Cboe BZX Exchange, Inc. has filed the Form 19-b4 with the U.S. Securities and Exchange Commission (SEC) seeking approval to list and trade shares of the Canary PENGU ETF. It is a novel fund backed by a combination of PENGU memecoin and non-fungible tokens (NFTs). This indicates that Canary would eventually file the Form S-1 for its PENGU ETF.
Filed under BZX Rule 14.11(e)(4) governing Commodity-Based Trust Shares, the ETF would be sponsored by Canary Capital Group LLC and structured as a Delaware statutory trust. The trust will not be registered under the Investment Company Act of 1940 and is not classified as a commodity pool.
According to the filing, the ETF will hold PENGU, a utility token issued on the Solana network, and Pudgy Penguin NFTs, a well-known Ethereum-based NFT collection. The trust will also hold small amounts of SOL and ETH to facilitate network transaction fees and NFT purchases.
The filing states: “The Trust is expected to hold approximately 80-95% of its total assets in PENGU and 5-15% of its total assets in Pudgy Penguin NFTs.” At least 95% of total assets will be invested in those two assets under normal circumstances.
The PENGU token, introduced in December 2024 by Pudgy Penguins, is described as “a digital collector’s item” and a “utility token” that gives holders access to ecosystem services. “PENGU differs from native cryptocurrencies like bitcoin, ETH, and SOL as it doesn’t have its own underlying network or blockchain,” the document explains.
Regarding market manipulation risks, the exchange stated: “The geographically diverse and continuous nature of PENGU trading renders it difficult and prohibitively costly to manipulate the price of PENGU.” It adds that “manipulation of the price of PENGU on any single venue would require manipulation of the global PENGU price in order to be effective.”
Each share of the ETF will represent a fractional interest in the trust’s assets. The fund will issue and redeem shares only in creation units of 10,000 shares, settled exclusively in cash.“ Authorized participants will deliver only cash to create Shares and will receive only cash when redeeming Shares,” the filing specifies.
The net asset value (NAV) of the ETF will be calculated daily at 4:00 p.m. ET. Real-time intraday indicative values (IIVs) will be published every 15 seconds during trading hours. The trust’s website will provide public access to daily NAVs, historical data, and premium/discount information.
The filing further notes that the trust “will not engage in proof-of-stake validation” and “will disclaim any incidental rights received, such as forks or airdrops.” The ETF will not distribute Portfolio Digital Assets to shareholders.
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