[Federal Register Volume 83, Number 37 (Friday, February 23, 2018)]
[Notices]
[Pages 8118-8122]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-03692]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-82730; File No. SR-NASDAQ-2017-131]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Order
Granting Approval of a Proposed Rule Change To List and Trade the
Shares of the Reinhart Intermediate Bond NextShares Fund Under Nasdaq
Rule 5745
February 16, 2018.
I. Introduction
On December 20, 2017, The NASDAQ Stock Market LLC (``Nasdaq'' or
``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 common shares (``Shares'') of
the Reinhart Intermediate Bond NextShares Fund (``Fund'') under Nasdaq
Rule 5745. The proposed rule change was published for comment in the
Federal Register on January 2, 2018.\3\ The Commission received no
comment letters on the proposed rule change. This order grants approval
of 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. 82408 (Dec. 27,
2017), 83 FR 186 (``Notice'').
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II. Exchange's Description of the Proposed Rule Change
The Exchange proposes to list and trade the Shares of the Fund
under Nasdaq Rule 5745, which governs the listing and trading of
Exchange-Traded Managed Fund Shares, as defined in Nasdaq Rule
5745(c)(1). The Fund is a series of Managed Portfolio Series and will
be advised by an investment adviser registered under the Investment
Advisers Act of 1940 (``Advisers Act''), as described below.\4\ The
Exchange represents that Managed Portfolio Series is registered with
the Commission as an open-end investment company and has filed a
Registration Statement with the Commission.\5\ Reinhart Partners, Inc.
(``Adviser'') will be the adviser to the Fund. Quasar Distributors, LLC
will be the principal underwriter and distributor of the Fund's Shares.
U.S. Bancorp Fund Services, LLC will act as the administrator and
accounting agent to the Fund. U.S. Bancorp Fund Services, LLC will act
as transfer agent to the Fund, and U.S. Bank, NA will act as custodian
to the Fund.
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\4\ The Commission has issued an order granting Managed
Portfolio Series and certain affiliates exemptive relief under the
Investment Company Act of 1940. See Investment Company Act Release
No. 32893 (Nov. 28, 2017) (File No. 812-14830).
\5\ See Post-Effective Amendment number 316 to the Registration
Statement on Form N-1A for Managed Portfolio Series dated Oct. 26,
2017 (File Nos. 333-172080 and 811-22525) (``Registration
Statement'').
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The Adviser is not a registered broker-dealer, and is not
affiliated with a broker-dealer. Personnel who make decisions on the
Fund's portfolio composition must be subject to procedures designed to
prevent the use and dissemination of material, non- public information
regarding the open-end fund's portfolio.\6\ In the event that (a) the
Adviser registers as a broker-dealer or becomes newly affiliated with a
broker-dealer, or (b) any new adviser or sub-adviser to the Fund is a
registered broker-dealer or is affiliated with a broker-dealer, such
adviser or sub-adviser will implement and will maintain a fire wall
with respect to its relevant personnel and/or such broker-dealer
affiliate, as applicable, regarding access to information concerning
the composition of, and/or changes to, the Fund's portfolio and will be
subject to procedures designed to prevent the use and dissemination of
material non-public information regarding such portfolio.
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\6\ An investment adviser to an open-end fund is required to be
registered under the Advisers Act. As a result, the Adviser and its
related personnel are subject to the provisions of Rule 204A-1 under
the Advisers Act relating to codes of ethics. This Rule requires
investment advisers to adopt a code of ethics that reflects the
fiduciary nature of the relationship to clients as well as
compliance with other applicable securities laws. Accordingly,
procedures designed to prevent the communication and misuse of non-
public information by an investment adviser must be consistent with
Rule 204A-1 under the Advisers Act. In addition, Rule 206(4)-7 under
the Advisers Act makes it unlawful for an investment adviser to
provide investment advice to clients unless such investment adviser
has (i) adopted and implemented written policies and procedures
reasonably designed to prevent violation, by the investment adviser
and its supervised persons, of the Advisers Act and the Commission
rules adopted thereunder; (ii) implemented, at a minimum, an annual
review regarding the adequacy of the policies and procedures
established pursuant to subparagraph (i) above and the effectiveness
of their implementation; and (iii) designated an individual (who is
a supervised person) responsible for administering the policies and
procedures adopted under subparagraph (i) above.
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The Exchange has made the following representations and statements
in describing the Fund.\7\ According to the Exchange, the Fund will be
actively managed and will pursue the principal investment strategy
described below.\8\
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\7\ The Commission notes that additional information regarding
Managed Portfolio Series, the Fund, and the Shares, including
investment strategies, risks, creation and redemption procedures,
calculation of net asset value (``NAV''), fees, distributions, and
taxes, among other things, can be found in the Notice and the
Registration Statement, as applicable. See supra notes 3 and 5,
respectively, and accompanying text.
\8\ According to the Exchange, additional information regarding
the Fund will be available on a free public website for the Fund
(www.reinhartfunds.com, which may contain links for certain
information to www.nextshares.com) and in the Registration Statement
for the Fund.
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A. Principal Investment Strategy
The Exchange represents that the Fund's investment objective is to
outperform its benchmark, the Barclays Capital Intermediate Government/
Credit Index, measured over an entire market cycle, while maintaining
key risks (interest rate risk, credit risk, structure risk, and
liquidity risk) similar to the benchmark. An entire market cycle refers
to the broad economy transitioning from a peak in economic growth
through a trough and back.
Under normal market conditions, the Reinhart Intermediate Bond
NextShares will invest primarily in investment grade fixed income
securities. The Fund considers a fixed income security to be investment
grade if it is rated within the BBB-category or better by Standard &
Poor's Ratings Services or the Baa3 category or better by Moody's
Investors Services, Inc., or an equivalent rating by another nationally
recognized statistical rating organization, or, if unrated, determined
by the Adviser to be of comparable quality.
[[Page 8119]]
The Fund will normally invest within the intermediate term
structure of the yield curve. The average-dollar weighted maturity of
the securities in which the Fund expects to invest will generally range
from 3 to 10 years. The Fund's investments in fixed income securities
may include government or agency securities or obligations, corporate
bonds, mortgage-backed securities, asset-backed securities, municipal
bonds, revenue bonds, variable and floating rate securities, zero
coupon bonds and collateralized mortgage obligations (``CMOs'').
Normally, the Reinhart Intermediate Bond NextShares will invest at
least 80% of its total assets in fixed income securities.
B. Portfolio Disclosure and Composition File
Consistent with the disclosure requirements that apply to
traditional open-end investment companies, a complete list of current
Fund portfolio positions will be made available at least once each
calendar quarter, with a reporting lag of not more than 60 days. The
Fund may provide more frequent disclosures of portfolio positions at
its discretion.
As defined in Nasdaq Rule 5745(c)(3), the Composition File is the
specified portfolio of securities and/or cash that the Fund will accept
as a deposit in issuing a creation unit of Shares, and the specified
portfolio of securities and/or cash that the Fund will deliver in a
redemption of a creation unit of Shares. The Composition File will be
disseminated through the National Securities Clearing Corporation once
each business day before the open of trading in Shares on such day and
also will be made available to the public each day on a free
website.\9\ Because the Fund will seek to preserve the confidentiality
of its current portfolio trading program, the Fund's Composition File
generally will not be a pro rata reflection of the Fund's investment
positions.
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\9\ The free public website containing the Composition File will
be www.nextshares.com.
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Each security included in the Composition File will be a current
holding of the Fund, but the Composition File generally will not
include all of the securities in the Fund's portfolio or match the
weightings of the included securities in the portfolio. Securities that
the Adviser is in the process of acquiring for the Fund generally will
not be represented in the Fund's Composition File until the purchase
has been completed. Similarly, securities that are held in the Fund's
portfolio but in the process of being sold may not be removed from its
Composition File until the sale program is substantially completed. To
the extent that the Fund creates or redeems Shares in kind, it will use
cash amounts to supplement the in-kind transactions to the extent
necessary to ensure that creation units are purchased and redeemed at
NAV. The Composition File also may consist entirely of cash, in which
case it will not include any of the securities in the Fund's
portfolio.\10\
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\10\ In determining whether the Fund will issue or redeem
creation units entirely on a cash basis, the key consideration will
be the benefit that would accrue to the Fund and its investors. For
instance, in bond transactions, the Adviser may be able to obtain
better execution for the Fund than authorized participants because
of the Adviser's size, experience and potentially stronger
relationships in the fixed-income markets.
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C. Intraday Indicative Value
An estimated value of an individual Share, defined in Nasdaq Rule
5745(c)(2) as the ``Intraday Indicative Value (``IIV''),'' will be
calculated and disseminated at intervals of not more than 15 minutes
throughout the Regular Market Session \11\ when Shares trade on the
Exchange. The Exchange will obtain a representation from the issuer of
the Shares that the IIV for the Fund will be calculated on an intraday
basis and provided to Nasdaq for dissemination via the Nasdaq Global
Index Service.
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\11\ See Nasdaq Rule 4120(b)(4) (describing the three trading
sessions on the Exchange: (1) Pre-Market Session from 4:00 a.m. to
9:30 a.m. Eastern Time; (2) Regular Market Session from 9:30 a.m. to
4:00 p.m. or 4:15 p.m. Eastern Time; and (3) Post-Market Session
from 4:00 p.m. or 4:15 p.m. to 8:00 p.m. Eastern Time).
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The IIV for the Fund will be based on current information regarding
the value of the securities and other assets held by the Fund.\12\ The
purpose of the IIV for the Fund is to enable investors to estimate the
next-determined NAV so they can determine the number of Shares to buy
or sell if they want to transact in an approximate dollar amount.\13\
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\12\ IIVs for the Fund disseminated throughout each trading day
will be based on the same portfolio as used to calculate that day's
NAV. The Fund will reflect purchases and sales of portfolio
positions in its NAV the next business day after trades are
executed.
\13\ Because, in NAV-Based Trading (as defined herein), prices
of executed trades are not determined until the reference NAV is
calculated, buyers and sellers of Shares during the trading day will
not know the final value of their purchases and sales until the end
of the trading day. The Exchange represents that the Fund's
Registration Statement, free public website and any advertising or
marketing materials will include prominent disclosure of this fact.
The Exchange represents that although the IIVs for the Fund may
provide useful estimates of the value of intraday trades, they
cannot be used to calculate with precision the dollar value of the
Shares to be bought or sold.
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D. NAV-Based Trading
Because Shares will be listed and traded on the Exchange, Shares
will be available for purchase and sale on an intraday basis. Shares
will be purchased and sold in the secondary market at prices directly
linked to the Fund's next-determined NAV using a trading protocol
called ``NAV-Based Trading.'' All bids, offers and execution prices of
Shares will be expressed as a premium/discount (which may be zero) to
the Fund's next-determined NAV (e.g., NAV -$0.01, NAV +$0.01).\14\ The
Fund's NAV will be determined daily (on each day the New York Stock
Exchange is open for trading), as of 4:00 p.m. Eastern Time. Trade
executions will be binding at the time orders are matched on Nasdaq's
facilities, with the transaction prices contingent upon the
determination of NAV. Nasdaq represents that the Shares listed on the
Exchange will have a unique identifier associated with its ticker
symbol, which will indicate that the Shares are traded using NAV-Based
Trading.
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\14\ According to the Exchange, the premium or discount to NAV
at which Share prices are quoted and transactions are executed will
vary depending on market factors, including the balance of supply
and demand for Shares among investors, transaction fees and other
costs in connection with creating and redeeming creation units of
Shares, the cost and availability of borrowing Shares, competition
among market makers, the Share inventory positions and inventory
strategies of market makers, the profitability requirements and
business objectives of market makers, and the volume of Share
trading.
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According to the Exchange, member firms will utilize certain
existing order types and interfaces to transmit Share bids and offers
to Nasdaq, which will process Share trades like trades in shares of
other listed securities.\15\ In the systems used to transmit and
process transactions in Shares, the Fund's next-determined NAV will be
represented by a proxy price (e.g., 100.00) and a premium/discount of a
stated amount to the next-determined NAV to be represented by the same
increment/decrement from the proxy price used to denote NAV (e.g., NAV
-$0.01 would be represented as 99.99; NAV +$0.01 as 100.01).
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\15\ According to the Exchange, all orders to buy or sell Shares
that are not executed on the day the order is submitted will be
automatically cancelled as of the close of trading on such day.
Prior to the commencement of trading in the Fund, the Exchange will
inform its members in an Information Circular of the effect of this
characteristic on existing order types.
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To avoid potential investor confusion, Nasdaq represents that it
will work with member firms and providers of market data services to
seek to ensure that representations of intraday bids, offers and
execution prices of Shares that are
[[Page 8120]]
made available to the investing public follow the ``NAV -$0.01/NAV
+$0.01'' (or similar) display format. Nasdaq makes available to member
firms and market data services certain proprietary data feeds that are
designed to supplement the market information disseminated through the
consolidated tape (``Consolidated Tape''). Specifically, the Exchange
will use the Nasdaq Basic and Nasdaq Last Sale data feeds to
disseminate intraday price and quote data for Shares in real time in
the ``NAV -$0.01/NAV +$0.01'' (or similar) display format. Member firms
may use the Nasdaq Basic and Nasdaq Last Sale data feeds to source
intraday Share prices for presentation to the investing public in the
``NAV -$0.01/NAV +$0.01'' (or similar) display format.
Alternatively, member firms may source intraday Share prices in
proxy price format from the Consolidated Tape and other Nasdaq data
feeds (e.g., Nasdaq TotalView and Nasdaq Level 2) and use a simple
algorithm to convert prices into the ``NAV -$0.01/NAV +$0.01'' (or
similar) display format. Prior to the commencement of trading in the
Fund, the Exchange will inform its members in an Information Circular
of the identities of the specific Nasdaq data feeds from which intraday
Share prices in proxy price format may be obtained.
III. Discussion and Commission Findings
After careful review, the Commission finds that the Exchange's
proposal to list and trade the Shares is consistent with the Act \16\
and the rules and regulations thereunder applicable to a national
securities exchange.\17\ In particular, the Commission finds that the
proposed rule change is consistent with Section 6(b)(5) of the Act,\18\
which requires, among other things, that the Exchange's rules be
designed to prevent fraudulent and manipulative acts and practices, to
promote just and equitable principles of trade, to foster cooperation
and coordination with persons engaged in facilitating transactions in
securities, to remove impediments to and perfect the mechanism of a
free and open market and a national market system, and, in general, to
protect investors and the public interest.
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\16\ 15 U.S.C. 78f.
\17\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
\18\ 15 U.S.C. 78f(b)(5).
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The Shares will be subject to Nasdaq Rule 5745, which sets forth
the initial and continued listing criteria applicable to Exchange-
Traded Managed Fund Shares. A minimum of 50,000 Shares and no less than
two creation units of the Fund will be outstanding at the commencement
of trading on the Exchange.
Nasdaq deems the Shares to be equity securities, thus rendering
trading in the Shares subject to Nasdaq's existing rules governing the
trading of equity securities. Every order to trade Shares of the Fund
is subject to the proxy price protection threshold of plus/minus $1.00,
which determines the lower and upper thresholds for the life of the
order and provides that the order will be cancelled at any point if it
exceeds $101.00 or falls below $99.00, the established thresholds.\19\
With certain exceptions, each order also must contain the applicable
order attributes, including routing instructions and time-in-force
information, as described in Nasdaq Rule 4703.\20\
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\19\ See Nasdaq Rule 5745(g).
\20\ See Nasdaq Rule 5745(b)(6).
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Nasdaq also represents that trading in the Shares will be subject
to the existing trading surveillances, administered by both Nasdaq and
the Financial Industry Regulatory Authority, Inc. (``FINRA'') on behalf
of the Exchange, which are designed to detect violations of Exchange
rules and applicable federal securities laws.\21\ The Exchange
represents that these surveillance procedures are adequate to properly
monitor trading of Shares on the Exchange and to deter and detect
violations of Exchange rules and applicable federal securities laws.
FINRA, on behalf of the Exchange, will communicate as needed with other
markets and other entities that are members of the Intermarket
Surveillance Group (``ISG'') \22\ regarding trading in Shares, and in
exchange-traded securities and instruments held by the Fund (to the
extent such exchange-traded securities and instruments are known
through the publication of the Composition File and periodic public
disclosures of the Fund's portfolio holdings), and FINRA may obtain
trading information regarding such trading from other markets and other
entities. In addition, the Exchange may obtain information regarding
trading in Shares, and in exchange-traded securities and instruments
held by the Fund (to the extent such exchange-traded securities and
instruments are known through the publication of the Composition File
and periodic public disclosures of the Fund's portfolio holdings), from
markets and other entities that are members of ISG, which includes
securities and futures exchanges, or with which the Exchange has in
place a comprehensive surveillance sharing agreement. Moreover, FINRA,
on behalf of the Exchange, will be able to access, as needed, trade
information for certain fixed income securities held by the Fund
reported to FINRA's Trade Reporting and Compliance Engine
(``TRACE'').\23\
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\21\ The Exchange states that FINRA provides surveillance of
trading on the Exchange pursuant to a regulatory services agreement
and that the Exchange is responsible for FINRA's performance under
this regulatory services agreement.
\22\ For a list of the current members of ISG, see
www.isgportal.org. The Exchange notes that not all components of the
Fund's portfolio may trade on markets that are members of ISG or
with which the Exchange has in place a comprehensive surveillance
sharing agreement.
\23\ For municipal securities, trade information can generally
be found on the Electronic Municipal Market Access (``EMMA'') of the
Municipal Securities Rulemaking Board (``MSRB'').
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Prior to the commencement of trading in the Fund, the Exchange will
inform its members in an Information Circular of the special
characteristics and risks associated with trading the Shares of the
Fund. Specifically, the Information Circular will discuss the
following: (a) The procedures for purchases and redemptions of Shares
in creation units (and noting that Shares are not individually
redeemable); (b) Nasdaq Rule 2111A, which imposes suitability
obligations on Nasdaq members with respect to recommending transactions
in Shares to customers; (c) how information regarding the IIV and
Composition File is disseminated; (d) the requirement that members
deliver a prospectus to investors purchasing Shares prior to or
concurrently with the confirmation of a transaction; and (e)
information regarding NAV-Based Trading protocols.
The Information Circular also will identify the specific Nasdaq
data feeds from which intraday Share prices in proxy price format may
be obtained. As noted above, all orders to buy or sell Shares that are
not executed on the day the order is submitted will be automatically
cancelled as of the close of trading on such day, and the Information
Circular will discuss the effect of this characteristic on existing
order types. In addition, Nasdaq intends to provide its members with a
detailed explanation of NAV-Based Trading through a Trader Alert issued
prior to the commencement of trading in Shares on the Exchange.
Nasdaq states that the Adviser is not a registered broker-dealer,
and is not affiliated with a broker-dealer. Personnel who make
decisions on the Fund's portfolio composition must be subject to
procedures designed to prevent the use and dissemination of
[[Page 8121]]
material, non-public information regarding the open-end fund's
portfolio. The Exchange represents that the Reporting Authority \24\
also will implement and maintain, or will ensure that the Composition
File will be subject to, procedures designed to prevent the use and
dissemination of material non-public information regarding the Fund's
portfolio positions and changes in the positions. In the event that (a)
the Adviser registers as a broker-dealer or becomes newly affiliated
with a broker-dealer, or (b) any new adviser or sub-adviser to the Fund
is a registered broker-dealer or is affiliated with a broker-dealer,
such adviser or sub-adviser will implement and will maintain a fire
wall with respect to its relevant personnel and/or such broker-dealer
affiliate, as applicable, regarding access to information concerning
the composition of, and/or changes to, the Fund's portfolio \25\ and
will be subject to procedures designed to prevent the use and
dissemination of material, non-public information regarding such
portfolio.
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\24\ See Nasdaq Rule 5745(c)(4).
\25\ The Exchange further represents that an investment adviser
to an open-end fund is required to be registered under the Advisers
Act. See supra note 6.
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The Commission finds that the proposal to list and trade the Shares
on the Exchange is consistent with Section 11A(a)(1)(C)(iii) of the
Act,\26\ which sets forth Congress' finding that it is in the public
interest and appropriate for the protection of investors and the
maintenance of fair and orderly markets to assure the availability to
brokers, dealers, and investors of information with respect to
quotations for, and transactions in, securities. Information regarding
NAV-Based Trading prices, best bids and offers for Shares, and volume
of Shares traded will be continuously available on a real-time basis
throughout each trading day on brokers' computer screens and other
electronic services. All bids and offers for Shares and all Share trade
executions will be reported intraday in real time by the Exchange to
the Consolidated Tape \27\ and separately disseminated to member firms
and market data services through the Exchange data feeds listed above.
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\26\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
\27\ Due to systems limitations, the Consolidated Tape will
report intraday execution prices and quotes for Shares using a proxy
price format. Nasdaq has represented that it will separately report
real-time execution prices and quotes to member firms and providers
of market data services in the ``NAV -$0.01/NAV +$0.01'' (or
similar) display format, and otherwise seek to ensure that
representations of intraday bids, offers and execution prices for
Shares that are made available to the investing public follow the
same display format.
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The Commission notes that once the Fund's daily NAV has been
calculated and disseminated, Nasdaq will price each Share trade entered
into during the day at the Fund's NAV plus/minus the trade's executed
premium/discount. Using the final trade price, each executed Share
trade will then be disseminated to member firms and market data
services via a File Transfer Protocol (``FTP'') file to be created for
exchange-traded managed funds and confirmed to the member firms
participating in the trade to supplement the previously provided
information to include final pricing.\28\
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\28\ According to Nasdaq, FTP is a standard network protocol
used to transfer computer files on the internet. Nasdaq will arrange
for the daily dissemination of an FTP file with executed Share
trades to member firms and market data services.
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The Exchange will obtain a representation from the issuer of the
Shares that the NAV per Share will be calculated daily (on each
business day the New York Stock Exchange is open for trading) and
provided to Nasdaq via the Mutual Fund Quotation Service (``MFQS'') by
the fund accounting agent. As soon as the NAV is entered into MFQS,
Nasdaq will disseminate the NAV to market participants and market data
vendors via the Mutual Fund Dissemination Service so all firms will
receive the NAV per Share at the same time.
The Exchange further represents that it may consider all relevant
factors in exercising its discretion to halt or suspend trading in the
Shares. The Exchange will halt trading in the Shares under the
conditions specified in Nasdaq Rule 4120 and in Nasdaq Rule
5745(d)(2)(C). Additionally, the Exchange may cease trading the Shares
if other unusual conditions or circumstances exist that, in the opinion
of the Exchange, make further dealings on the Exchange detrimental to
the maintenance of a fair and orderly market. To manage the risk of a
non-regulatory Share trading halt, Nasdaq has in place back-up
processes and procedures to ensure orderly trading. Prior to the
commencement of market trading in Shares, the Fund will be required to
establish and maintain a free public website through which its current
prospectus may be downloaded.\29\ The free public website will include
directly or through a link additional Fund information updated on a
daily basis, including the prior business day's NAV, and the following
trading information for such business day expressed as premiums/
discounts to NAV: (a) Intraday high, low, average and closing prices of
Shares in Exchange trading; (b) the midpoint of the highest bid and
lowest offer prices as of the close of Exchange trading, expressed as a
premium/discount to NAV (``Closing Bid/Ask Midpoint''); and (c) the
spread between highest bid and lowest offer prices as of the close of
Exchange trading (``Closing Bid/Ask Spread.''). The free public website
will also contain charts showing the frequency distribution and range
of values of trading prices, Closing Bid/Ask Midpoints and Closing Bid/
Ask Spreads over time.
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\29\ The free public website containing this information will be
www.reinhartfunds.com.
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The Exchange represents that all statements and representations
made in this filing regarding (a) the description of the portfolio or
reference assets, (b) limitations on portfolio holdings or reference
assets, (c) dissemination and availability of the reference asset or
intraday indicative values, or (d) the applicability of Exchange
listing rules shall constitute continued listing requirements for
listing the Shares on the Exchange. In addition, 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 the Nasdaq 5800 Series.
The approval order is based on all of the Exchange's
representations, including those set forth above and in the Notice. In
particular, the Commission notes that, although the Shares will be
available for purchase and sale on an intraday basis, the Shares will
be purchased and sold at prices directly linked to the Fund's next-
determined NAV. In addition, the Commission notes that the Fund will
not invest in assets that have not been described in this proposed rule
change. Further, the Commission notes that the Fund and the Shares must
comply with the requirements of Nasdaq Rule 5745 and the conditions set
forth in this proposed rule change to be listed and traded on the
Exchange on an initial and continuing basis.
For the foregoing reasons, the Commission finds that the proposed
rule change is consistent with Section 6(b)(5) \30\ and Section
11A(a)(1)(C)(iii) of
[[Page 8122]]
the Act \31\ and the rules and regulations thereunder applicable to a
national securities exchange.
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\30\ 15 U.S.C. 78f(b)(5).
\31\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
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IV. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\32\ that the proposed rule change (SR-NASDAQ-2017-131) be, and it
hereby is, approved.
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\32\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\33\
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\33\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-03692 Filed 2-22-18; 8:45 am]
BILLING CODE 8011-01-P