83 FR 23494 - Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to the Proposed Operation of the Perth Mint Physical Gold ETF Trust

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 83, Issue 98 (May 21, 2018)

[Federal Register Volume 83, Number 98 (Monday, May 21, 2018)]
[Notices]
[Pages 23494-23497]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-10713]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-83248; File No. SR-NYSEArca2018-32]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Relating to the 
Proposed Operation of the Perth Mint Physical Gold ETF Trust

May 15, 2018.
    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 May 7, 2018, 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, II, 
and III 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 reflect a change in the size of a 
``Basket'' applicable to shares of the Perth Mint Physical Gold ETF 
Trust (``Trust'') from 100,000 Shares to at least 50,000 Shares, and to 
amend certain other representations in the proposed rule change filed 
with and approved by the Securities and Exchange Commission 
(``Commission'') relating to listing and trading of Shares of the Trust 
on the Exchange.\4\ Shares of the Trust have been approved by the 
Commission for listing and trading on the Exchange under NYSE Arca Rule 
8.201-E. The Trust's shares have not commenced trading on the Exchange. 
The proposed rule change is available on the Exchange's website at 
www.nyse.com, at the principal office of the Exchange, and at the 
Commission's Public Reference Room.
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    \4\ See note 5, infra.
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II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

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

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

1. Purpose
    The Commission has approved a proposed rule change relating to 
listing and trading on the Exchange of shares (``Shares'') of the Trust 
for listing and trading on the Exchange under NYSE Arca Rule 8.201-E 
(``Commodity-Based Trust Shares'').\5\ The Exchange proposes to reflect 
a change in the size of a Creation Unit applicable to Shares of the 
Trust from 100,000 Shares to at least 50,000 Shares, and to amend 
certain other representations in the proposed rule change filed with 
and approved by the Commission relating to listing and trading of 
Shares of the Trust on the Exchange. The Trust's Shares have not 
commenced trading on the Exchange. The sponsors of the Trust will be 
the Gold Corporation and Exchange Traded Concepts, LLC 
(``Sponsors'').\6\
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    \5\ See Securities Exchange Act Release Nos. 82372 (December 21, 
2107), 82 FR 61601 (December 28, 2107) (SR-NYSEArca-2017-140) (NYSE 
Arca, Inc.; Notice of Filing of Proposed Rule Change To List and 
Trade Shares of the Perth Mint Physical Gold ETF Trust Under NYSE 
Arca Rule 8.201-E) (``Prior Notice''); 82593 (January 26, 2018), 83 
FR 4718 (February 1, 2018) (SR-NYSEArca-2017-140) Order Approving a 
Proposed Rule Change To List and Trade Shares of the Perth Mint 
Physical Gold ETF Trust Pursuant to NYSE Arca Rule 8.201-E) (``Prior 
Order'' and, together with the Prior Notice, the ``Prior 
Releases'').
    \6\ On April 20, 2018 the Trust filed with the Commission a 
registration statement on Form S-1 under the Securities Act of 1933 
relating to the Trust (File No. 333-224389) (``Registration 
Statement''). The description of the operation of the Trust herein 
is based, in part, on the Registration Statement. The procedures 
described in this proposed rule change will not be implemented until 
such proposed rule change is effective and operative.
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Change to the ``Basket'' Size
    The Prior Notice stated that the Trust will issue and redeem 
``Baskets'' equal to a block of 100,000 Shares. The Exchange proposes 
to reflect a change in the proposed size of a Basket from 100,000 
Shares to 50,000 Shares. The size of a Basket will be subject to 
change, but will not exceed 100,000 Shares. A reduction in the size of 
a Basket may provide potential benefits to investors by facilitating 
additional creation and redemption activity in the Shares, thereby 
potentially resulting in increased secondary market trading activity, 
tighter bid/ask spreads and narrower premiums or discounts to net asset 
value (``NAV'').\7\
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    \7\ The Exchange notes that the Commission has approved the 
listing and trading of other issues of Commodity-Based Trust Shares 
that have applied a minimum ``Creation Unit'' size of less than 
50,000 shares. See, e.g., Securities Exchange Act Release Nos. 82249 
(December 8, 2017), 82 FR 58884 (December 14, 2017) (SR-NYSEArca-
2017-110) (Notice of Filing of Amendment No. 2 and Order Approving 
on an Accelerated Basis a Proposed Rule Change, as Modified by 
Amendment No. 2, to List and Trade Shares of the GraniteShares 
Platinum Trust under NYSE Arca Rule 8.201-E); 81918 (October 23, 
2017), 82 FR 49884 (October 27, 2017) (SR-NYSEArca-2017-98) (Order 
Approving a Proposed Rule Change, as Modified by Amendment No. 1 
Thereto, to List and Trade Shares of The Gold Trust under NYSE Arca 
Rule 8.201-E); 80840 (June 1, 2017), 82 FR 26534 (June 7, 2017) (SR-
NYSEArca-2017-33) (Order Approving a Proposed Rule Change, as 
Modified by Amendment No. 2 Thereto, to List and Trade Shares of the 
Euro Gold Trust, Pound Gold Trust, and the Yen Gold Trust under NYSE 
Arca Equities Rule 8.201).
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Change to Initial Basket Gold Amount
    The Prior Releases stated that the initial Basket Gold Amount is 
1,000 Fine Ounces of gold. The Exchange proposes to change this 
representation to state that the initial Basket Gold Amount is 500 Fine 
Ounces of gold. The Sponsors represent that this change corresponds 
proportionately to the change made in the Basket size to 50,000 Shares.
Changes to Representations Regarding Delivery Applicants
    As described in the Registration Statement, persons permitted to 
take delivery of Physical Gold are referred to as ``investors'' rather 
than ``Delivery Applicants'', as stated in the Prior Notice, and, in 
connection with such delivery, Shares are delivered to the Gold 
Corporation and are not surrendered to the Trust, as represented in the 
Prior Notice. Thus investors that submit an ``Application'' (rather 
than a ``Delivery Application'', as described in the Prior Notice) to 
the Gold Corporation \8\ will deliver Shares to the

[[Page 23495]]

Gold Corporation (i.e., Custodian or Custodial Sponsor) rather than to 
the Trust. The Sponsors represent that, by conducting the delivery 
process directly through the Gold Corporation, rather than through the 
Trust, it is anticipated that an investor will save on certain service 
provider administrative charges, and that the process will therefore be 
more cost effective for investors.
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    \8\ The Prior Notice stated that ``Delivery Application'' means 
a document in a form satisfactory to the Custodian and as set forth 
the Prior Notice that expresses a Delivery Applicant's intention to 
surrender Shares on a Share Submission Day in exchange for an amount 
of Gold on such Share Submission Day. As defined in the Registration 
Statement, the term ``Application'' is defined as a document in a 
form satisfactory to Gold Corporation that expresses an investor's 
intention to deliver shares on a Share Submission Day in exchange 
for an amount of Physical Gold on such Share Submission Day.
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    The Prior Notice stated that the Trust's primary objective will be 
to provide investors with an opportunity to invest in gold through the 
Shares, have the gold securely stored by Gold Corporation and, if 
requested by an investor, deliver Physical Gold to such investor in 
exchange for its Shares. However, because investors redeeming Shares 
would deliver Shares to the Gold Corporation rather than to the Trust, 
the Trust's primary objective will be to provide investors with an 
opportunity to invest in gold through the Shares and have the gold 
securely stored by Gold Corporation; the Gold Corporation rather than 
the Trust will be the entity that delivers Physical Gold to investors 
in exchange for Shares.
Change to Representation Regarding the Government Guarantee
    The Prior Notice stated that the Government Guarantee \9\ applies 
to all gold held by the Custodian, whether in the Trust Allocated Metal 
Account, the Trust Unallocated Metal Account or in a Customer Account, 
for the benefit of the Trust or a Delivery Applicant.
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    \9\ See note 29 of the Prior Notice for a description of the 
Government Guarantee.
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    The Exchange proposes to change this representation to state that 
the Government Guarantee applies to all gold held by the Custodian or 
sub-custodian, whether in the Trust Allocated Metal Account, the Trust 
Unallocated Metal Account, the ``GC Metal Account'' \10\ or in a 
Customer Account, for the benefit of the Trust or an investor who is 
the Gold Corporation's direct customer.
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    \10\ The term GC [Gold Corporation] Metal Account is defined in 
the Registration Statement as one or more designated Gold accounts 
of which Gold Corporation, in its individual capacity, is the 
registered owner maintained with one or more LBMA Gold clearing 
members on an unallocated basis in such location or locations as 
Gold Corporation may determine and used by Gold Corporation 
exclusively for transfers of Gold to and from the Trust in 
connection with the creation and redemption of Baskets. The term is 
introduced in the Registration Statement to clarify that the 
Custodian maintains certain accounts that are designed to facilitate 
transfers of gold when an Authorized Participant elects to transfer 
gold from a third party unallocated account, and not from an 
unallocated account maintained with the Gold Corporation.
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Change to Representations Regarding Delivery of Required Deposits
    The Prior Notice stated that an Authorized Participant who places a 
purchase order is responsible for crediting the Trust Unallocated Metal 
Account with the required gold deposit amount by 9:00 a.m. London time 
on the third business day following the purchase order date.
    The Exchange proposes to change this representation to state that 
an Authorized Participant who places a purchase order is responsible 
for crediting its account, if held at the Custodian, with the required 
gold deposit amount and, if the Authorized Participant does not 
maintain its account with the Custodian, causing the required gold 
deposit amount to be transferred to the Custodian by 8:00 a.m. London 
time on the second business day following the purchase order date. The 
Sponsors represent that this change is being made in connection with 
the implementation of the T+2 settlement cycle for securities 
transactions in accordance with Rule 15c6-1(a) under the Act.\11\
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    \11\ See Securities Exchange Act Release No. 80295 (March 22, 
2017), 82 FR 15564 (March 29, 2017).
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Changes to Redemption Procedures
    The Prior Notice further stated that, by placing a redemption 
order, an Authorized Participant agrees to deliver the Baskets to be 
redeemed through DTC's book-entry system to the Trust no later than the 
third business day following the effective date of the redemption 
order. The Exchange proposes to change this representation to state 
that, by placing a redemption order, an Authorized Participant agrees 
to deliver the Baskets to be redeemed through DTC's book-entry system 
to the Trust no later than the second business day following the 
effective date of the redemption order. The Sponsors represent that 
this change is being made in connection with implementation of the T+2 
settlement cycle for securities transactions in accordance with Rule 
15c6-1(a) under the Act.
    The Prior Notice further stated that the redemption distribution 
due from the Trust is delivered to the Authorized Participant on the 
next following business day after the Trustee's DTC account has been 
credited with the Baskets to be redeemed. The Exchange proposes to 
change this representation to state that the redemption distribution 
due from the Trust is delivered to the Authorized Participant on the 
third business day following the redemption date if, by 9:00 a.m. 
Eastern time on the second business day following the redemption order 
date, the Trustee's DTC account has been credited with the Baskets to 
be redeemed. The Sponsors represent that this change is being made in 
connection with implementation of the T+2 settlement cycle for 
securities transactions in accordance with Rule 15c6-1(a) under the 
Act, provided that the redemption distribution will, unless otherwise 
agreed by the parties, be delivered to the Authorized Participant on 
the third business day following the redemption date.
    The Prior Notice stated that gold is delivered to the Trust and 
distributed by the Trust through credits and debits between Authorized 
Participants' accounts, the Trust Unallocated Metal Account and the 
Trust Allocated Metal Account. When the Trustee requests creation of a 
basket at an Authorized Participant's request, the Authorized 
Participant will then transfer gold to the Trust Unallocated Metal 
Account. The Exchange proposes to change this representation to state 
that gold is delivered to the Trust and distributed by the Trust 
through credits and debits between Authorized Participants' accounts, 
the GC Metal Account, the Trust Unallocated Metal Account and the Trust 
Allocated Metal Account. When the Trustee requests creation of a basket 
at an Authorized Participant's request, the Authorized Participant will 
then transfer gold to the Authorized Participant's account with the 
Custodian or to the GC Metal Account for credit to the Trust 
Unallocated Metal Account.
    The Sponsors represent that the proposed changes described above 
are consistent with the Trust's investment objective, and will further 
assist the Sponsors to achieve such investment objective. Except for 
the changes noted above, all other representations made in the Prior 
Releases remain unchanged.\12\
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    \12\ See note 5, supra. All terms referenced but not defined 
herein are defined in the Prior Releases.
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2. Statutory Basis
    The basis under the Act for this proposed rule change is the 
requirement under Section 6(b)(5) \13\ 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

[[Page 23496]]

and, in general, to protect investors and the public interest.
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    \13\ 15 U.S.C. 78f(b)(5).
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    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. The Exchange believes that the change to the size of a 
Basket to 50,000 Shares may provide potential benefits to investors by 
facilitating additional creation and redemption activity in the Shares, 
thereby potentially resulting in increased secondary market trading 
activity, tighter bid/ask spreads and narrower premiums or discounts to 
NAV. The reduction in the initial Basket Gold Amount from 1,000 Fine 
Ounces to 500 Fine Ounces corresponds proportionately to the change 
proposed to be made in the Basket size to 50,000 Shares.
    With respect to the proposed replacement of references in the Prior 
Notice to Delivery Applicants with ``investors'' and references to 
``Delivery Application'' with ``Application'', as applicable, and to 
specify that an investor delivers Shares to the Gold Corporation rather 
than to the Trust, the Sponsors represent that, by conducting the 
delivery process directly through the Gold Corporation, rather than 
through the Trust, it is anticipated that an investor will save on 
certain service provider administrative charges, and that the process 
will therefore be more cost effective for investors.
    With respect to proposed changes to representations regarding 
delivery of required deposits and redemption procedures, as described 
above, the Sponsors represent that such changes are being made in 
connection with the implementation of the T+2 settlement cycle for 
securities transactions in accordance with Rule 15c6-1(a) under the 
Act.
    With respect to the term GC Metal Account, such term has been 
introduced in the Registration Statement to clarify that the Custodian 
will maintain certain accounts that are designed to facilitate 
transfers of gold when an Authorized Participant elects to transfer 
gold from a third party unallocated account, and not from an 
unallocated account maintained with the Gold Corporation.
    The Sponsors represent that the proposed changes described above 
are consistent with the Trust's investment objective, and will further 
assist the Sponsors to achieve such investment objective. Except for 
the changes noted above, all other representations made in the Prior 
Releases remain unchanged.

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

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purpose of the Act. The Exchange believes the 
proposed rule changes, because of the potential increase in secondary 
market trading activity that may result from a decrease in the Basket 
size for Shares of the Trust, the corresponding reduction in the 
initial Basket Gold Amount, and the reduction in certain time frames, 
regarding delivery of required deposits and other redemption procedures 
will enhance competition among issues of gold-based Commodity-Based 
Trust Shares.

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

    The Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \14\ and Rule 19b-4(f)(6) thereunder.\15\ 
Because the proposed rule change does not: (i) Significantly affect the 
protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) become operative prior to 
30 days from the date on which it was filed, or such shorter time as 
the Commission may designate, if consistent with the protection of 
investors and the public interest, the proposed rule change has become 
effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6)(iii) thereunder.
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    \14\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \15\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19b-4(f)(6) \16\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b 4(f)(6)(iii),\17\ the Commission 
may designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has asked 
the Commission to waive the 30-day operative delay so that the proposal 
may become operative immediately upon filing. The Exchange states that 
the Trust plans to launch trading in the Shares on the Exchange prior 
to such delayed operative date if this proposed rule change is 
effective and operative. Additionally, the Exchange asserts that waiver 
would be consistent with the protection of investors and the public 
interest because reducing the size of a Basket may provide potential 
benefits to investors by facilitating additional creation and 
redemption activity in the Shares, thereby potentially resulting in 
increased secondary market trading activity, tighter bid/ask spreads 
and narrower premiums or discounts to NAV.\18\ The Commission believes 
that waiver of the 30-day operative delay is consistent with the 
protection of investors and the public interest. Accordingly, the 
Commission hereby waives the 30-day operative delay and designates the 
proposed rule change operative upon filing.\19\
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    \16\ 17 CFR 240.19b-4(f)(6).
    \17\ 17 CFR 240.19b-4(f)(6)(iii).
    \18\ See supra text accompanying note 7.
    \19\ For purposes only of waiving the 30-day operative delay, 
the Commission has also considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of such proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings under 
Section 19(b)(2)(B) \20\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \20\ 15 U.S.C. 78s(b)(2)(B).
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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 [email protected]. Please include 
File Number SR-NYSEArca-2018-32 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-2018-32. This 
file number should be included on the

[[Page 23497]]

subject line if email is used. To help the Commission process and 
review your comments more efficiently, please use only one method. The 
Commission will post all comments on the Commission's internet website 
(http://www.sec.gov/rules/sro.shtml). Copies of the submission, all 
subsequent amendments, all written statements with respect to the 
proposed rule change that are filed with the Commission, and all 
written communications relating to the proposed rule change between the 
Commission and any person, other than those that may be withheld from 
the public in accordance with the provisions of 5 U.S.C. 552, will be 
available for website viewing and printing in the Commission's Public 
Reference Room, 100 F Street NE, Washington, DC 20549, on official 
business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of 
the filing also will be available for inspection and copying at the 
principal office of the Exchange. All comments received will be posted 
without change. Persons submitting comments are cautioned that we do 
not redact or edit personal identifying information from comment 
submissions. You should submit only information that you wish to make 
available publicly. All submissions should refer to File Number SR-
NYSEArca-2018-32, and should be submitted on or before June 11, 2018.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\21\
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    \21\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-10713 Filed 5-18-18; 8:45 am]
BILLING CODE 8011-01-P