Document ID: SEC-2023-1466-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: The Nasdaq Stock Market LLC
Posted Date: 2023-12-19T05:00Z

[Federal Register Volume 88, Number 242 (Tuesday, December 19, 2023)]
[Notices]
[Pages 87827-87829]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-27805]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-99163; File No. SR-NASDAQ-2023-055]

Self-Regulatory Organizations; The Nasdaq Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend the Definition of Commodity-Based Trust Shares in Nasdaq Rule 
5711(d)(iv)(A) and To Correct a Typographical Error in Nasdaq Rule 
5711(d)(iv)(B)

December 13, 2023.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on December 11, 2023, The Nasdaq Stock Market LLC (``Nasdaq'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II below, which Items have been prepared by the Exchange. The 
Commission is publishing this notice to solicit

[[Page 87828]]

comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend Nasdaq Rule 5711(d)(iv)(A) to mirror 
the definition of Commodity-Based Trust Shares in Section (c)(1) of 
Arca's Rule 8.201-E. Commodity-Based Trust Shares, as well as to 
correct a typographical error in Rule Nasdaq Rule 5711(d)(iv)(B).
    The text of the proposed rule change is available on the Exchange's 
website at https://listingcenter.nasdaq.com/rulebook/nasdaq/rules, at 
the principal office of the Exchange, and at the Commission's Public 
Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of, and basis for, the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
sections A, B, and C below, of the most significant aspects of such 
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The purpose of the proposed rule change is to amend Nasdaq Rule 
5711(d)(iv)(A) to mirror the definition of Commodity-Based Trust Shares 
in Section (c)(1) of Arca's Rule 8.201-E. Commodity-Based Trust 
Shares.\3\
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    \3\ See Arca Rule 8.201-E(c)(1).
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    The Exchange proposes to conform its rule language for the 
definition of Commodity-Based Trust Shares to that of Arca's so that 
there exists no discrepancy between the definitions. Specifically, 
Nasdaq currently defines ``Commodity-Based Trust Shares'' as ``a 
security (1) that is issued by a trust (``Trust'') that holds a 
specified commodity deposited with the Trust; (2) 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 (3) 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.''
    The term ``Commodity-Based Trust Shares'' will now mirror Arca's 
and be defined as ``a security (1) that is issued by a trust 
(``Trust'') that holds (a) a specified commodity deposited with the 
Trust, or (b) a specified commodity and, in addition to such specified 
commodity, cash; (2) 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.
    Additionally, the Exchange proposes to correct a typographical 
error in Rule Nasdaq Rule 5711(d)(iv)(B) to change the Commodity 
Exchange Act cite from 1(a)(4) to 1a(9).
2. Statutory Basis
    The Exchange believes that its proposal is consistent with section 
6(b) of the Act,\4\ in general, and furthers the objectives of section 
6(b)(5) of the Act,\5\ in particular, in that it is designed 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.
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    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that its proposal will 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 by harmonizing the definition of Commodity-Based Trust Shares 
with that of Arca and lessening any potential confusion among market 
participants as to its meaning.
    The Exchange also believes that correcting the typographical error 
in Nasdaq Rule 5711(d)(iv)(B) serves 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 by 
lessening possible confusion of market participants as to where the 
term ``commodity'' is defined in the Commodity Exchange Act through 
clarifying the rule language and enhancing transparency.
    For the foregoing reasons, the Exchange believes that the proposed 
rule change is consistent with the Act.

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 not necessary or appropriate in 
furtherance of the purposes of the Act. The proposal merely harmonizes 
the definition of Commodity-Based Trust Shares with that of Arca and 
lessens any potential confusion among market participants as to its 
meaning, as well as fixes a typographical error involving the Commodity 
Exchange Act that will clarify the rule language and enhance 
transparency.
    For the foregoing reasons, the Exchange does not believe the 
proposed rule change will result in any burden on competition that is 
not necessary or appropriate in furtherance of the purposes of the Act.

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

    No written comments were either solicited or received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Pursuant to section 19(b)(3)(A) of the Act \6\ and Rule 19b-4(f)(6) 
\7\ thereunder, the Exchange has designated this proposal as one that 
effects a change that: (i) does not significantly affect the protection 
of investors or the public interest; (ii) does not impose any 
significant burden on competition; and (iii) by its terms, does not 
become operative for 30 days after the date of the filing, or such 
shorter time as the Commission may designate if consistent with the 
protection of investors and the public interest.\8\
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    \6\ 15 U.S.C. 78s(b)(3)(A).
    \7\ 17 CFR 240.19b-4(f)(6).
    \8\ In addition, Rule 19b-4(f)(6) requires a self-regulatory 
organization to give the Commission written notice of its intent to 
file the proposed rule change at least five business days prior to 
the date of filing of the proposed rule change, or such shorter time 
as designated by the Commission. The Exchange has satisfied this 
requirement.
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    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act normally does not become operative for 30 days after the date of 
its filing. However, Rule 19b-4(f)(6)(iii) \9\ permits the Commission 
to designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange requested 
that the Commission waive the 30-day operative delay so that the 
proposal may become operative immediately upon

[[Page 87829]]

filing. The proposed rule change, which modifies the Exchange's rules 
by conforming the definition of Commodity-Based Trust Shares with the 
same definition used by another national securities exchange \10\ and 
corrects the citation for the term ``commodity,'' as defined in the 
Commodity Exchange Act, raises no unique or novel legal or regulatory 
issues and will lessen any potential confusion among market 
participants. Therefore, the Commission believes that waiver of the 30-
day operative delay is consistent with the protection of investors and 
the public interest. Accordingly, the Commission hereby waives the 30-
day operative delay and designates the proposed rule change operative 
upon filing.\11\
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    \9\ 17 CFR 240.19b-4(f)(6)(iii).
    \10\ See supra note 3.
    \11\ For purposes only of waiving the 30-day operative delay, 
the Commission has also considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
file number SR-NASDAQ-2023-055 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-NASDAQ-2023-055. 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 (https://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 
a.m. and 3 p.m. Copies of the filing also will be available for 
inspection and copying at the principal office of the Exchange. Do not 
include personal identifiable information in submissions; you should 
submit only information that you wish to make available publicly. We 
may redact in part or withhold entirely from publication submitted 
material that is obscene or subject to copyright protection. All 
submissions should refer to file number SR-NASDAQ-2023-055 and should 
be submitted on or before January 9, 2024.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12), (59).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-27805 Filed 12-18-23; 8:45 am]
BILLING CODE 8011-01-P