
[Federal Register Volume 81, Number 241 (Thursday, December 15, 2016)]
[Notices]
[Pages 90876-90889]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-30081]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79518; File No. SR-NYSEArca-2016-84]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
of Amendment No. 3, and Order Granting Accelerated Approval of Proposed 
Rule Change, as Modified by Amendment No. 3, Relating to the Listing 
and Trading of Shares of the Long Dollar Gold Trust Under NYSE Arca 
Equities Rule 8.201

December 9, 2016.

I. Introduction

    On June 1, 2016, NYSE Arca, Inc. (``NYSE Arca'' or ``Exchange'') 
filed with the Securities and Exchange Commission (``Commission''), 
pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Exchange Act'') \1\ and Rule 19b-4 thereunder,\2\ a proposed rule 
change to list and trade shares (``Shares'') of the Long Dollar Gold 
Trust (``Fund'') under NYSE Arca Equities Rule 8.201. The proposed rule 
change was published for comment in the Federal Register on June 21, 
2016.\3\ On July 27, 2016, the Commission extended the time period 
within which to approve the proposed rule change, disapprove the 
proposed rule change, or institute proceedings to determine whether to 
approve or disapprove the proposed rule change to September 19, 
2016.\4\ On July 29, 2016, the Exchange filed Amendment No. 1 to the 
proposed rule change, which replaced and superseded the proposed rule 
change as originally filed.\5\ On September 8, 2016, the Exchange filed 
Amendment No. 2 to the proposed rule change, which replaced and 
superseded the proposed rule change as modified by Amendment No. 1.\6\ 
On September 16, 2016, the Commission noticed the filing of Amendment 
No. 2, and instituted proceedings under Section 19(b)(2)(B) of the 
Exchange Act \7\ to determine whether to approve or disapprove the 
proposed rule change, as modified by Amendment No. 2.\8\ On November 
22, 2016, the Exchange filed Amendment No. 3, which replaced the 
proposed rule change as modified by Amendment No. 2.\9\ The Commission 
has not received any comments on the proposed rule change. The 
Commission is publishing this notice to solicit comments on Amendment 
No. 3 from interested persons, and is approving the proposed rule 
change, as modified by Amendment No. 3, on an accelerated basis.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 78075 (June 15, 
2016), 81 FR 40381.
    \4\ See Securities Exchange Act Release No. 78425 (July 27, 
2016), 81 FR 50759 (August 2, 2016).
    \5\ In Amendment No. 1, the Exchange: (1) Provided additional 
information about WM/Reuters, which calculates the ``Spot Rate'' 
(discussed below); (2) provided additional information about 
calculation of the Spot Rate; (3) provided additional information 
about dissemination of the value of the underlying index; (4) 
corrected a statement that the net asset value (``NAV'') of the 
Shares would not be calculated during the occurrence of a Market 
Disruption Event (discussed below) or Extraordinary Event (discussed 
below), and instead stated that, if the LBMA Gold Price AM is 
unavailable during such circumstances, the Fund would calculate NAV 
using the last published LBMA Gold Price AM; (5) identified 
circumstances in which the Fund may reject a purchase order; (6) 
modified the circumstances in which the Fund may reject a redemption 
order; and (7) explained how market makers in the Shares would be 
able to hedge their positions. All amendments to the proposed rule 
change are available at: https://www.sec.gov/comments/sr-nysearca-2016-84/nysearca201684.shtml.
    \6\ In Amendment No. 2, the Exchange: (1) Changed the names of 
the Fund and the Trust; (2) stated that the methodology of the 
underlying index is transparent; (3) explained how market makers in 
the Shares could calculate an approximate value for the underlying 
index during the Exchange's Core Trading Session, which is 
ordinarily between 9:30 a.m. to 4:00 p.m. Eastern time (``ET''); (4) 
made further modifications to its description of when and how NAV 
would be calculated, and when it would be disseminated; (5) 
disclosed more information regarding the availability of the value 
of the underlying index; (6) provided information about its ability 
to obtain information from Exchange Trading Permit Holders (``ETP 
Holders'') regarding their trading in currencies and currency 
derivatives; and (7) represented that it (a) may halt trading in the 
Shares during the trading day if an interruption occurs in the 
dissemination of the value of the underlying index, and (b) would 
halt trading in the Shares no later than the beginning of the 
trading day following the interruption if the interruption in the 
dissemination of the value of the underlying index persists past the 
trading day in which it occurs.
    \7\ 15 U.S.C. 78s(b)(2)(B).
    \8\ See Securities Exchange Act Release No. 78859, 81 FR 65431 
(September 22, 2016) (``OIP''). The Commission instituted 
proceedings to allow for additional analysis of the proposed rule 
change's consistency with Section 6(b)(5) of the Exchange Act, which 
requires, among other things, that the rules of a national 
securities exchange be ``designed to prevent fraudulent and 
manipulative acts and practices, to promote just and equitable 
principles of trade,'' and ``to protect investors and the public 
interest.'' Id., 81 FR at 65441.
    \9\ In Amendment No. 3, the Exchange: (1) Proposes to expand 
NYSE Arca Equities Rule 8.201(g), which governs market maker 
accounts, to include non-U.S. currencies; (2) states that the 
administrator of the WM/Reuters currency benchmarks complies with 
the International Organization of Securities Commissions (``IOSCO'') 
Principles for Financial Benchmarks; and (3) states that: (a) The 
Commission has previously approved the listing and trading of other 
issues of securities based on a WM/Reuters exchange rate or an index 
that uses such a rate, and (b) WM/Reuters utilizes the same 
methodology in calculating the ``Closing Spot Rate'' (discussed 
below) and the Spot Rate.

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[[Page 90877]]

II. The Exchange's Description of the Proposed Rule Change, as Modified 
by Amendment No. 3

    In its filing with the Commission, NYSE Arca included statements 
concerning the purpose of, and basis for, the proposed rule change and 
discussed any comments it received on the proposed rule change. NYSE 
Arca has prepared summaries, set forth in Sections A, B, and C below, 
of the most significant aspects of such statements.

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

1. Purpose
    The Exchange proposes to list and trade the Shares, a series of the 
World Currency Gold Trust (``Trust''), under NYSE Arca Equities Rule 
8.201.\10\ Under NYSE Arca Equities Rule 8.201, the Exchange may 
propose to list and trade, or trade pursuant to unlisted trading 
privileges (``UTP''), ``Commodity-Based Trust Shares.'' \11\ In 
addition, the Exchange proposes to amend NYSE Arca Equities Rule 
8.201(g) (Market Maker Accounts) to add references to non-U.S. 
currencies in connection with market maker accounts used to hedge 
positions in an underlying commodity.
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    \10\ On August 30, 2016, the Trust filed with the Commission 
Amendment No. 3 to its registration statement on Form S-1 under the 
Securities Act of 1933 relating to the Fund (File No. 333-206640) 
(``Registration Statement'').
    \11\ 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.
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    The Fund will not be registered as an investment company under the 
Investment Company Act of 1940 \12\ and is not required to register 
under such act.
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    \12\ 15 U.S.C. 80a-1.
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    The Sponsor of the Fund and the Trust will be WGC USA Asset 
Management Company, LLC (``Sponsor'').\13\ BNY Mellon Asset Servicing, 
a division of The Bank of New York Mellon (``BNYM''), will be the 
Fund's administrator (``Administrator'') and transfer agent (``Transfer 
Agent'') and will not be affiliated with the Trust, the Fund or the 
Sponsor. BNYM will also serve as the custodian of the Fund's cash, if 
any. HSBC Bank plc will be the custodian (``Custodian'') of the Fund's 
Gold (defined below).
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    \13\ The Trust will be a Delaware statutory trust consisting of 
multiple series, each of which will issue common units of beneficial 
interest, which represent units of fractional undivided beneficial 
interest in and ownership of such series. The term of the Trust and 
each series will be perpetual (unless terminated earlier in certain 
circumstances). The sole trustee of the Trust will be Delaware Trust 
Company (``Trustee'').
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    The Commission has previously approved listing on the Exchange 
under NYSE Arca Equities Rules 5.2(j)(5) and 8.201 of other precious 
metals and gold-based commodity trusts, including the Merk Gold Trust; 
\14\ ETFS Gold Trust,\15\ ETFS Platinum Trust \16\ and ETFS Palladium 
Trust (collectively, the ``ETFS Trusts''); \17\APMEX Physical-1 oz. 
Gold Redeemable Trust; \18\ Sprott Gold Trust; \19\ SPDR Gold Trust 
(formerly, streetTRACKS Gold Trust); iShares Silver Trust; \20\ and 
iShares COMEX Gold Trust.\21\ Prior to their listing on the Exchange, 
the Commission approved listing of the streetTRACKS Gold Trust on the 
New York Stock Exchange (``NYSE'') \22\ and listing of iShares COMEX 
Gold Trust and iShares Silver Trust on the American Stock Exchange 
LLC.\23\ In addition, the Commission has approved trading of the 
streetTRACKS Gold Trust and iShares Silver Trust on the Exchange 
pursuant to UTP.\24\
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    \14\ Securities Exchange Act Release No. 71378 (January 23, 
2014), 79 FR 4786 (January 29, 2014) (SR-NYSEArca-2013-137).
    \15\ Securities Exchange Act Release No. 59895 (May 8, 2009), 74 
FR 22993 (May 15, 2009) (SR-NYSEArca-2009-40).
    \16\ Securities Exchange Act Release No. 61219 (December 22, 
2009), 74 FR 68886 (December 29, 2009) (SR-NYSEArca-2009-95).
    \17\ Securities Exchange Act Release No. 61220 (December 22, 
2009), 74 FR 68895 (December 29, 2009) (SR-NYSEArca-2009-94).
    \18\ Securities Exchange Act Release No. 66930 (May 7, 2012), 77 
FR 27817 (May 11, 2012) (SR-NYSEArca-2012-18).
    \19\ Securities Exchange Act Release No. 61496 (February 4, 
2010), 75 FR 6758 (February 10, 2010) (SR-NYSEArca-2009-113).
    \20\ See Securities Exchange Act Release No. 58956 (November 14, 
2008), 73 FR 71074 (November 24, 2008) (SR-NYSEArca-2008-124) 
(approving listing on the Exchange of the iShares Silver Trust)).
    \21\ See Securities Exchange Act Release No. 56224 (August 8, 
2007), 72 FR 45850 (August 15, 2007) (SR-NYSEArca-2007-76) 
(approving listing on the Exchange of the streetTRACKS Gold Trust); 
Securities Exchange Act Release No. 56041 (July 11, 2007), 72 FR 
39114 (July 17, 2007) (SR-NYSEArca-2007-43) (order approving listing 
on the Exchange of iShares COMEX Gold Trust).
    \22\ See Securities Exchange Act Release No. 50603 (October 28, 
2004), 69 FR 64614 (November 5, 2004) (SR-NYSE-2004-22) (order 
approving listing of street TRACKS Gold Trust on NYSE).
    \23\ See Securities Exchange Act Release Nos. 51058 (January 19, 
2005), 70 FR 3749 (January 26, 2005) (SR-Amex-2004-38) (order 
approving listing of iShares COMEX Gold Trust on the American Stock 
Exchange LLC); 53521 (March 20, 2006), 71 FR 14967 (March 24, 2006) 
(SR-Amex-2005-72) (approving listing on the American Stock Exchange 
LLC of the iShares Silver Trust).
    \24\ See Securities Exchange Act Release Nos. 53520 (March 20, 
2006), 71 FR 14977 (March 24, 2006) (SR-PCX-2005-117) (approving 
trading on the Exchange pursuant to UTP of the iShares Silver 
Trust); 51245 (February 23, 2005), 70 FR 10731 (March 4, 2005) (SR-
PCX-2004-117) (approving trading on the Exchange of the streetTRACKS 
Gold Trust pursuant to UTP).
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Operation of the Fund
    Gold bullion typically is priced and traded throughout the world in 
U.S. dollars. The Fund has been established as an alternative to 
traditional dollar-based gold investing. Although investors will 
purchase shares of the Fund with U.S. dollars, the Fund is designed to 
provide investors with the economic effect of holding gold in terms of 
a specific basket of major, non-U.S. currencies, such as the euro, 
Japanese yen and British pound (each, a ``Reference Currency''), rather 
than the U.S. dollar. Specifically, the Fund will seek to track the 
performance of the Solactive GLD[supreg] Long USD Gold Index, less Fund 
expenses. The Solactive GLD[supreg] Long USD Gold Index, or the 
``Index,'' represents the daily performance of a long position in 
physical gold and a short position in the FX Basket \25\ comprised of 
each of the Reference Currencies.\26\ The Index is designed to measure 
daily gold bullion returns as though an investor had invested in Gold 
in terms of the FX Basket comprised of the Reference Currencies 
reflected in the Index. (The Index is described in more detail below 
under the heading ``Description of the Index.'')
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    \25\ ``FX Basket'' means the basket of Reference Currencies with 
weighting determined by the Index.
    \26\ ``Gold'' means gold bullion meeting the requirements of 
London Good Delivery Standards. London Good Delivery Standards are 
the specifications for weight dimensions, fineness (or purity), 
identifying marks and appearance set forth in ``The Good Delivery 
Rules for Gold and Silver Bars'' published by the London Bullion 
Markets Association (``LBMA'').
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    The U.S. dollar value of an investment in Shares would therefore be 
expected to increase when both the price of Gold goes up and the value 
of the U.S. dollar increases against the value of the Reference 
Currencies comprising the FX Basket (as weighted in the Index). 
Conversely, the U.S. dollar value of an investment would be expected to 
decrease when the price of Gold goes down and the value of the U.S. 
dollar decreases against the value of the Reference Currencies 
comprising the FX Basket (as weighted in the Index). If Gold increases 
and the value of the U.S. dollar decreases against the value of the 
Reference Currencies comprising the FX Basket, or vice versa, the net 
impact of these changes will determine the value of the Shares on a 
daily basis.\27\
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    \27\ For additional information regarding the gold bullion 
market, gold futures exchanges, and regulation of the global gold 
market, see, e.g., Securities Exchange Act Release Nos. 59895 (May 
8, 2009), 74 FR 22993 (May 15, 2009) (SR-NYSEArca-2009-40) (order 
approving Exchange listing and trading of the ETFS Gold Trust); and 
66627 (March 20, 2012), 77 FR 27817 (May 11, 2012) (SR-NYSE Arca-
2012-18) (order approving Exchange listing and trading of the APMEX 
Physical-1 oz. Gold Redeemable Trust).

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[[Page 90878]]

    The Fund is a passive investment vehicle and is designed to track 
the performance of the Index regardless of: (i) The value of Gold or 
any Reference Currency; (ii) market conditions; and (iii) whether the 
Index is increasing or decreasing in value. The Fund's holdings 
generally will consist entirely of Gold. Substantially all of the 
Fund's Gold holdings will be delivered by Authorized Participants 
(defined below) in exchange for Shares. The Fund will not hold any of 
the Reference Currencies. The Fund generally will not hold U.S. dollars 
(except from time to time in very limited amounts to pay expenses). The 
Fund's Gold holdings will not be managed and the Fund will not have any 
investment discretion.
    The Fund's NAV will go up or down each ``Business Day'' based 
primarily on two factors.\28\ The first is the change in the price of 
Gold measured in U.S. dollars from the prior Business Day. This drives 
the value of the Fund's Gold holdings measured in U.S. dollars up (as 
Gold prices increase) or down (as Gold prices fall). The second is the 
change in the value of the Reference Currencies comprising the FX 
Basket against the U.S. dollar from the prior Business Day. This drives 
the value of the Fund's Gold holdings measured in the Reference 
Currencies comprising the FX Basket up (when the value of the U.S. 
dollar against the Reference Currencies comprising the FX Basket 
increases) or down (when the value of the U.S. dollar against the 
Reference Currencies comprising the FX Basket declines). The value of 
Gold and the Reference Currencies comprising the FX Basket are based on 
publicly available, transparent prices--for Gold, the LBMA Gold Price 
AM (defined below), for currencies, the WMR Fix.\29\
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    \28\ A Business Day with respect to the Fund is any day the 
Exchange is open for trading.
    \29\ The WMR Fix is the World Markets Company plc foreign 
exchange benchmark rate.
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    Because the Fund generally will hold only Gold bullion (and not 
U.S. dollars or the Reference Currencies), the economic impact of 
changes to the value of the Reference Currencies against the U.S. 
dollar from day to day is reflected in the Fund by moving an amount of 
Gold ounces of equivalent value in or out of the Fund. Therefore, the 
Fund will seek to track the performance of the Index by entering into a 
transaction each Index Business Day with the ``Gold Delivery Provider'' 
pursuant to which Gold is moved in or out of the Fund.\30\ The terms of 
this transaction are set forth in a written contract between the Fund 
and the Gold Delivery Provider referred to as the ``Gold Delivery 
Agreement.'' Pursuant to the terms of the Gold Delivery Agreement, the 
Fund will deliver Gold to, or receive Gold from, the Gold Delivery 
Provider each Index Business Day. The amount of Gold transferred will 
be equivalent to the Fund's profit or loss as if the Fund had exchanged 
the Reference Currencies comprising the FX Basket, in the proportion in 
which they are reflected in the Index, for U.S. dollars in an amount 
equal to the Fund's declared holdings of Gold on such day. If there is 
a currency gain (i.e., the value of the U.S. dollar against the 
Reference Currencies comprising the FX Basket increases), the Fund will 
receive Gold. If there is a currency loss (i.e., the value of the U.S. 
dollar against the Reference Currencies comprising the FX Basket 
decreases), the Fund will deliver Gold.\31\ In this manner, the value 
of the Gold held by the Fund will be adjusted to reflect the daily 
change in the value of the Reference Currencies comprising the FX 
Basket against the U.S. dollar. The Gold Delivery Agreement requires 
Gold ounces equal to the value of the Gold Delivery Amount to be 
delivered to the custody account of the Fund or Gold Delivery Provider, 
as applicable. The fee that the Fund pays the Gold Delivery Provider 
for its services under the Gold Delivery Agreement will be accrued 
daily and reflected in the calculation of the Gold Delivery Amount.
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    \30\ The Gold Delivery Provider, Merrill Lynch International, is 
a company incorporated in England and Wales and regulated by the 
Prudential Regulation Authority (``PRA'') and the Financial Conduct 
Authority (``FCA''). The Gold Delivery Provider will not be 
affiliated with the Trust, the Fund, the Sponsor, the Trustee, the 
Administrator, the Transfer Agent, the Custodian or the Index 
Provider (defined below).
    \31\ If the applicable currency exchange rates did not change 
from one day to the next, or the net impact of such changes was 
zero, then the Fund would neither deliver nor receive Gold pursuant 
to the Gold Delivery Agreement.
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    The Fund does not intend to enter into any other Gold transactions 
other than with the Gold Delivery Provider as described in the Gold 
Delivery Agreement (except that the Fund may sell Gold to cover Fund 
expenses), and the Fund does not intend to hold any Reference Currency 
or enter into any currency transactions.
Description of the Index
    The Index is maintained and calculated by a third-party data and 
index provider, Solactive AG (``Index Provider''). The Index Provider 
will license the Index to the Sponsor for use in connection with the 
Trust and the Fund. The Index Provider is not affiliated with the 
Trust, the Fund, the Sponsor, the trustee for the Trust, the 
Administrator, the Transfer Agent, the Custodian or the Gold Delivery 
Provider. The Index Provider is not affiliated with a broker-dealer. 
The Index Provider has adopted policies and procedures designed to 
prevent the spread of material non-public information about the Index.
    The description of the strategy and methodology underlying the 
Index, which will be identified and described in the Registration 
Statement, is based on rules formulated by the Index Provider (``Index 
Rules''). The Index Rules, which will be described in the Registration 
Statement, will govern the calculation and constitution of the Index 
and other decisions and actions related to its maintenance. The Index 
is described as a ``notional'' or ``synthetic'' portfolio or strategy 
because there is no actual portfolio of assets to which any person is 
entitled or in which any person has any ownership interest. The Index 
references certain assets (i.e., Gold and the Reference Currencies 
comprising the FX Basket), the performance of which will be used as a 
reference point for calculating the daily performance of the Index 
(``Index Level''). The Index seeks to track the daily performance of a 
long position in physical Gold and a short position in the Reference 
Currencies comprising the FX Basket (as weighted in the Index). If the 
Gold Price (as defined below) increases and the Reference Currencies 
comprising the FX Basket depreciate against the U.S. dollar, the Index 
Level will increase. Conversely, if the Gold Price decreases and the 
Reference Currencies comprising the FX Basket appreciate against the 
U.S. dollar, the Index Level will decrease. In certain cases, the 
appreciation of the Gold Price or the depreciation of the FX Basket 
comprised of the Reference Currencies may be offset by the appreciation 
of the FX Basket comprised of the Reference Currencies or the 
depreciation of the Gold Price, as applicable. The net impact of these 
changes determines the Index Level on a daily basis.
    The Index values Gold on a daily basis using the ``Gold Price.'' 
The Gold Price generally is the LBMA Gold Price AM. The ``LBMA Gold 
Price'' means the price per troy ounce of Gold stated in U.S. dollars 
as set via an electronic auction process run twice daily at 10:30 a.m. 
and 3:00 p.m., London time each Business Day as calculated and 
administered by ICE Benchmark Administration Limited (``IBA'') and

[[Page 90879]]

published by LBMA on its Web site. The ``LBMA Gold Price AM'' is the 
10:30 a.m. LBMA Gold Price. IBA, an independent specialist benchmark 
administrator, provides the price platform, methodology and the overall 
administration and governance for the LBMA Gold Price.
    As noted herein, the term ``Reference Currencies'' refers to the 
following non-U.S. currencies: The euro, Japanese yen, British pound 
sterling, Canadian dollar, Swedish krona and Swiss franc. Each 
Reference Currency comprising the FX Basket is expressed in terms of a 
number of foreign currency units relative to one U.S. dollar (e.g., a 
number of Japanese yen per one U.S. dollar) or in terms of a number of 
U.S. dollars per one unit of the reference currency (e.g., a number of 
U.S. dollars per one euro).
    The Index references European Union euro (``euro'' or ``EUR''), the 
Japanese yen (``JPY'' or ``yen''), the British pound sterling 
(``GBP''), the Swiss franc (``CHF''), the Canadian dollar (``CAD'') and 
the Swedish Krona (``SEK'') (each of which is measured against U.S. 
dollars). The weightings of each currency referenced are as follows: 
Euro (57.6%), yen (13.6%), GBP (11.9%), CAD (9.1%), SEK (4.2%) and CHF 
(3.6%).
    Reference Currency Index values generally are calculated using the 
published WM/Reuters (``WMR'') \32\ Spot Rate (``Spot Rate'') as of 
9:00 a.m., London time associated with each Reference Currency.\33\ The 
Spot Rate is the rate at which a Reference Currency comprising the FX 
Basket can be exchanged for U.S. dollars on an immediate basis, subject 
to the applicable settlement cycle. Thus, if an investor wanted to 
convert U.S. dollars into euros, the investor could enter into a spot 
transaction at the Spot Rate (subject to the bid/ask) and would receive 
euros in a number of days, depending on the settlement cycle of that 
currency. Generally, the settlement of a ``spot'' transaction is two 
currency business days (except in the case of Canadian dollars, which 
settle on the next business day). The following table sets forth the 
Reference Currencies comprising the FX Basket (each of which is 
measured against U.S. dollars), the applicable ``Reuters Page'' for 
each Spot Rate referenced by the Index and the market convention for 
quoting such currency.\34\
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    \32\ WMR provides both intraday and closing fixes for currency 
spot rates, forward contracts and non-deliverable forward contracts. 
WMR rates are widely utilized by financial institutions in 
evaluating global markets. Thomson Reuters Benchmark Services 
Limited, the administrator of the WM/Reuters spot, forward and non-
deliverable foreign exchange benchmark rates, has stated that it 
complies with the IOSCO Principles for Financial Benchmarks. See 
http://financial.thomsonreuters.com/content/dam/openweb/documents/pdf/financial/wm-reuters-iosco-principles-statement.pdf.
    \33\ The Spot Rate is calculated by WMR using observable data 
from arms-length transactions between buyers and sellers in the 
applicable currency market. The World Markets Company plc (``WM'') 
provides an exchange rate service that publishes Spot Rates at fixed 
times throughout the global trading day. WM does not use a panel or 
polling solicitation process to obtain underlying data in the 
benchmark calculation process. WM uses transactional data to set 
``Trade Rates,'' reflecting data from actual transactions entered 
into on an arm's length basis between buyers and sellers in that 
market, where that data is available and reflects sufficient 
liquidity. The Thomson Reuters Market Data System is the primary 
infrastructure used to source spot foreign exchange rates used in 
the calculation of the rates. Other systems may be used where the 
appropriate rates are not available on the Thomson Reuters 
architecture. Over a five-minute fix period, actual trades executed 
and bid and offer order rates from the order matching systems are 
captured every second from 2 minutes 30 seconds before to 2 minutes 
30 seconds after the time of the fix. From each data source, a 
single traded rate will be captured--this will be identified as a 
bid or offer depending on whether the trade is a buy or sell. A pre-
defined spread set for each currency at each fix will be applied to 
the Trade Rate to calculate the opposite bid or offer. All captured 
trades will be subjected to validation checks. This may result in 
some captured data being excluded from the fix calculation. The WMR 
methodology guide is available at: http://www.wmcompany.com/pdfs/WMReutersMethodology.pdf.
    \34\ The Commission has previously approved for Exchange trading 
issues of Currency Trust Shares based on the WM/Reuters closing 
rate. See, e.g., Securities Exchange Act Release No. 58365 (August 
14, 2008), 73 FR 49522 (August 21, 2008) (SR-NYSEArca-2008-81) 
(notice of filing and order granting accelerated approval of 
proposed rule change relating to listing and trading of four 
CurrencyShares Trusts). The Sponsor represents that WM/Reuters 
utilizes the same methodology in calculating the Closing Spot Rate 
and the ``Spot Rate'' as defined herein. In addition, the Commission 
has approved for Exchange listing and trading exchange-traded 
products based on indexes that use the WM/Reuters Closing Spot Rate 
to calculate the applicable foreign currency exchange rate. See, 
e.g., Securities Exchange Act Release Nos. 56592 (October 1, 2007), 
72 FR 57364 (October 9, 2007) (SR-Amex-2007-60) (order approving 
proposed rule change relating to the listing and trading on the 
American Stock Exchange of shares of eight funds of the ProShares 
Trust based on MSCI international equity indexes); 55985 (June 29, 
2007), 72 FR 37291 (July 9, 2007) (SR-NYSEArca-2007-47) (notice of 
filing and order granting accelerated approval of proposed rule 
change to list and trade shares of the iShares FTSE EPRA/NAREIT Asia 
Index Funds). See also, Securities Exchange Act Release No. 58458 
(September 3, 2008), 73 FR 52717 (September 10, 2008) (SR-NYSEArca-
2008-95) (notice of filing and immediate effectiveness of proposed 
rule change relating to a change in net asset value calculations for 
CurrencyShares Trusts to use the WM/Reuters Closing Spot Rate).

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        Reference currency                 Reuters page                  Market convention for quotation
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EUR/USD...........................  USDEURFIX=WM..............  Number of USD per one EUR.
USD/JPY...........................  USDJPYFIX=WM..............  Number of JPY per one USD.
GBP/USD...........................  USDGBPFIX=WM..............  Number of USD per one GBP.
USD/CAD...........................  USDCADFIX=WM..............  Number of CAD per one USD.
USD/SEK...........................  USDSEKFIX=WM..............  Number of SEK per one USD.
USD/CHF...........................  USDCHFFIX=WM..............  Number of CHF per one USD.
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    Settlement in most spot currency transactions is two currency 
business days after the trade date. A ``spot-next trade'' effectively 
extends the spot settlement cycle by one Business Day (i.e., the 
``next'' day) and a ``spot-next forward point'' represents the 
difference in price between a spot transaction and a spot-next trade. 
Combining a spot-next trade with a spot transaction allows for exposure 
to the currency without taking delivery. By entering on each Index 
Business Day (as defined below) into notional spot-next trades that are 
closed the next Index Business Day against spot transactions, the Index 
is exposed to the Reference Currencies comprising the FX Basket without 
having to take delivery of these currencies. The Index approximates the 
cost of entering into a spot-next trade by linearly interpolating the 
cost of that trade based on the WM/Reuters ``SW--Spot Week (One Week)'' 
forward rates and a spot transaction.
    In general, the Index is calculated and published by the Index 
Provider each Index Business Day, unless there is a ``Market Disruption 
Event'' or ``Extraordinary Event'' as described below. The Index value 
is disseminated each Index Business Day at approximately 6:00 a.m. ET.
    The Index methodology is transparent. Market makers will 
recalculate an approximate Index value using reliable intraday prices 
of gold and the relevant Index currencies to identify arbitrage 
opportunities that present themselves during the

[[Page 90880]]

Exchange's Core Trading Session (ordinarily 9:30 a.m. to 4:00 p.m., 
ET).
The Gold Delivery Agreement
    The Fund has entered into a written contract with the Gold Delivery 
Provider. Subject to the terms of the Gold Delivery Agreement, on a 
daily basis, the Gold Delivery Provider will (i) calculate the Gold 
Delivery Amount and (ii) deliver Gold ounces equal to the U.S. dollar 
value of the Gold Delivery Amount into or out of the Fund. The Gold 
Delivery Amount is the amount of Gold ounces to be delivered into or 
out of the Fund on a daily basis to reflect price movements in the 
Reference Currencies comprising the FX Basket against the U.S. dollar 
from the prior Index Business Day (assuming no Market Disruption Event 
or Extraordinary Event has occurred or is continuing, as described in 
more detail below).
    On each Index Business Day, the Gold Delivery Provider determines 
the notional exposure for each Reference Currency comprising the FX 
Basket based upon their respective Index weights. The total notional 
exposure for each Reference Currency on an Index Business Day takes 
into account the NAV of the Fund (which takes into account creation and 
redemption orders received on that day).
    The Gold Delivery Provider then determines the ``FX PnL'' which 
captures the effect of changes in the daily value of the Reference 
Currencies comprising the FX Basket in their respective weights by 
calculating the change in the Spot Rate from the prior Index Business 
Day to the current Index Business Day and adjusting that change to 
reflect a notional spot-next trade because delivery of currencies is 
not being taken. The Gold Delivery Provider may use another rate if any 
Spot Rate is delayed or unavailable as set forth in the Gold Delivery 
Agreement. The Gold Delivery Provider generally will make this 
calculation outside of U.S. market hours (at approximately 4:00 a.m. 
ET) based on the prices of the Reference Currencies comprising the FX 
Basket published at the ``WMR FX Fixing Time,'' which is generally at 
9:00 a.m., London Time.
    The FX PnL is divided by the Gold Price (i.e., the LBMA Gold Price 
AM) to determine the Gold Delivery Amount. The fee that the Fund pays 
the Gold Delivery Provider for its services under the Gold Delivery 
Agreement is accrued daily and reflected in the calculation of the Gold 
Delivery Amount.
    If the Gold Delivery Amount is a positive number (meaning that the 
Fund has experienced a currency gain on the notional short position in 
the FX Basket comprised of Reference Currencies), the Gold Delivery 
Provider will transfer to the Fund's custody account an amount of Gold 
(in ounces) equal to the Gold Delivery Amount. If the Gold Delivery 
Amount is a negative number (meaning that the Fund has experienced a 
currency loss on the notional short position in the FX Basket comprised 
of Reference Currencies), the Fund will transfer to the Gold Delivery 
Provider's custody account an amount of Gold (in ounces) equal to the 
Gold Delivery Amount.
Market Disruption and Extraordinary Events
    From time to time, unexpected events may cause the calculation of 
the Index and/or the operation of the Fund to be disrupted. These 
events are expected to be relatively rare, but there can be no 
guarantee that these events will not occur. These events are referred 
to as either ``Market Disruption Events'' or ``Extraordinary Events'' 
depending largely on their significance and potential impact to the 
Index and Fund. Market Disruption Events generally include disruptions 
in the trading of Gold or the Reference Currencies comprising the FX 
Basket, delays or disruptions in the publication of the LBMA Gold Price 
or the Reference Currency prices, and unusual market or other events 
that are tied to either the trading of gold or the Reference Currencies 
comprising the FX Basket or otherwise have a significant impact on the 
trading of gold or the Reference Currencies comprising the FX Basket. 
For example, market conditions or other events which result in a 
material limitation in, or a suspension of, the trading of physical 
Gold generally would be considered Market Disruption Events, as would 
material disruptions or delays in the determination or publication of 
the LBMA Gold Price AM. Similarly, market conditions which prevent, 
restrict or delay the Gold Delivery Provider's ability to convert a 
Reference Currency to U.S. dollars or deliver a Reference Currency 
through customary channels generally would be considered a Market 
Disruption Event, as would material disruptions or delays in the 
determination or publication of WMR spot prices for any Reference 
Currency comprising the FX Basket. The complete definition of a Market 
Disruption Event is set forth below.
    A ``Market Disruption Event'' occurs if either an ``FX Basket 
Disruption Event'' or a ``Gold Disruption Event'' occurs.
    An ``FX Basket Disruption Event'' occurs if any of the following 
exist on any ``Index Business Day'' \35\ with respect to the Reference 
Currencies comprising the FX Basket:
---------------------------------------------------------------------------

    \35\ An ``Index Business Day'' is (i) any day that is a business 
day in New York and London, (ii) any day (other than a Saturday or 
Sunday) on which the LBMA is scheduled to publish the LBMA Gold 
Price AM, and (iii) any day (other than a Saturday or Sunday) on 
which WM Company is scheduled to publish prices for each of the 
Reference Currency pairs comprising the FX Basket.
---------------------------------------------------------------------------

    (i) An event, circumstance or cause (including, without limitation, 
the adoption of or any change in any applicable law or regulation) that 
has had or would reasonably be expected to have a materially adverse 
effect on the availability of a market for converting such Reference 
Currency to US Dollars (or vice versa), whether due to market 
illiquidity, illegality, the adoption of or change in any law or other 
regulatory instrument, inconvertibility, establishment of dual exchange 
rates or foreign exchange controls or the occurrence or existence of 
any other circumstance or event, as determined by the Index Sponsor; or
    (ii) the failure of Reuters to announce or publish the relevant 
spot exchange rates for any Reference Currency in the FX Basket; or
    (iii) any event or any condition that (I) results in a lack of 
liquidity in the market for trading any Reference Currency that makes 
it impossible or illegal for market participants (a) to convert from 
one currency to another through customary commercial channels, (b) to 
effect currency transactions in, or to obtain market values of, such, 
currency, (c) to obtain a firm quote for the related exchange rate, or 
(d) to obtain the relevant exchange rate by reference to the applicable 
price source; or (II) leads to any governmental entity imposing rules 
that effectively set the prices of any of the currencies; or
    (iv) the declaration of (a) a banking moratorium or the suspension 
of payments by banks, in either case, in the country of any currency 
used to determine any Reference Currency exchange rate, or (b) capital 
and/or currency controls (including, without limitation, any 
restriction placed on assets in or transactions through any account 
through which a non-resident of the country of any currency used to 
determine the currency exchange rate may hold assets or transfer monies 
outside the country of that currency, and any restriction on the 
transfer of funds, securities or other assets of market participants 
from, within or outside of the country of any currency used to 
determine the applicable exchange rate.

[[Page 90881]]

    A ``Gold Disruption Event'' occurs if any of the following exist on 
any Index Business Day with respect to gold:
    (i) (a) The failure of the LBMA to announce or publish the LBMA 
Gold Price (or the information necessary for determining the price of 
gold) on that Index Business Day, (b) the temporary or permanent 
discontinuance or unavailability of the LBMA or the LBMA Gold Price; or
    (ii) the material suspension of, or material limitation imposed on, 
trading in Gold by the LBMA; or
    (iii) an event that causes market participants to be unable to 
deliver gold bullion loco London under rules of the LBMA by credit to 
an unallocated account at a member of the LBMA; or
    (iv) the permanent discontinuation of trading of gold on the LBMA 
or any successor body thereto, the disappearance of, or of trading in, 
gold; or
    (v) a material change in the formula for or the method of 
calculating the price of gold, or a material change in the content, 
composition or constitution of gold.
    The occurrence of a Market Disruption Event for five Index Business 
Days generally would be considered an Extraordinary Event for the Index 
and Fund.
Consequences of a Market Disruption or Extraordinary Event
    On any Index Business Day in which a Market Disruption Event or 
Extraordinary Event has occurred or is continuing, the Index Provider 
generally will calculate the Index based on the following fallback 
procedures: (i) Where the Market Disruption Event is based on the Gold 
Price, the Index will be kept at the same level as the previous Index 
Business Day and updated when the Gold Price is no longer disrupted; 
(ii) where the Gold Price is not disrupted but one of the Reference 
Currency prices is disrupted, the Index will be calculated in the 
ordinary course except that the disrupted Reference Currency will be 
kept at its value from the previous Index Business Day and updated when 
it is no longer disrupted; and (iii) if both the Gold Price and a 
Reference Currency price are disrupted, the Index will be kept at the 
same level as the previous Index Business Day and updated when such 
prices are no longer disrupted. If a Market Disruption Event has 
occurred and is continuing for five (5) or more consecutive Index 
Business Days, the Index Provider will calculate a substitute price for 
each index component that is disrupted. If an Extraordinary Event has 
occurred and is continuing, the Index Provider shall be responsible for 
making any decisions regarding the future composition of the Index and 
implement any necessary adjustments that might be required. If 
necessary, the Fund may use alternate pricing sources to calculate NAV 
during the occurrence of any Market Disruption or Extraordinary 
Event.\36\ If the LBMA Gold Price AM is unavailable during the 
occurrence of a Market Disruption Event or Extraordinary Event, the 
Fund will calculate NAV using the last published LBMA Gold Price AM.
---------------------------------------------------------------------------

    \36\ The Exchange may suspend trading in the Shares in the event 
the Sponsor suspends the right of redemptions.
---------------------------------------------------------------------------

The London Gold Bullion Market
    Although the market for physical gold is global, most over-the-
counter, or ``OTC,'' trades are cleared through London. In addition to 
coordinating market activities, the LBMA acts as the principal point of 
contact between the market and its regulators. A primary function of 
the LBMA is its involvement in the promotion of refining standards by 
maintenance of the ``London Good Delivery Lists,'' which are the lists 
of LBMA accredited melters and assayers of gold. The LBMA also 
coordinates market clearing and vaulting, promotes good trading 
practices and develops standard documentation.
    The term ``loco London'' refers to gold bars physically held in 
London that meet the specifications for weight, dimensions, fineness 
(or purity), identifying marks (including the assay stamp of a LBMA 
acceptable refiner) and appearance set forth in ``The Good Delivery 
Rules for Gold and Silver Bars'' published by the LBMA. Gold bars 
meeting these requirements are known as ``London Good Delivery Bars.'' 
All of the gold held by the Fund will be London Good Delivery Bars 
meeting the specifications for weight, dimensions, fineness (or 
purity), identifying marks and appearance of gold bars as set forth in 
``The Good Delivery Rules for Gold and Silver Bars'' published by the 
LBMA.
    The unit of trade in London is the troy ounce, whose conversion 
between grams is: 1,000 grams = 32.1507465 troy ounces and 1 troy ounce 
= 31.1034768 grams. A London Good Delivery Bar is acceptable for 
delivery in settlement of a transaction on the OTC market. Typically 
referred to as 400-ounce bars, a London Good Delivery Bar must contain 
between 350 and 430 fine troy ounces of gold, with a minimum fineness 
(or purity) of 995 parts per 1,000 (99.5%), be of good appearance and 
be easy to handle and stack. The fine gold content of a gold bar is 
calculated by multiplying the gross weight of the bar (expressed in 
units of 0.025 troy ounces) by the fineness of the bar.
The LBMA Gold Price
    IBA hosts a physically settled, electronic and tradeable auction 
process that provides a market-based platform for buyers and sellers to 
trade physical spot Gold. The final auction price is used and published 
to the market as the ``LBMA Gold Price benchmark.'' The LBMA Gold Price 
is set twice daily at 10:30 a.m., London time and 3:00 p.m., London 
time in three currencies: U.S. dollars, euro and British pounds 
sterling. The LBMA Gold Price is a widely used benchmark for the 
physical spot price of Gold and is quoted by various financial 
information sources.
    Participants in the IBA auction process submit anonymous bids and 
offers which are published on screen and in real-time. Throughout the 
auction process, aggregated Gold bids and offers are updated in real-
time with the imbalance calculated and the price updated every 45 
seconds until the buy and sell orders are matched. When the net volume 
of all participants falls within a pre-determined tolerance, the 
auction is deemed complete and the applicable LBMA Gold Price is 
published. Information about the auction process (such as aggregated 
bid and offer volumes) will be immediately available after the auction 
on the IBA's Web site.
    The LBMA Gold Price replaced the widely used ``London Gold Fix'' as 
of March 20, 2015.
The Gold Futures Markets
    Although the Fund will not invest in gold futures, information 
about the gold futures market is relevant as such markets contribute 
to, and provide evidence of, the liquidity of the overall market for 
Gold.
    The most significant gold futures exchange is COMEX, part of the 
CME Group, Inc., which began to offer trading in gold futures contracts 
in 1974. TOCOM (Tokyo Commodity Exchange) is another significant 
futures exchange and has been trading gold since 1982. Trading on these 
exchanges is based on fixed delivery dates and transaction sizes for 
the futures and options contracts traded. Trading costs are negotiable. 
As a matter of practice, only a small percentage of the futures market 
turnover ever comes to physical delivery of the gold represented by the 
contracts traded. Both exchanges permit trading on margin. Both COMEX 
and TOCOM operate through a central clearance system and in each case, 
the

[[Page 90882]]

clearing organization acts as a counterparty for each member for 
clearing purposes. Gold futures contracts also are traded on the 
Shanghai Gold Exchange and the Shanghai Futures Exchange.
    The global gold markets are overseen and regulated by both 
governmental and self-regulatory organizations. In addition, certain 
trade associations have established rules and protocols for market 
practices and participants.
Net Asset Value
    The Administrator will determine the NAV of Shares each Business 
Day. The NAV of Shares will be the aggregate value of the Fund's assets 
(which include gold payable, but not yet delivered, to the Fund) less 
its liabilities (which include accrued but unpaid fees and expenses). 
The NAV of the Fund will be calculated based on the price of Gold per 
ounce applied against the number of ounces of Gold owned by the Fund. 
For purposes of calculating NAV, the number of ounces of Gold owned by 
the Fund is adjusted up or down on a daily basis to reflect the Gold 
Delivery Amount. The number of ounces of Gold held by the Fund also 
reflects the amount of Gold delivered into (or out of) the Fund on a 
daily basis by Authorized Participants (as described below) creating 
and redeeming Shares. The number of ounces of Gold held by the Fund is 
adjusted downward by the Sponsor's fee and the expenses of the Gold 
Delivery Agreement.
    In determining the Fund's NAV, the Administrator generally will 
value the Gold held by the Fund based on the LBMA Gold Price AM for an 
ounce of Gold. If no LBMA Gold Price AM is made on a particular 
Business Day (including a Business Day that is not an Index Business 
Day), the next most recent LBMA Gold Price AM determined prior to that 
Business Day generally will be used in the determination of the NAV of 
the Fund, unless the Sponsor determines that such price is 
inappropriate to use as the basis for such determination.\37\ If the 
Sponsor determines that such price is inappropriate to use, it shall 
identify an alternate basis for evaluation of the Gold held by the 
Fund. In such case, the Sponsor would, for example, look to the current 
trading price of gold from other reported sources, such as dealer 
quotes, broker quotes or electronic trading data, to value the Fund's 
Shares. Although the Fund will not hold the Reference Currencies, the 
Gold Delivery Provider generally will value the Reference Currencies 
based on the rates in effect as of the WMR FX Fixing Time, which is 
generally at 9:00 a.m., London Time (though other prices may be used if 
the 9:00 a.m. rate is delayed or unavailable). The Administrator will 
also determine the NAV per Share, which equals the NAV of the Fund, 
divided by the number of outstanding Shares. Unless there is a Market 
Disruption Event or Extraordinary Event with respect to the price of 
gold, NAV generally will be calculated and disseminated by 12:00 p.m. 
ET.
---------------------------------------------------------------------------

    \37\ The Exchange notes that such valuation procedure is 
substantially similar to that utilized by other issues of commodity-
based exchange-traded products approved by the Commission for 
exchange listing. See, e.g., Securities Exchange Act Release No. 
59895 at p.17 (May 8, 2009), 74 FR 22993 (May 15, 2009) (SR-
NYSEArca-2009-40) (approving listing on NYSE Arca of the ETFS Gold 
Trust); Securities Exchange Act Release No. 53521 at n.32 (March 20, 
2006), 71 FR 14967 (March 24, 2006) (SR-Amex-2005-72) (approving 
listing on the American Stock Exchange LLC of the iShares Silver 
Trust); and Securities Exchange Act Release No. 51058 at p.13 
(January 19, 2005), 70 FR 3749 (January 26, 2005) (SR-Amex-2004-38) 
(order approving listing of iShares COMEX Gold Trust on the American 
Stock Exchange LLC).
---------------------------------------------------------------------------

Creation and Redemption of Shares
    The Fund expects to create and redeem Shares but only in Creation 
Units (a Creation Unit equals a block of 10,000 Shares or more). The 
creation and redemption of Creation Units requires the delivery to the 
Fund (or the distribution by the Fund in the case of redemptions) of 
the amount of Gold and any cash, if any, represented by the Creation 
Units being created or redeemed. The total amount of Gold and cash, if 
any, required for the creation of Creation Units will be based on the 
combined NAV of the number of Creation Units being created or redeemed. 
The initial amount of Gold required for deposit with the Fund to create 
Shares is 1,000 ounces per Creation Unit. The number of ounces of Gold 
required to create a Creation Unit or to be delivered upon redemption 
of a Creation Unit will change over time depending on Index performance 
net of the fees charged by the Fund and the Gold Delivery Provider. 
Creation Units may be created or redeemed only by ``Authorized 
Participants'' (as described below), who may be required to pay a 
transaction fee for each order to create or redeem Creation Units as 
will be set forth in the Registration Statement. Authorized 
Participants may sell to other investors all or part of the Shares 
included in the Creation Units they purchase from the Fund.
Creation Procedures--Authorized Participants
    Authorized Participants are the only persons that may place orders 
to create and redeem Creation Units. To become an Authorized 
Participant, a person must enter into a Participant Agreement. All Gold 
bullion must be delivered to the Fund and distributed by the Fund in 
unallocated form through credits and debits between an Authorized 
Participant's unallocated account (``Authorized Participant Unallocated 
Account'') and the Fund's unallocated account (``Fund Unallocated 
Account'') (except for Gold delivered to or from the Gold Delivery 
Provider pursuant to the Gold Delivery Agreement). All Gold bullion 
must be of at least a minimum fineness (or purity) of 995 parts per 
1,000 (99.5%) and otherwise conform to the rules, regulations practices 
and customs of the LBMA, including the specifications for a London Good 
Delivery Bar.
    On any Business Day, an Authorized Participant may place an order 
with the Fund to create one or more Creation Units. Purchase orders 
must be placed by 5:30 p.m., ET. The day on which the Fund receives a 
valid purchase order is the purchase order date. By placing a purchase 
order, an Authorized Participant agrees to deposit Gold with the Fund, 
or a combination of Gold and cash, if any, as described below.\38\ 
Prior to the delivery of Creation Units for a purchase order, the 
Authorized Participant must also have wired to the Fund the non-
refundable transaction fee due for the purchase order.
---------------------------------------------------------------------------

    \38\ The Sponsor anticipates that in the ordinary course of the 
Fund's operations cash generally will not be part of any Creation 
Unit.
---------------------------------------------------------------------------

    The total deposit of Gold (and cash, if any) required to create 
each Creation Unit is referred to as the ``Creation Unit Gold Delivery 
Amount.'' The Creation Unit Gold Delivery Amount is the number of 
ounces of Gold required to be delivered to the Fund by an Authorized 
Participant in connection with a creation order for a single Creation 
Unit.\39\ The Creation Unit Gold Delivery Amount will be determined on 
the Business Day following the date such creation order is accepted. It 
is calculated by multiplying the number of Shares in a Creation Unit by 
the number of ounces of Gold associated with Shares on the Business Day 
after the day the creation order is accepted. In addition, because the 
Gold Delivery Amount for the Fund does not reflect creation order 
transactions (see the section herein entitled ``The Gold Delivery 
Agreement''), the Creation Unit Gold Delivery Amount is required to

[[Page 90883]]

reflect the Gold Delivery Amount associated with such creation order. 
This amount is determined on the Business Day following the date such 
creation order is accepted.
---------------------------------------------------------------------------

    \39\ The ``Creation Unit Gold Delivery Amount'' is also used to 
refer to the number of ounces of Gold to be paid by the Fund to an 
Authorized Participant in connection with the redemption of a 
Creation Unit. See ``Redemption Procedures--Authorized 
Participants'' herein.
---------------------------------------------------------------------------

    An Authorized Participant who places a purchase order is 
responsible for crediting its Authorized Participant Unallocated 
Account with the required Gold deposit amount by the end of the third 
Business Day in London following the purchase order date. Upon receipt 
of the Gold deposit amount, the Custodian, after receiving appropriate 
instructions from the Authorized Participant and the Fund, will 
transfer on the third Business Day following the purchase order date 
the Gold deposit amount from the Authorized Participant Unallocated 
Account to the Fund Unallocated Account and the Administrator will 
direct the Depository Trust Company (``DTC'') to credit the number of 
Creation Units ordered to the Authorized Participant's DTC account. The 
expense and risk of delivery, ownership and safekeeping of Gold until 
such Gold has been received by the Fund will be borne solely by the 
Authorized Participant. If Gold is to be delivered other than as 
described above, the Sponsor is authorized to establish such procedures 
and to appoint such custodians and establish such custody accounts as 
the Sponsor determines to be desirable.
    Acting on standing instructions given by the Fund, the Custodian 
will transfer the Gold deposit amount from the Fund Unallocated Account 
to the Fund's allocated account by allocating to the allocated account 
specific bars of Gold which the Custodian holds or instructing a sub-
custodian to allocate specific bars of Gold held by or for the sub-
custodian. The Gold bars in an allocated Gold account are specific to 
that account and are identified by a list which shows, for each Gold 
bar, the refiner, assay or fineness, serial number and gross and fine 
weight. Gold held in the Fund's allocated account is the property of 
the Fund and is not traded, leased or loaned under any circumstances.
    The Custodian will use commercially reasonable efforts to complete 
the transfer of Gold to the Fund's allocated account prior to the time 
by which the Administrator is to credit the Creation Unit to the 
Authorized Participant's DTC account; if, however, such transfers have 
not been completed by such time, the number of Creation Units ordered 
will be delivered against receipt of the Gold deposit amount in the 
Fund's unallocated account, and all Shareholders will be exposed to the 
risks of unallocated Gold to the extent of that Gold deposit amount 
until the Custodian completes the allocation process.
    The Fund has the right, but not the obligation, to reject a 
purchase order if (i) the order is not in proper form as described in 
the Participant Agreement, (ii) the fulfillment of the order, in the 
opinion of its counsel, might be unlawful, (iii) if the Fund determines 
that acceptance of the order from an Authorized Participant would 
expose the Fund to credit risk; or (iv) circumstances outside the 
control of the Administrator, the Sponsor or the Custodian make the 
purchase, for all practical purposes, not feasible to process.
Redemption Procedures--Authorized Participants
    The procedures by which an Authorized Participant can redeem one or 
more Creation Units mirror the procedures for the creation of Creation 
Units. On any Business Day, an Authorized Participant may place an 
order with the Fund to redeem one or more Creation Units. Redemption 
orders must be placed by 5:30 p.m. ET. A redemption order so received 
is effective on the date it is received in satisfactory form by the 
Fund. An Authorized Participant may be required to pay a transaction 
fee per order to create or redeem Creation Units as will be set forth 
in the Registration Statement.
    The redemption distribution from the Fund consists of a credit in 
the amount of the Creation Unit Gold Delivery Amount to the Authorized 
Participant Unallocated Account of the redeeming Authorized 
Participant. The Creation Unit Delivery Amount for redemptions is the 
number of ounces of Gold held by the Fund associated with the Shares 
being redeemed plus, or minus, the cash redemption amount (if any). The 
Sponsor anticipates that in the ordinary course of the Fund's 
operations there will be no cash distributions made to Authorized 
Participants upon redemptions. In addition, because the Gold to be paid 
out in connection with the redemption order will decrease the amount of 
Gold subject to the Gold Delivery Agreement, the Creation Unit Gold 
Delivery Amount reflects the cost to the Gold Delivery Provider of 
resizing (i.e., decreasing) its positions so that it can fulfill its 
obligations under the Gold Delivery Agreement.
    The redemption distribution due from the Fund is delivered to the 
Authorized Participant on the third Business Day following the 
redemption order date if, by 10:00 a.m. ET on such third Business Day, 
the Fund's DTC account has been credited with the Creation Units to be 
redeemed. If the Administrator's DTC account has not been credited with 
all of the Creation Units to be redeemed by such time, the redemption 
distribution is delivered to the extent of whole Creation Units 
received. Any remainder of the redemption distribution is delivered on 
the next Business Day to the extent of remaining whole Creation Units 
received if the Administrator receives the fee applicable to the 
extension of the redemption distribution date which the Administrator 
may, from time to time, determine and the remaining Creation Units to 
be redeemed are credited to the Administrator's DTC account by 10:00 
a.m. ET on such next Business Day. Any further outstanding amount of 
the redemption order will be cancelled. The Administrator is also 
authorized to deliver the redemption distribution notwithstanding that 
the Creation Units to be redeemed are not credited to the 
Administrator's DTC account by 10:00 a.m. ET on the third Business Day 
following the redemption order date if the Authorized Participant has 
collateralized its obligation to deliver the Creation Units through 
DTC's book entry system on such terms as the Sponsor and the 
Administrator may from time to time agree upon.
    The Custodian transfers the redemption Gold amount from the Fund's 
allocated account to the Fund's unallocated account and, thereafter, to 
the redeeming Authorized Participant's Authorized Participant 
Unallocated Account.
    The Fund may, in its discretion, suspend the right of redemption, 
or postpone the redemption settlement date: (1) For any period during 
which NYSE Arca is closed other than customary weekend or holiday 
closings, or trading on NYSE Arca is suspended or restricted, (2) for 
any period during which an emergency exists as a result of which 
delivery, disposal or evaluation of Gold is not reasonably practicable, 
or (3) such other period as the Sponsor determines to be necessary for 
the protection of the Shareholders, such as during the occurrence of a 
Market Disruption Event or Extraordinary Event based on the Gold Price.
    The Fund has the right, but not the obligation, to reject a 
redemption order if (i) the order is not in proper form as described in 
the Participant Agreement, (ii) the fulfillment of the order, in the 
opinion of its counsel, might be unlawful, (iii) if the Fund determines 
that acceptance of the order from an Authorized Participant would 
expose the Fund to credit risk; or (iv) circumstances outside the 
control of the

[[Page 90884]]

Administrator, the Sponsor or the Custodian make the redemption, for 
all practical purposes, not feasible to process.
Secondary Market Trading
    While the Fund's investment objective is for the Shares to reflect 
the performance of Gold bullion in terms of the Reference Currencies 
reflected in the Index, less the expenses of the Fund, the Shares may 
trade in the secondary market at prices that are lower or higher 
relative to their NAV per Share. The amount of the discount or premium 
in the trading price relative to the NAV per Share may be influenced by 
non-concurrent trading hours between the NYSE Arca and the COMEX, 
London, Zurich and Singapore. While the Shares will trade on NYSE Arca 
until 8:00 p.m. ET, liquidity in the global gold market will be reduced 
after the close of the COMEX at 1:30 p.m. ET. As a result, during this 
time, trading spreads, and the resulting premium or discount, on the 
Shares may widen.
    The Adviser represents that market makers in the Shares will be 
able to efficiently hedge their positions through use of spot gold 
transactions and spot currency transactions in Reference Currencies 
comprising the FX Basket. Transactions in spot gold and spot currencies 
during the Exchange's Core Trading Session (9:30 a.m. to 4:00 p.m. ET) 
take place in a highly liquid market; such transactions that hedge the 
market makers' positions in Shares are expected to facilitate the 
market maker's ability to trade Shares at a price that is not at a 
material discount or premium to NAV.
Fund Expenses
    The Sponsor will receive an annual fee equal to 0.33% of the daily 
NAV of the Fund. In return the Sponsor will be responsible for the 
payment of the ordinary fees and expenses of the Fund, including the 
Administrator's fee, the Custodian's fee, and the Index Provider's fee. 
This will be the case regardless of whether the ordinary expenses of 
the Fund exceed 0.33% of the daily NAV of the Fund. In addition, the 
Fund will pay the Gold Delivery Provider an annual fee of 0.17% of the 
daily NAV, so that the Fund's total annual expense ratio will be equal 
to 0.50%. The Sponsor's fee and payment to the Gold Delivery Provider 
are expected to be the only ordinary recurring expenses of the Fund.
Availability of Information Regarding Gold and Reference Currency 
Prices
    Currently, the Consolidated Tape Plan does not provide for 
dissemination of the spot price of a commodity, such as gold, or the 
spot price of the Reference Currencies, over the Consolidated Tape. 
However, there will be disseminated over the Consolidated Tape the last 
sale price for the Shares, as is the case for all equity securities 
traded on the Exchange (including exchange-traded funds). In addition, 
there is a considerable amount of information about gold and currency 
prices and gold and currency markets available on public Web sites and 
through professional and subscription services.
    Investors may obtain on a 24-hour basis gold pricing information 
based on the spot price for an ounce of Gold and pricing information 
for the Reference Currencies from various financial information service 
providers, such as Reuters and Bloomberg.
    Reuters and Bloomberg, for example, provide at no charge on their 
Web sites delayed information regarding the spot price of Gold and last 
sale prices of Gold futures, as well as information about news and 
developments in the gold market. Reuters and Bloomberg also offer a 
professional service to subscribers for a fee that provides information 
on Gold prices directly from market participants. Complete real-time 
data for Gold futures and options prices traded on the COMEX are 
available by subscription from Reuters and Bloomberg. There are a 
variety of other public Web sites providing information on gold, 
ranging from those specializing in precious metals to sites maintained 
by major newspapers. In addition, the LBMA Gold Price is publicly 
available at no charge at www.lbma.org.uk.
    In addition, Reuters and Bloomberg, for example, provide at no 
charge on their Web sites delayed information regarding the spot price 
of each Reference Currency, as well as information about news and 
developments in the currency markets. Reuters and Bloomberg also offer 
a professional service to subscribers for a fee that provides 
information on currency transactions directly from market participants. 
Complete real-time data for currency transactions are available by 
subscription from Reuters and Bloomberg. There are a variety of other 
public Web sites providing information about the Reference Currencies 
and currency transactions, ranging from those specializing in currency 
trading to sites maintained by major newspapers.
Availability of Information
    The Fund's Web site (www.spdrgoldshares.com) will provide an 
intraday indicative value (``IIV'') per Share for the Shares updated 
every 15 seconds, as calculated by the Exchange or a third party 
financial data provider during the Exchange's Core Trading Session 
(9:30 a.m. to 4:00 p.m. ET). The IIV will be calculated based on the 
amount of Gold held by the Fund and (i) a price of Gold derived from 
updated bids and offers indicative of the spot price of Gold, and (ii) 
intra-day exchange rates for each Reference Currency against the U.S. 
dollar.\40\ The Fund's Web site will also provide the Creation Basket 
Deposit and the NAV of the Fund as calculated each Business Day by the 
Administrator.
---------------------------------------------------------------------------

    \40\ The IIV on a per Share basis disseminated during the Core 
Trading Session should not be viewed as a real-time update of the 
NAV, which is calculated once a day.
---------------------------------------------------------------------------

    In addition, the Web site for the Fund will contain the following 
information, on a per Share basis, for the Fund: (a) The mid-point of 
the bid-ask price \41\ at the close of trading (``Bid/Ask Price''), and 
a calculation of the premium or discount of such price against such 
NAV; and (b) data in chart format displaying the frequency distribution 
of discounts and premiums of the Bid/Ask Price against the NAV, within 
appropriate ranges, for each of the four previous calendar quarters. 
The Web site for the Fund will also provide the Fund's prospectus, as 
well as the two most recent reports to stockholders. Finally, the Fund 
Web site will provide the last sale price of the Shares as traded in 
the U.S. market. In addition, the Exchange will make available over the 
Consolidated Tape quotation information, trading volume, closing prices 
and NAV for the Shares from the previous day. The Index value will be 
calculated daily using the daily LBMA Gold Price AM and the Spot Rate 
as of 9:00 a.m., London time. The Index value will be available from 
one or more major market data vendors and will be available during the 
Exchange's Core Trading Session.
---------------------------------------------------------------------------

    \41\ The bid-ask price of the Shares will be determined using 
the highest bid and lowest offer on the Consolidated Tape as of the 
time of calculation of the closing day NAV.
---------------------------------------------------------------------------

Criteria for Initial and Continued Listing
    The Fund will be subject to the criteria in NYSE Arca Equities Rule 
8.201(e) for initial and continued listing of the Shares.
    A minimum of 100,000 Shares will be required to be outstanding at 
the start of trading. The minimum number of shares required to be 
outstanding is comparable to requirements that have been applied to 
previously listed shares of the Sprott Physical Gold Trust, ETFS 
Trusts, streetTRACKS Gold Trust, the iShares COMEX Gold Trust, and the

[[Page 90885]]

iShares Silver Trust. The Exchange believes that the anticipated 
minimum number of Shares outstanding at the start of trading is 
sufficient to provide adequate market liquidity.
Trading Rules
    The Exchange deems the Shares to be equity securities, thus 
rendering trading in the Fund subject to the Exchange's existing rules 
governing the trading of equity securities. Trading in the Shares on 
the Exchange will occur in accordance with NYSE Arca Equities Rule 
7.34(a). The Exchange has appropriate rules to facilitate transactions 
in the Shares during all trading sessions. As provided in NYSE Arca 
Equities Rule 7.6, Commentary .03, the minimum price variation 
(``MPV'') for quoting and entry of orders in equity securities traded 
on the NYSE Arca Marketplace is $0.01, with the exception of securities 
that are priced less than $1.00 for which the MPV for order entry is 
$0.0001.
    Further, NYSE Arca Equities Rule 8.201 sets forth certain 
restrictions on ETP Holders acting as registered market makers in the 
Shares to facilitate surveillance. Rule 8.201(g) requires that a market 
maker in Commodity-Based Trust Shares must file with the Exchange in a 
manner prescribed by the Exchange and keep current a list identifying 
all accounts for trading in an underlying commodity, related commodity 
futures or options on commodity futures, or any other related commodity 
derivatives, which the market maker may have or over which it may 
exercise investment discretion. Such rule provides further that no 
market maker shall trade in an underlying commodity, or options on 
commodity futures, or any other related commodity derivatives, in an 
account in which a market maker, directly or indirectly, controls 
trading activities, or has a direct interest in the profits or losses 
thereof, which has not been reported to the Exchange as required by 
such rule. The Exchange proposes to amend Rule 8.201(g) to state that 
an ETP Holder acting as a registered market maker in Commodity-Based 
Trust Shares with no exposure to a non-U.S. currency or currencies must 
file with the Exchange in a manner prescribed by the Exchange and keep 
current a list identifying all accounts for trading in an underlying 
commodity, related commodity futures or options on commodity futures, 
or any other related commodity derivatives, which the market maker may 
have or over which it may exercise investment discretion. An ETP Holder 
acting as a registered market maker in Commodity-Based Trust Shares 
with exposure to one or more non-U.S. currencies (``Underlying FX'') 
also must file with the Exchange, in a manner prescribed by the 
Exchange, and keep current a list identifying all accounts for trading 
in Underlying FX and derivatives overlying Underlying FX which the 
market maker may have or over which it may exercise investment 
discretion, as well as a list of all commodity and commodity-related 
accounts referenced above. In addition, the proposed amended rule would 
state that no market maker in Commodity-Based Trust Shares shall trade 
in a commodity, Underlying FX or any related derivative in an account 
that the market maker (1) directly or indirectly controls trading 
activities or has a direct interest in the profits or losses thereof, 
(2) is required by this rule to disclose to the Exchange, and (3) has 
not reported to the Exchange. The last sentence of the first paragraph 
of Rule 8.201(g) is proposed to be deleted as unnecessary in view of 
the proposed amendment to such rule. The Exchange further proposes to 
amend the second paragraph of Rule 8.201(g), which relates to books, 
records or other information required to be made available to the 
Exchange, to add applicable Underlying FX and Underlying FX derivatives 
to the financial instruments that are subject to requirements of such 
rule.
    Pursuant to NYSE Arca Equities Rule 8.201(g), an ETP Holder acting 
as a registered market maker in the Shares is required to provide the 
Exchange, upon request, with information relating to its trading in the 
underlying commodity (e.g., gold), related futures or options on 
futures, or any other related commodity derivatives. The Exchange 
proposes to amend Rule 8.201(g) to add non-U.S. currency futures, 
options on non-U.S. currency futures and other related currency 
derivatives to the information that may be requested by the Exchange.
    With respect to issues of Commodity-Based Trust Shares for which 
non-U.S. currency price changes may impact the NAV of the applicable 
shares, such as the Shares, the Exchange believes the proposed 
amendments to Rule 8.600(g) are appropriate in that a market maker may 
find it necessary to use non-U.S. currencies or currency derivatives to 
hedge positions in the underlying commodity. Therefore, to facilitate 
Exchange surveillance, any such non-U.S. currency-related trading 
activity should be in accounts reported to the Exchange, and books, 
records or other information related to such activity should be made 
available to the Exchange.
    The Exchange notes that, under NYSE Arca Equities Rule 10.2, in the 
course of an investigation by the Exchange, the Exchange may request 
from ETP Holders documentary materials and other information, including 
trading records, regarding trading in currencies and currency 
derivatives. In addition, Commentary .04 of NYSE Arca Equities Rule 6.3 
requires an ETP Holder acting as a registered market maker, and its 
affiliates, in the Shares to establish, maintain and enforce written 
policies and procedures reasonably designed to prevent the misuse of 
any material nonpublic information with respect to such products, any 
components of the related products, any physical asset or commodity 
underlying the product, applicable currencies, underlying indexes, 
related futures or options on futures, and any related derivative 
instruments (including the Shares).
    As a general matter, the Exchange has regulatory jurisdiction over 
its ETP Holders and their associated persons, which include any person 
or entity controlling an ETP Holder. A subsidiary or affiliate of an 
ETP Holder that does business only in commodities or futures contracts 
would not be subject to Exchange jurisdiction, but the Exchange could 
obtain information regarding the activities of such subsidiary or 
affiliate through surveillance sharing agreements with regulatory 
organizations of which such subsidiary or affiliate is a member.
    With respect to trading halts, the Exchange may consider all 
relevant factors in exercising its discretion to halt or suspend 
trading in the Shares. Trading on the Exchange in the Shares may be 
halted because of market conditions or for reasons that, in the view of 
the Exchange, make trading in the Shares inadvisable. These may 
include: (1) The extent to which conditions in the underlying gold 
market have caused disruptions and/or lack of trading, or (2) whether 
other unusual conditions or circumstances detrimental to the 
maintenance of a fair and orderly market are present. In addition, 
trading in Shares will be subject to trading halts caused by 
extraordinary market volatility pursuant to the Exchange's ``circuit 
breaker'' rule.\42\ The Exchange will halt trading in the Shares if the 
NAV of the Trust is not calculated or disseminated daily. The Exchange 
may halt trading during the day in which an interruption occurs to the 
dissemination of the IIV, as described above, or the Index value. If 
the interruption to the dissemination of the IIV or the Index value 
persists past the trading day in which it occurs, the

[[Page 90886]]

Exchange will halt trading no later than the beginning of the trading 
day following the interruption.
---------------------------------------------------------------------------

    \42\ See NYSE Arca Equities Rule 7.12.
---------------------------------------------------------------------------

Surveillance
    The Exchange represents that trading in the Shares will be subject 
to the existing trading surveillances administered by the Exchange, as 
well as cross-market surveillances administered by the Financial 
Industry Regulatory Authority (``FINRA'') on behalf of the Exchange, 
which are designed to detect violations of Exchange rules and 
applicable federal securities laws.\43\ The Exchange represents that 
these procedures are adequate to properly monitor Exchange trading of 
the Shares in all trading sessions and to deter and detect violations 
of Exchange rules and federal securities laws applicable to trading on 
the Exchange.
---------------------------------------------------------------------------

    \43\ FINRA conducts cross-market surveillances on behalf of the 
Exchange pursuant to a regulatory services agreement. The Exchange 
is responsible for FINRA's performance under this regulatory 
services agreement.
---------------------------------------------------------------------------

    The surveillances referred to above generally focus on detecting 
securities trading outside their normal patterns, which could be 
indicative of manipulative or other violative activity. When such 
situations are detected, surveillance analysis follows and 
investigations are opened, where appropriate, to review the behavior of 
all relevant parties for all relevant trading violations.
    The Exchange or FINRA, on behalf of the Exchange, or both, will 
communicate as needed regarding trading in the Shares with other 
markets and other entities that are members of the ISG, and the 
Exchange or FINRA, on behalf of the Exchange, or both, may obtain 
trading information regarding trading in the Shares from such markets 
and other entities. In addition, the Exchange may obtain information 
regarding trading in the Shares from markets and other entities that 
are members of ISG or with which the Exchange has in place a 
comprehensive surveillance sharing agreement.\44\
---------------------------------------------------------------------------

    \44\ For a list of the current members of ISG, see 
www.isgportal.org.
---------------------------------------------------------------------------

    Also, pursuant to NYSE Arca Equities Rule 8.201(g), the Exchange is 
able to obtain information regarding trading in the Shares and the 
underlying gold, gold futures contracts, options on gold futures, or 
any other gold derivative, through ETP Holders acting as registered 
market makers, in connection with such ETP Holders' proprietary or 
customer trades through ETP Holders which they effect on any relevant 
market.
    In addition, the Exchange also has a general policy prohibiting the 
distribution of material, non-public information by its employees.
    All statements and representations made in this filing regarding 
(a) the description of the portfolio, (b) limitations on portfolio 
holdings or reference assets, or (c) the applicability of Exchange 
rules and surveillance procedures shall constitute continued listing 
requirements for listing the Shares on the Exchange.
    The issuer has represented to the Exchange that it will advise the 
Exchange of any failure by the Fund to comply with the continued 
listing requirements, and, pursuant to its obligations under Section 
19(g)(1) of the Exchange Act, the Exchange will monitor for compliance 
with the continued listing requirements. If the Fund is not in 
compliance with the applicable listing requirements, the Exchange will 
commence delisting procedures under NYSE Arca Equities Rule 5.5(m).
Information Bulletin
    Prior to the commencement of trading, the Exchange will inform its 
ETP Holders in an Information Bulletin of the special characteristics 
and risks associated with trading the Shares. Specifically, the 
Information Bulletin will discuss the following: (1) The procedures for 
purchases and redemptions of Shares in Baskets (including noting that 
Shares are not individually redeemable); (2) NYSE Arca Equities Rule 
9.2(a), which imposes a duty of due diligence on its ETP Holders to 
learn the essential facts relating to every customer prior to trading 
the Shares; (3) how information regarding the IIV is disseminated; (4) 
the requirement that ETP Holders deliver a prospectus to investors 
purchasing newly issued Shares prior to or concurrently with the 
confirmation of a transaction; (5) the possibility that trading spreads 
and the resulting premium or discount on the Shares may widen as a 
result of reduced liquidity of gold trading during the Core and Late 
Trading Sessions after the close of the major world gold markets; and 
(6) trading information. For example, the Information Bulletin will 
advise ETP Holders, prior to the commencement of trading, of the 
prospectus delivery requirements applicable to the Fund. The Exchange 
notes that investors purchasing Shares directly from the Fund (by 
delivery of the Creation Basket Deposit) will receive a prospectus. ETP 
Holders purchasing Shares from the Fund for resale to investors will 
deliver a prospectus to such investors.
    In addition, the Information Bulletin will reference that the Fund 
is subject to various fees and expenses as will be described in the 
Registration Statement. The Information Bulletin will also reference 
the fact that there is no regulated source of last sale information 
regarding physical gold, that the Commission has no jurisdiction over 
the trading of gold as a physical commodity, and that the CFTC has 
regulatory jurisdiction over the trading of gold futures contracts and 
options on gold futures contracts.
    The Information Bulletin will also discuss any relief, if granted, 
by the Commission or the staff from any rules under the Exchange Act.
2. Statutory Basis
    The basis under the Exchange Act for this proposed rule change is 
the requirement under Section 6(b)(5) \45\ 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.
---------------------------------------------------------------------------

    \45\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange believes that the proposed rule change is designed to 
prevent fraudulent and manipulative acts and practices in that the 
Shares will be listed and traded on the Exchange pursuant to the 
initial and continued listing criteria in NYSE Arca Equities Rule 
8.201. The Exchange has in place surveillance procedures that are 
adequate to properly monitor trading in the Shares in all trading 
sessions and to deter and detect violations of Exchange rules and 
applicable federal securities laws. The Exchange may obtain information 
via ISG from other exchanges that are members of ISG or with which the 
Exchange has entered into a comprehensive surveillance sharing 
agreement. Under NYSE Arca Equities Rule 10.2, in the course of an 
investigation by the Exchange, the Exchange may request from ETP 
Holders documentary materials and other information, including trading 
records, regarding trading in currencies and currency derivatives. With 
respect to issues of Commodity-Based Trust Shares for which non-U.S. 
currency price changes may impact the NAV of the applicable shares, 
such as the Shares, the Exchange believes the proposed amendments to 
Rule 8.600(g), as described above, are appropriate and in the public 
interest in that such amendments will facilitate Exchange surveillance 
of market makers' non-U.S.

[[Page 90887]]

currency-related trading activity. The last sentence of the first 
paragraph of Rule 8.201(g) is proposed to be deleted as unnecessary in 
view of the proposed amendment to such rule. The Exchange further 
proposes to amend the second paragraph of Rule 8.201(g), which relates 
to books, records or other information required to be made available to 
the Exchange, to add applicable Underlying FX and Underlying FX 
derivatives to the financial instruments that are subject to 
requirements of such rule. In addition, Commentary .04 of NYSE Arca 
Equities Rule 6.3 requires an ETP Holder acting as a registered market 
maker, and its affiliates, in the Shares to establish, maintain and 
enforce written policies and procedures reasonably designed to prevent 
the misuse of any material nonpublic information with respect to such 
products, any components of the related products, any physical asset or 
commodity underlying the product, applicable currencies, underlying 
indexes, related futures or options on futures, and any related 
derivative instruments (including the Shares).
    The proposed rule change is designed to promote just and equitable 
principles of trade and to protect investors and the public interest in 
that there is a considerable amount of gold price and gold market 
information available on public Web sites and through professional and 
subscription services. Investors may obtain on a 24-hour basis gold 
pricing information based on the spot price for an ounce of gold from 
various financial information service providers. Investors may obtain 
gold pricing information based on the spot price for an ounce of gold 
from various financial information service providers. Current spot 
prices also are generally available with bid/ask spreads from gold 
bullion dealers. In addition, the Fund's Web site will provide pricing 
information for gold spot prices and the Shares. Market prices for the 
Shares will be available from a variety of sources including brokerage 
firms, information Web sites and other information service providers. 
The NAV of the Fund will be published by the Sponsor on each day that 
the NYSE Arca is open for regular trading and will be posted on the 
Fund's Web site. The IIV relating to the Shares will be widely 
disseminated by one or more major market data vendors at least every 15 
seconds during the Core Trading Session. In addition, the LBMA Gold 
Price is publicly available at no charge at www.lbma.org.uk. The Fund's 
Web site will also provide the Fund's prospectus, as well as the two 
most recent reports to stockholders. In addition, the Exchange will 
make available over the Consolidated Tape quotation information, 
trading volume, closing prices and NAV for the Shares from the previous 
day.
    The proposed rule change is designed to perfect the mechanism of a 
free and open market and, in general, to protect investors and the 
public interest in that it will facilitate the listing and trading of 
an additional type of exchange-traded product that will enhance 
competition among market participants, to the benefit of investors and 
the marketplace. As noted above, the Exchange has in place surveillance 
procedures relating to trading in the Shares and may obtain information 
via ISG from other exchanges that are members of ISG or with which the 
Exchange has entered into a comprehensive surveillance sharing 
agreement. In addition, as noted above, investors will have ready 
access to information regarding gold pricing.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Exchange Act. The Exchange 
believes the proposed rule change will enhance competition by 
accommodating Exchange trading of an additional exchange-traded product 
relating to physical gold.

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

    No written comments were solicited or received with respect to the 
proposed rule change.

III. Discussion and Commission Findings

    After careful review, the Commission finds that the Exchange's 
proposed rule change to list and trade the Shares is consistent with 
the Exchange Act and the rules and regulations thereunder applicable to 
a national securities exchange.\46\ In particular, the Commission finds 
that the proposal is consistent with Section 11A(a)(1)(C)(iii) of the 
Exchange Act,\47\ which sets forth Congress' finding that it is in the 
public interest and appropriate for the protection of investors and the 
maintenance of fair and orderly markets to assure the availability to 
brokers, dealers, and investors of information with respect to 
quotations for and transactions in securities. Quotation, last-sale, 
trading volume, and closing price information for the Shares will be 
available over the Consolidated Tape.
---------------------------------------------------------------------------

    \46\ In approving this proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. See 15 U.S.C. 78c(f).
    \47\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
---------------------------------------------------------------------------

    Additionally, the Commission finds that the proposed rule change is 
consistent with Section 6(b)(5) of the Exchange Act,\48\ which 
requires, among other things, that the Exchange's rules be designed to 
prevent fraudulent and manipulative acts and practices, 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 
Commission believes that the proposed rule change is reasonably 
designed to promote fair disclosure of information that may be 
necessary to price the Shares appropriately.
---------------------------------------------------------------------------

    \48\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Fund's Web site (www.spdrgoldshares.com) will provide an IIV 
per Share, updated every 15 seconds, during the Exchange's Core Trading 
Session. The Exchange states that the IIV will be widely disseminated 
by one or more major market data vendors at least every 15 seconds 
during the Core Trading Session. Additionally, the Fund will publish on 
its Web site the Creation Basket Deposit and the NAV. \49\ The Index 
value generally will be calculated daily, using the daily LBMA Gold 
Price AM and the Spot Rate as of 9:00 a.m., London time, and it will be 
available from one or more major market data vendors and will be 
available during the Exchange's Core Trading Session. The Exchange 
represents that the Index methodology is transparent, and that market 
makers will recalculate an approximate Index value using reliable 
intraday prices of gold and the relevant Index currencies to identify 
arbitrage opportunities that present themselves during the Exchange's 
Core Trading Session.\50\ The

[[Page 90888]]

Reference Currency Index values, which impact the NAV of the Fund, 
generally would be calculated using the Spot Rate for each Reference 
Currency. According to the Exchange, each Spot Rate would be calculated 
using observable data from arms-length transactions ``where that data 
is available and reflects sufficient liquidity.'' \51\ The Exchange 
represents that WMR utilizes the same methodology to calculate the Spot 
Rate as it does to calculate the NAV for certain issues of Currency 
Trust Shares, the listing and trading of which the Commission 
approved.\52\ The Commission believes that the markets for the 
Reference Currencies (i.e., the euro, Japanese yen, British pound 
sterling, Canadian dollar, Swedish krona and Swiss franc) and gold are 
deep and liquid. For these reasons, and in light of the Exchange's 
representations that the Index methodology is transparent,\53\ the 
Commission presently has no reason to believe that the Index is 
susceptible to manipulation.
---------------------------------------------------------------------------

    \49\ The Fund also will publish the following information on its 
Web site: (1) The mid-point of the Bid/Ask Price, and a calculation 
of the premium or discount of such price against such NAV; (2) data 
in chart format displaying the frequency distribution of discounts 
and premiums of the Bid/Ask Price against the NAV, within 
appropriate ranges, for each of the four previous calendar quarters; 
(3) the Fund's prospectus, as well as the two most recent reports to 
stockholders; and (4) the last-sale price of the Shares as traded in 
the U.S. market.
    \50\ See Amendment No. 3, supra note 9, at 13. The Exchange 
states that there is a considerable amount of information about gold 
and currency prices available on public Web sites and through 
professional and subscription services. For example, according to 
the Exchange, investors may obtain on a 24-hour basis gold pricing 
information, as well as pricing information for the Reference 
Currencies from various financial information service providers, 
such as Reuters and Bloomberg. See id. at 24.
    \51\ See id. at 44.
    \52\ See note 34, supra.
    \53\ See note 50, supra, and accompanying text.
---------------------------------------------------------------------------

    The Commission also believes that the proposal is reasonably 
designed to prevent trading when a reasonable degree of transparency 
cannot be assured. With respect to trading halts, the Exchange may 
consider all relevant factors in exercising its discretion to halt or 
suspend trading in the Shares. The Exchange may halt trading in the 
Shares because of market conditions or for reasons that, in the view of 
the Exchange, make trading in the Shares inadvisable including: (1) The 
extent to which conditions in the underlying gold market have caused 
disruptions and/or lack of trading, or (2) whether other unusual 
conditions or circumstances detrimental to the maintenance of a fair 
and orderly market are present. The Exchange will halt trading in the 
Shares if the NAV is not calculated or disseminated daily.\54\ The 
Exchange may halt trading during the day in which an interruption 
occurs to the dissemination of the IIV or the Index value; if the 
interruption to the dissemination of the IIV or the Index value 
persists past the trading day in which it occurs, the Exchange will 
halt trading no later than the beginning of the trading day following 
the interruption.\55\
---------------------------------------------------------------------------

    \54\ See Amendment No. 3, supra note 9, at 28.
    \55\ See id.
---------------------------------------------------------------------------

    Further, the Commission believes that the Exchange's proposal to 
expand the scope of NYSE Arca Equities Rule 8.201(g) is designed to 
prevent manipulative acts and practices. As amended, the rule would 
allow the Exchange to better monitor the Reference Currency positions 
of market makers in the Shares to ensure that such market participants 
do not use their positions as market makers to violate the requirements 
of Exchange rules or applicable federal securities laws.\56\
---------------------------------------------------------------------------

    \56\ The Commission notes that Commentary .04 of NYSE Arca 
Equities Rule 6.3 requires that an ETP Holder acting as a registered 
market maker in the Shares, and its affiliates, establish, maintain 
and enforce written policies and procedures reasonably designed to 
prevent the misuse of any material nonpublic information with 
respect to such products, any components of the related products, 
any physical asset or commodity underlying the product, applicable 
currencies, underlying indexes, related futures or options on 
futures, and any related derivative instruments.
---------------------------------------------------------------------------

    In support of this proposal, the Exchange has made the following 
additional representations:
    (1) The Shares will be listed and traded on the Exchange pursuant 
to the initial and continued listing criteria in NYSE Arca Equities 
Rule 8.201.\57\
---------------------------------------------------------------------------

    \57\ See Amendment No. 3, supra note 9, at 75.
---------------------------------------------------------------------------

    (2) The Exchange deems the Shares to be equity securities, and 
therefore the Shares will be subject to the Exchange's existing rules 
governing the trading of equity securities.
    (3) The Exchange has appropriate rules to facilitate transactions 
in the Shares during all trading sessions.\58\
---------------------------------------------------------------------------

    \58\ See id. at 68.
---------------------------------------------------------------------------

    (4) The Exchange has a general policy prohibiting the distribution 
of material, non-public information by its employees.\59\
---------------------------------------------------------------------------

    \59\ See id. at 29.
---------------------------------------------------------------------------

    (5) The Index Provider, which is not affiliated with a broker-
dealer, has adopted policies and procedures designed to prevent the 
spread of material non-public information about the Index.\60\
---------------------------------------------------------------------------

    \60\ See id. at 9.
---------------------------------------------------------------------------

    (6) Trading in the Shares will be subject to the existing trading 
surveillances administered by the Exchange, as well as cross-market 
surveillances administered by FINRA on behalf of the Exchange, which 
are designed to detect violations of Exchange rules and applicable 
federal securities laws, and that these procedures are adequate to 
properly monitor Exchange trading of the Shares in all trading sessions 
and to deter and detect violations of Exchange rules and federal 
securities laws applicable to trading on the Exchange.\61\
---------------------------------------------------------------------------

    \61\ See id. at 72. FINRA conducts cross-market surveillances on 
behalf of the Exchange pursuant to a regulatory services agreement. 
The Exchange is responsible for FINRA's performance under this 
regulatory services agreement.
---------------------------------------------------------------------------

    (7) The Exchange or FINRA, on behalf of the Exchange, or both, will 
communicate as needed regarding trading in the Shares with other 
markets and other entities that are members of the ISG, and the 
Exchange or FINRA, on behalf of the Exchange, or both, may obtain 
trading information regarding trading in the Shares from such markets 
and other entities. In addition, the Exchange may obtain information 
regarding trading in the Shares from markets and other entities that 
are members of ISG or with which the Exchange has in place a 
comprehensive surveillance sharing agreement.\62\
---------------------------------------------------------------------------

    \62\ See id. at 72-73.
---------------------------------------------------------------------------

    (8) Prior to the commencement of trading, the Exchange will inform 
its ETP Holders in an Information Bulletin--the contents of which are 
discussed above--of the special characteristics and risks associated 
with trading the Shares.
    (9) All statements and representations made in the proposed rule 
change regarding (a) the description of the portfolio, (b) limitations 
on portfolio holdings or reference assets, or (c) the applicability of 
Exchange rules and surveillance procedures constitute continued listing 
requirements for listing the Shares on the Exchange.\63\
---------------------------------------------------------------------------

    \63\ See id. at 29.
---------------------------------------------------------------------------

    (10) The issuer has represented to the Exchange that it will advise 
the Exchange of any failure by the Fund to comply with the continued 
listing requirements, and, pursuant to its obligations under Section 
19(g)(1) of the Exchange Act, the Exchange will monitor for compliance 
with the continued listing requirements. If the Fund is not in 
compliance with the applicable listing requirements, the Exchange will 
commence delisting procedures under the NYSE Arca Equities Rule 
5.5(m).\64\
---------------------------------------------------------------------------

    \64\ See id. The Commission notes that certain other proposals 
for the listing and trading of exchange-traded products include a 
representation that the exchange will ``surveil'' for compliance 
with the continued listing requirements. See, e.g., Securities 
Exchange Act Release No. 77499 (Apr. 1, 2016), 81 FR 20428 (April 7, 
2016) (SR-BATS-2016-04). In the context of this representation, it 
is the Commission's view that ``monitor'' and ``surveil'' both mean 
ongoing oversight of the Fund's compliance with the continued 
listing requirements. Therefore, the Commission does not view 
``monitor'' as a more or less stringent obligation than ``surveil'' 
with respect to the continued listing requirements.
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    This approval order is based on all of the Exchange's 
representations, including those set forth above and in Amendment No. 
3, and the Exchange's description of the Fund.
    For the foregoing reasons, the Commission finds that the proposed 
rule change is consistent with Section

[[Page 90889]]

6(b)(5) of the Exchange Act \65\ and the rules and regulations 
thereunder applicable to a national securities exchange.
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    \65\ 15 U.S.C. 78f(b)(5).
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IV. Solicitation of Comments on Amendment No. 3

    Interested persons are invited to submit written data, views, and 
arguments concerning whether Amendment No. 3 is consistent with the 
Exchange 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-2016-84 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-2016-84. 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 Web site (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 Web site 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; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-NYSEArca-2016-84 and should 
be submitted on or before January 5, 2017.

V. Accelerated Approval of Proposed Rule Change as Modified by 
Amendment No. 3

    The Commission finds good cause to approve the proposed rule 
change, as modified by Amendment No. 3, prior to the thirtieth day 
after the date of publication of notice of the filing of Amendment No. 
3 in the Federal Register. In Amendment No. 3, the Exchange (among 
other things): (1) Provided additional information, which helped the 
Commission conclude that the Index is not susceptible to manipulation; 
and (2) expanded the scope of NYSE Arca Equities Rule 8.201(g) which, 
as discussed above, appropriately tailors the rule to accommodate the 
listing and trading of an issue of Commodity-Based Trust Shares that 
overlies both a commodity and currencies. Accordingly, Amendment No. 3 
helped the Commission find that the proposed listing and trading of the 
Shares is consistent with the portion of Section 6(b)(5) of the 
Exchange Act,\66\ which requires that the rules of a national 
securities exchange must be designed to, among other things, prevent 
fraudulent and manipulative acts and practices and, in general, to 
protect investors and the public interest. Accordingly, the Commission 
finds good cause, pursuant to Section 19(b)(2) of the Exchange Act,\67\ 
to approve the proposed rule change, as modified by Amendment No. 3, on 
an accelerated basis.
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    \66\ 15 U.S.C. 78f(b)(5).
    \67\ 15 U.S.C. 78s(b)(2).
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VI. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Exchange Act,\68\ that the proposed rule change (SR-NYSEArca-2016-84), 
as modified by Amendment No. 3 be, and it hereby is, approved on an 
accelerated basis.
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    \68\ Id.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\69\
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    \69\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2016-30081 Filed 12-14-16; 8:45 am]
 BILLING CODE 8011-01-P


