Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing of a Proposed Rule Change To Amend the Fidelity Wise Origin Bitcoin Fund and the Fidelity Ethereum Fund, 10664-10667 [2025-03031]

Download as PDF 10664 Federal Register / Vol. 90, No. 36 / Tuesday, February 25, 2025 / Notices is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend its fee schedule to adopt fees for Cboe Timestamping Service reports. The text of the proposed rule change is provided in Exhibit 5. The proposed rule change, including the Exchange’s statement of the purpose of, and statutory basis for, the proposed rule change, is available on the Exchange’s website at https:// www.cboe.com/us/options/regulation/ rule_filings/ and on the Commission’s website at https://www.sec.gov/rulesregulations/self-regulatory-organizationrulemaking/national-securitiesexchanges?file_number=SR-CBOE-2025010. lotter on DSK11XQN23PROD with NOTICES1 II. 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.5 Comments may be submitted electronically by using the Commission’s internet comment form (https://www.sec.gov/rules-regulations/ self-regulatory-organizationrulemaking/national-securitiesexchanges?file_number=SR-CBOE-2025010) or by sending an email to rulecomments@sec.gov. Please include file number SR–CBOE–2025–010 on the subject line. Alternatively, paper comments may be sent to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549–1090. All submissions should refer to file number SR–CBOE–2025– 010. 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 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. 5 Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for website viewing and printing in the Commission’s Public Reference Room, 100 F Street NE, Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. VerDate Sep<11>2014 17:40 Feb 24, 2025 Jkt 265001 (https://www.sec.gov/rules-regulations/ self-regulatory-organizationrulemaking/national-securitiesexchanges?file_number=SR-CBOE-2025010). Do not include personal identifiable information in submissions; you should submit only information that you wish to make available publicly. We may redact in part or withhold entirely from publication submitted material that is obscene or subject to copyright protection. All submissions should refer to file number SR–CBOE–2025–010 and should be submitted on or before March 18, 2025. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.6 Sherry R. Haywood, Assistant Secretary. [FR Doc. 2025–03026 Filed 2–24–25; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–102451; File No. SR– CboeBZX–2025–023] Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing of a Proposed Rule Change To Amend the Fidelity Wise Origin Bitcoin Fund and the Fidelity Ethereum Fund February 19, 2025. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on February 7, 2025, Cboe BZX Exchange, Inc. (the ‘‘Exchange’’ or ‘‘BZX’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I, II, and III 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. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change Cboe BZX Exchange, Inc. (‘‘BZX’’ or the ‘‘Exchange’’) is filing with the Securities and Exchange Commission (‘‘Commission’’ or ‘‘SEC’’) a proposed rule change to amend the Fidelity Wise Origin Bitcoin Fund (the ‘‘Bitcoin Trust’’) and the Fidelity Ethereum Fund (the ‘‘Eth Trust’’ and, collectively with the Bitcoin Trust, the ‘‘Trusts’’). The text of the proposed rule change is also available on the Exchange’s 6 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 PO 00000 Frm 00042 Fmt 4703 Sfmt 4703 website (https://markets.cboe.com/us/ equities/regulation/rule_filings/bzx/), at the Exchange’s Office of the Secretary, and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Commission approved the listing and trading of shares (the ‘‘Bitcoin ETP Shares’’) of the Bitcoin Trust on the Exchange pursuant to Exchange Rule 14.11(e)(4), Commodity-Based Trust Shares, on January 10, 2024.3 The Commission also approved the listing and trading of shares (the ‘‘ETH ETP Shares’’) of the Eth Trust on the Exchange pursuant to Exchange Rule 14.11(e)(4), Commodity-Based Trust Shares, on May 23, 2024.4 Exchange Rule 14.11(e)(4) governs the listing and trading of Commodity-Based Trust Shares, which means a security (a) that is issued by a trust that holds (1) a specified commodity deposited with the trust, or (2) a specified commodity and, 3 See Securities Exchange Act Release Nos. 99290 (January 8, 2024) 89 FR 2338 (January 12, 2024) (SR–CboeBZX–2023–044) (Notice of Filing of Amendment No. 3 to a Proposed Rule Change To List and Trade Shares of the Wise Origin Bitcoin Fund Under BZX Rule 14.11(e)(4), CommodityBased Trust Shares) (‘‘Bitcoin ETP Amendment No. 3’’); 99306 (January 10, 2024) 89 FR 3008 (January 17, 2024) (SR–CboeBZX–2023–044) (Order Granting Accelerated Approval of Proposed Rule Changes, as Modified by Amendments Thereto, To List and Trade Bitcoin-Based Commodity-Based Trust Shares and Trust Units) (the ‘‘Bitcoin ETP Approval Order’’). 4 See Securities Exchange Act Release Nos. 100215 (May 22, 2024) 89 FR 46478 (May 29, 2024) (SR–CboeBZX–2023–095) (Notice of Filing of Amendment No. 2 to a Proposed Rule Change to List and Trade Shares of the Fidelity Ethereum Fund Under BZX Rule 14.11(e)(4), CommodityBased Trust Shares) (‘‘Eth ETP Amendment No. 2’’); 100224 (May 23, 2024) 89 FR 46937 (May 30, 2024) (SR–CboeBZX–2023–095) (Order Granting Accelerated Approval of Proposed Rule Changes, as Modified by Amendments Thereto, to List and Trade Shares of Ether-Based Exchange-Traded Products) (the ‘‘ETH ETP Approval Order’’). E:\FR\FM\25FEN1.SGM 25FEN1 Federal Register / Vol. 90, No. 36 / Tuesday, February 25, 2025 / Notices in addition to such specified commodity, 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. The Bitcoin ETP Shares are issued by the Bitcoin Trust and the ETH ETP Shares are issued by the Eth Trust. The Bitcoin Trust was formed as a Delaware statutory trust on March 17, 2021 and the Eth Trust was formed as a Delaware statutory trust on October 31, 2023. Bitcoin Trust The Exchange proposes to amend several portions of the Bitcoin ETP Amendment No. 3 in order to permit inkind creation and redemptions. lotter on DSK11XQN23PROD with NOTICES1 Representations The Bitcoin ETP Amendment No. 3 included a specific representation making clear that the Bitcoin Trust would only process creations and redemptions in cash. Specifically, the ‘‘Investment Objective’’ section of the Bitcoin ETP Amendment No. 3 stated: In seeking to achieve its investment objective, the Trust will hold bitcoin, cash, and cash equivalents and will value its Shares daily as of 4:00 p.m. Eastern time using the Index price to value the bitcoin and process all creations and redemptions in cash transactions with authorized participants.5 The Exchange proposes to replace the above with the following: In seeking to achieve its investment objective, the Trust will hold bitcoin, cash, and cash equivalents and will value its Shares daily as of 4:00 p.m. Eastern time using the Index price to value the bitcoin and process all creations and redemptions in cash or inkind transactions with authorized participants. Creation and Redemption of Shares Additionally, the ‘‘Creation and Redemption of Shares’’ section of the filing includes a detailed description of how the cash-only creation and redemption process works.6 The Exchange proposes to replace this section as follows: Creation and Redemption of Shares When the Trust creates or redeems its Shares, it will do so in cash or in-kind. 5 Bitcoin 6 Bitcoin ETP Amendment No. 3 at 2366. ETP Amendment No. 3 at 2368. VerDate Sep<11>2014 17:40 Feb 24, 2025 Jkt 265001 In connection with cash creations and cash redemptions, the authorized participants will submit orders to create or redeem Baskets of Shares in exchange for cash. When the Trust creates or redeems its Shares in cash, it will do so in transactions in blocks of 25,000 Shares that are based on the quantity of bitcoin attributable to each Share of the Trust (e.g., a Creation Basket) at the Trust’s NAV. When the Trust creates or redeems its Shares in kind, it will do so in transfers of bitcoin in blocks of 25,000 Shares that are based on the quantity of bitcoin attributable to the Creation Basket being created or redeemed. The authorized participants will deliver or cause to be delivered cash or bitcoin to create Shares and the authorized participant or its designee will receive cash or bitcoin when redeeming Shares. The Trust will create Shares by receiving bitcoin or cash from an authorized participant or its designee and will redeem shares by delivering bitcoin or cash to an authorized participant or its designee. On any business day, an authorized participant may place an order to create one or more Creation Baskets. Purchase orders must be placed by the close of Regular Trading Hours on the Exchange or another time determined by the Sponsor. The day on which an order is received is considered the purchase order date. For a cash creation order, the total deposit of cash required is an amount of cash sufficient to purchase such amount of bitcoin, the amount of which is equal to the combined NAV of the number of Shares included in the Creation Baskets being created determined as of 4:00 p.m. ET on the date the order to purchase is properly received. For a creation order in kind, the total in-kind transfer of bitcoin is based on the quantity of bitcoin attributable to the Creation Baskets being created determined as of 4:00 p.m. ET on the date the order to purchase is properly received. The Administrator determines the quantity of bitcoin used to calculate the Creation Basket for a given day by dividing the number of bitcoin held by the Trust as of the opening of business on that business day, adjusted for the amount of bitcoin constituting estimated accrued but unpaid fees and expenses of the Trust as of the opening of business on that business day, by the quotient of the number of Shares outstanding at the opening of business divided by the number of Shares in a Creation Basket. The procedures by which an authorized participant can redeem one or more Creation Baskets mirror the PO 00000 Frm 00043 Fmt 4703 Sfmt 4703 10665 procedures for the creation of Creation Baskets. For a cash creation order, an authorized participant will deliver cash to create Shares. For an in-kind creation order, an authorized participant or its designee will deliver bitcoin to create Shares. For a cash redemption order, an authorized participant will deliver Shares to the Trust and will receive cash for the Shares delivered. For an in-kind redemption order, an authorized participant will deliver Shares to the Trust and the authorized participant or its designee will receive bitcoin for the Shares delivered. Eth Trust Similarly, the Exchange proposes to amend several portions of the Eth ETP Amendment No. 2 in order to permit inkind creations and redemptions. Representations The Eth ETP Amendment No. 2 included a specific representation making clear that the Eth Trust would only process creations and redemptions in cash. Specifically, the ‘‘Investment Objective’’ section of the Eth ETP Amendment No. 2 stated: In seeking to achieve its investment objective, the Trust will hold ETH, cash, and cash equivalents and will value its Shares daily as of 4:00 p.m. Eastern time using the Index price to value the ether and process all creations and redemptions in transactions in cash transactions with authorized participants. The Trust is not actively managed.7 The Exchange proposes to replace the above with the following: In seeking to achieve its investment objective, the Trust will hold ETH, cash, and cash equivalents and will value its Shares daily as of 4:00 p.m. Eastern time using the Index price to value the ether and process all creations and redemptions in transactions in cash or in-kind transactions with authorized participants. The Trust is not actively managed. Creation and Redemption of Shares Additionally, the ‘‘Creation and Redemption of Shares’’ section of the filing includes a detailed description of how the cash-only creation and redemption process works.8 The Exchange proposes to replace this section as follows: Creation and Redemption of Shares When the Trust creates or redeems its Shares, it will do so in cash or in-kind. In connection with cash creations and 7 See 8 See E:\FR\FM\25FEN1.SGM Eth ETP Amendment No. 2 at 46488. Eth ETP Amendment No. 2 at 46489–46490. 25FEN1 lotter on DSK11XQN23PROD with NOTICES1 10666 Federal Register / Vol. 90, No. 36 / Tuesday, February 25, 2025 / Notices cash redemptions, the authorized participants will submit orders to create or redeem Baskets of Shares in exchange for cash. When the Trust creates or redeems its Shares in cash, it will do so in transactions in blocks of 25,000 Shares that are based on the quantity of ether attributable to each Share of the Trust (e.g., a Creation Basket) at the Trust’s NAV. When the Trust creates or redeems its Shares in-kind, it will do so in transfers of ether in blocks of 25,000 Shares that are based on the quantity of ether attributable to the Creation Basket being created or redeemed. The authorized participants will deliver or cause to be delivered cash or ether to create Shares and the authorized participant or its designee will receive cash or ether when redeeming Shares. The Trust will create Shares by receiving ether or cash from an authorized participant or its designee and will redeem Shares by delivering ether or cash to an authorized participant or its designee. On any business day, an authorized participant may place an order to create one or more Creation Baskets. Purchase orders must be placed by the close of Regular Trading Hours on the Exchange or another time determined by the Sponsor. The day on which an order is received is considered the purchase order date. For a cash creation order, the total deposit of cash required is an amount of cash sufficient to purchase such amount of ether, the amount of which is based on the combined NAV of the number of Shares included in the Creation Baskets being created determined as of 4:00 p.m. ET on the date the order to purchase is properly received. For a creation order in kind, the total in-kind transfer of ether is based on the quantity of ether attributable to the Creation Baskets being created determined as of 4:00 p.m. ET on the date the order to purchase is properly received. The Administrator determines the quantity of ether used to calculate the Creation Basket for a given day by dividing the number of ether held by the Trust as of the opening of business on that business day, adjusted for the amount of ether constituting estimated accrued but unpaid fees and expenses of the Trust as of the opening of business on that business day, by the quotient of the number of Shares outstanding at the opening of business divided by the number of Shares in a Creation Basket. The procedures by which an authorized participant can redeem one or more Creation Baskets mirror the procedures for the creation of Creation Baskets. For a cash creation order, an VerDate Sep<11>2014 17:40 Feb 24, 2025 Jkt 265001 authorized participant will deliver cash to create Shares. For an in-kind creation order, an authorized participant or its designee will deliver ether to create Shares. For a cash redemption order, an authorized participant will deliver Shares to the Trust and will receive cash for the Shares delivered. For an in-kind redemption order, an authorized participant will deliver Shares to the Trust and the authorized participant or its designee will receive ether for the Shares delivered. Conclusion Except for the above changes, all other representations in the Bitcoin ETP Amendment No. 3 and the Eth ETP Amendment No. 2 remain unchanged and will continue to constitute continuing listing requirements. In addition, the Bitcoin Trust will continue to comply with the terms of Bitcoin ETP Amendment No. 3 and the Eth Trust will continue to comply with the terms of Eth ETP Amendment No. 2 and the Trusts will continue to comply with the requirements of Rule 14.11(e)(4). 2. Statutory Basis The Exchange believes the proposed rule change is consistent with the Act and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of Section 6(b) of the Act.9 Specifically, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) 10 requirements that the rules of an exchange be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, 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. The Exchange believes the proposed rule change is designed to remove impediments to and perfect the mechanism of a free and open market and, in general, to protect investors and the public interest because it would update representations in both the Bitcoin ETP Amendment No. 3 and the Eth ETP Amendment No. 2 such that the Trusts would both be able to engage in in-kind creation and redemptions with authorized participants or their designees, as described above. This ability would make the Trusts (and the 9 15 U.S.C. 78f(b). U.S.C. 78f(b)(5). 10 15 PO 00000 Frm 00044 Fmt 4703 Sfmt 4703 market more generally) operate more efficiently because authorized participants would be able to source bitcoin or ether, as applicable, rather than to provide cash to the applicable Trust and to receive bitcoin or ether from the Trusts. This means that the authorized participant would be responsible for buying and selling the applicable crypto asset rather than the Trust itself, which would potentially lessen the impact on the market of the Trusts on both sides of the transaction by allowing the authorized participant to decide how and where to source the underlying crypto asset for creations and deciding how, where, and whether to sell the underlying crypto asset received for redemptions. This would improve the creation and redemption process for both authorized participants and the Trusts, increase efficiency, and ultimately benefit the end investors in the Trusts. Except for the addition of in-kind creation and redemption for the Bitcoin Trust as specifically set forth herein, all other representations made in the Bitcoin ETP Amendment No. 3 remain unchanged and will continue to constitute continuing listing requirements for the Bitcoin Trust. Similarly, except for the addition of inkind creation and redemption for the Eth Trust as specifically set forth herein, all other representations made in the Eth ETP Amendment No. 2 remain unchanged and will continue to constitute continuing listing requirements for the Eth Trust. 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. As noted above, the proposed amendment is intended to allow the Trusts to operate more efficiently by allowing for in-kind creation and redemption. The Exchange believes these changes will not impose any burden on competition. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange neither solicited nor received comments on 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 E:\FR\FM\25FEN1.SGM 25FEN1 Federal Register / Vol. 90, No. 36 / Tuesday, February 25, 2025 / Notices 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 Exchange consents, the Commission will: A. by order approve or disapprove such proposed rule change, or B. institute proceedings to determine whether the proposed rule change should be 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: lotter on DSK11XQN23PROD with NOTICES1 Electronic Comments • Use the Commission’s internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include file number SR– CboeBZX–2025–023 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–CboeBZX–2025–023. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s internet website (https://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for website viewing and printing in the Commission’s Public Reference Room, 100 F Street NE, Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. Do not include personal identifiable information in submissions; you should submit only information that you wish to make available publicly. We may redact in part or withhold entirely from publication VerDate Sep<11>2014 17:40 Feb 24, 2025 Jkt 265001 submitted material that is obscene or subject to copyright protection. All submissions should refer to file number SR–CboeBZX–2025–023 and should be submitted on or before March 18, 2025. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.11 Sherry R. Haywood, Assistant Secretary. [FR Doc. 2025–03031 Filed 2–24–25; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–102443; File No. SR– NASDAQ–2025–012] Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing of Proposed Rule Change To List and Trade Shares of the CoinShares XRP ETF Under Nasdaq Rule 5711(d) February 19, 2025. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1, and Rule 19b–4 thereunder,2 notice is hereby given that on February 7, 2025, The Nasdaq Stock Market LLC (‘‘Nasdaq’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’) the proposed rule change as described in Items I, II, and III, 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. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to list and trade shares of the CoinShares XRP ETF (the ‘‘Trust’’) under Nasdaq Rule 5711(d) (‘‘Commodity-Based Trust Shares’’). The shares of the Trust are referred to herein as the ‘‘Shares.’’ The text of the proposed rule change is available on the Exchange’s website at https://listingcenter.nasdaq.com/ rulebook/nasdaq/rulefilings, at the principal office of the Exchange, and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements 11 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 PO 00000 Frm 00045 Fmt 4703 Sfmt 4703 10667 concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to list and trade the Shares under Nasdaq Rule 5711(d), which governs the listing and trading of Commodity-Based Trust Shares on the Exchange.3 CoinShares Co. is the sponsor of the Trust (the ‘‘Sponsor’’).4 Any statements or representations included in this proposal regarding: (a) the description of the reference assets or trust holdings; (b) limitations on the reference assets or trust holdings; (c) dissemination and availability of the reference asset or intraday indicative value; or (d) the applicability of Nasdaq listing rules specified in this proposal shall constitute continued listing standards for the Shares listed on the Exchange. Overview of the Trust and the Shares According to the Registration Statement, the Trust is a Delaware Statutory Trust that was formed on December 10, 2024. The Trust will operate pursuant to a trust agreement (the ‘‘Trust Agreement’’), as amended and/or restated from time to time. CSC Delaware Trust Company, a Delaware corporation, is the trustee of the Trust (the ‘‘Trustee’’). A third party will be the transfer agent of the Trust (in such capacity, the ‘‘Transfer Agent’’) and the administrator of the Trust (in such capacity, the ‘‘Administrator’’). A thirdparty custodian (the ‘‘Custodian’’) will be responsible for the custody of the Trust’s XRP. According to the Registration Statement, each Share will represent a fractional undivided beneficial interest in and ownership of the Trust. The 3 The Commission approved Nasdaq Rule 5711 in Securities Exchange Act Release No. 66648 (March 23, 2012), 77 FR 19428 (March 30, 2012) (SR– NASDAQ–2012–013). 4 See Registration Statement on Form S–1, dated January 24, 2025 filed with the Commission on behalf of the Trust. The descriptions of the Trust, the Shares, the Index (as defined below), and XRP contained herein are based, in part, on information in the Registration Statement. The Registration Statement in not yet effective and the Shares will not trade on the Exchange until such time that the Registration Statement is effective. E:\FR\FM\25FEN1.SGM 25FEN1

Agencies

[Federal Register Volume 90, Number 36 (Tuesday, February 25, 2025)]
[Notices]
[Pages 10664-10667]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-03031]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-102451; File No. SR-CboeBZX-2025-023]


Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of 
Filing of a Proposed Rule Change To Amend the Fidelity Wise Origin 
Bitcoin Fund and the Fidelity Ethereum Fund

February 19, 2025.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on February 7, 2025, Cboe BZX Exchange, Inc. (the ``Exchange'' or 
``BZX'') filed with the Securities and Exchange Commission (the 
``Commission'') the proposed rule change as described in Items I, II, 
and III 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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Cboe BZX Exchange, Inc. (``BZX'' or the ``Exchange'') is filing 
with the Securities and Exchange Commission (``Commission'' or ``SEC'') 
a proposed rule change to amend the Fidelity Wise Origin Bitcoin Fund 
(the ``Bitcoin Trust'') and the Fidelity Ethereum Fund (the ``Eth 
Trust'' and, collectively with the Bitcoin Trust, the ``Trusts'').
    The text of the proposed rule change is also available on the 
Exchange's website (https://markets.cboe.com/us/equities/regulation/rule_filings/bzx/), at the Exchange's Office of the Secretary, and at 
the Commission's Public Reference Room.

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

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

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

1. Purpose
    The Commission approved the listing and trading of shares (the 
``Bitcoin ETP Shares'') of the Bitcoin Trust on the Exchange pursuant 
to Exchange Rule 14.11(e)(4), Commodity-Based Trust Shares, on January 
10, 2024.\3\ The Commission also approved the listing and trading of 
shares (the ``ETH ETP Shares'') of the Eth Trust on the Exchange 
pursuant to Exchange Rule 14.11(e)(4), Commodity-Based Trust Shares, on 
May 23, 2024.\4\ Exchange Rule 14.11(e)(4) governs the listing and 
trading of Commodity-Based Trust Shares, which means a security (a) 
that is issued by a trust that holds (1) a specified commodity 
deposited with the trust, or (2) a specified commodity and,

[[Page 10665]]

in addition to such specified commodity, 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. 
The Bitcoin ETP Shares are issued by the Bitcoin Trust and the ETH ETP 
Shares are issued by the Eth Trust. The Bitcoin Trust was formed as a 
Delaware statutory trust on March 17, 2021 and the Eth Trust was formed 
as a Delaware statutory trust on October 31, 2023.
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    \3\ See Securities Exchange Act Release Nos. 99290 (January 8, 
2024) 89 FR 2338 (January 12, 2024) (SR-CboeBZX-2023-044) (Notice of 
Filing of Amendment No. 3 to a Proposed Rule Change To List and 
Trade Shares of the Wise Origin Bitcoin Fund Under BZX Rule 
14.11(e)(4), Commodity-Based Trust Shares) (``Bitcoin ETP Amendment 
No. 3''); 99306 (January 10, 2024) 89 FR 3008 (January 17, 2024) 
(SR-CboeBZX-2023-044) (Order Granting Accelerated Approval of 
Proposed Rule Changes, as Modified by Amendments Thereto, To List 
and Trade Bitcoin-Based Commodity-Based Trust Shares and Trust 
Units) (the ``Bitcoin ETP Approval Order'').
    \4\ See Securities Exchange Act Release Nos. 100215 (May 22, 
2024) 89 FR 46478 (May 29, 2024) (SR-CboeBZX-2023-095) (Notice of 
Filing of Amendment No. 2 to a Proposed Rule Change to List and 
Trade Shares of the Fidelity Ethereum Fund Under BZX Rule 
14.11(e)(4), Commodity-Based Trust Shares) (``Eth ETP Amendment No. 
2''); 100224 (May 23, 2024) 89 FR 46937 (May 30, 2024) (SR-CboeBZX-
2023-095) (Order Granting Accelerated Approval of Proposed Rule 
Changes, as Modified by Amendments Thereto, to List and Trade Shares 
of Ether-Based Exchange-Traded Products) (the ``ETH ETP Approval 
Order'').
---------------------------------------------------------------------------

Bitcoin Trust
    The Exchange proposes to amend several portions of the Bitcoin ETP 
Amendment No. 3 in order to permit in-kind creation and redemptions.
Representations
    The Bitcoin ETP Amendment No. 3 included a specific representation 
making clear that the Bitcoin Trust would only process creations and 
redemptions in cash. Specifically, the ``Investment Objective'' section 
of the Bitcoin ETP Amendment No. 3 stated:
    In seeking to achieve its investment objective, the Trust will hold 
bitcoin, cash, and cash equivalents and will value its Shares daily as 
of 4:00 p.m. Eastern time using the Index price to value the bitcoin 
and process all creations and redemptions in cash transactions with 
authorized participants.\5\
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    \5\ Bitcoin ETP Amendment No. 3 at 2366.
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    The Exchange proposes to replace the above with the following:
    In seeking to achieve its investment objective, the Trust will hold 
bitcoin, cash, and cash equivalents and will value its Shares daily as 
of 4:00 p.m. Eastern time using the Index price to value the bitcoin 
and process all creations and redemptions in cash or in-kind 
transactions with authorized participants.
Creation and Redemption of Shares
    Additionally, the ``Creation and Redemption of Shares'' section of 
the filing includes a detailed description of how the cash-only 
creation and redemption process works.\6\ The Exchange proposes to 
replace this section as follows:
---------------------------------------------------------------------------

    \6\ Bitcoin ETP Amendment No. 3 at 2368.
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Creation and Redemption of Shares
    When the Trust creates or redeems its Shares, it will do so in cash 
or in-kind. In connection with cash creations and cash redemptions, the 
authorized participants will submit orders to create or redeem Baskets 
of Shares in exchange for cash. When the Trust creates or redeems its 
Shares in cash, it will do so in transactions in blocks of 25,000 
Shares that are based on the quantity of bitcoin attributable to each 
Share of the Trust (e.g., a Creation Basket) at the Trust's NAV. When 
the Trust creates or redeems its Shares in kind, it will do so in 
transfers of bitcoin in blocks of 25,000 Shares that are based on the 
quantity of bitcoin attributable to the Creation Basket being created 
or redeemed.
    The authorized participants will deliver or cause to be delivered 
cash or bitcoin to create Shares and the authorized participant or its 
designee will receive cash or bitcoin when redeeming Shares. The Trust 
will create Shares by receiving bitcoin or cash from an authorized 
participant or its designee and will redeem shares by delivering 
bitcoin or cash to an authorized participant or its designee.
    On any business day, an authorized participant may place an order 
to create one or more Creation Baskets. Purchase orders must be placed 
by the close of Regular Trading Hours on the Exchange or another time 
determined by the Sponsor. The day on which an order is received is 
considered the purchase order date.
    For a cash creation order, the total deposit of cash required is an 
amount of cash sufficient to purchase such amount of bitcoin, the 
amount of which is equal to the combined NAV of the number of Shares 
included in the Creation Baskets being created determined as of 4:00 
p.m. ET on the date the order to purchase is properly received.
    For a creation order in kind, the total in-kind transfer of bitcoin 
is based on the quantity of bitcoin attributable to the Creation 
Baskets being created determined as of 4:00 p.m. ET on the date the 
order to purchase is properly received.
    The Administrator determines the quantity of bitcoin used to 
calculate the Creation Basket for a given day by dividing the number of 
bitcoin held by the Trust as of the opening of business on that 
business day, adjusted for the amount of bitcoin constituting estimated 
accrued but unpaid fees and expenses of the Trust as of the opening of 
business on that business day, by the quotient of the number of Shares 
outstanding at the opening of business divided by the number of Shares 
in a Creation Basket.
    The procedures by which an authorized participant can redeem one or 
more Creation Baskets mirror the procedures for the creation of 
Creation Baskets. For a cash creation order, an authorized participant 
will deliver cash to create Shares. For an in-kind creation order, an 
authorized participant or its designee will deliver bitcoin to create 
Shares. For a cash redemption order, an authorized participant will 
deliver Shares to the Trust and will receive cash for the Shares 
delivered. For an in-kind redemption order, an authorized participant 
will deliver Shares to the Trust and the authorized participant or its 
designee will receive bitcoin for the Shares delivered.
Eth Trust
    Similarly, the Exchange proposes to amend several portions of the 
Eth ETP Amendment No. 2 in order to permit in-kind creations and 
redemptions.
Representations
    The Eth ETP Amendment No. 2 included a specific representation 
making clear that the Eth Trust would only process creations and 
redemptions in cash. Specifically, the ``Investment Objective'' section 
of the Eth ETP Amendment No. 2 stated:
    In seeking to achieve its investment objective, the Trust will hold 
ETH, cash, and cash equivalents and will value its Shares daily as of 
4:00 p.m. Eastern time using the Index price to value the ether and 
process all creations and redemptions in transactions in cash 
transactions with authorized participants. The Trust is not actively 
managed.\7\
---------------------------------------------------------------------------

    \7\ See Eth ETP Amendment No. 2 at 46488.
---------------------------------------------------------------------------

    The Exchange proposes to replace the above with the following:
    In seeking to achieve its investment objective, the Trust will hold 
ETH, cash, and cash equivalents and will value its Shares daily as of 
4:00 p.m. Eastern time using the Index price to value the ether and 
process all creations and redemptions in transactions in cash or in-
kind transactions with authorized participants. The Trust is not 
actively managed.
Creation and Redemption of Shares
    Additionally, the ``Creation and Redemption of Shares'' section of 
the filing includes a detailed description of how the cash-only 
creation and redemption process works.\8\ The Exchange proposes to 
replace this section as follows:
---------------------------------------------------------------------------

    \8\ See Eth ETP Amendment No. 2 at 46489-46490.
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Creation and Redemption of Shares
    When the Trust creates or redeems its Shares, it will do so in cash 
or in-kind. In connection with cash creations and

[[Page 10666]]

cash redemptions, the authorized participants will submit orders to 
create or redeem Baskets of Shares in exchange for cash. When the Trust 
creates or redeems its Shares in cash, it will do so in transactions in 
blocks of 25,000 Shares that are based on the quantity of ether 
attributable to each Share of the Trust (e.g., a Creation Basket) at 
the Trust's NAV. When the Trust creates or redeems its Shares in-kind, 
it will do so in transfers of ether in blocks of 25,000 Shares that are 
based on the quantity of ether attributable to the Creation Basket 
being created or redeemed.
    The authorized participants will deliver or cause to be delivered 
cash or ether to create Shares and the authorized participant or its 
designee will receive cash or ether when redeeming Shares. The Trust 
will create Shares by receiving ether or cash from an authorized 
participant or its designee and will redeem Shares by delivering ether 
or cash to an authorized participant or its designee.
    On any business day, an authorized participant may place an order 
to create one or more Creation Baskets. Purchase orders must be placed 
by the close of Regular Trading Hours on the Exchange or another time 
determined by the Sponsor. The day on which an order is received is 
considered the purchase order date.
    For a cash creation order, the total deposit of cash required is an 
amount of cash sufficient to purchase such amount of ether, the amount 
of which is based on the combined NAV of the number of Shares included 
in the Creation Baskets being created determined as of 4:00 p.m. ET on 
the date the order to purchase is properly received.
    For a creation order in kind, the total in-kind transfer of ether 
is based on the quantity of ether attributable to the Creation Baskets 
being created determined as of 4:00 p.m. ET on the date the order to 
purchase is properly received.
    The Administrator determines the quantity of ether used to 
calculate the Creation Basket for a given day by dividing the number of 
ether held by the Trust as of the opening of business on that business 
day, adjusted for the amount of ether constituting estimated accrued 
but unpaid fees and expenses of the Trust as of the opening of business 
on that business day, by the quotient of the number of Shares 
outstanding at the opening of business divided by the number of Shares 
in a Creation Basket.
    The procedures by which an authorized participant can redeem one or 
more Creation Baskets mirror the procedures for the creation of 
Creation Baskets. For a cash creation order, an authorized participant 
will deliver cash to create Shares. For an in-kind creation order, an 
authorized participant or its designee will deliver ether to create 
Shares. For a cash redemption order, an authorized participant will 
deliver Shares to the Trust and will receive cash for the Shares 
delivered. For an in-kind redemption order, an authorized participant 
will deliver Shares to the Trust and the authorized participant or its 
designee will receive ether for the Shares delivered.
Conclusion
    Except for the above changes, all other representations in the 
Bitcoin ETP Amendment No. 3 and the Eth ETP Amendment No. 2 remain 
unchanged and will continue to constitute continuing listing 
requirements. In addition, the Bitcoin Trust will continue to comply 
with the terms of Bitcoin ETP Amendment No. 3 and the Eth Trust will 
continue to comply with the terms of Eth ETP Amendment No. 2 and the 
Trusts will continue to comply with the requirements of Rule 
14.11(e)(4).
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the Act and the rules and regulations thereunder applicable to the 
Exchange and, in particular, the requirements of Section 6(b) of the 
Act.\9\ Specifically, the Exchange believes the proposed rule change is 
consistent with the Section 6(b)(5) \10\ requirements that the rules of 
an exchange be designed to prevent fraudulent and manipulative acts and 
practices, to promote just and equitable principles of trade, to foster 
cooperation and coordination with persons engaged in regulating, 
clearing, settling, processing information with respect to, and 
facilitating transactions in securities, 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.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes the proposed rule change is designed to 
remove impediments to and perfect the mechanism of a free and open 
market and, in general, to protect investors and the public interest 
because it would update representations in both the Bitcoin ETP 
Amendment No. 3 and the Eth ETP Amendment No. 2 such that the Trusts 
would both be able to engage in in-kind creation and redemptions with 
authorized participants or their designees, as described above. This 
ability would make the Trusts (and the market more generally) operate 
more efficiently because authorized participants would be able to 
source bitcoin or ether, as applicable, rather than to provide cash to 
the applicable Trust and to receive bitcoin or ether from the Trusts. 
This means that the authorized participant would be responsible for 
buying and selling the applicable crypto asset rather than the Trust 
itself, which would potentially lessen the impact on the market of the 
Trusts on both sides of the transaction by allowing the authorized 
participant to decide how and where to source the underlying crypto 
asset for creations and deciding how, where, and whether to sell the 
underlying crypto asset received for redemptions. This would improve 
the creation and redemption process for both authorized participants 
and the Trusts, increase efficiency, and ultimately benefit the end 
investors in the Trusts.
    Except for the addition of in-kind creation and redemption for the 
Bitcoin Trust as specifically set forth herein, all other 
representations made in the Bitcoin ETP Amendment No. 3 remain 
unchanged and will continue to constitute continuing listing 
requirements for the Bitcoin Trust. Similarly, except for the addition 
of in-kind creation and redemption for the Eth Trust as specifically 
set forth herein, all other representations made in the Eth ETP 
Amendment No. 2 remain unchanged and will continue to constitute 
continuing listing requirements for the Eth Trust.

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. As noted above, the proposed 
amendment is intended to allow the Trusts to operate more efficiently 
by allowing for in-kind creation and redemption. The Exchange believes 
these changes will not impose any burden on competition.

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

    The Exchange neither solicited nor received comments on 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

[[Page 10667]]

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 Exchange consents, the Commission will:
    A. by order approve or disapprove such proposed rule change, or
    B. institute proceedings to determine whether the proposed rule 
change should be 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 (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
file number SR-CboeBZX-2025-023 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-CboeBZX-2025-023. This 
file number should be included on the subject line if email is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's internet website (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for website viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE, 
Washington, DC 20549, on official business days between the hours of 10 
a.m. and 3 p.m. Copies of the filing also will be available for 
inspection and copying at the principal office of the Exchange. Do not 
include personal identifiable information in submissions; you should 
submit only information that you wish to make available publicly. We 
may redact in part or withhold entirely from publication submitted 
material that is obscene or subject to copyright protection. All 
submissions should refer to file number SR-CboeBZX-2025-023 and should 
be submitted on or before March 18, 2025.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-03031 Filed 2-24-25; 8:45 am]
BILLING CODE 8011-01-P
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