Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) and Rule 19b-4 thereunder, notice is hereby given that, on April 18, 2022, NYSE Arca, Inc. (“NYSE Arca” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I and II below, which Items have been prepared by the self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons.
I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change
The Exchange proposes to amend a representation regarding the Sprott ESG Gold ETF (the “Trust”). The proposed rule change is available on the Exchange's website at www.nyse.com, at the principal office of the Exchange, and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change
1. Purpose
The Commission has approved a proposed rule change relating to listing and trading on the Exchange of shares (“Shares”) of the Trust under NYSE Arca Rule 8.201-E. Under NYSE Arca Rule 8.201-E, the Exchange may propose to list and/or trade Commodity-Based Trust Shares pursuant to unlisted trading privileges (“UTP”). Shares of the Trust have not commenced listing and trading on the Exchange.
See Securities Exchange Act Release No. 94518 (March 25, 2022), 87 FR 18837 (March 31, 2022) (SR-NYSEArca-2021-65) (Notice of Filing of Amendment No. 1 and Order Granting Accelerated Approval of a Proposed Rule Change, as Modified by Amendment No. 1, to List and Trade Shares of the Sprott ESG Gold ETF under NYSE Arca Rule 8.201-E (Commodity-Based Trust Shares)) (the “Prior Order”).
Commodity-Based Trust Shares are securities issued by a trust that represent investors' discrete identifiable and undivided beneficial ownership interest in the commodities deposited into the Trust.
The Exchange proposes to amend a representation made in the Prior Order relating to the Trust. Specifically, the Prior Order represented that: “A minimum of two Creation Units or 100,000 Shares will be required to be outstanding at the start of trading, which is equivalent to 20,000 fine ounces of gold or about $36,527,000 as of February 9, 2022.” The sponsor of the Trust, Sprott Asset Management LP, has determined instead that 100,000 Shares would be equivalent to 2,000 fine ounces of gold. The Exchange accordingly proposes to delete the representation quoted above and replace it with the following: “A minimum of two Creation Units or 100,000 Shares will be required to be outstanding at the start of trading, which is equivalent to 2,000 fine ounces of gold or about $3,903,100 as of April 11, 2022.” All of the remaining representations in the Prior Order remain unchanged.
2. Statutory Basis
The basis under the Act for this proposed rule change is the requirement under Section 6(b)(5) that an exchange have rules that are designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to remove impediments to, and perfect the mechanism of a free and open market and, in general, to protect investors and the public interest.
The proposed rule change merely amends the number of fine ounces of gold that are equivalent to 100,000 Shares, which 100,00 Shares would still be required to be outstanding at the start of trading. The Exchange believes that amending the representation to reflect the correct equivalent of fine ounces of gold, and the correct corresponding dollar amount that would be equivalent to the 100,000 Shares that will be available at the onset of trading, would promote just and equitable principles of trade and remove impediments to and perfect the mechanism of a free and open market and a national market system, and in general, protect investors and the public interest because it is to correct the number of fine ounces of gold, and the corresponding dollar amount equivalent to 100,000 Shares, before the Shares begin trading.
Other than this proposed change, all remaining statements in the Prior Order remain unchanged.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The proposed change is not designed to address any competitive issue but rather to amend a representation regarding the number of fine ounces of gold that are equivalent to 100,000 Shares, which 100,00 Shares would still be required to be outstanding at the start of trading, and the corresponding dollar amount that would be equivalent to the 100,000 Shares. The Exchange believes that this change will have no impact at all on intramarket or intermarket competition.
C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to the proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action
Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-4(f)(6) thereunder.
17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) requires a self-regulatory organization to give the Commission written notice of its intent to file the proposed rule change at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Exchange has satisfied this requirement.
A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the Act normally does not become operative for 30 days after the date of its filing. However, Rule 19b-4(f)(6)(iii) permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange requested that the Commission waive the 30-day operative delay so that the proposal may become operative immediately upon filing. The Commission notes that the Exchange filed this proposal to amend a representation in order to reflect the correct equivalent of fine ounces of gold, and the correct corresponding dollar amount that would be equivalent to the 100,000 Shares, that will be available at the onset of trading, before the Shares begin trading. Other than this proposed change, all remaining statements in the Prior Order remain unchanged. The proposed rule change raises no novel legal or regulatory issues. Therefore, the Commission believes that waiver of the 30-day operative delay is consistent with the protection of investors and the public interest. Accordingly, the Commission hereby waives the 30-day operative delay and designates the proposed rule change operative upon filing.
For purposes only of waiving the 30-day operative delay, the Commission has also considered the proposed rule's impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f).
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
Electronic Comments
• Use the Commission's internet comment form ( http://www.sec.gov/rules/sro.shtml ); or
• Send an email to rule-comments@sec.gov. Please include File Number SR-NYSEArca-2022-24 on the subject line.
Paper Comments
- Send paper comments in triplicate to: Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSEArca-2022-24. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's internet website ( http://www.sec.gov/rules/sro.shtml ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for website viewing and printing in the Commission's Public Reference Room, 100 F Street NE, Washington, DC 20549 on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change. Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-NYSEArca-2022-24 and should be submitted on or before May 24, 2022.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-09401 Filed 5-2-22; 8:45 am]
BILLING CODE 8011-01-P