Canary SUI ETF Sings into Cboe: New Commodity Investment Bird
Published Date: 4/25/2025
Notice
Summary
The Cboe BZX Exchange wants to start trading shares of the new Canary SUI ETF, a fund based on commodities, starting soon. This change affects investors looking for fresh ways to invest in commodity-based assets and could open up new money-making opportunities. The SEC is reviewing the proposal and inviting public comments before giving the green light.
Analyzed Economic Effects
7 provisions identified: 5 benefits, 1 costs, 1 mixed.
Proposed Listing of Canary SUI ETF
On April 8, 2025, Cboe BZX filed to list and trade the Canary SUI ETF, a trust whose assets will consist of spot SUI, cash, or cash equivalents. If approved and the Trust's Form S-1 registration statement becomes effective, U.S. investors would be able to access SUI through this regulated exchange-traded vehicle.
Trust May Receive Staking Rewards
The Sponsor may stake all or a portion of the Trust's SUI through staking providers, and the Trust would receive all or a portion of the staking rewards; those staking rewards may be treated as income to the Trust.
Custodian Cold Storage and Segregation
The Custodian will hold the Trust's SUI in segregated cold-storage addresses separate from the Custodian's other customers, safeguard private keys, and will not withdraw, loan, hypothecate, pledge, or encumber the Trust's SUI without the Trust's instruction.
Cash-Only Creation and Redemption Process
Creations and redemptions of the Trust's Shares will occur only in cash in Creation Baskets of 10,000 Shares; authorized participants will deliver only cash and will not directly purchase, hold, deliver, or receive SUI as part of the creation/redemption process. Purchase orders must be placed by 4:00 p.m. ET on a business day.
Daily NAV and 15-Second IIV Transparency
The Trust's NAV will be calculated once daily as of 4:00 p.m. ET and disseminated to all market participants; an Intraday Indicative Value (IIV) per share will be updated every 15 seconds during Regular Trading Hours (9:30 a.m. to 4:00 p.m. ET). The Pricing Benchmark will be calculated and made publicly available by the provider.
Trading Halt Rules for IIV/NAV Interruptions
The Exchange may halt trading in the Shares under BZX Rule 11.18 for market conditions (including lack of trading in underlying SUI) or if the IIV or Pricing Benchmark is not being disseminated; if such dissemination interruption persists past the trading day, the Exchange will halt trading no later than the next trading day. The Exchange will also halt trading if the NAV is not disseminated to all market participants at the same time.
Member Information Circular and Risk Warnings
Before trading begins the Exchange will issue an Information Circular describing special characteristics and risks, including (i) that Shares are not individually redeemable and creations/redemptions occur in Creation Baskets, (ii) suitability obligations for members, (iii) risks of trading outside Regular Trading Hours when an updated IIV is not available, (iv) prospectus delivery requirements, and (v) that there is no regulated source of last-sale information for SUI and the Commission has no jurisdiction over SUI trading as a commodity.
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