Document ID: SEC-2020-1144-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc.
Posted Date: 2020-07-20T04:00Z

[Federal Register Volume 85, Number 139 (Monday, July 20, 2020)]
[Notices]
[Pages 43932-43938]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-15553]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-89310; File No. SR-NYSEArca-2020-59]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
of Proposed Rule Change To Amend NYSE Arca Rule 8.201-E (Commodity-
Based Trust Shares) and To Permit the Listing and Trading of Shares of 
the United States Gold and Treasury Investment Trust Under NYSE Arca 
Rule 8.201-E

July 14, 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 June 30, 2020, NYSE Arca, Inc. (``NYSE Arca'' 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 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 (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, or (b) a specified 
commodity and, in addition to such specified commodity, U.S. Department 
of Treasury securities and/or cash, and to issue and redeem shares for 
such commodity and/or cash; and (2) to list and trade shares of the 
United States Gold and Treasury Investment Trust under NYSE Arca Rule 
8.201-E as proposed to be amended. The proposed 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 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, U.S. 
Department of Treasury securities and/or cash, and (2) to list and 
trade shares (``Shares'') of the United States Gold and Treasury 
Investment Trust (``Trust'') under NYSE Arca Rule 8.201-E as proposed 
to be amended.\4\
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    \4\ On May 8, 2020, the Trust filed Amendment No. 1 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.
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    The Trust will not be registered as an investment company under the 
Investment Company Act of 1940, as amended.\5\ The Trust is not a 
commodity pool for purposes of the Commodity Exchange Act, as 
amended.\6\
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    \5\ 15 U.S.C. 80a-1.
    \6\ 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 and treasury custodian (``Treasury 
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 
Trust; \7\ Merk Gold Trust; \8\ ETFS Gold Trust; \9\ ETFS

[[Page 43933]]

Platinum Trust \10\ and ETFS Palladium Trust (collectively, the ``ETFS 
Trusts''); \11\ APMEX Physical-1 oz. Gold Redeemable Trust; \12\ Sprott 
Gold Trust; \13\ SPDR Gold Trust (formerly, streetTRACKS Gold Trust); 
iShares Silver Trust; \14\ iShares COMEX Gold Trust; \15\ Long Dollar 
Gold Trust; \16\ Euro Gold Trust, Pound Gold Trust and Yen 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 UTP.\21\
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    \7\ 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).
    \8\ Securities Exchange Act Release No. 71378 (January 23, 
2014), 79 FR 4786 (January 29, 2014) (SR-NYSEArca-2013-137).
    \9\ Securities Exchange Act Release No. 59895 (May 8, 2009), 74 
FR 22993 (May 15, 2009) (SR-NYSEArca-2009-40).
    \10\ Securities Exchange Act Release No. 61219 (December 22, 
2009), 74 FR 68886 (December 29, 2009) (SR-NYSEArca-2009-95).
    \11\ Securities Exchange Act Release No. 61220 (December 22, 
2009), 74 FR 68895 (December 29, 2009) (SR-NYSEArca-2009-94).
    \12\ Securities Exchange Act Release No 66930 (May 7, 2012), 77 
FR 27817 (May 11, 2012) (SR-NYSEArca-2012-18).
    \13\ Securities Exchange Act Release No. 61496 (February 4, 
2010), 75 FR 6758 (February 10, 2010) (SR-NYSEArca-2009-113).
    \14\ 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).
    \15\ 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 streetTRACKS 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).
    \16\ See Securities Exchange Act Release No. 79518 (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).
    \17\ See Securities Exchange Act Release No. 80840 (June 17, 
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).
    \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 unlisted trading privileges (``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 may be redeemed in the same specified minimum number by 
a holder for the quantity of the underlying commodity. 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, U.S. Department of Treasury securities and/or 
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.''
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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 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 issuance or redemption of 
shares. In addition, the proposed change will accommodate a trust's 
holding U.S. Department of Treasury securities (such as U.S. Treasury 
Bills (``T-Bills'')) 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) (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) (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 (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 4, supra.
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    According to the Registration Statement, the Trust will have no 
assets other than (a) physical gold bullion (``Physical Gold'') and (b) 
short term duration T-Bills in proportions that seek to closely 
replicate the Gold Treasury Index (the ``Index''), as described below.

[[Page 43934]]

The Trust will also hold U.S. dollars for short periods of time in 
connection with (i) the purchase, sale and/or maturity of T-Bills, (ii) 
the purchase and sale of Physical Gold, (iii) creations and redemptions 
of Shares (as described below), and (iv) to pay fees and expenses of 
the Trust.
    The investment objective of the Trust is for the Shares to closely 
reflect the Index, which is published by the ``Index Calculation 
Agent'', less the Trust's liabilities and expenses. The amount of 
Physical Gold and T-Bills held by the Trust will be determined by the 
Index. On the last business day of each month (the ``Rebalance Date''), 
the Index will dynamically calculate its weightings of Physical Gold, 
and T-Bills based on the volatility of gold and the volatility of the 
U.S. equity markets utilizing 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 and 
T-Bills on a monthly basis for consistency with the Index weights.\26\
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    \26\ 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 Gold Treasury Index
    The Index is calculated and published by the Index Calculation 
Agent. The Index value using the London Bullion Market Association 
(``LBMA'') Gold Price PM (defined below) \27\ will be calculated and 
published daily each business day at approximately 5:00 p.m. (Eastern 
time (``E.T.'')). 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. 
Eastern time (``E.T.'').
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    \27\ See note 33, 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.\28\
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    \28\ 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 two 
components: (i) A notional component representing Physical Gold (the 
``Physical Gold Component'') and (ii) a notional component representing 
T-Bills (the ``Treasury Component'').
    On each Rebalance Date, the Index rebalances its weighting of the 
Physical Gold Component and the T-Bill Component utilizing a 
mathematically derived passive rules-based methodology. This 
methodology employs realized volatility of the LBMA Gold Price PM \29\ 
and volatility measures of the U.S. equity markets utilizing a look-
back period, among other parameters. At the end of each month, the 
Index Calculation Agent calculates the Index's new weights for the 
Physical Gold Component and the T-Bill Component based on the 
immediately preceding period's LBMA Gold Price PM (defined below) and 
volatility measures of the U.S. equity markets.
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    \29\ See note 33, infra.
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    According to the Registration Statement, the new percentage weight 
for the Physical Gold Component will generally be lower than the prior 
month if realized volatility is higher than during the previous 
calculation, and vice versa. In addition, during times of distress 
within the U.S. equity markets, as signaled by volatility measures, the 
Index will calculate a higher weight for the overall exposure to gold. 
The weights of the Physical Gold Component and the T-Bill Component 
will never be negative. The weight for the Physical Gold Component will 
not exceed 100%. The combined weights of the Physical Gold Component 
and the T-Bill Component will always sum to 100%, and if the weight of 
the Physical Gold Component is 100%, then the weight of the T-Bill 
Component will be zero.
    On each Rebalance Date, following the calculation of the weighting 
of the components of the Index, the Trust will rebalance its assets in 
order to closely replicate the Index. The Index's weight for the 
Physical Gold 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.
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 and the T-Bill 
Component of the Index, 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.\30\ If no LBMA Gold Price (defined below) is available for the 
day, the Administrator values the Trust's gold based on the most 
recently announced LBMA Gold Price PM or LBMA Gold Price AM.
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    \30\ See note 33, infra.
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T-Bill Component
    The T-Bill Component of the Index is a notional component 
representing T-Bills, which are short-term U.S. Treasury 
securities.\31\
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    \31\ U.S. Treasury securities are debt obligations issued by, 
and backed by the full faith and credit of the U.S. government. U.S. 
Treasury securities are highly liquid, have low volatility, and 
generally come in three varieties based on maturity: (i) Treasury 
bills; (ii) Treasury notes; and (iii) Treasury bonds.
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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'' \32\ 
and the ``Treasury and Cash Holdings,'' \33\ 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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    \32\ ``Physical Gold Holdings'' is defined in the Registration 
Statement as the Trust's holdings of Physical Gold.
    \33\ ``Treasury and Cash Holdings'' is defined in the 
Registration Statement as the value of the T-Bills and 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.\34\
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    \34\ 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 fair value of T-Bills based on 
the price of each T-Bill held by the Trust plus 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

[[Page 43935]]

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 Marketing Agent to create one 
or more ``Creation Units.'' Creation orders must be placed by 9:15 
a.m., E.T.\35\ Creation Units are issued on the creation order 
settlement date as of 2:45 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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    \35\ 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 at least 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 Marketing 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 
as of 2:45 p.m., E.T. 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 at 2:45 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
    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 T-Bills 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 T-Bills.\36\
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    \36\ 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.
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    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 \37\ 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. Finally, the Trust's website will provide the prior day's 
closing 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.
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    \37\ 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.
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    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, there will be disseminated over the 
Consolidated Tape the last sale price for the Shares. 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. Investors may obtain 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 by the Sponsor 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 stockholders.
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-

[[Page 43936]]

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 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 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.\38\ 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 
IIV or the official Index value persists past the trading day in which 
it occurred, the Exchange will halt trading in the Shares.
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    \38\ See NYSE Arca Rule 7.12-E.
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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.\39\ 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.
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    \39\ 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.
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    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.\40\
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    \40\ For a list of the current members of ISG, see 
www.isgportal.org.
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    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 portfolio, (b) limitations on portfolio 
holdings or reference assets, or (c) the applicability of Exchange 
listing rules specified in this rule filing shall 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).
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 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

[[Page 43937]]

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) \41\ 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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    \41\ 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 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.\42\ 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 U.S. Department of Treasury Securities 
(such as T-Bills) 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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    \42\ See note 23, supra.
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    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. Investors may obtain 
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 by the Sponsor 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 most recent reports 
to stockholders.
    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 will enhance competition by accommodating Exchange 
trading of an additional exchange-traded product 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. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Within 45 days of the date of publication of this notice in the 
Federal Register or within such longer period up to 90 days (i) as the 
Commission may designate if it finds such longer period to be 
appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (A) By order approve or disapprove the proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule 
change should be disapproved.

[[Page 43938]]

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-2020-59 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 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 August 10, 2020.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\43\
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    \43\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.

[FR Doc. 2020-15553 Filed 7-17-20; 8:45 am]
BILLING CODE 8011-01-P