Document ID: SEC-2020-1929-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc.
Posted Date: 2020-12-04T05:00Z

[Federal Register Volume 85, Number 234 (Friday, December 4, 2020)]
[Notices]
[Pages 78391-78394]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-26674]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-90529; File No. SR-NYSEArca-2020-100]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Relating to the 
Perth Mint Physical Gold ETF

November 30, 2020.
    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 November 20, 2020, 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 Exchange. 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 reflect (i) a change in the sponsors and 
the custodian of the Perth Mint Physical

[[Page 78392]]

Gold ETF, which will be renamed as the Goldman Sachs Physical Gold ETF 
\4\ (``Trust''), (ii) the elimination of an investor's ability to take 
delivery of Physical Gold, and (iii) in connection with the change of 
custodian, the removal of the Government Guarantee, and to amend 
certain other representations in the proposed rule change filed with 
and approved by the Securities and Exchange Commission (``Commission'') 
relating to listing and trading of Shares of the Trust on the Exchange. 
Shares of the Trust have been approved by the Commission for listing 
and trading on the Exchange under NYSE Arca Rule 8.201-E.\5\ 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.
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    \4\ Upon the closing of the Sponsorship Transfer Agreement 
(defined in note 7, infra), the name of the Trust will be changed 
from ``Perth Mint Physical Gold ETF'' to ``Goldman Sachs Physical 
Gold ETF''.
    \5\ See note 6, infra.
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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 a proposed rule change relating to 
listing and trading on the Exchange of shares (``Shares'') of the Trust 
for listing and trading on the Exchange under NYSE Arca Rule 8.201-E 
(``Commodity-Based Trust Shares'').\6\ The Exchange proposes to reflect 
(i) a change in the sponsors and the custodian of the Trust, (ii) the 
elimination of an investor's ability to take delivery of Physical Gold, 
and (iii) in connection with the change of custodian, the removal of 
the Government Guarantee, and to amend certain other representations in 
the proposed rule change filed with and approved by the Commission 
relating to listing and trading of Shares of the Trust on the 
Exchange.\7\ The Trust will continue to comply with all initial and 
continued listing requirements under NYSE Arca Rule 8.201-E. Except for 
the changes noted below, all other representations made in the Prior 
Releases remain unchanged.\8\
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    \6\ See Securities Exchange Act Release Nos. 82372 (December 21, 
2017), 82 FR 61601 (December 28, 2017) (SR-NYSEArca-2017-140) (NYSE 
Arca, Inc.; Notice of Filing of Proposed Rule Change To List and 
Trade Shares of the Perth Mint Physical Gold ETF Trust Under NYSE 
Arca Rule 8.201-E) (``First Prior Notice''); 82593 (January 26, 
2018), 83 FR 4718 (February 1, 2018) (SR-NYSEArca-2017-140) (Order 
Approving a Proposed Rule Change To List and Trade Shares of the 
Perth Mint Physical Gold ETF Trust Pursuant to NYSE Arca Rule 8.201-
E) (``Prior Order'' and, together with the Prior Notice, the ``First 
Prior Releases''). See also, Securities Exchange Act Release No. 
83248 (May 15, 2018), 83 FR 23494 (May 21, 2018) (SR-NYSEArca-2018-
32) (Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change Relating to the Proposed Operation of the Perth Mint Physical 
Gold ETF Trust) (``Second Prior Release'' and, together with the 
First Prior Releases, the ``Prior Releases'').
    \7\ On June 11, 2019 the Trust filed with the Commission a 
registration statement on Form S-1 under the Securities Act of 1933 
relating to the Trust (File No. 333- 224389) (``Registration 
Statement''). The Registration Statement was declared effective by 
the SEC on June 20, 2019. The description of the operation of the 
Trust herein is based, in part, on the Registration Statement. The 
procedures described in this proposed rule change will not be 
implemented until such proposed rule change is effective and 
operative and such changes will be reflected in a prospectus to the 
Registration Statement. On September 29, 2020, Perth Mint Physical 
Gold Trust filed with the Commission Form 8-K (the ``8-K'') under 
the Act relating to an agreement, also dated September 29, 2020, to 
transfer the role of sponsor from Gold Corporation and Exchange 
Traded Concepts, LLC to Goldman Sachs Asset Management, L.P. (such 
agreement, the ``Sponsorship Transfer Agreement'').
    \8\ See note 6, supra. All terms referenced but not defined 
herein are defined in the Prior Releases.
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Change to the Trust's Investment Objective
    The First Prior Notice stated that the Trust's primary objective 
will be to provide investors with an opportunity to invest in gold 
through the Shares, have the gold securely stored by Gold Corporation 
and, if requested by an investor, deliver Physical Gold to such 
investor in exchange for its Shares. The Second Prior Release stated, 
however, that, because investors redeeming Shares would deliver Shares 
to the Gold Corporation rather than to the Trust, the Trust's primary 
objective will be to provide investors with an opportunity to invest in 
gold through the Shares and have the gold securely stored by Gold 
Corporation; and that the Gold Corporation rather than the Trust will 
be the entity that is responsible for and delivers Physical Gold to 
investors in exchange for Shares.
    The Exchange proposes to change these representations regarding the 
Trust's investment objective to state that the Trust's investment 
objective is for the Shares to reflect the performance of the price of 
gold less the expenses of the Trust's operations, thus deleting 
reference to delivery of Physical Gold to an investor in exchange for 
Shares.
Change to Custodian and Sponsors
    The Prior Notice stated that the sponsors of the Trust are the Gold 
Corporation and Exchange Traded Concepts, LLC. The Exchange proposes to 
change this representation to state that the Trust's sponsor 
(``Sponsor'') will be Goldman Sachs Asset Management, L.P. Goldman 
Sachs Asset Management, L.P. will take on the responsibilities 
previously performed by both the Gold Corporation (in its role as 
custodial sponsor) and Exchange Traded Concepts, LLC (in its role as 
administrative sponsor).\9\ Although the sponsors of the Trust will 
change upon the closing of the Sponsorship Transfer Agreement, the 
Trust itself will remain in place and continue to issue and redeem 
Shares in Creation Unit sizes to Authorized Participants.\10\
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    \9\ All references in the Prior Releases to ``Sponsors'' would 
be replaced by ``Sponsor''. In addition, reference to 
``Administrative Sponsor'' in the Prior Releases would be replaced 
by ``Sponsor'', as applicable.
    \10\ The Second Prior Release stated that the Trust will issue 
and redeem ``Baskets'' equal to a block of 50,000 Shares and that 
the size of a Basket is subject to change. In the Registration 
Statement, the Trust described its change of the size of a Basket to 
25,000 Shares. The Second Prior Release stated further that a 
reduction in the size of a Basket may provide potential benefits to 
investors by facilitating additional creation and redemption 
activity in the Shares, thereby potentially resulting in increased 
secondary market trading activity, tighter bid/ask spreads and 
narrower premiums or discounts to net asset value (``NAV''). The 
Trust's change to a Basket size of 25,000 Shares is consistent with 
the August 8, 2018 letter from the Division of Trading and Markets 
granting no-action relief to certain commodity-based investment 
vehicles from Rules 101 and 102 of Regulation M under the Act. See 
footnote 2 to letter, dated August 8, 2018, from Josephine J. Tao, 
Assistant Director, Division of Trading and Markets, to Eric 
Simanek, Sullivan & Worcester LLP. The Exchange notes that the 
Commission has approved the listing and trading of other issues of 
Commodity-Based Trust Shares that have applied a minimum ``Creation 
Unit'' size of less than 50,000 shares. See, e.g., Securities 
Exchange Act Release Nos. 82249 (December 8, 2017), 82 FR 58884 
(December 14, 2017) (SR-NYSEArca-2017-110) (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 GraniteShares Platinum Trust under NYSE Arca 
Rule 8.201-E); 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); 80840 (June 1, 2017), 
82 FR 26534 (June 7, 2017) (SR-NYSEArca-2017-33) (Order Approving a 
Proposed Rule Change, as Modified by Amendment No. 2 Thereto, to 
List and Trade Shares of the Euro Gold Trust, Pound Gold Trust, and 
the Yen Gold Trust under NYSE Arca Equities Rule 8.201).

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[[Page 78393]]

    The Registration Statement stated that the custodian of the Trust 
is the Gold Corporation. The Exchange proposes to change this 
representation to state that the Trust's custodian will be JPMorgan 
Chase Bank, N.A. (``Custodian''), which will take on all of the 
responsibilities of the Gold Corporation (in its role as 
custodian).\11\
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    \11\ In regard to the role of the Custodian, footnote 8 of the 
First Prior Notice stated the following: ``As Custodian of the 
Trust's gold bullion, Gold Corporation will be responsible for the 
safekeeping of the Trust's gold and supplying inventory information 
to the Trustee and the Sponsors. The Custodian will also be 
responsible for facilitating the transfer of gold in and out of the 
Trust and facilitating the shipment of Physical Gold to Delivery 
Applicants.'' The Exchange proposes to change this representation to 
the following: ``As Custodian of the Trust's gold bullion, the 
Custodian will be responsible for the safekeeping of the Trust's 
gold and supplying inventory information to the Trustee and the 
Sponsor.'' A prospectus to the Registration Statement will be filed 
at the closing of the Sponsorship Transfer Agreement incorporating 
the changes listed herein.
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Change to Taking Delivery of Physical Gold by Investors
    The Prior Releases described procedures permitting an investor to 
take delivery of Physical Gold in exchange for its shares, provided the 
investor follows certain procedures set out in the Registration 
Statement. In connection with the replacement of the custodian of the 
Trust, the Exchange proposes to eliminate an investor's ability to take 
delivery of Physical Gold. Therefore, all references in the Prior 
Releases regarding investors taking delivery of Physical Gold will no 
longer be in effect.\12\ The Trust's investment objective is for the 
Shares to reflect the performance of the price of gold less the 
expenses of the Trust's operations. Further, Goldman Sachs Asset 
Management, L.P. represents that the option to take delivery of 
Physical Gold has been utilized only 12 times since the inception of 
the Trust. Given the limited use of this feature and the fact that 
investors have been notified through the 8-K that this feature will be 
removed, this change will not impact investors' ability to invest in a 
product that reflects the performance of the price of gold less the 
expenses of the Trust's operations. The Exchange notes that, except as 
described in this proposed rule change, procedures relating to creation 
and redemption of Shares as applied to Authorized Participants, as 
described in the Prior Releases, will remain unchanged.\13\
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    \12\ Procedures regarding delivery of Physical Gold to investors 
are described in the following sections of the First Prior Notice: 
``Permitting Investors to Take Delivery of Physical Gold,'' ``Taking 
Delivery of Physical Gold--Delivery Applicants'' and ``Delivery 
Application''; and in the following section of the Second Prior 
Release: ``Changes to Representations Regarding Delivery 
Applicants.''
    \13\ The Exchange notes that the Commission has previously 
approved Exchange listing and trading of shares of gold trusts under 
NYSE Arca Rule 8.201-E without the ability of individual investors 
to receive Physical Gold from a trust outside the redemption process 
utilized by Authorized Participants. See e.g., Securities Exchange 
Act Release Nos. 81077 (July 5, 2017), 82 FR 32024 (July 11, 2017) 
(SR-NYSEArca-2017-55) (order approving listing and trading shares of 
the GraniteShares Gold Trust under NYSE Arca Equities Rule 8.201; 
75918 (December 9, 2016), 81 FR 90876 (December 15, 2016) (SR-
NYSEArca-2016-84) (order approving listing and trading of shares of 
the Long Dollar Gold Trust Under NYSE Arca Equities Rule 8.201); 
80840 (June 1, 2017), 82 FR 26534 (June 7, 2017) (SR-NYSEArca-2017-
33) (order approving listing and trading of shares of the Euro Gold 
Trust, Pound Gold Trust, and the Yen Gold Trust Under NYSE Arca 
Equities Rule 8.201).
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Change to Representation Regarding the Government Guarantee
    The Prior Notice referred to a Government Guarantee provided by the 
State of Western Australia \14\ and stated that the Government 
Guarantee applies to all gold held by the Custodian or sub-custodian, 
whether in the Trust Allocated Metal Account, the Trust Unallocated 
Metal Account, the ``GC Metal Account'' or in a Customer Account, for 
the benefit of the Trust or an investor who is the Gold Corporation's 
direct customer. The Government Guarantee applies only to Physical Gold 
held in The Perth Mint's vaults.
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    \14\ See note 29 of the Prior Notice, which stated that the Gold 
Corporation, doing business as the Perth Mint, is a Western 
Australian Government owned statutory body corporate established by 
the Gold Corporation Act 1987 (Western Australia) (the ``WA Act''). 
The Government Guarantee provided by the State of Western Australia 
pursuant to Section 22 of the WA Act provides (among other things) 
that the payment of the cash equivalent of gold due, payable and 
deliverable by the Custodian under the WA Act is guaranteed by the 
Treasurer of Western Australia, in the name and on behalf of the 
Crown in the right of the State of Western Australia.
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    As the Custodian is not affiliated with the State of Western 
Australia, the Custodian intends to substitute the Government Guarantee 
with insurance on the Physical Gold held by the Custodian or a sub-
custodian. The Custodian has represented that it will maintain adequate 
insurance from reputable and solvent insurers of international standing 
that is customary with other single-asset commodity-based Exchange 
Traded Products. Moreover, the costs of insuring the Physical Gold held 
by the Custodian or a sub-custodian will be assumed by the Custodian 
and not the Trust directly. The Trust's expense ratio will not change 
as a result of the new Custodian being appointed. Accordingly, the 
Exchange proposes to change this representation to state that the 
Government Guarantee referenced in the Prior Releases is eliminated. 
Because the Custodian intends to provide insurance to the Trust for the 
Physical Gold held by the Custodian or a sub-custodian, the removal of 
the Government Guarantee will not impact investors' ability to invest 
in the Shares.
Change to Representation Regarding Delivery of Required Deposits
    The First Prior Notice stated that an Authorized Participant who 
places a purchase order is responsible for crediting the Trust 
Unallocated Metal Account with the required gold deposit amount by 9:00 
a.m. London time on the third business day following the purchase order 
date. The Exchange proposes to change the above reference from 9:00 
a.m. London time to 8:00 a.m. London time.
    In addition, in connection with information regarding the required 
gold deposit, the Exchange proposes that the Sponsor shall publish, or 
shall designate another person to publish, for each business day, the 
``Basket Gold Amount''.
2. Statutory Basis
    The basis under the Act for this proposed rule change is the 
requirement under Section 6(b)(5) \15\ 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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    \15\ 15 U.S.C. 78f(b)(5).
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    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.
    With respect to the proposed elimination of an investor's ability 
to take delivery of Physical Gold, the Exchange believes that, given 
the limited use of this feature, as noted above, and the fact that 
investors have been notified through the 8-K that this feature will be 
removed, this change will not impact investors' ability to invest in 
the Shares. The Exchange notes that the Commission has previously 
approved Exchange listing and trading of shares of gold trusts under 
NYSE Arca Rule 8.201-E without the ability of individual investors to 
receive Physical Gold from a trust outside the redemption process 
utilized

[[Page 78394]]

by Authorized Participants.\16\ Except as described in this proposed 
rule change, procedures relating to creation and redemption of Shares 
as applied to Authorized Participants, as described in the Prior 
Releases, will remain unchanged.
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    \16\ See note 13, supra.
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    With respect to the proposed elimination of the Government 
Guarantee as referenced above, because the Custodian intends to provide 
insurance to the Trust for the Physical Gold held by the Custodian or a 
sub-custodian, the removal of the Government Guarantee will not impact 
investors' ability to invest in a product that reflects the performance 
of the price of gold less the expenses of the Trust's operations.
    The Exchange represents that the proposed changes described above 
are consistent with the Trust's investment objective, and will further 
assist the Sponsor to achieve such investment objective. Except for the 
changes noted above, all other representations made in the Prior 
Releases remain unchanged.

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 changes, because of the removal of the ability for 
investors to take delivery of Physical Gold, like other gold trusts 
listed under NYSE Arca Rule 8.201-E,\17\ and the reduction in certain 
time frames, regarding delivery of required deposits and other 
redemption procedures, will enhance competition among issues of gold-
based Commodity-Based Trust Shares.
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    \17\ Id.
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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

    Because the foregoing 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 for 
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 \18\ and Rule 19b-4(f)(6) 
thereunder.\19\
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    \18\ 15 U.S.C. 78s(b)(3)(A).
    \19\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change, along 
with a brief description and text of 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) \20\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, Rule 19b-4(f)(6)(iii) \21\ permits the Commission to 
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 proposed 
rule change may become effective and operative immediately upon filing. 
The Exchange states that the proposed changes will not adversely impact 
investors and will permit the Trust to promptly implement the 
efficiencies associated with the proposed operational and 
administrative changes described in the 8-K. The Commission believes 
that waiving the 30-day operative delay is consistent with the 
protection of investors and the public interest. For this reason, the 
Commission hereby waives the 30-day operative delay and designates the 
proposed rule change as operative upon filing.\22\
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    \20\ 17 CFR 240.19b-4(f)(6).
    \21\ 17 CFR 240.19b-4(f)(6)(iii).
    \22\ 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 also 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. If the Commission 
takes such action, the Commission will institute proceedings to 
determine whether the proposed rule change should be approved or 
disapproved.

IV. Solicitation of Comments

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

Electronic comments:

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-NYSEArca-2020-100 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-2020-100. 
This file number should be included on the subject line if email is 
used. To help the Commission process and review your comments more 
efficiently, please use only one method. The Commission will post all 
comments on the Commission's internet website (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, 
all written statements with respect to the proposed rule change that 
are filed with the Commission, and all written communications relating 
to the proposed rule change between the Commission and any person, 
other than those that may be withheld from the public in accordance 
with the provisions of 5 U.S.C. 552, will be available for website 
viewing and printing in the Commission's Public Reference Room, 100 F 
Street NE, Washington, DC 20549 on official business days between the 
hours of 10:00 a.m. and 3:00 p.m. Copies of the filing also will be 
available for inspection and copying at the principal offices 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-2020-100, and 
should be submitted on or before December 28, 2020.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\23\
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    \23\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLes Dernier,
Assistant Secretary.
[FR Doc. 2020-26674 Filed 12-3-20; 8:45 am]
BILLING CODE 8011-01-P