[Federal Register Volume 79, Number 118 (Thursday, June 19, 2014)]
[Notices]
[Page 35205]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-14317]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-72384; File No. SR-NASDAQ-2014-038]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Designation of a Longer Period for Commission Action on
Proposed Rule Change, as Modified by Amendment Nos. 1 and 2 Thereto,
Relating to the Listing and Trading of the Shares of the Reality Shares
NASDAQ-100 DIVS Index ETF of the Reality Shares ETF Trust Under Rule
5705
June 13, 2014.
On April 10, 2014, The NASDAQ Stock Market LLC (``Exchange'') filed
with the Securities and Exchange Commission (``Commission''), pursuant
to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act'')
\1\ and Rule 19b-4 thereunder,\2\ a proposed rule change to list and
trade shares of the Reality Shares NASDAQ-100 DIVS Index ETF (``Fund'')
(formerly, Reality Shares NASDAQ-100 Isolated Dividend Growth Index
ETF) under Rule 5705. The proposed rule change was published for
comment in the Federal Register on April 30, 2014.\3\ On May 13, 2014,
the Exchange filed Amendment No. 1 to the proposed rule change, which
amended and replaced the proposed rule change in its entirety.\4\ On
June 4, 2014, the Exchange filed Amendment No. 2 to the proposed rule
change.\5\ The Commission received no comment letters on the proposed
rule change.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 72014 (Apr. 24,
2014), 79 FR 24465.
\4\ In Amendment No. 1, the Exchange confirms the three trading
sessions on the Exchange, clarifies the valuation of investments for
purposes of calculating net asset value, clarifies what information
would be available on the Fund's Web site, and provides additional
information relating to surveillance with respect to certain assets
to be held by the Fund.
\5\ In Amendment No. 2, the Exchange amends the proposal to
reflect a name change to the Fund and the underlying index.
Specifically, the Exchange replaces each reference to ``Reality
Shares NASDAQ-100 Isolated Dividend Growth Index ETF'' in the
proposal with ``Reality Shares NASDAQ-100 DIVS Index ETF,'' and
replaces each reference to ``Reality Shares NASDAQ-100 Isolated
Dividend Growth Index'' in the proposal with ``Reality Shares
NASDAQ-100 DIVS Index.''
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The proposed rule change would permit the listing and trading of
shares of the Fund, which would seek long-term capital appreciation by
tracking the performance of the Reality Shares NASDAQ-100 DIVS Index
(``Index'') (formerly, Reality Shares NASDAQ-100 Isolated Dividend
Growth Index). At least 80% of the Fund's total assets would be
invested in the component securities of the Index, which would be
calculated using a proprietary, rules-based methodology designed to
track market expectations for dividend growth conveyed in real-time
using the mid-point of the bid-ask spread on U.S. exchange-listed
NASDAQ-100 Index options and U.S. exchange-listed options on exchange
traded funds designed to track the NASDAQ-100 Index. Under the
proposal, the Fund would buy (i.e., hold a ``long'' position in) and
sell (i.e., hold a ``short'' position in) put and call options. The
strategy of taking both a long position in a security through its ex-
dividend date (the last date an investor can own the security and
receive dividends paid on the security) and a corresponding short
position in the same security immediately thereafter is designed to
allow the Fund to isolate its exposure to the growth of the level of
dividends expected to be paid on such security while minimizing its
exposure to changes in the trading price of such security.
Section 19(b)(2) of the Act \6\ provides that, within 45 days of
the publication of notice of the filing of a proposed rule change, or
within such longer period up to 90 days as the Commission may designate
if it finds such longer period to be appropriate and publishes its
reasons for so finding or as to which the self-regulatory organization
consents, the Commission shall either approve the proposed rule change,
disapprove the proposed rule change, or institute proceedings to
determine whether the proposed rule change should be disapproved. The
Commission is extending this 45-day time period.
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\6\ 15 U.S.C. 78s(b)(2).
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The Commission finds that it is appropriate to designate a longer
period within which to take action on the proposed rule change so that
it has sufficient time to consider the proposed rule change and the
unique nature of the investment strategy of the proposed Fund.
Accordingly, the Commission, pursuant to Section 19(b)(2) of the
Act,\7\ designates July 29, 2014, as the date by which the Commission
should either approve or disapprove or institute proceedings to
determine whether to disapprove the proposed rule change (File Number
SR-NASDAQ-2014-038).
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\7\ Id.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\8\
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\8\ 17 CFR 200.30-3(a)(31).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-14317 Filed 6-18-14; 8:45 am]
BILLING CODE 8011-01-P