[Federal Register Volume 86, Number 171 (Wednesday, September 8, 2021)]
[Notices]
[Pages 50385-50391]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-19293]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-92840; File No. SR-NYSEArca-2021-73]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
of Proposed Rule Change To List and Trade Shares of the Franklin 
Responsibly Sourced Gold ETF Under NYSE Arca Rule 8.201-E

September 1, 2021.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given 
that on August 23, 2021, NYSE Arca, Inc. (``NYSE Arca'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II below, which Items have been prepared by the Exchange. 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 Franklin 
Responsibly Sourced Gold ETF under NYSE Arca Rule 8.201-E. The proposed 
change is available on the Exchange's website at www.nyse.com, at the 
principal office of the Exchange, and at the Commission's Public 
Reference Room.

[[Page 50386]]

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 
Franklin Responsibly Sourced Gold ETF (the ``Fund''), under NYSE Arca 
Rule 8.201-E.\4\ The Fund is a series of the Franklin Templeton 
Holdings Trust, a Delaware statutory trust (the ``Trust''). Under NYSE 
Arca Rule 8.201-E, the Exchange may propose to list and/or trade 
Commodity-Based Trust Shares pursuant to unlisted trading privileges 
(``UTP'').\5\
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    \4\ On April 22, 2021, the Trust submitted to the Commission its 
confidential draft registration statement on Form S-1 (the 
``Registration Statement'') under the Securities Act of 1933 (15 
U.S.C. 77a) (the ``Securities Act''). The Jumpstart Our Business 
Startups Act, enacted on April 5, 2012, added Section 6(e) to the 
Securities Act. Section 6(e) of the Securities 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 Securities Act Rule 433(h)(4), or 15 days prior to 
anticipated effectiveness in the case of an issuer who will not 
conduct a road show. An emerging growth company is defined in 
Section 2(a)(19) of the Securities Act as an issuer with less than 
$1,070,000,000 total annual gross revenues during its most recently 
completed fiscal year. The Fund meets the definition of an emerging 
growth company and consequently has submitted its Form S-1 
Registration Statement on a confidential basis with the Commission. 
The Registration Statement in not yet effective and the Shares will 
not trade on the Exchange until such time that the Registration 
Statement is effective.
    \5\ 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, as amended,\6\ and is not required to 
register under such act. The Fund 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 Fund is Franklin Holdings, LLC, a Delaware 
limited liability company. BNY Mellon Asset Servicing, a division of 
The Bank of New York Mellon (``BNYM''), serves as the Fund's 
administrator (the ``Administrator'') and transfer agent (the 
``Transfer Agent''). Delaware Trust Company, a subsidiary of the 
Corporation Service Company serves as trustee of the Trust (the 
``Trustee''). J.P. Morgan Chase Bank, N.A., London branch is the 
custodian of the Fund's Gold Bullion (as defined in the Registration 
Statement) (the ``Gold Custodian'').\8\ BNYM will serve as the 
custodian of the Fund's cash, if any (the ``Cash Custodian'').
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    \8\ The Gold Custodian is responsible for safekeeping the Fund's 
gold pursuant to the Allocated Gold Account Agreement and the 
Unallocated Gold Account Agreement. The Gold Custodian will 
facilitate the transfer of gold in and out of the Fund through (i) 
the unallocated gold accounts it may maintain for each Authorized 
Participant (as defined below) or unallocated gold accounts that may 
be maintained for an Authorized Participant by another London 
Precious Metals Clearing Limited clearing bank, and (ii) the 
unallocated and allocated gold accounts it will maintain for the 
Fund. The Gold Custodian is responsible for allocating specific bars 
of gold to the Fund Allocated Account. As used herein, ``Fund 
Allocated Account'' means the allocated gold account of the Trust 
established with the Gold Custodian on behalf of the Fund by the 
Allocated Gold Account Agreement, to be used to hold gold that is 
transferred from the Fund Unallocated Account to be held by the Fund 
in allocated form; the ``Fund Unallocated Account'' means the 
unallocated gold account of the Trust established with the Gold 
Custodian on behalf of the Fund by the Unallocated Gold Account 
Agreement, to be used to facilitate the transfer of gold in and out 
of the Fund. The Gold Custodian will provide the Fund with regular 
reports detailing the gold transfers into and out of the Fund 
Unallocated Account and the Fund Allocated Account and identifying 
the gold bars held in the Fund Allocated Account.
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    The Commission has previously approved listing on the Exchange 
under NYSE Arca Rules 5.2-E(j)(5) and 8.201-E of other precious metals 
and gold-based commodity trusts, including the GraniteShares Gold 
MiniBAR Trust; \9\ GraniteShares Gold Trust; \10\ Merk Gold Trust; \11\ 
ETFS Gold Trust; \12\ ETFS Platinum Trust \13\ and ETFS Palladium Trust 
(collectively, the ``ETFS Trusts''); \14\ APMEX Physical-1 oz. Gold 
Redeemable Trust; \15\ Sprott Gold Trust; \16\ SPDR Gold Trust 
(formerly the streetTRACKS Gold Trust); \17\ iShares Silver Trust; \18\ 
iShares COMEX Gold Trust; \19\ and Long Dollar Gold Trust.\20\ Prior to 
their listing on the Exchange, the Commission approved listing of the 
streetTRACKS Gold Trust on the New York Stock Exchange (``NYSE'') \21\ 
and listing of iShares COMEX Gold Trust and iShares Silver Trust on the 
American Stock Exchange LLC.\22\ In addition, the Commission has 
approved trading of the streetTRACKS Gold Trust and iShares Silver 
Trust on the Exchange pursuant to UTP.\23\
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    \9\ Securities Exchange Act Release No. 84257 (September 21, 
2018), 83 FR 48877 (September 27, 2018) (SR-NYSEArca-2018-55).
    \10\ Securities Exchange Act Release No. 81077 (July 5, 2017), 
82 FR 32024 (July 11, 2017) (SR-NYSEArca-2017-55).
    \11\ Securities Exchange Act Release No. 71378 (January 23, 
2014), 79 FR 4786 (January 29, 2014) (SR-NYSEArca-2013-137).
    \12\ Securities Exchange Act Release No. 59895 (May 8, 2009), 74 
FR 22993 (May 15, 2009) (SR-NYSEArca-2009-40).
    \13\ Securities Exchange Act Release No. 61219 (December 22, 
2009), 74 FR 68886 (December 29, 2009) (SR-NYSEArca-2009-95).
    \14\ Securities Exchange Act Release No. 61220 (December 22, 
2009), 74 FR 68895 (December 29, 2009) (SR-NYSEArca-2009-94).
    \15\ Securities Exchange Act Release No 66930 (May 7, 2012), 77 
FR 27817 (May 11, 2012) (SR-NYSEArca-2012-18).
    \16\ Securities Exchange Act Release No. 61496 (February 4, 
2010), 75 FR 6758 (February 10, 2010) (SR-NYSEArca-2009-113).
    \17\ See Securities Exchange Act Release No. 56224 (August 8, 
2007), 72 FR 45850 (August 15, 2007) (SR-NYSEArca-2007-76).
    \18\ 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).
    \19\ 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).
    \20\ 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).
    \21\ See Securities Exchange Act Release No. 50603 (October 28, 
2004), 69 FR 64614 (November 5, 2004) (SR-NYSE-2004-22) (order 
approving listing of streetTRACKS Gold Trust on the NYSE).
    \22\ 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).
    \23\ 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.\24\
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    \24\ With respect to the application of Rule 10A-3 (17 CFR 
240.10A-3) under the Act, the Fund relies on the exemption contained 
in Rule 10A-3(c)(7).

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[[Page 50387]]

Operation of the Trust and Fund \25\
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    \25\ The description of the operation of the Trust, the Fund, 
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 investment objective of the Fund will be for the Shares to 
reflect the performance of the price of gold bullion, less the expenses 
of the Fund's operations. Shares of the Fund will represent units of 
fractional undivided beneficial interest in and ownership of the net 
assets of the Fund.
    The Fund seeks to predominantly hold responsibly sourced gold 
bullion, defined as London Good Delivery gold bullion bars produced 
after January 2012 in accordance with London Bullion Market 
Association's (``LBMA'') Responsible Gold Guidance (the ``Guidance''). 
From time to time, in certain circumstances a portion of the Fund's 
assets may include pre-2012 LBMA gold bullion (i.e., London Good 
Delivery gold bars produced prior to January 2012 which was not subject 
to the Guidance), including, for example, due to availability 
constraints. In those circumstances, the Gold Custodian will seek to 
replace any pre-2012 LBMA gold bullion in the Fund Allocated Account 
with LBMA good delivery bars produced after January 2012 as soon as is 
practicable.
    The Guidance is a mandatory governance framework for the 
responsible sourcing of gold applicable to LBMA approved good delivery 
refiners that is designed to promote the integrity of the global supply 
chain for the wholesale gold markets. Among other things, the Guidance 
includes measures to address environmental issues, avoid materials from 
conflict-afflicted areas, and combat money laundering, financing of 
terrorism, and human rights abuses, including child labor. The Guidance 
requires each LBMA good delivery refinery to undergo a comprehensive 
audit, at least annually, in order to confirm compliance with the 
LBMA's minimum requirements related to the responsible sourcing of gold 
and to publicly report results (audits are made available on the LBMA 
website). The audits, among other aspects, focus on the refiner's 
management systems and controls, and whether they are robust and 
appropriate to addressing the refiner's risk profile. Additional 
information regarding the LBMA's efforts to promote ethical sourcing of 
gold and a copy of the current version of the Guidance is available at 
https://www.lbma.org.uk/responsible-sourcing.
    The Fund will not trade in gold futures, options, or swap contracts 
on any futures exchange or over-the-counter (``OTC''). The Fund will 
not hold or trade in commodity futures contracts, ``commodity 
interests,'' or any other instruments regulated by the Commodity 
Exchange Act. The Fund's Cash Custodian may hold cash proceeds from 
gold sales and other cash received by the Fund.
    The Shares are intended to constitute a simple and cost-efficient 
means of gaining investment benefits similar to those of holding gold 
bullion directly, by providing investors an opportunity to participate 
in the responsibly sourced gold market through an investment in the 
Shares, instead of the traditional means of purchasing, storing and 
insuring gold.
Operation of the Gold Market
    The global gold trading market consists of OTC transactions in 
spot, forwards, and options and other derivatives, together with 
exchange-traded futures and options.
    The OTC gold market includes spot, forward, and option and other 
derivative transactions conducted on a principal-to-principal basis. 
While this is a global, nearly 24-hour per day market, its main centers 
are London, New York, and Zurich.
    According to the Registration Statement, most OTC market trades are 
cleared through London. The LBMA plays an important role in setting OTC 
gold trading industry standards. A London Good Delivery Bar (as 
described below), which is acceptable for delivery in settlement of any 
OTC transaction, will be acceptable for delivery to the Fund, as 
discussed below.
    The most significant gold futures exchange is COMEX, operated by 
Commodities Exchange, Inc., a subsidiary of New York Mercantile 
Exchange, Inc., and a subsidiary of the Chicago Mercantile Exchange 
Group (the ``CME Group''). Other commodity exchanges include the Tokyo 
Commodity Exchange (``TOCOM''), the Multi Commodity Exchange of India 
(``MCX''), the Shanghai Futures Exchange, the Shanghai Gold Exchange, 
ICE Futures US (the ``ICE''), and the Dubai Gold & Commodities 
Exchange. The CME Group and ICE are members of the Intermarket 
Surveillance Group (``ISG'').
The London Gold Bullion Market
    According to the Registration Statement, most trading in physical 
gold is conducted on the OTC market and is predominantly 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 promulgated by the LBMA from time to time. Gold bars meeting 
these requirements are known as ``London Good Delivery Bars.''
    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.
Creation and Redemption of Shares
    According to the Registration Statement, the Fund will create and 
redeem Shares on a continuous basis in one or more Creation Units. A 
Creation Unit equals a block of 50,000 Shares. The Fund will issue 
Shares in Creation Units to certain authorized participants 
(``Authorized Participants'') on an ongoing basis. Each Authorized 
Participant must be a registered broker-dealer or other securities 
market participant such as a bank or other financial institution which 
is not required to register as a broker-dealer to engage in securities 
transactions, a participant in The Depository Trust Company (``DTC''), 
and have entered into an agreement with the Administrator (the 
``Participant Agreement''), and has established an unallocated gold 
account with the Gold Custodian or another London Precious Metals 
Clearing Limited clearing bank.
    Creation Units may be created or redeemed only by Authorized 
Participants. The creation and redemption of Creation Units is only

[[Page 50388]]

made in exchange for the delivery to the Fund or the distribution by 
the Fund of the amount of gold represented by the Creation Units being 
created or redeemed. The amount of gold required to be delivered to the 
Fund in connection with any creation, or paid out upon redemption, is 
based on the combined NAV of the number of Shares included in the 
Creation Units being created or redeemed as determined on the day the 
order to create or redeem Creation Units is properly received and 
accepted. Orders must be placed by 3:59:59 p.m. New York time. The day 
on which the Administrator receives a valid purchase or redemption 
order is the order date. Creation Units may only be issued or redeemed 
on a day that the Exchange is open for regular trading.
    According to the Registration Statement, the total deposit required 
to create each Creation Unit, or a Creation Unit Gold Delivery Amount, 
is an amount of gold and cash, if any, that is in the same proportion 
to the total assets of the Fund (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. An Authorized Participant who places a purchase 
order is responsible for transferring the Creation Unit Gold Delivery 
Amount to the Fund Unallocated Account. Upon receipt, the Administrator 
will direct DTC to credit the number of Creation Units ordered to the 
Authorized Participant's DTC account. The Gold Custodian will transfer 
the Creation Unit Gold Delivery Amount from the Fund Unallocated 
Account to the Fund Allocated Account by allocating to the Fund 
Allocated Account specific bars of gold which the Gold Custodian holds, 
or instructing a sub-custodian to allocate specific bars of gold held 
by or for the sub-custodian.
    The redemption distribution from the Fund consists of a credit to 
the redeeming Authorized Participant's unallocated account in the 
amount of the Creation Unit Gold Delivery Amount. The Creation Unit 
Gold Delivery Amount for redemptions is the number of ounces of gold 
held by the Fund to be paid out upon redemption of a Creation Unit. The 
Gold Custodian will transfer the redemption amount from the Fund 
Allocated Account to the Fund Unallocated Account and, thereafter, to 
the redeeming Authorized Participant's unallocated account.
Net Asset Value
    To determine the Fund's NAV, the Administrator will value the gold 
held by the Fund on the basis of the LBMA Gold Price PM, as published 
by the ICE Benchmark Administration Limited (the ``IBA''). IBA operates 
electronic auctions for spot, unallocated loco London gold, providing a 
market-based platform for buyers and sellers to trade. The auctions are 
run at 10:30 a.m. and 3:00 p.m. London time for gold. The final auction 
prices are published to the market as the LBMA Gold Price AM and the 
LBMA Gold Price PM, respectively.
    The Administrator will calculate the NAV on each day the Exchange 
is open for regular trading, at the earlier LBMA Gold Price PM for the 
day or 12:00 p.m. New York time. If no LBMA Gold Price (AM or PM) is 
made on a particular evaluation day or if the LBMA Gold Price PM has 
not been announced by 12:00 p.m. New York time on a particular 
evaluation day, the next most recent LBMA Gold Price AM or PM will be 
used in the determination of the NAV, unless the Sponsor determines 
that such price is inappropriate to use as the basis for such 
determination.
    Once the value of the gold has been determined, the Administrator 
will subtract all estimated accrued expenses and other liabilities of 
the Fund from the total value of the gold and all other assets of the 
Fund. The resulting figure is the NAV. The Administrator will determine 
the NAV per Share by dividing the NAV of the Fund by the number of 
Shares outstanding as of the close of trading on the Exchange.
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 websites 
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 
websites 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 websites 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 Fund and a 
price of gold derived from updated bids and offers indicative of the 
spot price of gold.\26\
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    \26\ The IIV on a per Share basis disseminated during the 
Exchange's Core Trading Session, as defined in NYSE Arca Rule 7.34-
E, should not be viewed as a real-time update of the NAV, which is 
calculated once a day.
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    The Fund's website will contain the following information, on a per 
Share basis: (a) The Official Closing Price \27\ and a calculation of 
the premium or discount of such Official Closing Price against the 
Fund's NAV; and (b) data in chart format displaying the frequency 
distribution of discounts and premiums of the Official Closing Price 
against the NAV, within appropriate ranges, for each of the four 
previous calendar quarters. The website for the Fund will also provide 
its prospectus. 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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    \27\ The term ``Official Closing Price'' is defined in NYSE Arca 
Rule 1.1(ll) as the reference price to determine the closing price 
in a security for purposes of Rule 7-E Equities Trading, and the 
procedures for determining the Official Closing Price are set forth 
in that rule.
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Criteria for Initial and Continued Listing
    The Fund 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 100,000 Shares will be required to be outstanding at 
the start of trading, which is equivalent to 1,384 fine ounces of gold 
or approximately $2,500,000 as of July 22, 2021. The Exchange believes 
that the anticipated minimum number of Shares outstanding

[[Page 50389]]

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 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 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 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, any related futures or options on futures, or any 
other related derivatives. Commentary .04 of NYSE Arca Rule 11.3-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. To the extent the Exchange may be 
found to lack jurisdiction over a subsidiary or affiliate of an ETP 
Holder that does business only in commodities or futures contracts, 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.\28\ The Exchange will halt trading in the Shares if the 
NAV of the Fund 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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    \28\ 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 the Financial 
Industry Regulatory Authority Inc. (``FINRA''), on behalf of the 
Exchange, which are designed to detect violations of Exchange rules and 
applicable federal securities laws.\29\ 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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    \29\ 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.\30\
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    \30\ 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 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 
improper 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 Fund on the 
Exchange.
    The Trust 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 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 Rule 5.5-E(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

[[Page 50390]]

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 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 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 Act.
2. Statutory Basis
    The basis under the Act for this proposed rule change is the 
requirement under Section 6(b)(5) \31\ 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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    \31\ 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 websites 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. Current spot prices 
also are generally available with bid/ask spreads from gold bullion 
dealers. In addition, the Fund's website 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 websites and other information service providers. 
The NAV of the Fund will be published on each day that the NYSE Arca is 
open for regular trading and will be posted on the Fund's website. 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 website will also provide 
its 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 such proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule 
change should be disapproved.

IV. Solicitation of Comments

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

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-2021-73 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-2021-73. 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

[[Page 50391]]

internet website (http://www.sec.gov/rules/sro.shtml). Copies of the 
submission, all subsequent amendments, all written statements with 
respect to the proposed rule change that are filed with the Commission, 
and all written communications relating to the proposed rule change 
between the Commission and any person, other than those that may be 
withheld from the public in accordance with the provisions of 5 U.S.C. 
552, will be available for website viewing and printing in the 
Commission's Public Reference Room, 100 F Street NE, Washington, DC 
20549 on official business days between the hours of 10:00 a.m. and 
3:00 p.m. Copies of the filing also will be available for inspection 
and copying at the principal office of the Exchange. All comments 
received will be posted without change. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-NYSEArca-2021-73 and should be submitted 
on or before September 29, 2021.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\32\
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    \32\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-19293 Filed 9-7-21; 8:45 am]
BILLING CODE 8011-01-P


