
[Federal Register Volume 82, Number 178 (Friday, September 15, 2017)]
[Notices]
[Pages 43417-43422]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-19585]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81568; File No. SR-NYSEArca-2017-98]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
of Proposed Rule Change To List and Trade Shares of The Gold Trust 
Under NYSE Arca Rule 8.201-E

September 11, 2017.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby 
given that, on August 30, 2017, NYSE Arca, Inc. (the ``Exchange'' or 
``NYSE Arca'') filed with the Securities and Exchange Commission (the 
``Commission'') the proposed rule change as described in Items I and II 
below, which Items have been prepared by the self-regulatory 
organization. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to list and trade shares of The Gold Trust 
under NYSE Arca Rule 8.201-E. The proposed rule change is available on 
the Exchange's Web site at www.nyse.com, at the principal office of the 
Exchange, and at the Commission's Public Reference Room.

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

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

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

1. Purpose
    The Exchange proposes to list and trade shares (``Shares'') of The 
Gold Trust (``Trust''), a series of the World Currency Gold Trust 
(``WCGT''), under NYSE Arca Rule 8.201-E.\4\ Under NYSE Arca Rule 
8.201-E, the Exchange may propose to list and/or trade pursuant to 
unlisted trading privileges (``UTP'') ``Commodity-Based Trust Shares.'' 
\5\
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    \4\ On August 29, 2017, WCGT submitted to the Commission its 
draft registration statement, with respect to the Trust, on Form S-1 
(``Registration Statement'') under the Securities Act of 1933 
(``1933 Act''). The Jumpstart Our Business Startups Act, enacted on 
April 5, 2012, added Section 6(e) to the 1933 Act. Section 6(e) of 
the 1933 Act provides that an ``emerging growth company'' may 
confidentially submit to the Commission a draft registration 
statement for confidential, non-public review by the Commission 
staff prior to public filing, provided that the initial confidential 
submission and all amendments thereto shall be publicly filed not 
later than 21 days before the date on which the issuer conducts a 
road show, as such term is defined in 1933 Act Rule 433(h)(4). An 
emerging growth company is defined in Section 2(a)(19) of the 1933 
Act as an issuer with less than $1,000,000,000 total annual gross 
revenues during its most recently completed fiscal year. The Trust 
meets the definition of an emerging growth company and consequently 
has submitted its Registration Statement on a confidential basis 
with the Commission.
    \5\ Commodity-Based Trust Shares are securities issued by a 
trust that represents investors' discrete identifiable and undivided 
beneficial ownership interest in the commodities deposited into the 
Trust.
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    The Trust will not be registered as an investment company under the 
Investment Company Act of 1940, as amended,\6\ and is not required to 
register under such act. The Trust is not a commodity pool for purposes 
of the Commodity Exchange Act, as amended.\7\
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    \6\ 15 U.S.C. 80a-1.
    \7\ 17 U.S.C. 1.
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    The Sponsor of the Trust is WGC USA Asset Management Company, 
LLC.\8\ BNY Mellon Asset Servicing, a division of The Bank of New York 
Mellon (``BNYM''), will be the Trust's administrator 
(``Administrator'') and transfer agent. BNYM will serve as the 
custodian of the Trust's cash, if any. A bank will serve as the 
custodian (``Custodian'') of the Trust's gold.
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    \8\ WCGT is a Delaware statutory trust consisting of multiple 
series, each of which issues common units of beneficial interest, 
which represent units of fractional undivided beneficial interest in 
and ownership of such series. The term of WCGT and each series will 
be perpetual (unless terminated earlier in certain circumstances). 
The sole trustee of WCGT is 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) (now NYSE Arca Rule 5.2-
E(j)(5)) and 8.201 (now NYSE Arca Rule 8.201-E) of other precious 
metals and gold-based commodity trusts, including the GraniteShares 
Gold Trust; \9\ Merk Gold Trust; \10\ ETFS Gold Trust,\11\ ETFS 
Platinum Trust \12\ and ETFS Palladium Trust (collectively, the ``ETFS 
Trusts''); \13\ APMEX Physical-1 oz. Gold Redeemable Trust; \14\ Sprott 
Gold Trust; \15\ SPDR Gold Trust (formerly, streetTRACKS Gold Trust); 
iShares Silver Trust; \16\ iShares COMEX Gold

[[Page 43418]]

Trust; \17\ Long Dollar Gold Trust; \18\ and Euro Gold Trust, Pound 
Gold Trust and Yen Gold Trust.\19\ Prior to their listing on the 
Exchange, the Commission approved listing of the streetTRACKS Gold 
Trust on the New York Stock Exchange (``NYSE'') \20\ and listing of 
iShares COMEX Gold Trust and iShares Silver Trust on the American Stock 
Exchange LLC.\21\ In addition, the Commission has approved trading of 
the streetTRACKS Gold Trust and iShares Silver Trust on the Exchange 
pursuant to UTP.\22\
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    \9\ Securities Exchange Act Release No. 81077 (July 5, 2017) 
(SR-NYSEArca-2017-55) (order approving listing and trading shares of 
the GraniteShares Gold Trust under NYSE Arca Equities Rule 8.201).
    \10\ Securities Exchange Act Release No. 71378 (January 23, 
2014), 79 FR 4786 (January 29, 2014) (SR-NYSEArca-2013-137).
    \11\ Securities Exchange Act Release No. 59895 (May 8, 2009), 74 
FR 22993 (May 15, 2009) (SR-NYSEArca-2009-40).
    \12\ Securities Exchange Act Release No. 61219 (December 22, 
2009), 74 FR 68886 (December 29, 2009) (SR-NYSEArca-2009-95).
    \13\ Securities Exchange Act Release No. 61220 (December 22, 
2009), 74 FR 68895 (December 29, 2009) (SR-NYSEArca-2009-94).
    \14\ Securities Exchange Act Release No 66930 (May 7, 2012), 77 
FR 27817 (May 11, 2012) (SR-NYSEArca-2012-18).
    \15\ Securities Exchange Act Release No. 61496 (February 4, 
2010), 75 FR 6758 (February 10, 2010) (SR-NYSEArca-2009-113).
    \16\ 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)).
    \17\ 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 street TRACKS 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).
    \18\ See Securities Exchange Act Release No. 79518 (December 9, 
2016), 81 FR 90876 (December 15, 2016) (SR-NYSEArca-2016-84) (order 
approving listing and trading of shares of the Long Dollar Gold 
Trust).
    \19\ See Securities Exchange Act Release No. 80840 (June 17, 
2017) (SR-NYSEArca-2017-33) (order approving listing and trading of 
shares of the Euro Gold Trust, Pound Gold Trust, and the Yen Gold 
Trust under NYSE Arca Equities Rule 8.201).
    \20\ 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).
    \21\ 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).
    \22\ 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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    The Exchange represents that the Shares satisfy the requirements of 
NYSE Arca Rule 8.201-E and thereby qualify for listing on the 
Exchange.\23\
Operation of the Trust \24\
    According to the Registration Statement, the investment objective 
of the Trust is for the Shares to reflect the performance of the price 
of gold bullion, less the expenses of the Trust's operations. The 
Shares are designed for investors who want a cost-effective and 
convenient way to invest in gold.
    The Trust will not trade in gold futures, options or swap contracts 
on any futures exchange or over the counter (``OTC''). The Trust will 
not hold or trade in commodity futures contracts, ``commodity 
interests,'' or any other instruments regulated by the Commodity 
Exchange Act. The Trust will take delivery of physical gold that 
complies with the London Bullion Market Association (``LBMA'') gold 
delivery rules.
Operation of the Gold Market
    According to the Registration Statement, the global trade in gold 
consists of over-the-counter (``OTC'') transactions in spot, forwards, 
and options and other derivatives, together with exchange-traded 
futures and options.
    The OTC market trades on a continuous basis and accounts for most 
global gold trading. Market makers and participants in the OTC market 
trade with each other and their clients on a principal-to-principal 
basis.
    The main centers of the OTC market are London, New York and Zurich.
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    \23\ With respect to the application of Rule 10A-3 (17 CFR 
240.10A-3) under the Act, the Trust relies on the exemption 
contained in Rule 10A-3(c)(7).
    \24\ The description of the operation of the Trust, the Shares 
and the gold market contained herein are based, in part, on the 
Registration Statement. See note 4, supra.
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The London Bullion Market
    According to the Registration Statement, although the market for 
physical gold is global, most OTC market 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 an 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.'' 
The unit of trade in London is the troy ounce. 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
    According to the Registration Statement, the LBMA Gold Price is 
determined twice daily during London trading hours through an auction 
which provides reference gold prices for that day's trading. The LBMA 
Gold Price was initiated on March 20, 2015 and replaced the London PM 
Gold Fix. The auction that determines the LBMA Gold Price is a 
physically settled, electronic and tradeable auction, with the ability 
to settle trades in U.S. Dollars, Euros or British Pounds. ICE 
Benchmark Administration (``IBA'') provides the auction platform and 
methodology as well as the overall administration and governance for 
the LBMA Gold Price. Many long-term contracts are expected to be priced 
on the basis of either the morning (AM) or afternoon (PM) LBMA Gold 
Price, and many market participants are expected to refer to one or the 
other of these prices when looking for a basis for valuations.
    The Financial Conduct Authority (FCA) in the U.K. regulates the 
LBMA Gold Price.
Futures Exchanges
    Although the Trust 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.
    According to the Registration Statement, the most significant gold 
futures exchange is COMEX, part of the CME Group. It began to offer 
trading in gold futures contracts in 1974, and for most of the period 
since that date, it has been the largest exchange in the world for 
trading precious metals, futures and options. The Tokyo Commodity 
Exchange, or TOCOM, 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. Both the COMEX and the TOCOM operate through a 
central clearance system, and in each case, the exchange 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.

[[Page 43419]]

Net Asset Value (``NAV'')
    The NAV of the Trust is the aggregate value of the Trust's assets 
less its liabilities (which include estimated accrued but unpaid fees 
and expenses). The NAV of the Trust is calculated based on the price of 
gold per ounce applied against the number of ounces of gold owned by 
the Trust. For purposes of calculating NAV, the number of ounces of 
gold owned by the Trust reflects the amount of gold delivered into (or 
out of) the Trust on a daily basis by Authorized Participants creating 
and redeeming Shares. In determining the NAV of the Trust, the 
Administrator generally will value the Gold Bullion held by the Trust 
on the basis of the LBMA Gold Price PM. If no LBMA Gold Price PM is 
made on a particular day or if the LBMA Gold Price PM has not been 
announced by 12:00 p.m. New York time on a particular day, the next 
most recent LBMA Gold Price PM is used in the determination of the NAV 
of the Trust, unless the Sponsor determines that such price is 
inappropriate to use as the basis for such determination. If the 
Sponsor determines that such price is inappropriate to use, it shall 
identify an alternate basis for evaluation of the Gold Bullion held by 
the Trust. 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 
Trust's Shares.
    The Administrator will also determine the NAV per Share, which 
equals the NAV of the Trust, divided by the number of outstanding 
Shares.
Creation and Redemption of Shares
    According to the Registration Statement, the Trust will create and 
redeem Shares from time to time, but only in one or more Creation Units 
of a specified whole number of Shares of no less than 10,000. The 
creation and redemption of Creation Units is only made in exchange for 
the delivery to the Trust or the distribution by the Trust of the 
amount of gold and any cash represented by the Creation Units being 
created or redeemed, the amount of which is based on the combined NAV 
of the number of Shares included in the Creation Units being created or 
redeemed determined on the day the order to create or redeem Creation 
Units is properly received.
    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'' with 
the Sponsor and the Administrator.
    Prior to initiating any creation or redemption order, an Authorized 
Participant must have entered into an agreement with a gold custodian 
to establish an ``Authorized Participant Unallocated Account'' in 
London, or a Participant Unallocated Bullion Account Agreement. An 
unallocated account is an account with a bullion dealer, which may also 
be a bank, to which a fine weight amount of gold is credited. Transfers 
to or from an unallocated account are made by crediting or debiting the 
number of ounces of gold being deposited or withdrawn. The account 
holder is entitled to direct the bullion dealer to deliver an amount of 
physical gold equal to the amount of gold standing to the credit of the 
account holder. Gold held in an unallocated account is not segregated 
from the custodian's assets. The account holder therefore has no 
ownership interest in any specific bars of gold that the bullion dealer 
holds or owns.
    Authorized Participants must be (1) a DTC Participant; (2) 
registered as a broker-dealer under the Exchange Act and regulated by 
Financial Industry Regulatory Authority (``FINRA''), or some other 
self-regulatory organization or will be exempt from being or otherwise 
not be required to be so regulated or registered; and (3) qualified to 
act as a broker or dealer in the states or other jurisdictions where 
the nature of its business so requires.
    All gold bullion must be delivered to the Trust and distributed by 
the Trust in unallocated form through credits and debits between 
Authorized Participant Unallocated Accounts and the Trust Unallocated 
Account.
    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. Under the Participant 
Agreement, the Sponsor has agreed to indemnify the Authorized 
Participants against certain liabilities, including liabilities under 
the Securities Act, and to contribute to the payments the Authorized 
Participants may be required to make in respect of those liabilities.
Creation Procedures
    On any business day, an Authorized Participant may place an order 
with the Administrator to create one or more Baskets. Purchase orders 
must be placed by 4:00 p.m. or the close of regular trading on NYSE 
Arca, whichever is earlier. The day on which the Administrator receives 
a valid purchase order is the purchase order date.
    By placing a purchase order, an Authorized Participant agrees to 
deposit gold with the Trust, or a combination of gold and cash, as 
described below. Prior to the delivery of Baskets for a purchase order, 
the Authorized Participant must also have wired to the Administrator 
the non-refundable transaction fee due for the purchase order.
Determination of Required Deposits
    The total deposit required to create each Basket, or a Creation 
Basket Deposit, is an amount of gold and cash, if any, that is in the 
same proportion to the total assets of the Trust (net of estimated 
accrued expenses and other liabilities) on the date the order to 
purchase is properly received as the number of Shares to be created 
under the purchase order is in proportion to the total number of Shares 
outstanding on the date the order is received.
Redemption Procedures
    The procedures by which an Authorized Participant can redeem one or 
more Baskets mirror the procedures for the creation of Baskets. On any 
business day, an Authorized Participant may place an order with the 
Trustee to redeem one or more Baskets. Redemption orders must be placed 
by 4:00 p.m. or the close of the Core Trading Session on NYSE Arca, 
whichever is earlier. A redemption order so received is effective on 
the date it is received in satisfactory form by the Trustee.
Determination of Redemption Distribution
    The redemption distribution from the Trust consists of a credit to 
the redeeming Authorized Participant's Authorized Participant 
Unallocated Account representing the amount of the gold held by the 
Trust evidenced by the Shares being redeemed plus, or minus, the cash 
redemption amount. The cash redemption amount is equal to the value of 
all assets of the Trust other than gold less all estimated accrued 
expenses and other liabilities, divided by the number of Baskets 
outstanding and multiplied by the number of Baskets included in the 
Authorized Participant's redemption order. The Sponsor anticipates that 
in the ordinary course of the Trust's operations there will be no cash 
distributions made to Authorized Participants upon redemptions.
Secondary Market Trading
    While the Trust seeks to reflect generally the performance of the 
price of

[[Page 43420]]

gold less the Trust's expenses and liabilities, Shares may trade at, 
above or below their NAV. The NAV of Shares will fluctuate with changes 
in the market value of the Trust's assets. The trading prices of Shares 
will fluctuate in accordance with changes in their NAV as well as 
market supply and demand. The amount of the discount or premium in the 
trading price relative to the NAV may be influenced by non-concurrent 
trading hours between the major gold markets and the Exchange. While 
the Shares trade on the Exchange until 4:00 p.m. E.T., liquidity in the 
market for gold may be reduced after the close of major world gold 
markets, including London, Zurich and the COMEX. As a result, during 
this time, trading spreads, and the resulting premium or discount, on 
Shares may widen.
Availability of Information Regarding Gold
    Currently, the Consolidated Tape Plan does not provide for 
dissemination of the spot price of a commodity such as gold 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 gold markets available on public Web sites 
and through professional and subscription services.
    Investors may obtain gold pricing information on a 24-hour basis 
based on the spot price for an ounce of Gold 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.
Availability of Information
    The intraday indicative value (``IIV'') per Share for the Shares 
will be disseminated by one or more major market data vendors. The IIV 
will be calculated based on the amount of gold held by the Trust and a 
price of gold derived from updated bids and offers indicative of the 
spot price of gold.\25\
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    \25\ 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 calcuated once a day.
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    The Trust will create a Web site that will contain the following 
information, on a per Share basis, for the Trust: (a) The mid-point of 
the bid-ask price \26\ 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 Trust will also provide the Trust's prospectus. 
Finally, the Trust's Web site will provide the last sale price of the 
Shares as traded in the U.S. market. In addition, information regarding 
market price and trading volume of the Shares will be continually 
available on a real-time basis throughout the day on brokers' computer 
screens and other electronic services. Information regarding the 
previous day's closing price and trading volume information for the 
Shares will be published daily in the financial section of newspapers.
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    \26\ 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.
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Criteria for Initial and Continued Listing
    The Trust will be subject to the criteria in NYSE Arca Rule 8.201-
E(e) for initial and continued listing of the Shares.
    A minimum of 20,000 Shares will be required to be outstanding at 
the start of trading. 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 Trust 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 Rule 7.34-E(a). 
The Exchange has appropriate rules to facilitate transactions in the 
Shares during all trading sessions. As provided in NYSE Arca Rule 7.6-
E, Commentary .03, the minimum price variation (``MPV'') for quoting 
and entry of orders in equity securities traded on NYSE Arca 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 Rule 8.201-E sets forth certain restrictions on 
ETP Holders acting as registered Market Makers in the Shares to 
facilitate surveillance. Under NYSE Arca Rule 8.201-E(g), an ETP Holder 
acting as a registered Market Maker in the Shares is required to 
provide the Exchange with information relating to its trading in the 
underlying gold, related futures or options on futures, or any other 
related derivatives. Commentary .04 of NYSE Arca Rule 6.3-E 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''

[[Page 43421]]

rule.\27\ 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. If the interruption to 
the dissemination of the IIV 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.
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    \27\ See NYSE Arca Rule 7.12-E.
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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 FINRA on behalf of 
the Exchange, which are designed to detect violations of Exchange rules 
and applicable federal securities laws.\28\ 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.
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    \28\ 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.
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    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.\29\
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    \29\ For a list of the current members of ISG, see 
www.isgportal.org.
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    Also, pursuant to NYSE Arca Rule 8.201-E(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 
listing rules specified in this rule filing shall constitute continued 
listing requirements for listing the Shares of the Trust on the 
Exchange.
    The issuer has represented to the Exchange that it will advise the 
Exchange of any failure by the Trust to comply with the continued 
listing requirements, and, pursuant to its obligations under Section 
19(g)(1) of the Act, the Exchange will monitor for compliance with the 
continued listing requirements. If the Trust is not in compliance with 
the applicable listing requirements, the Exchange will commence 
delisting procedures under NYSE Arca 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 Creation Units (including noting 
that Shares are not individually redeemable); (2) NYSE Arca Rule 9.2-
E(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 Trust. The Exchange 
notes that investors purchasing Shares directly from the Trust (by 
delivery of the Creation Unit Deposit) will receive a prospectus. ETP 
Holders purchasing Shares from the Trust for resale to investors will 
deliver a prospectus to such investors.
    In addition, the Information Bulletin will reference that the Trust 
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 Act.
2. Statutory Basis
    The basis under the Act for this proposed rule change is the 
requirement under Section 6(b)(5) \30\ 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.
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    \30\ 15 U.S.C. 78f(b)(5).
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    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 Rule 8.201-E. 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.
    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

[[Page 43422]]

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 Trust'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 Trust will be published by the Sponsor on each day that 
the NYSE Arca is open for regular trading and will be posted on the 
Trust'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 
Trust's Web site will also provide the Trust's prospectus, as well as 
the two most recent reports to stockholders. In addition, information 
regarding market price and trading volume of the Shares will be 
continually available on a real-time basis throughout the day on 
brokers' computer screens and other electronic services. Information 
regarding the previous day's closing price and trading volume 
information for the Shares will be published daily in the financial 
section of newspapers.
    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 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. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Within 45 days of the date of publication of this notice in the 
Federal Register or within such longer period up to 90 days (i) as the 
Commission may designate if it finds such longer period to be 
appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (A) By order approve or disapprove the proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule 
change should be disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-NYSEArca-2017-98 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-2017-98. 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-2017-98, and should 
be submitted on or before October 6, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\31\
Eduardo A. Aleman,
Assistant Secretary.
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    \31\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 2017-19585 Filed 9-14-17; 8:45 am]
 BILLING CODE 8011-01-P


