share, which will be calculated by the 
Administrator on each business day, is equal to the Trust's NAV divided 
by the number of outstanding Shares.
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    \35\ ``Physical Gold Holdings'' is defined in the Registration 
Statement as the Trust's holdings of Physical Gold.
    \36\ ``Cash Holdings'' is defined in the Registration Statement 
as the value of the U.S. dollars held by the Trust.
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    In accordance with the Trust's valuation policy and procedures, the 
Administrator will generally determine the price of the Trust's 
Physical Gold by reference to the LBMA Gold Price PM.\37\
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    \37\ For purposes of calculating the NAV of the Trust, to 
ascertain the price of Physical Gold held by the Trust, the prices 
(the ``LBMA Gold Price'') obtained from auctions conducted by ICE 
Benchmark Administration (``IBA''), a benchmark administrator 
appointed by the LBMA, will be used, which are generally conducted 
in the morning (London time) (the ``LBMA Gold Price AM'') and in the 
afternoon (London time) (the ``LBMA Gold Price PM'').
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    The Administrator will determine the value of any cash, which will 
be held in U.S. dollars, as of 4:00 p.m., E.T. or as soon thereafter as 
practicable, on each business day.
    On each business day at 4:00 p.m., E.T., or as soon thereafter as 
practicable (the ``Evaluation Time''), the Administrator will evaluate 
the Physical Gold held by the Trust and calculate and publish the 
Trust's Physical Gold Holdings. To calculate the Trust's Physical Gold 
Holdings, the Administrator will:
    1. Determine the LBMA Gold Price; and
    2. Multiply the LBMA Gold Price by the amount of Physical Gold 
owned by the Trust as of the Evaluation Time on such day.
Creation and Redemption of Shares
    On any business day (other than business days on which banking 
institutions in the United Kingdom are authorized or permitted by law 
to close for all or part of the day or a day on which the London gold 
market is closed for all or part of the day), an ``Authorized 
Participant'' may place an order with the Transfer Agent to create one 
or more ``Creation Units.'' Creation orders must be placed by 9:15 
a.m., E.T.\38\ Creation Units are issued on the creation order 
settlement date by 4:00 p.m., E.T. on the business day immediately 
following the creation order date at the applicable NAV per Share on 
the creation order date, if the required payment has been timely 
received. Authorized Participants are the only persons that may place 
orders to create and redeem Creation Units. Authorized Participants 
must be (1) registered broker-dealers or other securities market 
participants, such as banks and other financial institutions, which are 
not required to register as broker-dealers to engage in securities 
transactions, and (2) participants in the Depository Trust Company 
(``DTC'').
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    \38\ The Sponsor represents that, for the Trust to fulfill cash 
creation and redemption orders on a given business day to reflect 
the corresponding NAV on that business day, the Trust must execute 
buy or sell orders at price determination times of the assets used 
in the NAV calculation. Because the LBMA Gold Price PM fix occurs at 
3:00 p.m. London time, which is normally 10:00 a.m., E.T., the cut-
off time for creation and redemption orders is 9:15 a.m., E.T. to 
enable the Trust to buy and sell Physical Gold on that day's LBMA 
Gold Price PM. An Authorized Participant's arbitrage opportunities 
with respect to the price it must pay for a Creation Unit should not 
be materially impacted by the requirement that creation and 
redemption orders must be received by 9:15 a.m. E.T. on a business 
day. After the order cut-off time of 9:15 a.m., E.T., Authorized 
Participants can place creation or redemption orders that will occur 
at the next business day's NAV. Authorized Participants may also be 
able to arbitrage by trading gold futures on COMEX (a division of 
CME Group Inc.), which can be traded from 6:00 p.m. to 5:00 p.m. 
(E.T.), Sunday through Friday.
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    The total payment required to create each Creation Unit is an 
amount of cash equal to the NAV of 10,000 Shares of the Trust on the 
creation order date. The size of a Creation Unit is subject to change.
Redemption Procedures
    The procedures by which an Authorized Participant can redeem one or 
more Creation Units mirror the procedures for the creation of Creation 
Units. On any business day (other than business days on which the LBMA 
Gold Price PM or other applicable benchmark price is not announced), an 
Authorized Participant may place an order with the Transfer Agent to 
redeem one or more Creation Units. Redemption orders must be placed by 
9:15 a.m., E.T.
    By placing a redemption order, an Authorized Participant agrees to 
deliver the Creation Units to be redeemed through DTC's book-entry 
system to the Trust not later than the redemption order settlement date 
by 4:00 p.m., E.T.

[[Page 67405]]

on the business day immediately following the redemption order date.
    The redemption proceeds from the Trust consist of cash. The amount 
of cash included in a redemption is equal to the NAV of the number of 
Creation Unit(s) of the Trust requested in the Authorized Participant's 
redemption order on the redemption order date. The Transfer Agent will 
distribute the cash redemption amount by 4:00 p.m., E.T. on the 
redemption order settlement date through DTC to the account of the 
Authorized Participant as recorded on DTC's book entry system.
Availability of Information Regarding Gold
    Investors may obtain gold pricing information on a 24-hour basis 
based on the spot price for an ounce of gold from various financial 
information service providers, such as Reuters and Bloomberg.
    Reuters and Bloomberg, for example, provide at no charge on their 
websites delayed information regarding the spot price of gold and last 
sale prices of gold futures, as well as information about news and 
developments in the gold market. Reuters and Bloomberg also offer a 
professional service to subscribers for a fee that provides information 
on gold prices directly from market participants. Complete real-time 
data for gold futures and options prices traded on the COMEX are 
available by subscription from Reuters and Bloomberg. There are a 
variety of other public websites providing information on gold, ranging 
from those specializing in precious metals to sites maintained by major 
newspapers. In addition, the LBMA Gold Price is publicly available at 
no charge at www.lbma.org.uk.
Availability of Information
    The IIV for the Shares will be disseminated by one or more major 
market data vendors on at least a 15-second delayed basis, as required 
by NYSE Arca Rule 8.201-E(e)(2)(v). The IIV will be calculated based on 
the amount of Physical Gold and cash held in the Trust's portfolio, 
which are derived from updated bids and offers indicative of the spot 
price of gold and market prices of cash.\39\
---------------------------------------------------------------------------

    \39\ The IIV on a per Share basis disseminated during the Core 
Trading Session should not be viewed as a real-time update of the 
NAV, which is calculated once a day.
---------------------------------------------------------------------------

    The website for the Trust (www.wshares.com) will contain the 
following information, on a per Share basis, for the Trust: (a) The 
mid-point of the bid-ask price \40\ at the close of trading (``Bid/Ask 
Price''), and a calculation of the premium or discount of such price 
against such NAV; and (b) data in chart format displaying the frequency 
distribution of discounts and premiums of the Bid/Ask Price against the 
NAV, within appropriate ranges, for each of the four previous calendar 
quarters. The website for the Trust will also provide the Trust's 
prospectus as well as the two most recent reports to shareholders. 
Finally, the Trust's website will provide the prior day's last sale 
price of the Shares as traded in the U.S. market. In addition, 
information regarding market price and trading volume of the Shares 
will be continually available on a real-time basis throughout the day 
on brokers' computer screens and other electronic services. Information 
regarding the previous day's closing price and trading volume 
information for the Shares will be published daily in the financial 
section of newspapers.
---------------------------------------------------------------------------

    \40\ The bid-ask price of the Shares will be determined using 
the highest bid and lowest offer on the Consolidated Tape as of the 
time of calculation of the closing day NAV.
---------------------------------------------------------------------------

    Currently, the Consolidated Tape Plan does not provide for 
dissemination of the spot price of a commodity such as gold over the 
Consolidated Tape. However, the last sale price for the Shares will be 
disseminated over the Consolidated Tape. In addition, there is a 
considerable amount of information about gold and gold markets 
available on public websites and through professional and subscription 
services.
    Investors may obtain on a 24-hour basis gold pricing information 
based on the spot price for an ounce of gold from various financial 
information service providers. Current spot prices also are generally 
available with bid/ask spreads from gold bullion dealers. In addition, 
the Trust's website will provide pricing information for gold spot 
prices and the Shares. Market prices for the Shares will be available 
from a variety of sources including brokerage firms, information 
websites and other information service providers. The NAV of the Trust 
will be published on each business day and will be posted on the 
Trust's website. The current Index value will be disseminated by one or 
more major market vendors at least every 15 seconds during the 
Exchange's Core Trading Session. The IIV relating to the Shares will be 
widely disseminated by one or more major market data vendors at least 
every 15 seconds during the Exchange's Core Trading Session (normally 
9:30 a.m. to 4:00 p.m., E.T.). In addition, the LBMA Gold Price is 
publicly available at no charge at www.lbma.org.uk. The Trust's website 
will also provide the Trust's prospectus, as well as the most recent 
reports to shareholders.
Criteria for Initial and Continued Listing
    The Trust will be subject to the criteria in NYSE Arca Rule 8.201-
E(e) for initial and continued listing of the Shares.
    A minimum of 100,000 Shares will be required to be outstanding at 
the start of trading. The Exchange believes that the anticipated 
minimum number of Shares outstanding at the start of trading is 
sufficient to provide adequate market liquidity.
Trading Rules
    The Exchange deems the Shares to be equity securities, thus 
rendering trading in the Trust subject to the Exchange's existing rules 
governing the trading of equity securities. Trading in the Shares on 
the Exchange will occur in accordance with NYSE Arca Rule 7.34-E(a). 
The Exchange has appropriate rules to facilitate transactions in the 
Shares during all trading sessions. As provided in NYSE Arca Rule 7.6-
E, the minimum price variation (``MPV'') for quoting and entry of 
orders in equity securities traded on the NYSE Arca Marketplace is 
$0.01, with the exception of securities that are priced less than $1.00 
for which the MPV for order entry is $0.0001.
    Further, NYSE Arca Rule 8.201-E(g) sets forth certain restrictions 
on Equity Trading Permit (``ETP'') Holders acting as registered Market 
Makers in the Shares to facilitate surveillance. Under NYSE Arca Rule 
8.201-E(g), an ETP Holder acting as a registered Market Maker in the 
Shares is required to provide the Exchange with information relating to 
its trading in the underlying gold, related futures or options on 
futures, or any other related derivatives. Commentary .04 of NYSE Arca 
Rule 11.3-E requires an ETP Holder acting as a registered Market Maker, 
and its affiliates, in the Shares to establish, maintain and enforce 
written policies and procedures reasonably designed to prevent the 
misuse of any material nonpublic information with respect to such 
products, any components of the related products, any physical asset or 
commodity underlying the product, applicable currencies, underlying 
indexes, related futures or options on futures, and any related 
derivative instruments (including the Shares).
    As a general matter, the Exchange has regulatory jurisdiction over 
its ETP Holders and their associated persons, which include any person 
or entity controlling an ETP Holder. A subsidiary or affiliate of an 
ETP Holder that does business only in commodities or futures

[[Page 67406]]

contracts would not be subject to Exchange jurisdiction, but the 
Exchange could obtain information regarding the activities of such 
subsidiary or affiliate through surveillance sharing agreements with 
regulatory organizations of which such subsidiary or affiliate is a 
member.
Trading Halts
    With respect to trading halts, the Exchange may consider all 
relevant factors in exercising its discretion to halt or suspend 
trading in the Shares. Trading on the Exchange in the Shares may be 
halted because of market conditions or for reasons that, in the view of 
the Exchange, make trading in the Shares inadvisable. These may 
include: (1) The extent to which conditions in the underlying gold 
market have caused disruptions and/or lack of trading, or (2) whether 
other unusual conditions or circumstances detrimental to the 
maintenance of a fair and orderly market are present. In addition, 
trading in Shares will be subject to trading halts caused by 
extraordinary market volatility pursuant to the Exchange's ``circuit 
breaker'' rule.\41\ The Exchange will halt trading in the Shares if the 
NAV of the Trust is not calculated or disseminated daily. If the IIV or 
the official Index value is not being disseminated as required, the 
Exchange may halt trading during the day in which the interruption to 
the dissemination of the IIV or the official Index value occurs. If the 
interruption to the dissemination of the IIV persists past the trading 
day in which it occurs, the Exchange will halt trading no later than 
the beginning of the trading day following the interruption.
---------------------------------------------------------------------------

    \41\ See NYSE Arca Rule 7.12-E.
---------------------------------------------------------------------------

Surveillance
    The Exchange represents that trading in the Shares will be subject 
to the existing trading surveillances administered by the Exchange, as 
well as cross-market surveillances administered by the Financial 
Industry Regulatory Authority (``FINRA'') on behalf of the Exchange, 
which are designed to detect violations of Exchange rules and 
applicable federal securities laws.\42\ The Exchange represents that 
these procedures are adequate to properly monitor Exchange trading of 
the Shares in all trading sessions and to deter and detect violations 
of Exchange rules and federal securities laws applicable to trading on 
the Exchange.
---------------------------------------------------------------------------

    \42\ FINRA conducts cross-market surveillances on behalf of the 
Exchange pursuant to a regulatory services agreement. The Exchange 
is responsible for FINRA's performance under this regulatory 
services agreement.
---------------------------------------------------------------------------

    The surveillances referred to above generally focus on detecting 
securities trading outside their normal patterns, which could be 
indicative of manipulative or other violative activity. When such 
situations are detected, surveillance analysis follows and 
investigations are opened, where appropriate, to review the behavior of 
all relevant parties for all relevant trading violations.
    The Exchange or FINRA, on behalf of the Exchange, or both, will 
communicate as needed regarding trading in the Shares with other 
markets and other entities that are members of the Intermarket 
Surveillance Group (``ISG''), and the Exchange or FINRA, on behalf of 
the Exchange, or both, may obtain trading information regarding trading 
in the Shares from such markets and other entities. In addition, the 
Exchange may obtain information regarding trading in the Shares from 
markets and other entities that are members of ISG or with which the 
Exchange has in place a comprehensive surveillance sharing 
agreement.\43\
---------------------------------------------------------------------------

    \43\ For a list of the current members of ISG, see 
www.isgportal.org.
---------------------------------------------------------------------------

    Also, pursuant to NYSE Arca Rule 8.201-E(g), the Exchange is able 
to obtain information regarding trading in the Shares and the 
underlying gold, gold futures contracts, options on gold futures, or 
any other gold derivative, through ETP Holders acting as registered 
Market Makers, in connection with such ETP Holders' proprietary or 
customer trades through ETP Holders which they effect on any relevant 
market.
    In addition, the Exchange also has a general policy prohibiting the 
distribution of material, non-public information by its employees.
    All statements and representations made in this filing regarding 
(a) the description of the Index, portfolio or reference assets, (b) 
limitations on Index or portfolio holdings or reference assets, or (c) 
the applicability of Exchange listing rules specified in this rule 
filing will constitute continued listing requirements for listing the 
Shares of the Trust on the Exchange.
    The issuer has represented to the Exchange that it will advise the 
Exchange of any failure by the Trust to comply with the continued 
listing requirements, and, pursuant to its obligations under Section 
19(g)(1) of the Act, the Exchange will monitor for compliance with the 
continued listing requirements. If the Trust is not in compliance with 
the applicable listing requirements, the Exchange will commence 
delisting procedures under NYSE Arca Rule 5.5-E(m).
    The Trust will comply with all initial and continued listing 
requirements of NYSE Arca Rule 8.201-E as it is proposed to be amended.
Information Bulletin
    Prior to the commencement of trading, the Exchange will inform its 
ETP Holders in an Information Bulletin of the special characteristics 
and risks associated with trading the Shares. Specifically, the 
Information Bulletin will discuss the following: (1) The procedures for 
purchases and redemptions of Shares in Creation Units (including noting 
that Shares are not individually redeemable); (2) NYSE Arca Rule 9.2-
E(a), which imposes a duty of due diligence on its ETP Holders to learn 
the essential facts relating to every customer prior to trading the 
Shares; (3) how information regarding the Index value and IIV is 
disseminated; (4) the requirement that ETP Holders deliver a prospectus 
to investors purchasing newly issued Shares prior to or concurrently 
with the confirmation of a transaction; (5) the possibility that 
trading spreads and the resulting premium or discount on the Shares may 
widen as a result of reduced liquidity of gold trading during the Core 
and Late Trading Sessions after the close of the major world gold 
markets; and (6) trading information. The Exchange notes that investors 
purchasing Shares directly from the Trust will receive a prospectus. 
ETP Holders purchasing Shares from the Trust for resale to investors 
will deliver a prospectus to such investors.
    In addition, the Information Bulletin will reference that the Trust 
is subject to various fees and expenses as described in the 
Registration Statement. The Information Bulletin will also reference 
the fact that there is no regulated source of last sale information 
regarding physical gold and that the Commission has no jurisdiction 
over the trading of gold as a physical commodity.
    The Information Bulletin will also discuss any relief, if granted, 
by the Commission or the staff from any rules under the Act.
2. Statutory Basis
    The basis under the Act for this proposed rule change is the 
requirement under Section 6(b)(5) \44\ that an exchange have rules that 
are designed to prevent fraudulent and manipulative acts and practices, 
to promote just and equitable principles of trade, to remove

[[Page 67407]]

impediments to, and perfect the mechanism of a free and open market 
and, in general, to protect investors and the public interest.
---------------------------------------------------------------------------

    \44\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange believes that the proposed rule change is designed to 
prevent fraudulent and manipulative acts and practices in that the 
Shares will be listed and traded on the Exchange pursuant to the 
initial and continued listing criteria in NYSE Arca Rule 8.201-E. The 
Exchange has in place surveillance procedures that are adequate to 
properly monitor trading in the Shares in all trading sessions and to 
deter and detect violations of Exchange rules and applicable federal 
securities laws. The Exchange may obtain information via the ISG from 
other exchanges that are members of ISG or with which the Exchange has 
entered into a comprehensive surveillance sharing agreement.
    The Commission has previously approved listing and trading on the 
Exchange of Commodity-Based Trust Shares that permit issuance and 
redemption of shares for cash in whole or part.\45\ The Exchange 
believes the proposed amendment to Rule 8.201-E(c)(1) will provide a 
trust issuing Commodity-Based Trust Shares and holding a specified 
commodity with the flexibility to issue or redeem shares partially or 
wholly for cash. Such alternative would allow a trust to structure the 
procedures for issuance and redemption of shares in manner that as 
determined by the issuer, may provide operational efficiencies and 
accommodate investors who may wish to deliver or receive cash rather 
than, or in addition to, the underlying commodity upon requesting the 
issuance or redemption of shares. In addition, the proposed change will 
accommodate a trust's holding cash in addition to a specified commodity 
in order to achieve its investment objective. The Exchange, therefore, 
believes the proposed change will facilitate the listing and trading of 
additional types of exchange-traded derivative securities products that 
will enhance competition among market participants, to the benefit of 
investors and the marketplace.
---------------------------------------------------------------------------

    \45\ See note 23, supra.
---------------------------------------------------------------------------

    The Exchange's proposal to amend Rule 8.201-E(c)(2) to state that 
the term ``commodity'' is defined in Section 1a(9) of the Commodity 
Exchange Act (rather than Section 1(a)(4) as currently referenced in 
Rule 8.201-E(c)(2)) reflects an amendment to the Commodity Exchange Act 
included in the Dodd-Frank Wall Street Reform and Consumer Protection 
Act of 2010.
    The proposed rule change is designed to promote just and equitable 
principles of trade and to protect investors and the public interest in 
that there is a considerable amount of gold price and gold market 
information available on public websites and through professional and 
subscription services. Investors may obtain on a 24-hour basis gold 
pricing information based on the spot price for an ounce of gold from 
various financial information service providers. Current spot prices 
also are generally available with bid/ask spreads from gold bullion 
dealers. In addition, the Trust's website will provide pricing 
information for gold spot prices and the Shares. Market prices for the 
Shares will be available from a variety of sources including brokerage 
firms, information websites and other information service providers. 
The NAV of the Trust will be published on each business day and will be 
posted on the Trust's website. The IIV relating to the Shares and the 
current Index value will be widely disseminated by one or more major 
market data vendors at least every 15 seconds during the Core Trading 
Session. In addition, the LBMA Gold Price is publicly available at no 
charge at www.lbma.org.uk. The Trust's website will also provide the 
Trust's prospectus, as well as the two most recent reports to 
shareholders.
    The proposed rule change is designed to perfect the mechanism of a 
free and open market and, in general, to protect investors and the 
public interest in that it will facilitate the listing and trading of 
an additional type of exchange-traded product related, in part, to 
physical gold that will enhance competition among market participants, 
to the benefit of investors and the marketplace. As noted above, the 
Exchange has in place surveillance procedures relating to trading in 
the Shares and may obtain information via ISG from other exchanges that 
are members of ISG or with which the Exchange has entered into a 
comprehensive surveillance sharing agreement. In addition, as noted 
above, investors will have ready access to information regarding gold 
pricing.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. The Exchange believes the 
proposed rule change, including the proposed amendment to Rule 8.201-
E(c)(1), will enhance competition by accommodating Exchange trading of 
additional exchange-traded products relating, in part, to physical 
gold.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were solicited or received with respect to the 
proposed rule change.

III. Discussion and Commission's Findings

    After careful review, the Commission finds that the proposed rule 
change, as modified by Amendment No. 3, is consistent with the Act and 
the rules and regulations thereunder applicable to a national 
securities exchange.\46\ In particular, the Commission finds that the 
proposed rule change, as modified by Amendment No. 3, is consistent 
with Section 6(b)(5) of the Act,\47\ which requires, among other 
things, that the Exchange's rules be designed to prevent fraudulent and 
manipulative acts and practices, to promote just and equitable 
principles of trade, to remove impediments to and perfect the mechanism 
of a free and open market and a national market system, and, in 
general, to protect investors and the public interest.
---------------------------------------------------------------------------

    \46\ In approving this proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. See 15 U.S.C. 78c(f).
    \47\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange proposes to amend NYSE Arca Rule 8.201-E to (a) permit 
a trust to hold both a specified commodity and cash and (b) permit a 
trust that holds a specified commodity deposited with the trust to 
issue and redeem shares for such commodity and/or cash. The Commission 
believes that the proposed changes to the listing standard are 
consistent with the Act because holding cash will neither dilute the 
listing criteria nor render the commodity underlying the Commodity-
Based Trust Shares more susceptible to manipulation.\48\ In addition, 
the Commission notes that it has approved the listing and trading of 
Commodity-Based Trust Shares that permit issuance and redemption of 
shares for cash, in whole or part.\49\ Therefore, the

[[Page 67408]]

Commission believes that these proposed changes to NYSE Arca Rule 
8.201-E may enhance competition and allow for increased flexibility 
without rendering a trust more susceptible to manipulation and, thus, 
are consistent with Section 6(b)(5) of the Act.
---------------------------------------------------------------------------

    \48\ Pursuant to Commentary .04 of NYSE Arca Rule 8.201-E, the 
Exchange must file separate proposals under Section 19(b) of the 
Exchange Act before trading, either by listing or pursuant to 
unlisted trading privileges, Commodity-Based Trust Shares.
    \49\ See, e.g., Securities Exchange Act Release Nos. 61496 
(February 4, 2010), 75 FR 6758 (February 10, 2010) (SR-NYSEArca-
2009-113) (approving listing on the Exchange of shares of the Sprott 
Physical Gold Trust); 50603 (October 28, 2004), 69 FR 64614 
(November 5, 2004) (SR-NYSE-2004-22) (approving the listing and 
trading of shares of the streetTRACKS[supreg] Gold Shares).
---------------------------------------------------------------------------

    The Exchange also proposes to amend NYSE Arca Rule 8.201-E to 
correct the reference to the term ``commodity'' as it is defined in 
Section 1a(9) of the Commodity Exchange Act. The Commission believes 
that the proposed clerical correction is consistent with the Act 
because it updates an obsolete reference.
    The Commission believes that the aspect of the proposed rule change 
to list and trade the Shares pursuant to NYSE Arca Rule 8.201-E, as 
proposed to be amended, is reasonably designed to promote fair 
disclosure of information that may be necessary to price the Shares 
appropriately. The NAV of the Trust will be published on each business 
day and will be posted on the Trust's website. The IIV relating to the 
Shares and the current Index value will be widely disseminated by one 
or more major market data vendors at least every 15 seconds during the 
Core Trading Session. The IIV will be calculated based on the amount of 
Physical Gold and cash held in the Trust's portfolio, which are derived 
from updated bids and offers indicative of the spot price of gold and 
market prices of cash. The Index, which is calculated and published by 
the Index Calculation Agent, will be publicly available from various 
information service providers, such as Reuters and Bloomberg, on or 
prior to the date that the Registration Statement is declared 
effective. The Index value, using the LBMA Gold Price PM, will be 
calculated and published daily each business day at approximately 5:00 
p.m. E.T. on the Trust's website. The current Index value will be 
disseminated by one or more major market vendors at least every 15 
seconds during the Exchange's Core Trading Session. In addition, the 
LBMA Gold Price is publicly available at no charge at www.lbma.org.uk.
    Additionally, the website for the Trust will contain the following 
information, on a per Share basis, for the Trust: (a) The mid-point of 
the Bid/Ask Price and a calculation of the premium or discount of such 
price against such NAV and (b) data in chart format displaying the 
frequency distribution of discounts and premiums of the Bid/Ask Price 
against the NAV, within appropriate ranges, for each of the four 
previous calendar quarters. The website for the Trust will also provide 
the Trust's prospectus as well as the two most recent reports to 
shareholders.
    Information regarding market price and trading volume of the Shares 
will be continually available on a real-time basis throughout the day 
on brokers' computer screens and other electronic services. The Trust's 
website will provide the prior day's last sale price of the Shares as 
traded in the U.S. market. Information regarding the previous day's 
closing price and trading volume information for the Shares will be 
published daily in the financial section of newspapers. While the 
Consolidated Tape Plan does not provide for dissemination of the spot 
price of a commodity such as gold over the Consolidated Tape, the last 
sale price for the Shares will be disseminated over the Consolidated 
Tape. In addition, the Exchange represents that there is a considerable 
amount of information about gold and gold markets available on public 
websites and through professional and subscription services. According 
to the Exchange, investors may obtain gold pricing information on a 24-
hour basis based on the spot price for an ounce of gold from various 
financial information service providers.\50\
---------------------------------------------------------------------------

    \50\ The Exchange states that Reuters and Bloomberg, for 
example, provide at no charge on their websites delayed information 
regarding the spot price of gold and last sale prices of gold 
futures, as well as information about news and developments in the 
gold market. Reuters and Bloomberg also offer a professional service 
to subscribers for a fee that provides information on gold prices 
directly from market participants. Complete real-time data for gold 
futures and options prices traded on the COMEX are available by 
subscription from Reuters and Bloomberg. There are a variety of 
other public websites providing information on gold, ranging from 
those specializing in precious metals to sites maintained by major 
newspapers.
---------------------------------------------------------------------------

    The Commission also believes that the proposal is reasonably 
designed to prevent trading when a reasonable degree of transparency 
cannot be assured. With respect to trading halts, the Exchange states 
that it may consider all relevant factors in exercising its discretion 
to halt or suspend trading in the Shares. Trading on the Exchange in 
the Shares may be halted because of market conditions or for reasons 
that, in the view of the Exchange, make trading in the Shares 
inadvisable. These may include: (1) The extent to which conditions in 
the underlying gold market have caused disruptions or lack of trading, 
or (2) whether other unusual conditions or circumstances detrimental to 
the maintenance of a fair and orderly market are present. In addition, 
trading in Shares will be subject to trading halts caused by 
extraordinary market volatility pursuant to the Exchange's ``circuit 
breaker'' rule. The Exchange represents that it will halt trading in 
the Shares if the NAV of the Trust is not calculated or disseminated 
daily. If the IIV or the official Index value is not being disseminated 
as required, the Exchange may halt trading during the day in which the 
interruption to the dissemination of the IIV or the official Index 
value occurs. If the interruption to the dissemination of the IIV 
persists past the trading day in which it occurs, the Exchange will 
halt trading no later than the beginning of the trading day following 
the interruption.
    Additionally, the Exchange states that NYSE Arca Rule 8.201-E(g) 
sets forth certain restrictions on ETP Holders acting as registered 
Market Makers in the Shares to facilitate surveillance. Under NYSE Arca 
Rule 8.201-E(g), an ETP Holder acting as a registered Market Maker in 
the Shares is required to provide the Exchange with information 
relating to its trading in the underlying gold, related futures or 
options on futures, or any other related derivatives. Commentary .04 of 
NYSE Arca Rule 11.3-E requires an ETP Holder acting as a registered 
Market Maker, and its affiliates, in the Shares to establish, maintain 
and enforce written policies and procedures reasonably designed to 
prevent the misuse of any material nonpublic information with respect 
to such products, any components of the related products, any physical 
asset or commodity underlying the product, applicable currencies, 
underlying indexes, related futures or options on futures, and any 
related derivative instruments (including the Shares).\51\
---------------------------------------------------------------------------

    \51\ The Exchange confirms that it has regulatory jurisdiction 
over its ETP Holders and their associated persons, which include any 
person or entity controlling an ETP Holder. A subsidiary or 
affiliate of an ETP Holder that does business only in commodities or 
futures contracts would not be subject to Exchange jurisdiction, but 
the Exchange could obtain information regarding the activities of 
such subsidiary or affiliate through surveillance sharing agreements 
with regulatory organizations of which such subsidiary or affiliate 
is a member.
---------------------------------------------------------------------------

    In support of this proposal, the Exchange has made the following 
additional representations:
    (1) The Trust will be subject to the criteria in NYSE Arca Rule 
8.201-E(e) for initial and continued listing of the Shares.
    (2) The Exchange has appropriate rules to facilitate transactions 
in the Shares during all trading sessions. Trading in the Shares on the 
Exchange will occur in accordance with NYSE Arca Rule 7.34-E(a).
    (3) The Exchange deems the Shares to be equity securities, thus 
rendering

[[Page 67409]]

trading in the Trust subject to the Exchange's existing rules governing 
the trading of equity securities.
    (4) Trading in the Shares will be subject to the existing trading 
surveillances administered by the Exchange, as well as cross-market 
surveillances administered by FINRA on behalf of the Exchange, which 
are designed to detect violations of Exchange rules and applicable 
federal securities laws.\52\ The Exchange represents that these 
procedures are adequate to properly monitor Exchange trading of the 
Shares in all trading sessions and to deter and detect violations of 
Exchange rules and federal securities laws applicable to trading on the 
Exchange. These surveillances generally focus on detecting securities 
trading outside their normal patterns, which could be indicative of 
manipulative or other violative activity. When such situations are 
detected, surveillance analysis follows and investigations are opened, 
where appropriate, to review the behavior of all relevant parties for 
all relevant trading violations.
---------------------------------------------------------------------------

    \52\ FINRA conducts cross-market surveillances on behalf of the 
Exchange pursuant to a regulatory services agreement. The Exchange 
is responsible for FINRA's performance under this regulatory 
services agreement.
---------------------------------------------------------------------------

    (5) The Exchange or FINRA, on behalf of the Exchange, or both, will 
communicate as needed regarding trading in the Shares with other 
markets and other entities that are members of the ISG, and the 
Exchange or FINRA, on behalf of the Exchange, or both, may obtain 
trading information regarding trading in the Shares from such markets 
and other entities. In addition, the Exchange may obtain information 
regarding trading in the Shares from markets and other entities that 
are members of ISG or with which the Exchange has in place a 
comprehensive surveillance sharing agreement.
    (6) Pursuant to NYSE Arca Rule 8.201-E(g), the Exchange is able to 
obtain information regarding trading in the Shares and the underlying 
gold, gold futures contracts, options on gold futures, or any other 
gold derivative, through ETP Holders acting as registered Market 
Makers, in connection with such ETP Holders' proprietary or customer 
trades through ETP Holders which they effect on any relevant market.
    (7) The Exchange has a general policy prohibiting the distribution 
of material, non-public information by its employees.
    (8) Prior to the commencement of trading, the Exchange will inform 
its ETP Holders in an Information Bulletin of the special 
characteristics and risks associated with trading the Shares. 
Specifically, the Information Bulletin will discuss the following: (a) 
The procedures for purchases and redemptions of Shares in Creation 
Units (including noting that Shares are not individually redeemable); 
(b) NYSE Arca Rule 9.2-E(a), which imposes a duty of due diligence on 
its ETP Holders to learn the essential facts relating to every customer 
prior to trading the Shares; (c) how information regarding the Index 
value and IIV is disseminated; (d) the requirement that ETP Holders 
deliver a prospectus to investors purchasing newly issued Shares prior 
to or concurrently with the confirmation of a transaction; (e) the 
possibility that trading spreads and the resulting premium or discount 
on the Shares may widen as a result of reduced liquidity of gold 
trading during the Core and Late Trading Sessions after the close of 
the major world gold markets; and (f) trading information. The Exchange 
notes that investors purchasing Shares directly from the Trust will 
receive a prospectus. ETP Holders purchasing Shares from the Trust for 
resale to investors will deliver a prospectus to such investors. In 
addition, the Information Bulletin will reference that the Trust is 
subject to various fees and expenses as described in the Registration 
Statement, there is no regulated source of last sale information 
regarding physical gold, and the Commission has no jurisdiction over 
the trading of gold as a physical commodity. The Information Bulletin 
will also discuss any relief, if granted, by the Commission or the 
staff from any rules under the Act.
    (9) The Trust will comply with all initial and continued listing 
requirements of NYSE Arca Rule 8.201-E, as proposed to be amended.
    (10) A minimum of 100,000 Shares will be required to be outstanding 
at the start of trading.
    In addition, pursuant to Commentary .04 of NYSE Arca Rule 8.201-E, 
all statements and representations made in this filing regarding (a) 
the description of the Index, portfolio or reference assets, (b) 
limitations on Index or portfolio holdings or reference assets, or (c) 
the applicability of Exchange listing rules specified in this rule 
filing will constitute continued listing requirements for listing the 
Shares of the Trust on the Exchange. The issuer must notify the 
Exchange of any failure by the Trust to comply with the continued 
listing requirements. Pursuant to its obligations under Section 
19(g)(1) of the Act, the Exchange will monitor \53\ for compliance with 
the continued listing requirements. If the Trust is not in compliance 
with the applicable listing requirements, the Exchange will commence 
delisting procedures under NYSE Arca Rule 5.5-E(m).
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    \53\ The Commission notes that certain proposals for the listing 
and trading of exchange-traded products include a representation 
that the exchange will ``surveil'' for compliance with the continued 
listing requirements. See, e.g., Securities Exchange Act Release No. 
77499 (April 1, 2016), 81 FR 20428, 20432 (April 7, 2016) (SR-BATS-
2016-04). In the context of this representation, it is the 
Commission's view that ``monitor'' and ``surveil'' both mean ongoing 
oversight of compliance with the continued listing requirements. 
Therefore, the Commission does not view ``monitor'' as a more or 
less stringent obligation than ``surveil'' with respect to the 
continued listing requirements.
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    Accordingly, for the foregoing reasons, the Commission finds that 
the proposed rule change, as modified by Amendment No. 3, is consistent 
with Section 6(b)(5) of the Act \54\ and the rules and regulations 
thereunder applicable to a national securities exchange.
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    \54\ 15 U.S.C. 78f(b)(5).
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IV. Solicitation of Comments on the Proposed Rule Change, as Modified 
by Amendment No. 3

    Interested persons are invited to submit written views, data, and 
arguments concerning whether the proposed rule change, as modified by 
Amendment No. 3, 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-NYSEArca-2020-59 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-NYSEArca-2020-59. 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

[[Page 67410]]

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-2020-59 and should 
be submitted on or before November 12, 2020.

V. Accelerated Approval of the Proposed Rule Change, as Modified by 
Amendment No. 3

    The Commission finds good cause to approve the proposed rule 
change, as modified by Amendment No. 3, prior to the thirtieth day 
after the date of publication of notice of the filing of Amendment No. 
3 in the Federal Register. Amendment 3 to the proposed rule change 
reduced the scope of the proposed rule change by removing references to 
``cash equivalents'' as a permitted holding and as instruments used in 
the issuance and redemption of shares. Amendment No. 3 to the proposal 
also provided other clarifications and additional information related 
to the proposed rule change. The changes and additional clarifying 
information in Amendment No. 3 assist the Commission in evaluating the 
Exchange's proposal and in determining that it is consistent with the 
Act. The Commission believes that such changes and additional 
information do not raise unique or novel regulatory issues under the 
Act. Accordingly, the Commission finds good cause, pursuant to Section 
19(b)(2) of the Act,\55\ to approve the proposed rule change, as 
modified by Amendment No. 3, on an accelerated basis.
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    \55\ 15 U.S.C. 78s(b)(2).
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VI. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\56\ that the proposed rule change (SR-NYSEArca-2020-59), as 
modified by Amendment No. 3, be, and it hereby is, approved on an 
accelerated basis.
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    \56\ Id.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\57\
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    \57\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-23362 Filed 10-21-20; 8:45 am]
BILLING CODE 8011-01-P