[Federal Register Volume 85, Number 240 (Monday, December 14, 2020)]
[Notices]
[Pages 80854-80859]
[FR Doc No: 2020-27398]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-90608; File No. SR-NYSEArca-2020-105]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
of Proposed Rule Change To List and Trade the Shares of the Teucrium
Water Fund Under NYSE Arca Rule 8.200-E, Commentary .02

December 8, 2020.
    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 November 25, 2020, NYSE Arca, Inc. (``NYSE Arca'' or the
``Exchange'') 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 list and trade the shares of the following
under NYSE Arca Rule 8.200-E, Commentary .02 (``Trust Issued
Receipts''): Teucrium Water Fund. 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.

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
following under NYSE Arca Rule 8.200-E, Commentary .02, which governs
the listing and trading of Trust Issued Receipts: Teucrium Water Fund
(the ``Fund'').\4\
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    \4\ Commentary .02 to NYSE Arca Rule 8.200-E applies to Trust
Issued Receipts that invest in ``Financial Instruments.'' The term
``Financial Instruments,'' as defined in Commentary .02(b)(4) to
NYSE Arca Rule 8.200-E, means any combination of investments,
including cash; securities; options on securities and indices;
futures contracts; options on futures contracts; forward contracts;
equity caps, collars, and floors; and swap agreements.
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    The Fund is a series of Teucrium Commodity Trust (the ``Trust''), a
Delaware statutory trust.\5\ The Fund is managed and controlled by
Teucrium Trading, LLC (``Teucrium Trading'' or the ``Sponsor'').
Teucrium Trading is registered as a commodity pool operator (``CPO'')
and a commodity trading adviser (``CTA'') with the Commodity Futures
Trading Commission (``CFTC'') and is a member of the National Futures
Association (``NFA''). Foreside Fund Services, LLC will be the Fund's
distributor (``Distributor''). In its capacity as the Custodian for the
Fund, U.S. Bank, N.A. (``U.S. Bank'') may hold the Fund's securities
and cash and/or cash equivalents pursuant to a custodial agreement (the
``Custodian''). U.S. Bancorp Fund Services, LLC, (``U.S. Bancorp'')
will be the Fund's ``Transfer Agent.'' In addition, in its capacity as
Administrator for the Fund, U.S. Bancorp (the ``Administrator'') will
perform certain administrative and accounting services for the Fund and
prepare certain Commission and CFTC reports on behalf of the Fund.
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    \5\ On September 21, 2020, the Trust filed with the Commission a
registration statement on Form S-1 under the Securities Act of 1933
(15 U.S.C. 77a) (``Securities Act'') relating to the Fund (File No.
333-248948) (the ``Registration Statement''). The description of the
operation of the Trust and the Fund herein is based, in part, on the
Registration Statement.
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The Fund's Investment Objective and Strategy
    The investment objective of the Fund is for changes in the Shares'
Net Asset Value (``NAV'') to reflect the changes of the price of water
rights in the state of California, as measured by the Fund's Benchmark
(as defined below). The Benchmark is a weighted average of the closing
settlement prices for three equally weighted Nasdaq Veles California
Water index futures contracts (``Benchmark Component Futures
Contracts'') that are traded on the Chicago Mercantile Exchange Inc.
(``CME'').\6\ Nasdaq Veles California Water index futures contracts
will be financially settled and will trade eight consecutive quarterly
contracts (March, June, September and December) plus the two nearest
serial months which are not included in the quarterly contracts.
Settlement for each futures contract will occur the third Wednesday of
the expiration month.
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    \6\ According to the Registration Statement, futures contracts
are agreements between two parties that are executed on a designated
contract market (``DCM''), i.e., a commodity futures exchange, and
that are cleared and margined through a derivatives clearing
organization (``DCO''), i.e., a clearing house. One party agrees to
buy a commodity such as water from the other party at a later date
at a price and quantity agreed upon when the contract is made. In
market terminology, a party who purchases a futures contract is long
in the market and a party who sells a futures contract is short in
the market. The contractual obligations of a buyer or seller may
generally be satisfied by taking or making physical delivery of the
underlying commodity or by making an offsetting sale or purchase of
an identical futures contract on the same or linked exchange before
the designated date of delivery. The difference between the price at
which the futures contract is purchased or sold and the price paid
for the offsetting sale or purchase, after allowance for brokerage
commissions, constitutes the profit or loss to the trader.
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    The Benchmark will have three components, consisting of equally
weighted Nasdaq Veles California Water index futures contracts selected
from the following contract months: May, June, July, August and
September. The Benchmark will always hold a June contract month. The
Benchmark will roll upon the expiration of the February, May, June,
July and August contract months. See grid below for the full futures
rolls and holdings. The

Benchmark is not designed to track the spot price of water or water
rights.

                                              Annual Roll Schedule
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         Roll month                   Old contract                New contract            Holdings post roll
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February....................  September...................  May....................  May, June (1st to expire),
                                                                                June (2nd to expire)*.
May.........................  May.........................  July...................  June (1st to expire), July,
                                                                                June (2nd to expire).
June........................  June........................  August.................  July, August, June (2nd to
                                                                                expire).
July........................  July........................  September (2nd to        August, June (1st to
                                                             expire).                 expire), September (2nd to
                                                                                expire).
August......................  August......................  June (2nd to expire)...  June (1st to expire),
                                                                                September, June (2nd to
                                                                                expire).
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* 1st to expire--The contract month available for investment that is going to expire first; 2nd to expire--The
  contract month available for investment that is going to expire second.

    According to the Registration Statement, the Nasdaq Veles
California Water Index was designed to provide water market
participants with a price for water through verifiable price discovery.
The index sets a weekly benchmark spot price of water rights in
California, based on the volume-weighted average of the transaction
price in California's five largest and most actively traded water
markets.
    In seeking to achieve the Fund's investment objective, the Sponsor
will employ a ``neutral'' investment strategy that is intended to track
the changes in the Benchmark regardless of whether the Benchmark goes
up or goes down. According to the Registration Statement, the Fund will
endeavor to trade in Benchmark Component Futures Contracts so that the
Fund's average daily tracking error against the Benchmark will be less
than 10 percent over any period of 30 trading days. According to the
Registration Statement, the Fund's ``neutral'' investment strategy is
designed to permit investors generally to purchase and sell the Fund's
Shares for the purpose of investing indirectly in the California water
market. Such investors may include participants in the agricultural
industry and other industries seeking to hedge the risk of losses in
their water related transactions, as well as investors seeking exposure
to the water market.
    The Fund will seek to achieve its investment objective by investing
in Benchmark Component Futures Contracts. Under normal market
conditions,\7\ the Fund expects that 100% of the Fund's assets will be
invested in Benchmark Component Futures Contracts and in cash and cash
equivalents, such as short-term Treasury Bills, money market funds,
demand deposit accounts and commercial paper. The Fund may, to a lesser
extent, obtain exposure to the Benchmark through investment in over-
the-counter (``OTC'') swap agreements, OTC forward contracts, both
exchange-listed and OTC options, exchange-listed futures and exchange-
listed options on futures. Not more than 10% of the net assets of the
Fund in the aggregate invested in exchange-traded futures contracts or
exchange-traded options on futures shall consist of futures contracts
or options on futures whose principal market is not a member of the
Intermarket Surveillance Group (``ISG'') or is a market with which the
Exchange does not have a comprehensive surveillance sharing agreement
(``CSSA'').\8\
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    \7\ The term ``normal market conditions'' includes, but is not
limited to, the absence of: trading halts in the applicable
financial markets generally; operational issues (e.g., systems
failure) causing dissemination of inaccurate market information; or
force majeure type events such as natural or manmade disaster, act
of God, armed conflict, act of terrorism, riot or labor disruption
or any similar intervening circumstance. See NYSE Arca Rule 8.600-
E(c)(5).
    \8\ For a list of the current members of ISG, see
www.isgportal.org. The Exchange notes that not all components of the
Fund may trade on markets that are members of ISG or with which the
Exchange has in place a CSSA.
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    According to the Registration Statement, the price of water, over
time, fluctuates based on a number of market factors, including demand
for water relative to its supply. The value of Benchmark Component
Futures Contracts likewise will fluctuate in reaction to a number of
market factors. Because the Fund seeks to maintain its holdings in
Benchmark Component Futures Contracts with a roughly constant
expiration profile, the Fund's positions are changed or ``rolled'' on a
regular basis in order to track the changing nature of the Benchmark by
closing out soon to expire contracts that are no longer part of the
Benchmark and entering into subsequent to expire contracts. One factor
determining the total return from investing in futures contracts is the
price relationship between soon to expire contracts and later to expire
contracts.
    According to the Registration Statement, if the futures market is
in a state of backwardation (i.e., when the price of water in the
future is expected to be less than the current price), the Fund will
buy later to expire contracts for a lower price than the sooner to
expire contracts that it sells. Hypothetically, and assuming no changes
to either prevailing water prices or the price relationship between
soon to expire contracts and later to expire contracts, the value of a
contract will rise as it approaches expiration. Over time, if
backwardation remained constant, the differences would continue to
increase. If the futures market is in contango, the Fund will buy later
to expire contracts for a higher price than the sooner to expire
contracts that it sells. Hypothetically, and assuming no other changes
to either prevailing water prices or the price relationship between the
spot price, soon to expire contracts and later to expire contracts, the
value of a contract will fall as it approaches expiration. Over time,
if contango remained constant, the difference would continue to
increase. Frequently, whether contango or backwardation exists is a
function, among other factors, of the seasonality of the underlying
market and government policy.
Overview of the Water Market
    According to the Registration Statement, water is the natural
resource required to sustain all life on the planet, arguably making it
the most important commodity on Earth. U.S. water usage falls into
three major categories: residential, agricultural and industrial use.
Therefore, a primary challenge confronting the United States,
particularly the Western States, is water scarcity which can be
attributed to increased demand from population growth, economic
expansion, agricultural production, and climate change resulting in
rapidly changing and variable weather patterns.
    The U.S. ranks first globally in per capita water consumption and
second globally in total water consumption behind only China.
California ranks first

in U.S. demand. Competition continues to increase between domestic use,
agriculture, and industrial use. Food production and urban expansion
could both be threatened by water scarcity, and it is becoming
increasingly difficult and expensive to balance the water needs of
farmers growing crops in many parts of the country with water demands
created by expanding urban population centers. As water availability
becomes increasingly variable, state and local governments will have
increasing roles in rationing and disbursing water.
    California is one of the most active water trading markets in the
U.S. Water prices tend to trade in cycles generally tied to rain/
snowfall patterns. Western States receive most annual precipitation
from winter storms. Beyond that they must rely on spring rainstorms.
Western statewide precipitation occurs from November through March.
Approximately half occurs from December through February, coinciding
with winter storms. A few storms during the winter season can determine
if the year will be wet or dry. Droughts occur when dry conditions
persist long enough to impact natural water levels. Water trading has
become a fast-growing activity throughout the Western United States;
California, Washington, Arizona, Colorado, and Texas are among the most
active places where water rights are transacted. As climate change
continues to impact the planet, urban, industrial and agricultural
expansion will likely increase the demand for water, increasing the
need for the most efficient allocation of water possible among
competing users. The trading of water rights is a practical and
effective tool available to all participants in their continued efforts
at securing water.
Net Asset Value
    According to the Registration Statement, the Fund's NAV per Share
will be calculated by taking the current market value of its total
assets, subtracting any liabilities, and dividing that total by the
number of Shares.
    The Administrator of the Fund will calculate the NAV once each
trading day, as of the earlier of the close of the New York Stock
Exchange or 4:00 p.m. Eastern Standard Time (EST).
    To determine the value of Benchmark Component Futures Contracts,
the Fund's Administrator will use the Benchmark Component Futures
Contract settlement price on the exchange on which the contract is
traded, except that the ``fair value'' of Benchmark Component Futures
Contracts (as described in more detail below) may be used when
Benchmark Component Futures Contracts close at their price fluctuation
limit for the day. The Fund's Administrator will determine the value of
all other Fund investments as of the earlier of the close of the New
York Stock Exchange or 4:00 p.m. EST. The value of over the counter
water interests will be determined based on the value of the commodity
or futures contract underlying such water interest, except that a fair
value may be determined if the Fund's Sponsor believes that the Fund is
subject to significant credit risk relating to the counterparty to such
water interest. The Fund's NAV will include any unrealized profit or
loss on open water interests and any other credit or debit accruing to
the Fund but unpaid or not received by the Fund.
    The fair value of a water interest will be determined by the Fund's
Sponsor in good faith and in a manner that assesses the water
interest's value based on a consideration of all available facts and
all available information on the valuation date. When a Benchmark
Component Futures Contract has closed at its price fluctuation limit,
the fair value determination will attempt to estimate the price at
which such Benchmark Component Futures Contract would be trading in the
absence of the price fluctuation limit (either above such limit when an
upward limit has been reached or below such limit when a downward limit
has been reached). Typically, this estimate will be made primarily by
reference to the price of comparable water interests trading in the
over the counter market. The fair value of a water interest may not
reflect such security's market value or the amount that the Fund might
reasonably expect to receive for the water interest upon its current
sale.
Indicative Fund Value
    In order to provide updated information relating to the Fund for
use by investors and market professionals, ICE Data Indices, LLC will
calculate an updated ``Indicative Fund Value'' (``IFV''). The IFV will
be calculated by using the prior day's closing NAV per Share of the
Fund as a base and will be updated throughout the Core Trading Session
of 9:30 a.m. E.T. to 4:00 p.m. E.T. to reflect changes in the value of
the Fund's water interests during the trading day.
    The IFV will be disseminated on a per Share basis every 15 seconds
during the Exchange's Core Trading Session and be widely disseminated
by one or more major market data vendors during the NYSE Arca Core
Trading Session.\9\
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    \9\ Several major market data vendors display and/or make widely
available IFVs taken from the CTA or other data feeds. In addition,
the normal trading hours for Water Futures Contracts on CME are
generally shorter than those of NYSE Arca. As a result, there is a
gap in time at the beginning and the end of each day during which
the Fund's Shares are traded on NYSE Arca, but real-time CME trading
prices for Water Futures Contracts are not available. During such
gaps, there will be no update to the IFV.
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Creation and Redemption of Shares
    According to the Registration Statement, the Shares issued by the
Fund may only be purchased by Authorized Purchasers and only in blocks
of 10,000 Shares called ``Creation Baskets.'' The amount of the
purchase payment for a Creation Basket is equal to the total NAV of
Shares in the Creation Basket. Similarly, only Authorized Purchasers
may redeem Shares and only in blocks of 10,000 Shares called
``Redemption Baskets.'' The amount of the redemption proceeds for a
Redemption Basket is equal to the total NAV of Shares in the Redemption
Basket. The purchase price for Creation Baskets and the redemption
price for Redemption Baskets are the actual NAV calculated at the end
of the business day when a request for a purchase or redemption is
received by the Fund.
    ``Authorized Purchasers'' will be the only persons that may place
orders to create and redeem Creation Baskets. Authorized Purchasers
must be (1) either registered broker-dealers or other securities market
participants, such as banks and other financial institutions, that are
not required to register as broker-dealers to engage in securities
transactions, and (2) DTC Participants. An Authorized Purchaser is an
entity that has entered into an Authorized Purchaser Agreement with the
Sponsor.
Creation Procedures
    On any ``Business Day'', an Authorized Purchaser may place an order
with the Transfer Agent to create one or more Creation Baskets. For
purposes of processing both purchase and redemption orders, a
``Business Day'' means any day other than a day when any of the NYSE
Arca, the CME, or the New York Stock Exchange is closed for regular
trading. Purchase orders for Creation Baskets must be placed by 12:00
p.m. EST or the close of regular trading on the New York Stock
Exchange, which is earlier. The day on which the Distributor receives a
valid purchase order is referred to as the purchase order date. If the
purchase order is received after the applicable cut-off time, the
purchase order date will be the next Business Day. Purchase orders are
irrevocable.

    By placing a purchase order, an Authorized Purchaser generally
agrees to deposit cash with the Custodian.
Redemption Procedures
    According to the Registration Statement, the procedures by which an
Authorized Purchaser can redeem one or more Creation Baskets will
mirror the procedures for the creation of Creation Baskets. On any
Business Day, an Authorized Purchaser may place an order with the
Transfer Agent to redeem one or more Creation Baskets.
    The redemption procedures allow Authorized Purchasers to redeem
Creation Baskets. Individual shareholders may not redeem directly from
the Fund. By placing a redemption order, an Authorized Purchaser agrees
to deliver the Creation Baskets to be redeemed through DTC's book entry
system to the Fund by the end of the next Business Day following the
effective date of the redemption order or by the end of such later
business day.
Determination of Redemption Distribution
    The redemption distribution from the Fund will consist of an amount
of cash, cash equivalents and/or commodity futures that is in the same
proportion to the total assets of the Fund on the date that the order
to redeem is properly received as the number of Shares to be redeemed
under the redemption order is in proportion to the total number of
Shares outstanding on the date the order is received.
Delivery of Redemption Distribution
    An Authorized Purchaser who places a purchase order will transfer
to the Custodian the required amount of cash, cash equivalents and/or
commodity futures by the end of the next business day following the
purchase order date or by the end of such later business day, not to
exceed three business days after the purchase order date, as agreed to
between the Authorized Purchaser and the Custodian when the purchase
order is placed (the ``Purchase Settlement Date''). Upon receipt of the
deposit amount, the Custodian will direct DTC to credit the number of
Creation Baskets ordered to the Authorized Purchaser's DTC account on
the Purchase Settlement Date.
Availability of Information
    The NAV for the Fund's Shares will be disseminated daily to all
market participants at the same time. The intraday, closing prices, and
settlement prices of the Benchmark Component Futures Contracts will be
readily available from the applicable futures exchange websites,
automated quotation systems, published or other public sources, or
major market data vendors.
    Complete real-time data for the Benchmark Component Futures
Contracts will be available by subscription through on-line information
services. ICE Futures U.S. and CME also provide delayed futures and
options on futures information on current and past trading sessions and
market news free of charge on their respective websites. The specific
contract specifications for Benchmark Component Futures Contracts will
also be available on such websites, as well as other financial
informational sources. Quotation and last-sale information regarding
the Shares will be disseminated through the facilities of the
Consolidated Tape Association (``CTA''). Quotation information for cash
equivalents and commodity futures may be obtained from brokers and
dealers who make markets in such instruments. Intra-day price and
closing price level information for the Benchmark will be available
from major market data vendors. The Benchmark value will be
disseminated once every 15 seconds. The IFV will be available through
on-line information services.
    In addition, the Funds' website, www.teucrium.com, will display the
applicable end of day closing NAV. The daily holdings of the Fund will
be available on the Fund's website. The Fund's website will also
include a form of the prospectus for the Fund that may be downloaded.
The website will include the Shares' ticker and CUSIP information along
with additional quantitative information updated on a daily basis,
including: (1) The prior Business Day's reported NAV and closing price
and a calculation of the premium and discount of the closing price or
mid-point of the bid/ask spread at the time of NAV calculation (the
``Bid/Ask Price'') against the NAV; and (2) data in chart format
displaying the frequency distribution of discounts and premiums of the
daily closing price or Bid/Ask Price against the NAV, within
appropriate ranges, for at least each of the four previous calendar
quarters. The website disclosure of portfolio holdings will be made
daily and will include, as applicable, (i) the name, quantity, price,
and market value of Benchmark Component Futures Contracts, (ii) the
counterparty to and value of swap agreements, forward contracts and any
other financial instruments tracking the Benchmark, and (iii) the total
cash and cash equivalents held in the Fund's portfolio, if applicable.
    The Fund's website will be publicly available at the time of the
public offering of the Shares and accessible at no charge.
Trading Halts
    With respect to trading halts, the Exchange may consider all
relevant factors in exercising its discretion to halt or suspend
trading in the Shares of the Fund.\10\ Trading in Shares of the Fund
will be halted if the circuit breaker parameters in NYSE Arca Rule
7.12-E have been reached. Trading also may be halted because of market
conditions or for reasons that, in the view of the Exchange, make
trading in the Shares inadvisable.
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    \10\ See NYSE Arca Rule 7.12-E.
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    The Exchange may halt trading during the day in which an
interruption to the dissemination of the IFV or the value of the
Benchmark occurs. The Benchmark value will be disseminated once every
15 seconds. If the interruption to the dissemination of the IFV, or the
value of the Benchmark persists past the trading day in which it
occurred, the Exchange will halt trading no later than the beginning of
the trading day following the interruption. In addition, if the
Exchange becomes aware that the NAV with respect to the Shares is not
disseminated to all market participants at the same time, it will halt
trading in the Shares until such time as the NAV is available to all
market participants.
Trading Rules
    The Exchange deems the Shares to be equity securities, thus
rendering trading in the Shares subject to the Exchange's existing
rules governing the trading of equity securities. Shares will trade on
the NYSE Arca Marketplace from 4 a.m. to 8 p.m. E.T. in accordance with
NYSE Arca Rule 7.34-E (Early, Core, and Late Trading Sessions). The
Exchange has appropriate rules to facilitate transactions in the Shares
during all trading sessions. As provided in NYSE Arca Rule 7.6-E, 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.
    The Shares will conform to the initial and continued listing
criteria under NYSE Arca Rule 8.200-E. The trading of the Shares will
be subject to NYSE Arca Rule 8.200-E, Commentary .02(e), which sets
forth certain restrictions on Equity Trading Permit (``ETP'') Holders
acting as registered Market Makers in Trust Issued Receipts to
facilitate surveillance. With respect to the

application of Rule 10A-3 \11\ under the Act, the Trust will rely on
the exception contained in Rule 10A-3(c)(7).\12\ A minimum of 100,000
Shares of the Fund will be outstanding at the commencement of trading
on the Exchange.
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    \11\ 17 CFR 240.10A-3.
    \12\ See Rule 10A-3(c)(7), 17 CFR 240.10A-3(c)(7) (stating that
a listed issuer is not subject to the requirements of Rule 10A-3 if
the issuer is organized as an unincorporated association that does
not have a board of directors and the activities of the issuer are
limited to passively owning or holding securities or other assets on
behalf of or for the benefit of the holders of the listed
securities).
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Surveillance
    The Exchange represents that trading in the Shares of the Fund will
be subject to the existing trading surveillances administered by the
Exchange, as well as cross-market surveillances administered by the
Financial Industry Regulatory Authority (``FINRA'') on behalf of the
Exchange, which are designed to detect violations of Exchange rules and
applicable federal securities laws.\13\ 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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    \13\ 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, the Benchmark
Component Futures Contracts and certain other futures, and options on
futures 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, the
Benchmark Component Futures Contracts and certain other futures, and
options on futures from such markets and other entities. In addition,
the Exchange may obtain information regarding trading in the Shares,
the Benchmark Component Futures Contracts and certain other futures,
and options on futures from markets and other entities that are members
of ISG or with which the Exchange has in place a CSSA. The Exchange is
also able to obtain information regarding trading in the Shares, the
physical commodities underlying the futures contracts through ETP
Holders, in connection with such ETP Holders' proprietary or customer
trades which they effect through ETP Holders on any relevant market.
The Exchange can obtain market surveillance information, including
customer identity information, with respect to transactions (including
transactions in futures contracts) occurring on US futures exchanges,
which are members of the ISG.
    Not more than 10% of the net assets of the Fund in the aggregate
invested in exchange-traded futures contracts or exchange-traded
options on futures shall consist of futures contracts or options on
futures whose principal market is not a member of the ISG or is a
market with which the Exchange does not have a CSSA.
    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 portfolios of the Funds or Benchmark, (b)
limitations on portfolio holdings or the Benchmark, or (c) the
applicability of Exchange listing rules specified in this rule filing
shall constitute continued listing requirements for listing the Shares
on the Exchange.
    The issuer has represented to the Exchange that it will advise the
Exchange of any failure by the Fund to comply with the continued
listing requirements, and, pursuant to its obligations under Section
19(g)(1) of the 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).
2. Statutory Basis
    The basis under the Act for this proposed rule change is the
requirement under Section 6(b)(5) \14\ 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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    \14\ 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 and to protect
investors and the public interest in that the Shares will be listed and
traded on the Exchange pursuant to the initial and continued listing
criteria in NYSE Arca Rule 8.200-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 or FINRA, on behalf of the Exchange, or both, will
communicate as needed regarding trading in the Shares, Benchmark
Component Futures Contracts and certain other futures, and options on
futures 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, Benchmark
Component Futures Contracts and certain other futures, and options on
futures from such markets and other entities. In addition, the Exchange
may obtain information regarding trading in the Shares, Benchmark
Components Futures Contracts and certain other futures, and options on
futures from markets and other entities that are members of ISG or with
which the Exchange has in place a CSSA. The Exchange is also able to
obtain information regarding trading in the Shares, the physical
commodities underlying futures contracts through ETP Holders, in
connection with such ETP Holders' proprietary or customer trades which
they effect through ETP Holders on any relevant market. The Exchange
can obtain market surveillance information, including customer identity
information, with respect to transactions (including transactions in
Benchmark Component Futures Contracts) occurring on US futures
exchanges, which are members of the ISG. Not more than 10% of the net
assets of the Fund in the aggregate invested in exchange-traded futures
contracts or exchange-traded options on futures shall consist of
futures contracts or options on futures whose principal market is not a
member of the ISG or is a market with which the Exchange does not have
a CSSA. The intraday, closing prices, and settlement prices of the
Benchmark Component Futures Contracts will be readily available from
the applicable futures exchange websites, automated quotation systems,
published or other public sources, or

major market data vendors website or online information services.
    Complete real-time data for the Benchmark Component Futures
Contracts will be available by subscription from on-line information
services. ICE Futures U.S. and CME also provide delayed futures
information on current and past trading sessions and market news free
of charge on the Fund's website. The specific contract specifications
for Benchmark Component Futures Contracts will also be available on
such websites, as well as other financial informational sources.
Information regarding options will be available from the applicable
exchanges or major market data vendors. Quotation and last-sale
information regarding the Shares will be disseminated through the
facilities of the CTA. The IFV will be disseminated on a per Share
basis every 15 seconds during the Exchange's Core Trading Session and
be widely disseminated by one or more major market data vendors during
the NYSE Arca Core Trading Session. The Fund's website will also
include a form of the prospectus for the Fund that may be downloaded.
The website will include the Share's ticker and CUSIP information along
with additional quantitative information updated on a daily basis,
including, for the Fund: (1) The prior business day's reported NAV and
closing price and a calculation of the premium and discount of the
closing price or mid-point of the Bid/Ask Price against the NAV; and
(2) data in chart format displaying the frequency distribution of
discounts and premiums of the daily closing price or Bid/Ask Price
against the NAV, within appropriate ranges, for at least each of the
four previous calendar quarters. The website disclosure of portfolio
holdings will be made daily and will include, as applicable, (i) the
name, quantity, price, and market value of Benchmark Component Futures
Contracts, (ii) the counterparty to and value of swap agreements and
forward contracts, and (iii) other financial instruments, if any, and
the characteristics of such instruments and cash equivalents, and
amount of cash held in the Fund's portfolio, if applicable.
    Trading in Shares of the Fund will be halted if the circuit breaker
parameters in NYSE Arca Rule 7.12-E have been reached or because of
market conditions or for reasons that, in the view of the Exchange,
make trading in the Shares inadvisable.
    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
Trust Issued Receipts based on water 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 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.

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 notes that the
proposed rule change will facilitate the listing and trading of Trust
Issued Receipts based on water and that will enhance competition among
market participants, to the benefit of investors and the marketplace.

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 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<EMAIL_ADDRESS>Please include
File Number SR-NYSEArca-2020-105 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-NYSEArca2020-105. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (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-2020-105, and should be
submitted on or before January 4, 2021.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-27398 Filed 12-11-20; 8:45 am]
BILLING CODE 8011-01-P