88 FR 242 pgs. 87827-87829 - Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Definition of Commodity-Based Trust Shares in Nasdaq Rule 5711(d)(iv)(A) and To Correct a Typographical Error in Nasdaq Rule 5711(d)(iv)(B)
Type: NOTICEVolume: 88Number: 242Pages: 87827 - 87829
Pages: 87827, 87828, 87829Docket number: [Release No. 34–99163; File No. SR–NASDAQ–2023–055]
FR document: [FR Doc. 2023–27805 Filed 12–18–23; 8:45 am]
Agency: Securities and Exchange Commission
Official PDF Version: PDF Version
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-99163; File No. SR-NASDAQ-2023-055]
Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Definition of Commodity-Based Trust Shares in Nasdaq Rule 5711(d)(iv)(A) and To Correct a Typographical Error in Nasdaq Rule 5711(d)(iv)(B)
December 13, 2023.
[top] 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 December 11, 2023, The Nasdaq Stock Market LLC ("Nasdaq" 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 Exchange. The Commission is publishing this notice to solicit
Footnotes:
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 amend Nasdaq Rule 5711(d)(iv)(A) to mirror the definition of Commodity-Based Trust Shares in Section (c)(1) of Arca's Rule 8.201-E. Commodity-Based Trust Shares, as well as to correct a typographical error in Rule Nasdaq Rule 5711(d)(iv)(B).
The text of the proposed rule change is available on the Exchange's website at https://listingcenter.nasdaq.com/rulebook/nasdaq/rules, 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 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 the Statutory Basis for, the Proposed Rule Change
1. Purpose
The purpose of the proposed rule change is to amend Nasdaq Rule 5711(d)(iv)(A) to mirror the definition of Commodity-Based Trust Shares in Section (c)(1) of Arca's Rule 8.201-E. Commodity-Based Trust Shares. 3
Footnotes:
3 ? See Arca Rule 8.201-E(c)(1).
The Exchange proposes to conform its rule language for the definition of Commodity-Based Trust Shares to that of Arca's so that there exists no discrepancy between the definitions. Specifically, Nasdaq currently defines "Commodity-Based Trust Shares" as "a security (1) that is issued by a trust ("Trust") that holds a specified commodity deposited with the Trust; (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 (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."
The term "Commodity-Based Trust Shares" will now mirror Arca's and be defined as "a security (1) that is issued by a trust ("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 (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.
Additionally, the Exchange proposes to correct a typographical error in Rule Nasdaq Rule 5711(d)(iv)(B) to change the Commodity Exchange Act cite from 1(a)(4) to 1a(9).
2. Statutory Basis
The Exchange believes that its proposal is consistent with section 6(b) of the Act, 4 in general, and furthers the objectives of section 6(b)(5) of the Act, 5 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.
Footnotes:
4 ?15 U.S.C. 78f(b).
5 ?15 U.S.C. 78f(b)(5).
The Exchange believes that its proposal will 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 by harmonizing the definition of Commodity-Based Trust Shares with that of Arca and lessening any potential confusion among market participants as to its meaning.
The Exchange also believes that correcting the typographical error in Nasdaq Rule 5711(d)(iv)(B) serves 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 by lessening possible confusion of market participants as to where the term "commodity" is defined in the Commodity Exchange Act through clarifying the rule language and enhancing transparency.
For the foregoing reasons, the Exchange believes that the proposed rule change is consistent with the Act.
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. The proposal merely harmonizes the definition of Commodity-Based Trust Shares with that of Arca and lessens any potential confusion among market participants as to its meaning, as well as fixes a typographical error involving the Commodity Exchange Act that will clarify the rule language and enhance transparency.
For the foregoing reasons, the Exchange does not believe the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act.
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
Pursuant to section 19(b)(3)(A) of the Act? 6 and Rule 19b-4(f)(6)? 7 thereunder, the Exchange has designated this proposal as one that effects a change that: (i) does not significantly affect the protection of investors or the public interest; (ii) does not impose any significant burden on competition; and (iii) by its terms, does not become operative for 30 days after the date of the filing, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest. 8
Footnotes:
6 ?15 U.S.C. 78s(b)(3)(A).
7 ?17 CFR 240.19b-4(f)(6).
8 ?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.
[top] 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)? 9 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
Footnotes:
9 ?17 CFR 240.19b-4(f)(6)(iii).
10 ? See supra note 3.
11 ?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 ( https://www.sec.gov/rules/sro.shtml ); or
• Send an email to rule-comments@sec.gov. Please include file number SR-NASDAQ-2023-055 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-2023-055. 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-2023-055 and should be submitted on or before January 9, 2024.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority. 12
Footnotes:
12 ?17 CFR 200.30-3(a)(12), (59).
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-27805 Filed 12-18-23; 8:45 am]
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