Document ID: SEC-2023-1468-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc.
Posted Date: 2023-12-19T05:00Z

[Federal Register Volume 88, Number 242 (Tuesday, December 19, 2023)]
[Notices]
[Pages 87825-87827]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-27809]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-99164; File No. SR-NYSEARCA-2023-84]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Make Changes to 
Certain Representations Relating to the Hashdex Bitcoin Futures Fund

December 13, 2023.
    Pursuant to section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given 
that, on December 1, 2023, NYSE Arca, Inc. (``NYSE Arca'' or the 
``Exchange'') filed with the Securities and Exchange Commission (the 
``Commission'') the proposed rule change as described in Items I and II 
below, which Items have been prepared by the self-regulatory 
organization. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 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 make changes to certain representations 
made in the proposed rule change previously filed with the Securities 
and Exchange Commission (the ``Commission'' or ``SEC'') pursuant to 
Rule 19b-4 relating to the Hashdex Bitcoin Futures Fund,

[[Page 87826]]

shares of which are currently listed and traded on the Exchange under 
NYSE Arca Rule 8.200-E. The proposed rule change is available on the 
Exchange's website at www.nyse.com, at the principal office of the 
Exchange, and at the Commission's Public Reference Room.

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

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

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

1. Purpose
    The Commission has approved the listing and trading on the Exchange 
of shares (``Shares'') of the Hashdex Bitcoin Futures Fund (the 
``Target ETF''),\4\ under NYSE Arca Rule 8.200-E, Commentary .02, which 
governs the listing and trading of Trust Issued Receipts.\5\ Shares of 
the Target ETF are currently listed and traded on the Exchange under 
NYSE Arca Rule 8.200-E, Commentary .02. According to the Releases, the 
Target ETF is a series of Teucrium Commodity Trust (the ``Teucrium 
Trust''), a Delaware statutory trust. The Exchange represented in the 
Releases that the Target ETF is managed and controlled by Teucrium 
Trading, LLC (``Sponsor'') and that the Sponsor is registered as a 
commodity pool operator (``CPO'') and a commodity trading adviser 
(``CTA'') with the Commodity Futures Trading Commission (``CFTC'') and 
is a member of the National Futures Association (``NFA'').
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    \4\ See Securities Exchange Act Release Nos. 94620 (April 6, 
2022), 87 FR 21676 (April 12, 2022)) (SR-NYSEARCA-2021-53) (Order 
Granting Approval of a Proposed Rule Change, as Modified by 
Amendment No. 2, To List and Trade Shares of the Teucrium Bitcoin 
Futures Fund Under NYSE Arca Rule 8.200-E, Commentary .02 (Trust 
Issued Receipts) (``Approval Order''); and 92573 (August 5, 2021), 
86 FR 44062 (August 11, 2021) (Notice of Filing of a Proposed Rule 
Change To List and Trade Shares of Teucrium Bitcoin Futures Fund 
Under NYSE Arca Rule 8.200-E) (``Notice''). (The Approval Order and 
the Notice are referred to collectively herein as the ``Releases''). 
The Fund was renamed as the Hashdex Bitcoin Futures Fund after 
approval of the proposed rule change but prior to its initial 
listing and trading on the Exchange.
    \5\ Commentary .02 to NYSE Arca Rule 8.200-E applies to Trust 
Issued Receipts that invest in ``Financial Instruments.'' The term 
``Financial Instruments,'' as defined in Commentary .02(b)(4) to 
NYSE Arca Rule 8.200-E, means any combination of investments, 
including cash; securities; options on securities and indices; 
futures contracts; options on futures contracts; forward contracts; 
equity caps, collars, and floors; and swap agreements.
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    The Tidal Commodities Trust I (``Tidal Trust'') has filed a 
combined prospectus and information statement (the ``Information 
Statement'') with the Commission describing an Agreement and Plan of 
Partnership Merger and Liquidation (``Plan of Merger'') between the 
Teucrium Trust and the Tidal Trust pursuant to which the assets of the 
Target ETF will be reorganized into the Hashdex Bitcoin Futures ETF 
(the ``Acquiring ETF''), a series of the Tidal Trust.\6\ According to 
the Information Statement, the Target ETF has the same investment 
objective and investment strategies and substantially identical 
investment risks as the Acquiring ETF. Upon the closing of the 
reorganization contemplated by the Plan of Merger (``Reorganization''), 
the Target ETF will transfer all of its assets and liabilities to the 
Acquiring ETF. Simultaneously, the Acquiring ETF will distribute its 
shares (the ``Merger Shares'') to the shareholders of the Target ETF. 
The Merger Shares will have a net asset value (``NAV'') per share equal 
to the NAV per share of the Target ETF determined immediately before 
the closing of the Reorganization resulting in a distribution of one 
share of Merger Shares for each outstanding share of the Target ETF. 
Closing of the Reorganization will result in the termination of all 
outstanding Target ETF shares and the liquidation of the Target ETF. 
Shareholders of the Target ETF will thus effectively be converted into 
shareholders of the Acquiring ETF and will hold shares of the Acquiring 
ETF with the same NAV as shares of the Target ETF that they held prior 
to the Reorganization. According to the Information Statement, 
following the Reorganization, the Shares will be issued by the Tidal 
Trust and the sponsor of the Acquiring ETF will be Toroso Investments 
LLC (``New Sponsor'').
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    \6\ On July 21, 2023, the Tidal Commodities Trust I submitted to 
the Commission its registration statement on Form S-1 under the 
Securities Act of 1933 (the ``Registration Statement''). The 
Registration Statement is not yet effective.
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    The purpose of this proposed rule change is to change certain 
representations made in the proposed rule change previously filed with 
the Commission pursuant to Rule 19b-4 relating to the Target ETF, as 
described above, which changes would be implemented as a result of the 
Reorganization. Following the Reorganization, the Acquiring ETF will 
continue to comply with all initial and continued listing requirements 
under NYSE Arca Rule 8.200-E, Commentary .02. In addition, the 
Acquiring ETF's portfolio meets and will continue to meet the 
representations regarding the Target ETF's investments as described in 
the Releases.\7\ Except for the changes noted above, all other 
representations made in the Releases remain unchanged.
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    \7\ According to the Notice, the investment objective of the 
Target ETF is to have the daily changes in the NAV of the Target 
ETF's Shares reflect the daily changes in the price of a specified 
benchmark (the ``Benchmark''). The Benchmark is the average of the 
closing settlement prices for the first to expire and second to 
expire BTC Contracts listed on the Chicago Mercantile Exchange, Inc. 
The first to expire and second to expire BTC Contracts and MBT 
Contracts are referred to as the Bitcoin Futures Contracts. 
According to the Notice, under normal market conditions, the Target 
ETF will invest in Bitcoin Futures Contracts and in cash and cash 
equivalents.
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2. Statutory Basis
    The basis under the Act for this proposed rule change is the 
requirement under section 6(b)(5) \8\ 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 
impediments to, and perfect the mechanism of a free and open market 
and, in general, to protect investors and the public interest.
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    \8\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the proposed rule change is designed to 
prevent fraudulent and manipulative acts and practices, and is designed 
to promote just and equitable principles of trade and to protect 
investors and the public interest.
    Tidal Trust has filed the Information Statement describing the 
Reorganization pursuant to which the assets of the Target ETF will be 
reorganized into the Acquiring ETF. This filing proposes to reflect 
organizational and administrative changes that would be implemented as 
a result of the Reorganization, including changes to the trust entity 
issuing shares of the Target ETF and the sponsor to the Target ETF. 
According to the Information Statement, the investment objective of the 
Acquiring ETF will be the same as that of the Target ETF following the 
Reorganization. The Exchange believes these changes will not adversely 
impact investors or Exchange trading. In addition, the Acquiring ETF's 
portfolio meets and will continue to meet the representations regarding 
the Target

[[Page 87827]]

ETF's investments as described in the Releases. Except for the changes 
noted above, all other representations made in the Releases remain 
unchanged. As stated above and in the Releases, shares of the Acquiring 
ETF shall also conform to the initial and continued listing criteria 
under Rule 8.200-E.

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 purpose of the Act. The Exchange believes the 
proposed rule change will not impose a burden on competition and will 
benefit investors and the marketplace by permitting continued listing 
and trading of Shares of the Acquiring ETF following implementation of 
the changes described above, which changes would not impact the 
investment objective of the Acquiring ETF.

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

    The Exchange has filed the proposed rule change pursuant to section 
19(b)(3)(A)(iii) of the Act \9\ and Rule 19b-4(f)(6) thereunder.\10\ 
Because the proposed rule change does not: (i) significantly affect the 
protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) become operative prior to 
30 days from the date on which it was filed, or such shorter time as 
the Commission may designate, it has become effective pursuant to 
section 19(b)(3)(A) of the Act and Rule 19b-4(f)(6) thereunder.\11\
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    \9\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \10\ 17 CFR 240.19b-4(f)(6).
    \11\ 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 under Rule 19b-4(f)(6) \12\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b4(f)(6)(iii),\13\ the Commission 
may designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has asked 
the Commission to waive the 30-day operative delay so that the proposal 
may become operative immediately upon filing. The Exchange states that 
the proposed changes reflect organizational and administrative changes 
that would be implemented as a result of the Reorganization. The 
Commission believes that waiver of the 30-day operative delay is 
consistent with the protection of investors and the public interest 
because the proposal does not raise any new or novel issues. 
Accordingly, the Commission hereby waives the 30-day operative delay 
and designates the proposal operative upon filing.\14\
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    \12\ 17 CFR 240.19b-4(f)(6).
    \13\ 17 CFR 240.19b-4(f)(6)(iii).
    \14\ For purposes only of waiving the 30-day operative delay, 
the Commission has 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-NYSEARCA-2023-84 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-2023-84. 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-NYSEARCA-2023-84 and should 
be submitted on or before January 9, 2024.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12), (59).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-27809 Filed 12-18-23; 8:45 am]
BILLING CODE 8011-01-P