Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing of Proposed Rule Change To Permit In-Kind Creations and Redemptions by the iShares Ethereum Trust and Amend Certain Other Representations Under Nasdaq Rule 5711(d) (Commodity-Based Trust Shares), 22525-22529 [2025-09484]
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Federal Register / Vol. 90, No. 101 / Wednesday, May 28, 2025 / Notices
purchasing portion of the fund, must
prohibit the subadvisers from consulting
with each other concerning securities
transactions of the fund, and limit their
responsibility to providing advice with
respect to discrete portions of the fund’s
portfolio.4 This requirement regarding
the prohibitions and limitations in
advisory contracts of subadvisers
relying on the rule constitutes a
collection of information under the
PRA.5
The staff assumes that all existing
funds with subadvisory contracts
amended those contracts to comply with
the adoption of rule 17a–10 in 2003,
which conditioned certain exemptions
upon these contractual alterations, and
therefore there is no continuing burden
for those funds.6 However, the staff
assumes that all newly formed
subadvised funds, and funds that enter
into new contracts with subadvisers,
will incur the one-time burden by
amending their contracts to add the
terms required by the rule.
Based on an analysis of fund filings,
the staff estimates that approximately 49
funds enter into new subadvisory
agreements each year.7 Based on
discussions with industry
representatives, the staff estimates that
it will require approximately 3 attorney
hours to draft and execute additional
clauses in new subadvisory contracts in
order for funds and subadvisers to be
able to rely on the exemptions in rule
17a–10. Because these additional
clauses are identical to the clauses that
a fund would need to insert in their
subadvisory contracts to rely on rules
10f–3 (17 CFR 270.10f–3), 12d3–1 (17
CFR 270.12d3–1), and 17e–1 (17 CFR
270.17e–1), and because we believe that
funds that use one such rule generally
use all of these rules, we apportion this
3 hour time burden equally among all
four rules. Therefore, we estimate that
the burden allocated to rule 17a–10 for
this contract change would be 0.75
hours.8 Assuming that all 49 funds that
enter into new subadvisory contracts
each year make the modification to their
contract required by the rule, we
estimate that the rule’s contract
modification requirement will result in
37 burden hours annually, with an
associated cost of approximately
$18,907.9
The estimate of average burden hours
is made solely for the purposes of the
PRA. The estimate is not derived from
a comprehensive or even a
representative survey or study of the
costs of Commission rules. Complying
with this collection of information
requirement is necessary to obtain the
benefit of relying on rule 17a–10.
Responses will not be kept confidential.
An agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
unless it displays a currently valid OMB
Control Number.
Written comments are invited on: (a)
whether this collection of information is
necessary for the proper performance of
the functions of the agency, including
whether the information will have
practical utility; (b) the accuracy of the
agency’s estimate of the burden imposed
by the collection of information; (c)
ways to enhance the quality, utility, and
clarity of the information collected; and
(d) ways to minimize the burden of the
collection of information on
respondents, including through the use
of automated collection techniques or
other forms of information technology.
Please direct your written comments
to Austin Gerig, Director/Chief Data
Officer, Securities and Exchange
Commission, c/o Tanya Ruttenberg, 100
F Street NE, Washington, DC 20549 and
send it by email to
PaperworkReductionAct@sec.gov by
July 28, 2025.
Dated: May 21, 2025.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025–09481 Filed 5–27–25; 8:45 am]
BILLING CODE 8011–01–P
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4 17
CFR 270.17a–10(a)(2).
5 44 U.S.C. 3501.
6 Transactions of Investment Companies With
Portfolio and Subadviser Affiliates, Investment
Company Act Release No. 25888 (Jan. 14, 2003) [68
FR 3153, (Jan. 22, 2003)]; we assume that funds
formed after 2003 that intended to rely on rule 17a–
10 would have included the required provision as
a standard element in their initial subadvisory
contracts.
7 Based on filings by registrants on Form N–1A
and Form N–2 on Form N–CEN through March 14,
2025, there are 12,928 registered funds (open-end
funds, closed-end funds, and exchange-traded
funds), 5,272 funds of which have subadvisory
relationships (approximately 41%); 49 new funds
registered on Form N–1A or Form N–2 were
established in 2024 by registrants with subadvisory
relationships.
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8 This estimate is based on the following
calculation: (3 hours ÷ 4 rules = 0.75 hours).
9 These estimates are based on the following
calculations: (0.75 hours × 49 funds = 37 burden
hours); ($511 per hour × 37 hours = $18,907 total
cost); the Commission’s estimates concerning the
wage rates for attorney time are based on salary
information for the securities industry compiled by
the Securities Industry and Financial Markets
Association; the estimated wage figure is based on
published rates for in-house attorneys, modified to
account for a 1,800-hour work-year and inflation,
and adjusted to account for bonuses, firm size,
employee benefits, and overhead, yielding an
effective hourly rate of $511; see Securities Industry
and Financial Markets Association, Report on
Management & Professional Earnings in the
Securities Industry 2013.
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22525
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–103095; File No. SR–
NASDAQ–2025–038]
Self-Regulatory Organizations; The
Nasdaq Stock Market LLC; Notice of
Filing of Proposed Rule Change To
Permit In-Kind Creations and
Redemptions by the iShares Ethereum
Trust and Amend Certain Other
Representations Under Nasdaq Rule
5711(d) (Commodity-Based Trust
Shares)
May 21, 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 May 9,
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 and
II below, which Items have been
prepared by the Exchange. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to update
certain representations made in the
proposed rule change previously filed
with and approved by the Commission
relating to the shares of the iShares
Ethereum Trust (the ‘‘Trust’’),
specifically to add the Additional Ether
Custodian (as defined below), to allow
for ‘‘in-kind’’ transfers of the Trust’s
ether, and to amend the Trust’s name.
Shares of the Trust (‘‘Shares’’) are
currently listed and traded on the
Exchange under Nasdaq Rule 5711(d).
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
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
1 15
2 17
U.S.C. 78s(b)(1).
CFR 240.19b–4.
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Federal Register / Vol. 90, No. 101 / Wednesday, May 28, 2025 / Notices
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
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1. Purpose
The Commission approved the listing
and trading of the Shares on the
Exchange pursuant to Nasdaq Rule
5711(d) 3 on May 23, 2024.4 iShares
Delaware Trust Sponsor LLC, a
Delaware limited liability company and
an indirect subsidiary of BlackRock, Inc.
(‘‘BlackRock’’), is the sponsor of the
Trust (the ‘‘Sponsor’’). The Shares are
registered with the SEC by means of the
Trust’s registration statement on Form
S–1 (the ‘‘Registration Statement’’).5
Coinbase Custody Trust Company,
LLC (the ‘‘Ether Custodian’’) is the
custodian for the Trust’s ether holdings,
and maintains a custody account for the
Trust (‘‘Custody Account’’); Coinbase,
Inc. (the ‘‘Prime Execution Agent’’), an
affiliate of the Ether Custodian, is the
prime broker for the Trust and
maintains a trading account for the
Trust (‘‘Trading Account’’); and The
Bank of New York Mellon is the
custodian for the Trust’s cash holdings
(the ‘‘Cash Custodian’’) and the
administrator of the Trust (the ‘‘Trust
Administrator’’).
The Exchange now proposes to amend
representations regarding the Trust’s
creation and redemption process as set
forth in the previous rule filing to list
and trade Shares, specifically to add the
Additional Ether Custodian (as defined
3 Nasdaq Rule 5711(d) governs the listing and
trading of Commodity-Based Trust Shares, which
means a security (1) that is issued by a trust that
holds (a) a specified commodity deposited with the
trust, or (b) a specified commodity and, in addition
to such specified commodity, cash; (2) 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 (3) 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. See Nasdaq Rule 5711(d)(iv)(A).
4 See Securities Exchange Act Release No. 100224
(May 23, 2024), 89 FR 46937 (May 30, 2024) (SelfRegulatory Organizations; NYSE Arca, Inc.; The
Nasdaq Stock Market LLC; Cboe BZX Exchange,
Inc.; Order Granting Accelerated Approval of
Proposed Rule Changes, as Modified by
Amendments Thereto, To List and Trade Shares of
Ether-Based Exchange-Traded Products) (‘‘Spot
ETH ETP Approval Order’’).
5 See Amendment No. 4 to Registration Statement
on Form S–1, dated July 17, 2024 filed with the
Commission by the Sponsor on behalf of the Trust.
The descriptions of the Trust contained herein are
based, in part, on information in the Registration
Statement.
VerDate Sep<11>2014
16:10 May 27, 2025
Jkt 265001
below), to allow for in-kind transfers of
the Trust’s ether, and to amend the
Trust’s name.6 As it relates to the
proposed in-kind transfer process, this
will be an alternative to the Trust’s
current cash creation and redemption
process. In order to effectuate the
foregoing changes, the Exchange
proposes a number of changes to
Amendment No. 2 in the manner
described below. Except for the changes
described below, all other
representations in Amendment No. 2
remain unchanged and will continue to
constitute continued listing
requirements. In addition, the Trust will
continue to comply with the terms of
Amendment No. 2 and the requirements
in Rule 5711(d).
Proposal 1: Additional Ether Custodian
Amendment No. 2 represented that
the Ether Custodian is the custodian for
the Trust’s ether holdings. The
Exchange now proposes to add
Anchorage Digital Bank N.A. (the
‘‘Additional Ether Custodian’’) as an
available alternative custodian for the
Trust’s ether holdings. The Additional
Ether Custodian is a national trust bank
chartered by the Office of the
Comptroller of the Currency. The
Additional Ether Custodian is an
alternative eligible custodian for the
Trust’s ether pursuant to a custody
agreement. The custody agreement will
require the Additional Ether Custodian,
if operationalized, to maintain the
Trust’s ether in one or more segregated
custody accounts, controlled and
secured by Anchorage. The Additional
Ether Custodian will be bound by all
representations made in Amendment
No. 2 applicable to the Ether Custodian,
as amended herein. As described in
Proposal 2 below, the Exchange also
proposes to amend the Amendment No.
2 section entitled ‘‘Custody of the
Trust’s Ether and Creation and
Redemption’’ to reflect the Additional
Ether Custodian.
Proposal 2: Custody of the Trust’s Ether
and Creation and Redemption
The Exchange proposes to amend the
Amendment No. 2 section entitled
‘‘Custody of the Trust’s Ether and
Creation and Redemption’’ to add
further detail on the Additional Ether
Custodian. The Exchange also proposes
in this section to add more detail on
how the Trust will handle transfers of
ether in connection with the proposed
6 See Securities Exchange Act Release No. 100212
(May 22, 2024), 89 FR 46556 (May 29, 2024) (SR–
NASDAQ–2023–045) (Notice of Filing of
Amendment No. 2 to a Proposed Rule Change To
List and Trade Shares of the iShares Ethereum Trust
Under Nasdaq Rule 5711(d)) (‘‘Amendment No. 2’’).
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Frm 00062
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Sfmt 4703
in-kind creation and redemption
process, and make certain conforming
changes to the description of the cash
creation and redemption process. As
proposed, the language in the ‘‘Custody
of the Trust’s Ether and Creation and
Redemption’’ section from Amendment
No. 2 will be deleted and replaced with
the following language.
An investment in the Shares is backed by
ether held by the Ether Custodian on behalf
of the Trust. All of the Trust’s ether will be
held in the Custody Account, other than the
Trust’s ether which is temporarily
maintained in the Trading Account under
limited circumstances, i.e., in connection
with creation and redemption Basket 7
activity or sales of ether deducted from the
Trust’s holdings in payment of Trust
expenses or the Sponsor’s fee (or, in
extraordinary circumstances, upon
liquidation of the Trust). The Custody
Account includes all of the Trust’s ether held
at the Ether Custodian but does not include
the Trust’s ether temporarily maintained at
the Prime Execution Agent in the Trading
Account from time to time. The Ether
Custodian will keep all of the private keys
associated with the Trust’s ether held in the
Custody Account in ‘‘cold storage’’.8 The
hardware, software, systems, and procedures
of the Ether Custodian may not be available
or cost-effective for many investors to access
directly.
The Trust is not required to hold any
particular amount of assets at either the Ether
Custodian or the Additional Ether Custodian,
and the Sponsor shall, in its sole discretion,
determine the amounts held at either
custodian from time to time as permitted by
the Trust Agreement. As of the date of this
proposal, the Trust’s ether is held with the
Ether Custodian, and the Sponsor has no
plans to move any of the Trust’s ether to the
Additional Ether Custodian, though such
plans are subject to ongoing review.
The Trust’s ether holdings and cash
holdings from time to time may temporarily
be maintained in the Trading Account held
with the Prime Execution Agent, an affiliate
of the Ether Custodian. Coinbase Inc. serves
as the Trust’s Prime Execution Agent
pursuant to the Trust’s agreement with the
Prime Execution Agent (‘‘Prime Execution
Agent Agreement’’). In this capacity, the
Prime Execution Agent facilitates (1) the
buying and selling of ether by the Trust in
response to cash creations and redemptions
between the Trust and registered brokerdealers that are Depositary Trust Company
(‘‘DTC’’) participants that enter into an
authorized participant agreement with the
Sponsor and the Trustee (‘‘Authorized
7 The Trust issues and redeems Shares only in
blocks of 40,000 or integral multiples thereof. A
block of 40,000 Shares is called a ‘‘Basket.’’ These
transactions take place in exchange for ether.
8 The term ‘‘cold storage’’ refers to a safeguarding
method by which the private keys corresponding to
the Trust’s ether are generated and stored in an
offline manner, subject to layers of procedures
designed to enhance security. Private keys are
generated by the Ether Custodian in offline
computers that are not connected to the internet so
that they are more resistant to being hacked.
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Federal Register / Vol. 90, No. 101 / Wednesday, May 28, 2025 / Notices
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Participants’’), (2) the transfer of ether
between the Trust and an Authorized
Participant, its designated agent or client as
part of in-kind creations and redemptions,
and (3) the sale of ether to pay the Sponsor’s
fee, any other Trust expenses not assumed by
the Sponsor, to the extent applicable, and in
extraordinary circumstances, in connection
with the liquidation of the Trust’s ether.
The Authorized Participants will deliver
cash or ether to create shares and will receive
cash or ether when redeeming shares.
For a cash creation or redemption of a
Basket of Shares, the Authorized Participant
will be required to submit the cash creation
or redemption order by an early order cutoff
time (the ‘‘Cash Order Cutoff Time’’). The
Cash Order Cutoff Time will initially be 6:00
p.m. ET on the business day prior to trade
date.
For an in-kind creation or redemption of a
Basket of Shares, the Authorized Participant
will be required to submit the in-kind
creation or redemption order by an order
cutoff (‘‘In-Kind Order Cutoff Time’’). The InKind Order Cutoff Time will initially be 3:59
p.m. ET on the trade date.
Cash Creations
In connection with cash creations and cash
redemptions, the Authorized Participants
will submit orders to create or redeem
Baskets of Shares exclusively in exchange for
cash. The Trust will engage in ether
transactions to convert cash into ether (in
association with creation orders) and ether
into cash (in association with redemption
orders). The Trust will conduct its ether
purchase and sale transactions by, in its sole
discretion, choosing to trade directly with
designated third parties (each, an ‘‘Ether
Trading Counterparty’’), pursuant to written
agreements between each such Ether Trading
Counterparty and the Trust, or choosing to
trade through the Prime Execution Agent
acting in an agency capacity with third
parties through its Coinbase Prime service 9
pursuant to the Prime Execution Agent
Agreement. Ether Trading Counterparties
settle trades with the Trust using their own
accounts at the Prime Execution Agent when
trading with the Trust.
Following the Cash Order Cutoff Time for
a creation order, the Trust will choose, in its
sole discretion, to enter into a transaction
with an Ether Trading Counterparty or the
Prime Execution Agent to buy ether in
exchange for the cash proceeds from such
cash creation order. On settlement date for a
cash creation, the Trust delivers Shares to the
Authorized Participant in exchange for cash
received from the Authorized Participant.
Also, on or around the settlement date, the
Ether Trading Counterparty or Prime
Execution Agent, as applicable, deposits the
9 The Coinbase Prime service is an execution
service pursuant to which Coinbase will execute
ether orders for the Trust by accessing liquidity
from sources such as ether trading platforms, which
can include Coinbase’s own platform, and other
liquidity providers. Trades can be executed
according to an algorithm or on the basis of firm
quotes sought by requests-for-quote (‘‘RFQ’’) for a
two-way price sent to liquidity providers.
Algorithmic trades can be self-directed or executed
by Coinbase’s high touch execution desk, Coinbase
Execution Services.
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16:10 May 27, 2025
Jkt 265001
required ether pursuant to its trade with the
Trust into the Trust’s Trading Account in
exchange for cash. In the event the Trust has
not been able to successfully execute and
complete settlement of an ether transaction
by the settlement date of the cash creation
order, the Authorized Participant will be
given the option to (1) cancel the cash
creation order, or (2) accept that the Trust
will continue to attempt to complete the
execution, which will delay the settlement
date of the cash creation order. With respect
to a cash creation order, as between the Trust
and the Authorized Participant, the
Authorized Participant is responsible for the
dollar cost of the difference between the
ether price utilized in calculating NAV per
Share on trade date and the price at which
the Trust acquires the ether to the extent the
price realized in buying the ether is higher
than the ether price utilized in the NAV. To
the extent the price realized in buying the
ether is lower than the price utilized in the
NAV, the Authorized Participant shall get to
keep the dollar impact of any such
difference.
Because the Trust’s Trading Account may
not be funded with cash on trade date for the
purchase of ether associated with a cash
creation order, the Trust may borrow trade
credits (‘‘Trade Credits’’) in the form of cash
from Coinbase Credit, Inc. (the ‘‘Trade Credit
Lender’’), an affiliate of the Prime Execution
Agent, under the trade financing agreement
(‘‘Trade Financing Agreement’’) or may
require the Authorized Participant to deliver
the required cash for the cash creation order
on trade date. The extension of Trade Credits
on trade date allows the Trust to purchase
ether through the Prime Execution Agent on
trade date, with such ether being deposited
in the Trust’s Trading Account. On
settlement date for a cash creation order, the
Trust delivers Shares to the Authorized
Participant in exchange for cash received
from the Authorized Participant. To the
extent Trade Credits were utilized, the Trust
uses the cash to repay the Trade Credits
borrowed from the Trade Credit Lender. On
settlement date for a cash creation order, the
ether purchased is swept from the Trust’s
Trading Account to the Trust’s Custody
Account pursuant to a regular end-of-day
sweep process.
In-Kind Creations
In connection with in-kind creations, the
Authorized Participants will submit orders
by the In-Kind Order Cutoff Time to create
Baskets of Shares in exchange for ether.
On settlement date for an in-kind creation,
the Trust delivers Shares to the Authorized
Participant in exchange for ether received
from the Authorized Participant, or its
designated agent or client. The Authorized
Participant or its designated agent or client
will deposit such ether to the Trust’s Trading
Account at the Prime Execution Agent. In the
event the Authorized Participant, its
designated agent or client, has not deposited
the ether to the Trust’s Trading Account at
the Prime Execution Agent by the applicable
time on the settlement date of the in-kind
creation order, the Authorized Participant
will be given the option to (1) cancel the inkind creation order, (2) delay settlement of
the order to enable delivery of ether at a later
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22527
date, or (3) accept that the Trust will execute
a ether transaction required for the creation
and the Authorized Participant will deliver
the U.S. dollars required for this purchase. In
the case of (3) only, the Authorized
Participant is responsible for the dollar cost
of the difference between the ether price
utilized in calculating NAV per Share on
trade date and the price at which the Trust
acquires the ether to the extent the price
realized in buying the ether is higher than the
ether price utilized in the NAV. To the extent
the price realized in buying the ether is lower
than the price utilized in the NAV, the
Authorized Participant shall get to keep the
dollar impact of any such difference.
Cash Redemption
Following the Cash Order Cutoff Time for
a cash redemption order, the Trust may
choose, in its sole discretion, to enter into a
transaction with an Ether Trading
Counterparty or the Prime Execution Agent,
to sell ether in exchange for cash. After the
Cash Order Cutoff Time, the Trust instructs
the Ether Custodian to prepare to move the
associated ether from the Trust’s Custody
Account to the Trust’s Trading Account. On
settlement date for a cash redemption order,
the Authorized Participant delivers the
necessary Shares to the Trust, and on or
around settlement date, an Ether Trading
Counterparty or Prime Execution Agent, as
applicable, delivers the cash associated with
the Trust’s sale of ether to the Trust in
exchange for the Trust’s ether, and the Trust
delivers cash to the Authorized Participant.
In the event the Trust has not been able to
successfully execute and complete settlement
of an ether transaction by the settlement date,
the Authorized Participant will be given the
option to (1) cancel the cash redemption
order, or (2) accept that the Trust will
continue to attempt to complete the
execution, which will delay the settlement
date. With respect to a cash redemption
order, between the Trust and the Authorized
Participant, the Authorized Participant will
be responsible for the dollar cost of the
difference between the ether price utilized in
calculating the NAV per Share on trade date
and the price realized in selling the ether to
raise the cash needed for the cash
redemption order to the extent the price
realized in selling the ether is lower than the
ether price utilized in the NAV. To the extent
the price realized in selling the ether is
higher than the price utilized in the NAV, the
Authorized Participant will get to keep the
dollar impact of any such difference.
The Trust may use financing in connection
with a cash redemption order when ether
remains in the Trust’s Custody Account at
the point of intended execution of a sale of
ether. In those circumstances, the Trust may
borrow Trade Credits in the form of ether
from the Trade Credit Lender, which allows
the Trust to sell ether through the Prime
Execution Agent on trade date, and the cash
proceeds are deposited in the Trust’s Trading
Account. On settlement date for a cash
redemption order, the Trust delivers cash to
the Authorized Participant in exchange for
Shares received from the Authorized
Participant. In the event financing was used,
the Trust will use the ether moved from the
Trust’s Custody Account to the Trading
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Federal Register / Vol. 90, No. 101 / Wednesday, May 28, 2025 / Notices
Account to repay the Trade Credits borrowed
from the Trade Credit Lender.
In-Kind Redemptions
In connection with in-kind redemptions,
the Authorized Participants will submit
orders by the In-Kind Order Cutoff Time to
redeem Baskets of Shares in exchange for
ether.
On settlement date for an in-kind
redemption, the Trust delivers ether to the
account of the Authorized Participant or its
designated agent or client at the Prime
Execution Agent in exchange for Shares
received from the Authorized Participant.
Proposal 3: Creation and Redemption of
Shares
The Exchange also proposes to modify
the Amendment No. 2 section ‘‘Creation
and Redemption of Shares’’ to integrate
the proposed in-kind creation and
redemption process. Specifically,
Amendment No. 2 currently states that
Baskets are only issued or redeemed in
exchange for an amount of cash
determined by the Trustee on each day
that Nasdaq is open for regular trading.
No Shares are issued unless the Cash
Custodian has allocated to the Trust’s
account the corresponding amount of
cash. The amount of cash necessary for
the creation of a Basket, or to be
received upon redemption of a Basket,
will decrease over the life of the Trust,
due to the payment or accrual of fees
and other expenses or liabilities payable
by the Trust.
The Exchange now proposes to delete
the above language from Amendment
No. 2, and replace it with the following:
Baskets are only issued or redeemed in
exchange for an amount of ether and/or
cash determined by the Trustee on each
day that Nasdaq is open for regular
trading. No Shares are issued unless the
Cash Custodian has allocated to the
Trust’s account the corresponding
amount of cash or the Prime Execution
Agent has allocated to the Trust’s
account the corresponding amount of
ether.10 The amount of ether or cash
necessary for the creation of a Basket, or
to be received upon redemption of a
Basket, will decrease over the life of the
Trust, due to the payment or accrual of
fees and other expenses or liabilities
payable by the Trust.
khammond on DSK9W7S144PROD with NOTICES
Proposal 4: Trust Name Change
Lastly, the Exchange proposes to
change the name of the Trust to the
iShares Ethereum Trust ETF to be
consistent with the Trust’s Registration
Statement.
10 The amount of cash or ether is based on the
NAV of the Trust on the trade date.
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Jkt 265001
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act,11 in general, and furthers the
objectives of Section 6(b)(5) of the Act,12
in particular, in that it is designed to
promote just and equitable principles of
trade, to remove impediments to and
perfect the mechanism of a free and
open market and a national market
system, and, in general to protect
investors and the public interest.
The Exchange believes that the
proposed rule change to add the
Additional Ether Custodian is consistent
with the Act because it could mitigate
and diversify potential third-party
service provider risk in the event that
the Ether Custodian was unable to
provide custody services. Further, the
Additional Ether Custodian will be
bound by all representations made in
Amendment No. 2 applicable to the
Ether Custodian.
The Exchange believes that permitting
in-kind transfers with respect to the
Trust’s creation and redemption process
promotes just and equitable principles
of trade and helps remove impediments
to and perfect the mechanism of a free
and open market and a national market
system. As discussed above, the
proposed changes would permit the
Trust to utilize an in-kind creation and
redemption process in addition to the
cash creation and redemption process.
This added ability would make the
Trust (and the market more generally)
operate more efficiently because
Authorized Participants, their
designated agents or clients, would be
able to source ether rather than to
provide cash to the Trust and/or receive
ether from the Trust. This means that
the Authorized Participant, its
designated agent or client, would be
responsible for buying and selling the
ether rather than the Trust itself, which
would potentially lessen the impact on
the market of the Trust on both sides of
the transaction by allowing the
Authorized Participant to decide how
and where to source the underlying
ether for creations and deciding how,
where, and whether to sell the
underlying ether for redemptions. This
could lead to improvements in the
creation and redemption process for
both Authorized Participants and the
Trust, and could potentially increase
efficiency, and ultimately benefit the
end investors in the Trust.
Lastly, the Exchange believes that the
proposed Trust name change is
consistent with the Act because it
11 15
12 15
PO 00000
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
Frm 00064
Fmt 4703
Sfmt 4703
would align with the Trust’s
Registration Statement, and would
promote clarity and transparency with
respect to the Trust’s name.
Except for the changes described
above, all other representations in
Amendment No. 2 remain unchanged
and will continue to constitute
continued listing requirements. In
addition, the Trust will continue to
comply with the terms of Amendment
No. 2 and the requirements in Rule
5711(d).
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 not
necessary or appropriate in furtherance
of the purposes of the Act. As discussed
above, the proposed amendments are
intended to add the Additional Ether
Custodian, reflect the Trust’s name
change, and allow for in-kind transfers.
As it relates to in-kind transfers, the
Exchange believes that the proposed
changes would increase operational
efficiencies for the Trust (and the
market more generally). The Exchange
believes the changes proposed herein
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
No written comments were either
solicited or received.
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 Exchange consents, the Commission
shall: (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:
E:\FR\FM\28MYN1.SGM
28MYN1
Federal Register / Vol. 90, No. 101 / Wednesday, May 28, 2025 / Notices
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–
NASDAQ–2025–038 on the subject line.
Paper Comments
khammond on DSK9W7S144PROD with NOTICES
All submissions should refer to file
number SR–NASDAQ–2025–038. 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–NASDAQ–2025–038 and should be
submitted on or before June 18, 2025.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025–09484 Filed 5–27–25; 8:45 am]
BILLING CODE 8011–01–P
CFR 200.30–3(a)(12).
VerDate Sep<11>2014
16:10 May 27, 2025
[Investment Company Act Release No.
35604; 812–15743]
Mercer Funds and Mercer Investments
LLC
May 21, 2025.
Securities and Exchange
Commission (‘‘Commission’’ or ‘‘SEC’’).
ACTION: Notice.
AGENCY:
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
13 17
SECURITIES AND EXCHANGE
COMMISSION
Jkt 265001
Notice of an application under
Section 6(c) of the Investment Company
Act of 1940 (‘‘Act’’) for an exemption
from Section 15(c) of the Act.
SUMMARY OF APPLICATION: The requested
exemption would permit a Trust’s board
of trustees to approve new sub-advisory
agreements and material amendments to
existing sub- advisory agreements
without complying with the in-person
meeting requirement of Section 15(c) of
the Act.
APPLICANTS: Mercer Funds and Mercer
Investments LLC.
FILING DATE: The application was filed
on April 3, 2025.
HEARING OR NOTIFICATION OF HEARING:
An order granting the requested relief
will be issued unless the Commission
orders a hearing. Interested persons may
request a hearing on any application by
emailing the SEC’s Secretary at
Secretarys-Office@sec.gov and serving
the Applicants with a copy of the
request by email, if an email address is
listed for the relevant Applicant below,
or personally or by mail, if a physical
address is listed for the relevant
Applicant below. Hearing requests
should be received by the Commission
by 5:30 p.m. on June 16, 2025, and
should be accompanied by proof of
service on the Applicants, in the form
of an affidavit, or, for lawyers, a
certificate of service. Pursuant to rule 0–
5 under the Act, hearing requests should
state the nature of the writer’s interest,
any facts bearing upon the desirability
of a hearing on the matter, the reason for
the request, and the issues contested.
Persons who wish to be notified of a
hearing may request notification by
emailing the Commission’s Secretary.
ADDRESSES: The Commission:
Secretarys-Office@sec.gov. Applicants:
Kenneth R. Earley, Esq., Mercer
Investments LLC, kenneth.earley@
mercer.com, 99 High Street, Boston,
Massachusetts 02110.
FOR FURTHER INFORMATION CONTACT:
Rachel Loko, Senior Special Counsel, at
(202) 551–6825 (Division of Investment
Management, Chief Counsel’s Office).
SUPPLEMENTARY INFORMATION: For
Applicants’ representations, legal
PO 00000
Frm 00065
Fmt 4703
Sfmt 4703
22529
analysis, and conditions, please refer to
Applicants’ application, dated April 3,
2025, which may be obtained via the
Commission’s website by searching for
the file number at the top of this
document, or for an Applicant using the
Company name search field on the
SEC’s EDGAR system. The SEC’s
EDGAR system may be searched at
https://www.sec.gov/edgar/searchedgar/
companysearch. You may also call the
SEC’s Office of Investor Education and
Advocacy at (202) 551–8090.
For the Commission, by the Division of
Investment Management, under delegated
authority.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025–09499 Filed 5–27–25; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–103097; File No. SR–
EMERALD–2025–11]
Self-Regulatory Organizations; MIAX
Emerald, LLC; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Adopt New Fee
Categories for the Exchange’s
Proprietary Market Data Feeds
May 21, 2025.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (‘‘Act’’
or ‘‘Exchange Act’’),1 and Rule 19b–4
thereunder,2 notice is hereby given that
on May 7, 2025, MIAX Emerald, LLC
(‘‘MIAX Emerald’’ or ‘‘Exchange’’) filed
with the Securities and Exchange
Commission (‘‘Commission’’) a
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 amend the
MIAX Emerald Options Exchange Fee
Schedule (the ‘‘Fee Schedule’’) to
amend the MIAX Emerald Options
Exchange Fee Schedule (the ‘‘Fee
Schedule’’) to, among other things,
adopt new fee categories for the
Exchange’s proprietary market data
feeds: (1) the Top of Market (‘‘ToM’’)
feed, (2) the Complex Top of Market
feed (‘‘cToM’’), (3) the Administrative
Information Subscriber feed (‘‘AIS’’),
1 15
2 17
U.S.C. 78s(b)(1).
CFR 240.19b–4.
E:\FR\FM\28MYN1.SGM
28MYN1
]]>Agencies
[Federal Register Volume 90, Number 101 (Wednesday, May 28, 2025)]
[Notices]
[Pages 22525-22529]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-09484]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-103095; File No. SR-NASDAQ-2025-038]
Self-Regulatory Organizations; The Nasdaq Stock Market LLC;
Notice of Filing of Proposed Rule Change To Permit In-Kind Creations
and Redemptions by the iShares Ethereum Trust and Amend Certain Other
Representations Under Nasdaq Rule 5711(d) (Commodity-Based Trust
Shares)
May 21, 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 May 9, 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 and II below, which Items have been prepared by the Exchange.
The Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to update certain representations made in the
proposed rule change previously filed with and approved by the
Commission relating to the shares of the iShares Ethereum Trust (the
``Trust''), specifically to add the Additional Ether Custodian (as
defined below), to allow for ``in-kind'' transfers of the Trust's
ether, and to amend the Trust's name. Shares of the Trust (``Shares'')
are currently listed and traded on the Exchange under Nasdaq Rule
5711(d).
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
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
[[Page 22526]]
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 the Shares on
the Exchange pursuant to Nasdaq Rule 5711(d) \3\ on May 23, 2024.\4\
iShares Delaware Trust Sponsor LLC, a Delaware limited liability
company and an indirect subsidiary of BlackRock, Inc. (``BlackRock''),
is the sponsor of the Trust (the ``Sponsor''). The Shares are
registered with the SEC by means of the Trust's registration statement
on Form S-1 (the ``Registration Statement'').\5\
---------------------------------------------------------------------------
\3\ Nasdaq Rule 5711(d) governs the listing and trading of
Commodity-Based Trust Shares, which means a security (1) that is
issued by a trust that holds (a) a specified commodity deposited
with the trust, or (b) a specified commodity and, in addition to
such specified commodity, cash; (2) 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 (3) 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. See
Nasdaq Rule 5711(d)(iv)(A).
\4\ See Securities Exchange Act Release No. 100224 (May 23,
2024), 89 FR 46937 (May 30, 2024) (Self-Regulatory Organizations;
NYSE Arca, Inc.; The Nasdaq Stock Market LLC; Cboe BZX Exchange,
Inc.; Order Granting Accelerated Approval of Proposed Rule Changes,
as Modified by Amendments Thereto, To List and Trade Shares of
Ether-Based Exchange-Traded Products) (``Spot ETH ETP Approval
Order'').
\5\ See Amendment No. 4 to Registration Statement on Form S-1,
dated July 17, 2024 filed with the Commission by the Sponsor on
behalf of the Trust. The descriptions of the Trust contained herein
are based, in part, on information in the Registration Statement.
---------------------------------------------------------------------------
Coinbase Custody Trust Company, LLC (the ``Ether Custodian'') is
the custodian for the Trust's ether holdings, and maintains a custody
account for the Trust (``Custody Account''); Coinbase, Inc. (the
``Prime Execution Agent''), an affiliate of the Ether Custodian, is the
prime broker for the Trust and maintains a trading account for the
Trust (``Trading Account''); and The Bank of New York Mellon is the
custodian for the Trust's cash holdings (the ``Cash Custodian'') and
the administrator of the Trust (the ``Trust Administrator'').
The Exchange now proposes to amend representations regarding the
Trust's creation and redemption process as set forth in the previous
rule filing to list and trade Shares, specifically to add the
Additional Ether Custodian (as defined below), to allow for in-kind
transfers of the Trust's ether, and to amend the Trust's name.\6\ As it
relates to the proposed in-kind transfer process, this will be an
alternative to the Trust's current cash creation and redemption
process. In order to effectuate the foregoing changes, the Exchange
proposes a number of changes to Amendment No. 2 in the manner described
below. Except for the changes described below, all other
representations in Amendment No. 2 remain unchanged and will continue
to constitute continued listing requirements. In addition, the Trust
will continue to comply with the terms of Amendment No. 2 and the
requirements in Rule 5711(d).
---------------------------------------------------------------------------
\6\ See Securities Exchange Act Release No. 100212 (May 22,
2024), 89 FR 46556 (May 29, 2024) (SR-NASDAQ-2023-045) (Notice of
Filing of Amendment No. 2 to a Proposed Rule Change To List and
Trade Shares of the iShares Ethereum Trust Under Nasdaq Rule
5711(d)) (``Amendment No. 2'').
---------------------------------------------------------------------------
Proposal 1: Additional Ether Custodian
Amendment No. 2 represented that the Ether Custodian is the
custodian for the Trust's ether holdings. The Exchange now proposes to
add Anchorage Digital Bank N.A. (the ``Additional Ether Custodian'') as
an available alternative custodian for the Trust's ether holdings. The
Additional Ether Custodian is a national trust bank chartered by the
Office of the Comptroller of the Currency. The Additional Ether
Custodian is an alternative eligible custodian for the Trust's ether
pursuant to a custody agreement. The custody agreement will require the
Additional Ether Custodian, if operationalized, to maintain the Trust's
ether in one or more segregated custody accounts, controlled and
secured by Anchorage. The Additional Ether Custodian will be bound by
all representations made in Amendment No. 2 applicable to the Ether
Custodian, as amended herein. As described in Proposal 2 below, the
Exchange also proposes to amend the Amendment No. 2 section entitled
``Custody of the Trust's Ether and Creation and Redemption'' to reflect
the Additional Ether Custodian.
Proposal 2: Custody of the Trust's Ether and Creation and Redemption
The Exchange proposes to amend the Amendment No. 2 section entitled
``Custody of the Trust's Ether and Creation and Redemption'' to add
further detail on the Additional Ether Custodian. The Exchange also
proposes in this section to add more detail on how the Trust will
handle transfers of ether in connection with the proposed in-kind
creation and redemption process, and make certain conforming changes to
the description of the cash creation and redemption process. As
proposed, the language in the ``Custody of the Trust's Ether and
Creation and Redemption'' section from Amendment No. 2 will be deleted
and replaced with the following language.
An investment in the Shares is backed by ether held by the Ether
Custodian on behalf of the Trust. All of the Trust's ether will be
held in the Custody Account, other than the Trust's ether which is
temporarily maintained in the Trading Account under limited
circumstances, i.e., in connection with creation and redemption
Basket \7\ activity or sales of ether deducted from the Trust's
holdings in payment of Trust expenses or the Sponsor's fee (or, in
extraordinary circumstances, upon liquidation of the Trust). The
Custody Account includes all of the Trust's ether held at the Ether
Custodian but does not include the Trust's ether temporarily
maintained at the Prime Execution Agent in the Trading Account from
time to time. The Ether Custodian will keep all of the private keys
associated with the Trust's ether held in the Custody Account in
``cold storage''.\8\ The hardware, software, systems, and procedures
of the Ether Custodian may not be available or cost-effective for
many investors to access directly.
---------------------------------------------------------------------------
\7\ The Trust issues and redeems Shares only in blocks of 40,000
or integral multiples thereof. A block of 40,000 Shares is called a
``Basket.'' These transactions take place in exchange for ether.
\8\ The term ``cold storage'' refers to a safeguarding method by
which the private keys corresponding to the Trust's ether are
generated and stored in an offline manner, subject to layers of
procedures designed to enhance security. Private keys are generated
by the Ether Custodian in offline computers that are not connected
to the internet so that they are more resistant to being hacked.
---------------------------------------------------------------------------
The Trust is not required to hold any particular amount of
assets at either the Ether Custodian or the Additional Ether
Custodian, and the Sponsor shall, in its sole discretion, determine
the amounts held at either custodian from time to time as permitted
by the Trust Agreement. As of the date of this proposal, the Trust's
ether is held with the Ether Custodian, and the Sponsor has no plans
to move any of the Trust's ether to the Additional Ether Custodian,
though such plans are subject to ongoing review.
The Trust's ether holdings and cash holdings from time to time
may temporarily be maintained in the Trading Account held with the
Prime Execution Agent, an affiliate of the Ether Custodian. Coinbase
Inc. serves as the Trust's Prime Execution Agent pursuant to the
Trust's agreement with the Prime Execution Agent (``Prime Execution
Agent Agreement''). In this capacity, the Prime Execution Agent
facilitates (1) the buying and selling of ether by the Trust in
response to cash creations and redemptions between the Trust and
registered broker-dealers that are Depositary Trust Company
(``DTC'') participants that enter into an authorized participant
agreement with the Sponsor and the Trustee (``Authorized
[[Page 22527]]
Participants''), (2) the transfer of ether between the Trust and an
Authorized Participant, its designated agent or client as part of
in-kind creations and redemptions, and (3) the sale of ether to pay
the Sponsor's fee, any other Trust expenses not assumed by the
Sponsor, to the extent applicable, and in extraordinary
circumstances, in connection with the liquidation of the Trust's
ether.
The Authorized Participants will deliver cash or ether to create
shares and will receive cash or ether when redeeming shares.
For a cash creation or redemption of a Basket of Shares, the
Authorized Participant will be required to submit the cash creation
or redemption order by an early order cutoff time (the ``Cash Order
Cutoff Time''). The Cash Order Cutoff Time will initially be 6:00
p.m. ET on the business day prior to trade date.
For an in-kind creation or redemption of a Basket of Shares, the
Authorized Participant will be required to submit the in-kind
creation or redemption order by an order cutoff (``In-Kind Order
Cutoff Time''). The In-Kind Order Cutoff Time will initially be 3:59
p.m. ET on the trade date.
Cash Creations
In connection with cash creations and cash redemptions, the
Authorized Participants will submit orders to create or redeem
Baskets of Shares exclusively in exchange for cash. The Trust will
engage in ether transactions to convert cash into ether (in
association with creation orders) and ether into cash (in
association with redemption orders). The Trust will conduct its
ether purchase and sale transactions by, in its sole discretion,
choosing to trade directly with designated third parties (each, an
``Ether Trading Counterparty''), pursuant to written agreements
between each such Ether Trading Counterparty and the Trust, or
choosing to trade through the Prime Execution Agent acting in an
agency capacity with third parties through its Coinbase Prime
service \9\ pursuant to the Prime Execution Agent Agreement. Ether
Trading Counterparties settle trades with the Trust using their own
accounts at the Prime Execution Agent when trading with the Trust.
---------------------------------------------------------------------------
\9\ The Coinbase Prime service is an execution service pursuant
to which Coinbase will execute ether orders for the Trust by
accessing liquidity from sources such as ether trading platforms,
which can include Coinbase's own platform, and other liquidity
providers. Trades can be executed according to an algorithm or on
the basis of firm quotes sought by requests-for-quote (``RFQ'') for
a two-way price sent to liquidity providers. Algorithmic trades can
be self-directed or executed by Coinbase's high touch execution
desk, Coinbase Execution Services.
---------------------------------------------------------------------------
Following the Cash Order Cutoff Time for a creation order, the
Trust will choose, in its sole discretion, to enter into a
transaction with an Ether Trading Counterparty or the Prime
Execution Agent to buy ether in exchange for the cash proceeds from
such cash creation order. On settlement date for a cash creation,
the Trust delivers Shares to the Authorized Participant in exchange
for cash received from the Authorized Participant. Also, on or
around the settlement date, the Ether Trading Counterparty or Prime
Execution Agent, as applicable, deposits the required ether pursuant
to its trade with the Trust into the Trust's Trading Account in
exchange for cash. In the event the Trust has not been able to
successfully execute and complete settlement of an ether transaction
by the settlement date of the cash creation order, the Authorized
Participant will be given the option to (1) cancel the cash creation
order, or (2) accept that the Trust will continue to attempt to
complete the execution, which will delay the settlement date of the
cash creation order. With respect to a cash creation order, as
between the Trust and the Authorized Participant, the Authorized
Participant is responsible for the dollar cost of the difference
between the ether price utilized in calculating NAV per Share on
trade date and the price at which the Trust acquires the ether to
the extent the price realized in buying the ether is higher than the
ether price utilized in the NAV. To the extent the price realized in
buying the ether is lower than the price utilized in the NAV, the
Authorized Participant shall get to keep the dollar impact of any
such difference.
Because the Trust's Trading Account may not be funded with cash
on trade date for the purchase of ether associated with a cash
creation order, the Trust may borrow trade credits (``Trade
Credits'') in the form of cash from Coinbase Credit, Inc. (the
``Trade Credit Lender''), an affiliate of the Prime Execution Agent,
under the trade financing agreement (``Trade Financing Agreement'')
or may require the Authorized Participant to deliver the required
cash for the cash creation order on trade date. The extension of
Trade Credits on trade date allows the Trust to purchase ether
through the Prime Execution Agent on trade date, with such ether
being deposited in the Trust's Trading Account. On settlement date
for a cash creation order, the Trust delivers Shares to the
Authorized Participant in exchange for cash received from the
Authorized Participant. To the extent Trade Credits were utilized,
the Trust uses the cash to repay the Trade Credits borrowed from the
Trade Credit Lender. On settlement date for a cash creation order,
the ether purchased is swept from the Trust's Trading Account to the
Trust's Custody Account pursuant to a regular end-of-day sweep
process.
In-Kind Creations
In connection with in-kind creations, the Authorized
Participants will submit orders by the In-Kind Order Cutoff Time to
create Baskets of Shares in exchange for ether.
On settlement date for an in-kind creation, the Trust delivers
Shares to the Authorized Participant in exchange for ether received
from the Authorized Participant, or its designated agent or client.
The Authorized Participant or its designated agent or client will
deposit such ether to the Trust's Trading Account at the Prime
Execution Agent. In the event the Authorized Participant, its
designated agent or client, has not deposited the ether to the
Trust's Trading Account at the Prime Execution Agent by the
applicable time on the settlement date of the in-kind creation
order, the Authorized Participant will be given the option to (1)
cancel the in-kind creation order, (2) delay settlement of the order
to enable delivery of ether at a later date, or (3) accept that the
Trust will execute a ether transaction required for the creation and
the Authorized Participant will deliver the U.S. dollars required
for this purchase. In the case of (3) only, the Authorized
Participant is responsible for the dollar cost of the difference
between the ether price utilized in calculating NAV per Share on
trade date and the price at which the Trust acquires the ether to
the extent the price realized in buying the ether is higher than the
ether price utilized in the NAV. To the extent the price realized in
buying the ether is lower than the price utilized in the NAV, the
Authorized Participant shall get to keep the dollar impact of any
such difference.
Cash Redemption
Following the Cash Order Cutoff Time for a cash redemption
order, the Trust may choose, in its sole discretion, to enter into a
transaction with an Ether Trading Counterparty or the Prime
Execution Agent, to sell ether in exchange for cash. After the Cash
Order Cutoff Time, the Trust instructs the Ether Custodian to
prepare to move the associated ether from the Trust's Custody
Account to the Trust's Trading Account. On settlement date for a
cash redemption order, the Authorized Participant delivers the
necessary Shares to the Trust, and on or around settlement date, an
Ether Trading Counterparty or Prime Execution Agent, as applicable,
delivers the cash associated with the Trust's sale of ether to the
Trust in exchange for the Trust's ether, and the Trust delivers cash
to the Authorized Participant. In the event the Trust has not been
able to successfully execute and complete settlement of an ether
transaction by the settlement date, the Authorized Participant will
be given the option to (1) cancel the cash redemption order, or (2)
accept that the Trust will continue to attempt to complete the
execution, which will delay the settlement date. With respect to a
cash redemption order, between the Trust and the Authorized
Participant, the Authorized Participant will be responsible for the
dollar cost of the difference between the ether price utilized in
calculating the NAV per Share on trade date and the price realized
in selling the ether to raise the cash needed for the cash
redemption order to the extent the price realized in selling the
ether is lower than the ether price utilized in the NAV. To the
extent the price realized in selling the ether is higher than the
price utilized in the NAV, the Authorized Participant will get to
keep the dollar impact of any such difference.
The Trust may use financing in connection with a cash redemption
order when ether remains in the Trust's Custody Account at the point
of intended execution of a sale of ether. In those circumstances,
the Trust may borrow Trade Credits in the form of ether from the
Trade Credit Lender, which allows the Trust to sell ether through
the Prime Execution Agent on trade date, and the cash proceeds are
deposited in the Trust's Trading Account. On settlement date for a
cash redemption order, the Trust delivers cash to the Authorized
Participant in exchange for Shares received from the Authorized
Participant. In the event financing was used, the Trust will use the
ether moved from the Trust's Custody Account to the Trading
[[Page 22528]]
Account to repay the Trade Credits borrowed from the Trade Credit
Lender.
In-Kind Redemptions
In connection with in-kind redemptions, the Authorized
Participants will submit orders by the In-Kind Order Cutoff Time to
redeem Baskets of Shares in exchange for ether.
On settlement date for an in-kind redemption, the Trust delivers
ether to the account of the Authorized Participant or its designated
agent or client at the Prime Execution Agent in exchange for Shares
received from the Authorized Participant.
Proposal 3: Creation and Redemption of Shares
The Exchange also proposes to modify the Amendment No. 2 section
``Creation and Redemption of Shares'' to integrate the proposed in-kind
creation and redemption process. Specifically, Amendment No. 2
currently states that Baskets are only issued or redeemed in exchange
for an amount of cash determined by the Trustee on each day that Nasdaq
is open for regular trading. No Shares are issued unless the Cash
Custodian has allocated to the Trust's account the corresponding amount
of cash. The amount of cash necessary for the creation of a Basket, or
to be received upon redemption of a Basket, will decrease over the life
of the Trust, due to the payment or accrual of fees and other expenses
or liabilities payable by the Trust.
The Exchange now proposes to delete the above language from
Amendment No. 2, and replace it with the following: Baskets are only
issued or redeemed in exchange for an amount of ether and/or cash
determined by the Trustee on each day that Nasdaq is open for regular
trading. No Shares are issued unless the Cash Custodian has allocated
to the Trust's account the corresponding amount of cash or the Prime
Execution Agent has allocated to the Trust's account the corresponding
amount of ether.\10\ The amount of ether or cash necessary for the
creation of a Basket, or to be received upon redemption of a Basket,
will decrease over the life of the Trust, due to the payment or accrual
of fees and other expenses or liabilities payable by the Trust.
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\10\ The amount of cash or ether is based on the NAV of the
Trust on the trade date.
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Proposal 4: Trust Name Change
Lastly, the Exchange proposes to change the name of the Trust to
the iShares Ethereum Trust ETF to be consistent with the Trust's
Registration Statement.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\11\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\12\ in particular, in that it is designed to
promote just and equitable principles of trade, to remove impediments
to and perfect the mechanism of a free and open market and a national
market system, and, in general to protect investors and the public
interest.
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\11\ 15 U.S.C. 78f(b).
\12\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that the proposed rule change to add the
Additional Ether Custodian is consistent with the Act because it could
mitigate and diversify potential third-party service provider risk in
the event that the Ether Custodian was unable to provide custody
services. Further, the Additional Ether Custodian will be bound by all
representations made in Amendment No. 2 applicable to the Ether
Custodian.
The Exchange believes that permitting in-kind transfers with
respect to the Trust's creation and redemption process promotes just
and equitable principles of trade and helps remove impediments to and
perfect the mechanism of a free and open market and a national market
system. As discussed above, the proposed changes would permit the Trust
to utilize an in-kind creation and redemption process in addition to
the cash creation and redemption process. This added ability would make
the Trust (and the market more generally) operate more efficiently
because Authorized Participants, their designated agents or clients,
would be able to source ether rather than to provide cash to the Trust
and/or receive ether from the Trust. This means that the Authorized
Participant, its designated agent or client, would be responsible for
buying and selling the ether rather than the Trust itself, which would
potentially lessen the impact on the market of the Trust on both sides
of the transaction by allowing the Authorized Participant to decide how
and where to source the underlying ether for creations and deciding
how, where, and whether to sell the underlying ether for redemptions.
This could lead to improvements in the creation and redemption process
for both Authorized Participants and the Trust, and could potentially
increase efficiency, and ultimately benefit the end investors in the
Trust.
Lastly, the Exchange believes that the proposed Trust name change
is consistent with the Act because it would align with the Trust's
Registration Statement, and would promote clarity and transparency with
respect to the Trust's name.
Except for the changes described above, all other representations
in Amendment No. 2 remain unchanged and will continue to constitute
continued listing requirements. In addition, the Trust will continue to
comply with the terms of Amendment No. 2 and the requirements in Rule
5711(d).
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 not necessary or appropriate in
furtherance of the purposes of the Act. As discussed above, the
proposed amendments are intended to add the Additional Ether Custodian,
reflect the Trust's name change, and allow for in-kind transfers. As it
relates to in-kind transfers, the Exchange believes that the proposed
changes would increase operational efficiencies for the Trust (and the
market more generally). The Exchange believes the changes proposed
herein 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
No written comments were either solicited or received.
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 Exchange consents, the Commission shall: (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:
[[Page 22529]]
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-NASDAQ-2025-038 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-NASDAQ-2025-038. 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-NASDAQ-2025-038 and should
be submitted on or before June 18, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-09484 Filed 5-27-25; 8:45 am]
BILLING CODE 8011-01-P
