Document ID: SEC-2022-0118-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc.
Posted Date: 2022-01-27T05:00Z

[Federal Register Volume 87, Number 18 (Thursday, January 27, 2022)]
[Notices]
[Pages 4314-4317]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-01562]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-94025; File No. SR-NYSEArca-2021-29]

Self-Regulatory Organizations; NYSE Arca, Inc.; Order Granting 
Approval of a Proposed Rule Change, as Modified by Amendment No. 1, To 
List and Trade Shares of ConvexityShares 1x SPIKES Futures ETF Under 
NYSE Arca Rule 8.200-E (Trust Issued Receipts)

January 21, 2022.

I. Introduction

    On May 13, 2021, 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 
list and trade shares (``Shares'') of the ConvexityShares 1x SPIKES 
Futures ETF (``Fund''), a series of the ConvexityShares Trust 
(``Trust''), under NYSE Arca Rule 8.200-E, Commentary .02 (``Trust 
Issued Receipts''). The proposed rule change was published for comment 
in the Federal Register on May 26, 2021.\3\ On July 2, 2021, pursuant 
to Section 19(b)(2) of the Act,\4\ the Commission designated a longer 
period within which to approve the proposed rule change, disapprove the 
proposed rule change, or institute proceedings to determine whether to 
approve or disapprove the proposed rule change.\5\ On July 26, 2021, 
the Exchange filed Amendment No. 1 to the proposed rule change, which 
replaced and superseded the proposed rule change as originally 
filed.\6\ On August 12, 2021, the Commission published notice of 
Amendment No. 1 and instituted proceedings under Section 19(b)(2)(B) of 
the Act \7\ to determine whether to approve or disapprove the proposed 
rule change.\8\ On November 15, 2021, pursuant to Section 19(b)(2) of 
the Act,\9\ the Commission designated a longer period within which to 
issue an order approving or disapproving the proposed rule change.\10\
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 91952 (May 20, 
2021), 86 FR 28410. The comment letter received on the proposed rule 
change is available on the Commission's website at: https://www.sec.gov/comments/sr-nysearca-2021-29/srnysearca202129.htm.
    \4\ 15 U.S.C. 78s(b)(2).
    \5\ See Securities Exchange Act Release No. 92321, 86 FR 36173 
(July 8, 2021).
    \6\ Amendment No. 1 is available at: https://www.sec.gov/comments/sr-nysearca-2021-29/srnysearca202129.htm.
    \7\ 15 U.S.C. 78s(b)(2)(B).
    \8\ See Securities Exchange Act Release No. 92650, 86 FR 46287 
(August 18, 2021).
    \9\ 15 U.S.C. 78s(b)(2).
    \10\ See Securities Exchange Act Release No. 93574, 86 FR 64975 
(November 19, 2021). The Commission designated January 21, 2022, as 
the date by which the Commission shall either approve or disapprove 
the proposed rule change.
---------------------------------------------------------------------------

    The Commission is approving the proposed rule change, as modified 
by Amendment No. 1.

II. Description of the Proposed Rule Change, as Modified by Amendment 
No. 1 \11\
---------------------------------------------------------------------------

    \11\ Additional information regarding the Fund, the Trust, and 
the Shares, including investment strategies, creation and redemption 
procedures, and portfolio holdings can be found in Amendment No. 1, 
supra note 6.
---------------------------------------------------------------------------

    The Exchange proposes to list and trade Shares of the Fund \12\ 
under NYSE Arca Rule 8.200-E, Commentary .02 which governs the listing 
and trading of Trust Issued Receipts \13\ on the Exchange. The Fund 
will be managed and controlled by ConvexityShares, LLC (``Sponsor''), a 
commodity pool operator.\14\ Teucrium Trading, LLC, a commodity trading 
adviser registered with the Commodity Futures Trading Commission, will 
be the Sub-Adviser for the Fund (``Sub-Adviser'') and will manage the 
Fund's commodity futures investment strategy.\15\ U.S. Bank will 
provide custody and fund accounting to the Trust and the Fund; U.S. 
Bancorp Fund Services will be the transfer agent for the Shares and 
administrator for the Fund; and Foreside will serve as the distributor 
for the Fund.
---------------------------------------------------------------------------

    \12\ The Fund has filed a registration statement on Form S-1 
under the Securities Act of 1933, dated May 25, 2021 (``Registration 
Statement''). The Registration Statement for the Fund is not yet 
effective and the Exchange will not commence trading in Shares of 
the Fund until the Registration Statement becomes effective.
    \13\ 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.
    \14\ The Sponsor is not registered as a broker-dealer or 
affiliated with a broker-dealer. In the event (a) the Sponsor 
becomes registered as a broker-dealer or becomes newly affiliated 
with a broker-dealer, or (b) any new sponsor becomes registered as a 
broker-dealer or becomes newly affiliated with a broker-dealer, it 
will implement and maintain a fire wall with respect to its relevant 
personnel of the broker-dealer or broker-dealer affiliate, as 
applicable, regarding access to information concerning the 
composition and/or changes to the portfolio, and will be subject to 
procedures designed to prevent the use and dissemination of material 
non-public information regarding the portfolio.
    \15\ The Sub-Adviser is not registered as a broker-dealer or 
affiliated with a broker-dealer. In the event (a) the Sub-Adviser 
becomes registered as a broker-dealer or becomes newly affiliated 
with a broker-dealer, or (b) any new Sub-Adviser becomes registered 
as a broker-dealer or becomes newly affiliated with a broker-dealer, 
it will implement and maintain a fire wall with respect to its 
relevant personnel of the broker-dealer or broker-dealer affiliate, 
as applicable, regarding access to information concerning the 
composition and/or changes to the portfolio, and will be subject to 
procedures designed to prevent the use and dissemination of material 
non-public information regarding the portfolio.
---------------------------------------------------------------------------

    The Fund will seek investment results, before fees and expenses, 
that correspond to the performance of its benchmark index, the T3 SPIKE 
Front 2 Futures Index (``Index''), an investable index of SPIKES 
futures contracts.\16\ The Fund will seek to track the Index over time, 
not just for a single day. The Index is intended to reflect the returns 
that are potentially available through an unleveraged investment in a 
theoretical portfolio of first- and second-month futures contracts on 
the SPIKES Volatility Index (``SPIKES Index'').\17\
---------------------------------------------------------------------------

    \16\ The Index is sponsored by Triple Three Partners Pty Ltd, 
which licenses the use of the Index to its affiliated company, T3i 
Pty Ltd (Triple Three Partners Pty Ltd and T3i Pty Ltd. are 
collectively referred to herein as ``T3 Index'' or ``Index 
Sponsor''). The Index Sponsor is affiliated with the Sponsor. The 
Index Sponsor has implemented and will maintain a fire wall 
regarding access to information concerning the composition of and/or 
changes to the Index. In addition, the Index Sponsor has implemented 
and will maintain procedures that are designed to prevent the use 
and dissemination of material, non-public information regarding the 
Index. The Index Sponsor is not registered as an investment adviser 
or broker-dealer and is not affiliated with any broker-dealers. The 
Index is calculated and published by Solactive AG, which is not 
affiliated with T3 Index.
    \17\ The Exchange states that the SPIKES Index is a non-
investable index that measures the implied volatility of the SPDR 
S&P 500 ETF Trust (``SPY'') over 30 days in the future. SPY is a 
unit investment trust that holds a portfolio of common stocks that 
closely tracks the price performance and dividend yield of the S&P 
500 Composite Price Index (``S&P 500''). The SPIKES Index does not 
represent the actual or the realized volatility of SPY. The SPIKES 
Index is calculated based on the prices of a constantly changing 
portfolio of SPY put and call options. The SPIKES Index is 
reflective of the premium paid by investors for certain options 
linked to the level of the S&P 500. The SPIKES Index is a 
theoretical calculation and cannot be traded on a spot basis. T3 
Index is the owner, creator and licensor of the SPIKES Index. The 
SPIKES Index is calculated, maintained and published by Miami 
International Securities Exchange, LLC via the Options Price 
Reporting Authority.
---------------------------------------------------------------------------

    The Index is comprised solely of SPIKES futures contracts.\18\ The 
Index

[[Page 4315]]

employs rules for selecting the SPIKES futures contracts comprising the 
Index and a formula to calculate a level for the Index from the prices 
of these SPIKES futures contracts. Currently, the SPIKES futures 
contracts comprising the Index represent the prices of two near-term 
SPIKES futures contracts, replicating a position that rolls the nearest 
month SPIKES futures contracts to the next month SPIKES futures 
contracts at or close to the daily settlement price via a Trade-At-
Settlement \19\ program towards the end of each business day in equal 
fractional amounts. This results in a constant weighted average 
maturity of one month.
---------------------------------------------------------------------------

    \18\ According to the Exchange, SPIKES futures contracts were 
launched for trading by the Minneapolis Grain Exchange, LLC 
(``MGEX'') on December 14, 2020. While the SPIKES Index represents a 
measure of the expected 30-day volatility of SPY, the prices of 
SPIKES futures contracts are based on the current expectation of the 
expected 30-day volatility of SPY on the expiration date of the 
futures contract.
    \19\ According to the Exchange, a Trade at Settlement (``TAS'') 
transaction is a transaction at a price equal to the daily 
settlement price, or at a specified differential above or below the 
daily settlement price. The TAS transaction price will be determined 
following execution and based upon the daily settlement price of the 
respective SPIKES futures contracts month. The permissible price 
range for permitted TAS transactions is from 0.50 index points below 
the daily settlement price to 0.50 index points above the daily 
settlement price. The permissible minimum increment for a TAS 
transaction is 0.01 index points. See MGEX Rule 83.15 at http://www.mgex.com/documents/20210318-Rulebook.pdf.
---------------------------------------------------------------------------

    The Fund will invest primarily in SPIKES futures contracts to gain 
the appropriate exposure to the Index. Under certain circumstances 
(described below), the Fund may also invest in futures contracts and 
swap contracts (``VIX Related Positions'') on the Cboe Volatility Index 
(``VIX'').\20\ The Exchange states that the VIX is an index that tracks 
volatility and would be expected to perform in a substantially similar 
manner as the SPIKES Index.
---------------------------------------------------------------------------

    \20\ According to the Exchange, the VIX is a measure of 
estimated near-term future volatility based upon the weighted 
average of the implied volatilities of near-term put and call 
options on the S&P 500.
---------------------------------------------------------------------------

    The Fund seeks to achieve its investment objective through the 
appropriate amount of exposure to the SPIKES futures contracts included 
in the Index. The Sponsor or Sub-Adviser determines the type, quantity 
and mix of investments that the Sponsor or Sub-Adviser believes, in 
combination, should provide exposure to the Index to seek investment 
results equal to the performance of the Index. In the event 
accountability rules, price limits, position limits, margin limits or 
other exposure limits are reached with respect to SPIKES futures 
contracts, or if the market for a specific futures contract experiences 
emergencies (e.g., natural disaster, terrorist attack or an act of God) 
or disruptions (e.g., a trading halt or a flash crash), or in 
situations where the Sponsor or Sub-Adviser deems it impractical or 
inadvisable to buy or sell SPIKES futures contracts (such as during 
periods of market volatility or illiquidity, or when trading in SPY is 
halted), the Sponsor or Sub-Adviser may cause the Fund to invest in VIX 
Related Positions. The Sponsor expects the Fund's positions in VIX 
Related Positions to consist primarily of VIX futures contracts, which 
are traded on the Cboe Futures Exchange. However, in the event 
accountability rules, price limits, position limits, margin limits or 
other exposure limits are reached with respect to VIX futures 
contracts, or if the market for a specific VIX futures contract 
experiences emergencies or disruptions or in situations where the 
Sponsor or Sub-Adviser deems it impractical or inadvisable to buy or 
sell VIX futures contracts, the Fund would hold VIX swap 
agreements.\21\ The Fund will also hold cash or cash equivalents such 
as U.S. Treasury securities or other high credit quality, short-term 
fixed-income or similar securities (such as shares of money market 
funds) as collateral for investments and pending investments.
---------------------------------------------------------------------------

    \21\ The Fund will attempt to limit counterparty risk in 
uncleared swap agreements by entering into such agreements only with 
counterparties the Sponsor and Sub-Adviser believe are creditworthy 
and by limiting the Fund's exposure to each counterparty. The 
Exchange represents that the Sponsor and Sub-Adviser will monitor 
the creditworthiness of each counterparty and the Fund's exposure to 
each counterparty on an ongoing basis.
---------------------------------------------------------------------------

III. Discussion and Commission Findings

    After careful review of the proposed rule change, as modified by 
Amendment No. 1, as well as the comment received, the Commission finds 
that the proposed rule change, as modified by Amendment No. 1, is 
consistent with the Act and the rules and regulations thereunder 
applicable to a national securities exchange.\22\ In particular, the 
Commission finds that the proposed rule change, as modified by 
Amendment No. 1, is consistent with Section 6(b)(5) of the Act,\23\ 
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.
---------------------------------------------------------------------------

    \22\ 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).
    \23\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Sponsor submitted a comment in support of the proposed rule 
change.\24\ The Sponsor states that the Fund employs no leverage and 
only seeks to track the performance of the Index.\25\ The Sponsor 
states that because the Fund will likely be net buying SPIKES futures 
contracts when the stock market is steady or rising, and market 
volatility is steady or declining, and net selling SPIKES futures 
contracts when the stock market declines and market volatility is 
rising, the Fund is likely a supplier of liquidity, which is a 
desirable characteristic in an environment where liquidity is in high 
demand but short supply.\26\ Further, the Sponsor asserts approval of 
the proposal would increase competition in the market and provide a 
lower cost hedge against the effects of volatility than buying futures 
contracts.\27\
---------------------------------------------------------------------------

    \24\ See letter from Eric Simanek, Partner, Sullivan & Worcester 
LLP, on behalf of the Sponsor, to Vanessa Countryman, Secretary, 
Commission, dated September 8, 2021.
    \25\ See id. at 2.
    \26\ See id. at 9.
    \27\ See id. at 8-10.
---------------------------------------------------------------------------

    The proposal is reasonably designed to promote fair disclosure of 
information that may be necessary to price the Shares appropriately and 
to prevent trading in the Shares when a reasonable degree of certain 
pricing transparency cannot be assured. Specifically, the Exchange will 
obtain a representation from the issuer of the Shares that the net 
asset value (``NAV'') per Share will be calculated and disseminated 
daily and will be made available to all market participants at the same 
time. Each day before 9:30 a.m., E.T., the daily holdings of the Fund 
will be available on the Fund's website, www.convexityshares.com, which 
will be publicly accessible at no charge.\28\ This website disclosure 
of the Fund's daily holdings will occur at approximately the same time 
as the disclosure by the Trust of the daily holdings to authorized 
participants, so that all market participants will be provided daily 
holdings information at approximately the same time, and the

[[Page 4316]]

same holdings information will be provided on the public website as in 
electronic files provided to authorized participants. Quotation and 
last-sale information regarding the Shares will be disseminated through 
the facilities of the Consolidated Tape Association. As required by 
NYSE Arca Rule 8.200-E, Commentary .02, an updated Intraday Fund Value 
(``IFV'') will be calculated and widely disseminated by one or more 
major market data vendors every 15 seconds during the Exchange's Core 
Trading Session (9:30 a.m., E.T., to 4:00 p.m., E.T.). The IFV will be 
readily available from the Fund's website, automated quotation systems, 
published or other public sources, or major market data vendors' 
website or on-line information services. 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 Fund's website will include a form of 
the prospectus for the Fund and additional data relating to NAV and 
other applicable quantitative information. The level of the Index will 
be published at least every 15 seconds, both in real time from 9:30 
a.m. to 4 p.m., E.T., and at the close of trading on each business day 
by Bloomberg and Reuters. The Fund's website will also provide 
information regarding the SPIKES futures contracts constituting the 
Index and the Index methodology. In addition, the level of the SPIKES 
Index and the VIX is available from Bloomberg and Reuters.
---------------------------------------------------------------------------

    \28\ The daily website disclosure of portfolio holdings will 
include, as applicable, (i) the composite value of the total 
portfolio, (ii) the quantity and type of each holding (including the 
ticker symbol, maturity date or other identifier, if any) and other 
descriptive information including, in the case of a swap, the type 
of swap, its notional value and the underlying instrument, index or 
asset on which the swap is based, (iii) the market value of each 
investment held by the Fund, (iv) the type (including maturity, 
ticker symbol, or other identifier) and value of each Treasury 
security and cash equivalent, and (v) the amount of cash held in the 
Fund's portfolio.
---------------------------------------------------------------------------

    Complete real-time data for SPIKES futures contracts, which trade 
on MGEX, is available by subscription through on-line information 
services. MGEX also provides delayed futures information on current and 
past trading sessions and market news free of charge on its website. 
Price information regarding cleared VIX swap contracts is available 
from major market data vendors and price information for non-exchange-
traded VIX swap contracts may be obtained from brokers and dealers who 
make markets in such instruments. Price information regarding VIX 
futures is available from the Cboe Futures Exchange and from major 
market data vendors. Price information for cash equivalents is 
available from major market data vendors.
    The Exchange's rules regarding trading halts further help to ensure 
the maintenance of fair and orderly markets for the Shares, which is 
consistent with the protection of investors and the public interest. 
Trading 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 trading is not 
occurring in the securities and/or the financial instruments composing 
the daily disclosed portfolio of the Fund; or (2) whether other unusual 
conditions or circumstances detrimental to the maintenance of a fair 
and orderly market are present. Trading in Shares of the Fund will be 
halted if the circuit breaker parameters in NYSE Arca Rule 7.12-E 
(Trading Halts Due to Extraordinary Market Volatility) have been 
reached. The Exchange may halt trading during the day in which an 
interruption to the dissemination of the IFV or the value of the Index 
occurs. If the interruption to the dissemination of the IFV or the 
value of the Index persists past the trading day in which it occurred, 
the Exchange will halt trading no later than the beginning of the 
trading day following the interruption. In addition, if the Exchange 
becomes aware that the NAV with respect to the Shares or disclosure of 
the Fund's daily holdings is not disseminated to all market 
participants at the same time, it will halt trading in the Shares until 
such time as the NAV and the Fund's daily holdings is available to all 
market participants. NYSE Arca Rule 8.200-E, Commentary .02, enumerates 
additional circumstances under which the Exchange will consider the 
suspension of trading in and will commence delisting proceedings for 
the Shares.
    The Exchange's proposal is designed to safeguard material non-
public information relating to the Fund's portfolio. Specifically, as 
the Exchange states, neither the Sponsor nor the Sub-Adviser is 
registered as a broker-dealer or affiliated with a broker-dealer. In 
the event that (a) either the Sponsor or the Sub-Adviser becomes 
registered as a broker-dealer or newly affiliated with a broker-dealer, 
or (b) any new sponsor or sub-adviser is registered as a broker-dealer 
or becomes affiliated with a broker-dealer, it will implement and 
maintain a fire wall with respect to its relevant personnel or 
personnel of the broker-dealer affiliate, as applicable, regarding 
access to information concerning the composition of and/or changes to 
the portfolio, and will be subject to procedures designed to prevent 
the use and dissemination of material non-public information regarding 
the portfolio. Moreover, trading of the Shares will be subject to NYSE 
Arca Rule 8.200-E, Commentary .02(e), which sets forth certain 
restrictions on Equity Trading Permit Holders (``ETP Holders'') acting 
as registered Market Makers \29\ in Trust Issued Receipts to facilitate 
surveillance. In addition, the Exchange has a general policy 
prohibiting the distribution of material, non-public information by its 
employees.
---------------------------------------------------------------------------

    \29\ As defined in NYSE Arca Rule 1.1(z) the term ``Market 
Maker'' means an ETP Holder that acts as a Market Maker pursuant to 
NYSE Arca Rule 7-E.
---------------------------------------------------------------------------

    Furthermore, the Exchange or the Financial Industry Regulatory 
Authority (``FINRA''), on behalf of the Exchange, or both, will 
communicate as needed, and may obtain information, regarding trading in 
the Shares, SPIKES futures, VIX futures and other underlying exchange-
listed instruments with other markets and entities that are members of 
the Intermarket Surveillance Group (``ISG''). In addition, the Exchange 
may obtain information regarding trading in the Shares, SPIKES futures, 
VIX futures and other underlying exchange-listed instruments from 
markets and other entities with which the Exchange has in place a 
comprehensive surveillance sharing agreement (``CSSA''). All futures 
contracts in which the Fund invests shall consist of futures contracts 
whose principal market is a member of the ISG or is a market with which 
the Exchange has a CSSA. The Exchange states that trading in the Shares 
will be subject to existing trading surveillances administered by the 
Exchange, as well as cross-market surveillances administered by FINRA 
on behalf of the Exchange, and 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.
    The Exchange has demonstrated there is an appropriate regulatory 
framework to support listing and trading of the Shares, including 
trading rules, surveillance, and listing standards. Moreover, the 
trading of the Shares on the Exchange will be subject to the Exchange's 
and other rules listed below. Specifically:
    (1) The Exchange deems the Shares to be equity securities, thus 
rendering trading in the Shares subject to the Exchange's existing 
rules governing the trading of equity securities;
    (2) The Shares will conform to the initial and continued listing 
criteria under NYSE Arca Rule 8.200-E;
    (3) Pursuant to NYSEArca Rule 8.200-E(a), all statements and 
representations made in the filing regarding (a) the description of the 
Index, portfolio, or reference asset, (b) limitations on Index or 
portfolio holdings or reference assets, or (c) the applicability of 
Exchange

[[Page 4317]]

listing rules specified in the filing will constitute continued listing 
requirements for the Shares. The issuer will advise the Exchange of any 
failure by the Fund to comply with the continued listing requirements, 
and, pursuant to its obligations under Section 19(g)(1) of the Act, the 
Exchange will monitor \30\ for compliance with the continued listing 
requirements. If the Fund is not in compliance with the applicable 
listing requirements, the Exchange will commence delisting procedures 
under NYSE Arca Rule 5.5-E(m).
---------------------------------------------------------------------------

    \30\ 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.
---------------------------------------------------------------------------

    (4) The Exchange has the appropriate rules to facilitate 
transactions in the Shares during all trading sessions;
    (5) 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; \31\
---------------------------------------------------------------------------

    \31\ The Exchange states that the Information Bulletin will 
discuss the following: (1) The risks involved in trading the Shares 
during the Opening and Late Trading Sessions when an updated IFV 
will not be calculated or publicly disseminated; (2) the procedures 
for purchases and redemptions of Shares in Creation Units and 
Redemption Units (and that Shares are not individually redeemable); 
(3) 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; (4) how information regarding 
the IFV is disseminated; (5) how information regarding portfolio 
holdings is disseminated; (6) the requirement that ETP Holders 
deliver a prospectus to investors purchasing newly issued Shares 
prior to or concurrently with the confirmation of a transaction; and 
(7) trading information.
---------------------------------------------------------------------------

    (6) For initial and continued listing, the Fund will be in 
compliance with Rule 10A-3 under the Act; \32\ and
---------------------------------------------------------------------------

    \32\ 17 CFR 240.10A-3.
---------------------------------------------------------------------------

    (7) A minimum of 100,000 Shares of the Fund will be outstanding at 
the commencement of trading on the Exchange.
    Accordingly, the Commission finds that the proposed rule change, as 
modified by Amendment No. 1, is consistent with Section 6(b)(5) of the 
Act \33\ and the rules and regulations thereunder applicable to a 
national securities exchange.
---------------------------------------------------------------------------

    \33\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

VI. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\34\ that the proposed rule change (SR-NYSEArca-2021-29), as 
modified by Amendment No. 1, be, and hereby is, approved.
---------------------------------------------------------------------------

    \34\ Id.
    \35\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\35\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-01562 Filed 1-26-22; 8:45 am]
BILLING CODE 8011-01-P