81 FR 7620 - Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Include NextShares in the Lead Market Maker Program
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 29 (February 12, 2016)
Federal Register Volume 81, Issue 29 (February 12, 2016)
| Page Range | 7620-7623 | |
| FR Document | 2016-02840 |
[Federal Register Volume 81, Number 29 (Friday, February 12, 2016)] [Notices] [Pages 7620-7623] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-02840] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-77080; File No. SR-NASDAQ-2016-019] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Include NextShares in the Lead Market Maker Program February 8, 2016. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that on February 2, 2016, The NASDAQ Stock Market LLC (``Nasdaq'') filed with the Securities and Exchange Commission (``SEC'' or ``Commission'') the proposed rule change as described in Items I and II below, which Items have been prepared by Nasdaq. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change Nasdaq proposes to add NextShares to the list of securities eligible to be Qualified Securities under the Lead Market Maker Program of Rule 7014(f) and to make a technical change to the rule. Nasdaq will implement the proposed rule change on February 26, 2016. The text of the proposed rule change is available on the Nasdaq's Web site at http://nasdaq.cchwallstreet.com, at the principal office of Nasdaq, 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, Nasdaq 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 these statements may be examined at the places specified in Item IV below. Nasdaq has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose Background Nasdaq is proposing to include NextShares, listed under Rule 5745, to the list of securities eligible to be treated as a Qualified Security under the Lead Market Maker (``LMM'') Program of Rule 7014(f). The LMM Program is designed to provide incentive to market makers to make markets in certain relatively illiquid exchange-traded products (``ETPs''). To achieve this goal, Nasdaq provides credits to a designated LMM for execution of a Qualified Security. Under Rule 7014(f)(1), a security may be designated as a ``Qualified Security'' if: (A) It is an exchange-traded fund or index-linked security listed on Nasdaq pursuant to Nasdaq Rules 5705, 5710, 5720, or 5735; and (B) it has at least one LMM. An LMM is a registered Nasdaq market maker for a Qualified Security that has committed to maintain minimum performance standards, which are based on certain percentages [[Page 7621]] of time that the LMM is quoting at the national best bid and offer (``NBBO''). An LMM is selected by Nasdaq based on several factors including, but not limited to, experience with making markets in exchange-traded funds and index-linked securities, adequacy of capital, willingness to promote Nasdaq as a marketplace, issuer preference, operational capacity, support personnel, and history of adherence to Nasdaq rules and securities laws. Nasdaq may limit the number of LMMs in a security, or modify a previously established limit, upon prior written notice to members. Proposed Change to Rule 7014(f) As previously noted, Nasdaq currently includes in the program Portfolio Depository Receipts, Index Fund Shares, Securities Linked to the Performance of Indexes and Commodities (Including Currencies), Trust Issued Receipts, and Managed Fund Shares. Nasdaq is proposing to add another ETP, NextShares, as eligible to be a Qualified Security under the LMM Program. The term NextShares means a security that (a) represents an interest in a registered investment company (``NextShares Fund'') organized as an open-end management investment company that invests in a portfolio of securities and other assets selected and managed by the NextShares Fund's investment adviser consistent with the NextShares Fund's investment objectives and policies; (b) is issued in a specified aggregate unit quantity in return for a deposit of a specified portfolio of securities and/or a cash amount with a value per NextShare equal to the NextShares Fund's net asset value; (c) when aggregated in the same specified unit quantity, may be redeemed for a specified portfolio of securities and/or cash with a value per NextShare equal to the NextShares Fund's net asset value; and (d) is traded on Nasdaq or another national securities exchange using net asset value (``NAV'')- Based Trading.\3\ NextShares will trade on Nasdaq using a new trading protocol called ``NAV-Based Trading.'' In NAV-Based Trading, all bids, offers and execution prices will be expressed as a premium/discount (which may be zero) to the NextShares' next-determined NAV (e.g., NAV-$ 0.01; NAV+$ 0.01). A NextShares' next-determined NAV will be represented at the beginning of each trading day by a proxy price of 100.00. A NextShares' NAV will be determined each business day, normally no later than 6:45 p.m. Eastern Time. At this time, the day's premiums/discounts associated with the day's transactions will be applied to the day's NAV to create the final transaction price. Trade executions using NAV-Based Trading will be binding at the time orders are matched on Nasdaq's facilities, with the transaction prices contingent upon the determination of the NextShares' NAV at the end of the business day. Nasdaq represents that an [sic] NextShares' 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 [sic] 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). To convert proxy prices used to represent intraday bids, offers, and execution prices into prices expressed in relation to the next-determined NAV, member firms would subtract from the reported proxy price (e.g., 99.99) the proxy for NAV (e.g., 100.00) and insert ``NAV'' in front of the calculated number expressed in dollars (e.g., 99.99-100.00 = -0.01, expressed as ``NAV-$0.01''). Nasdaq will report intraday bids, offers, and trades for NextShares in real-time to the Consolidated Tape using the proxy price format. In addition, Nasdaq will disseminate intraday NextShares bids, offers, and trades through a proprietary exchange data feed using the NAV + $.01/ NAV-$.01 format. Nasdaq will also provide the member firms participating in each NextShares trade with a contemporaneous notice of trade execution, indicating the number NextShares bought or sold and the executed premium/discount to NAV. All orders to buy or sell NextShares that are not executed on the day the order is submitted would be automatically cancelled as of the close of trading on such day.\4\ --------------------------------------------------------------------------- \3\ See Rule 5745(c)(1). \4\ For a description of NAV-Based Trading and proxy price, see Rule 5745(b)(3); see also Securities Exchange Act Release No. 73562 (November 7, 2014), 79 FR 68309 (November 14, 2014) (SR-NASDAQ-2014- 020) and Securities Exchange Act Release No. 75815 (September 2, 2015), 80 FR 54349 (September 9, 2015) (SR-NASDAQ-2015-103). --------------------------------------------------------------------------- As a new and novel ETP, Nasdaq is proposing to include NextShares in its LMM Program to provide incentive to market makers to make markets in NextShares, which will help to ensure that adequate liquidity is provided in the novel product. This will benefit market participants interested in buying or selling these ETPs. As noted above, the LMM Program's performance criteria are based on an LMM's quoting at the NBBO. For purposes of the LMM Program, Nasdaq will use a NextShares' best proxy price bid and offer in comparison to an LMM's quoting at the time to determine whether it meets the performance criteria. Nasdaq will list and trade the first NextShares product on February 26, 2016 and plans to include NextShares in the LMM Program as Qualified Securities effective that day. Nasdaq is also proposing to make a technical change to rule text in Rule 7014(f). Currently, Nasdaq describes Qualified Securities as being ``exchange-traded fund or index-linked security listed on Nasdaq pursuant to Nasdaq Rules 5705, 5710, 5720, or 5735.'' \5\ Nasdaq is proposing to replace references to exchange-traded funds and index- linked securities under subparagraphs (f)(1)(A) and (f)(2) of Rule 7014 with the term ``exchange-traded product,'' which is a broader term that incorporates exchange-traded funds, index-linked securities, and NextShares within its meaning. The new term does not change what is eligible to be a Qualified Security under the rule. --------------------------------------------------------------------------- \5\ Rule 7014(f)(1)(A). --------------------------------------------------------------------------- 2. Statutory Basis Nasdaq believes that the proposed rule change is consistent with the provisions of Section 6 of the Act,\6\ in general, and with Sections 6(b)(4) and 6(b)(5) of the Act,\7\ in particular, in that it provides for the equitable allocation of reasonable dues, fees and other charges among its members and issuers and other persons using its facilities, and is 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 regulating, clearing, settling, processing information with respect to, and 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; and is not designed to permit unfair discrimination between customers, issuers, brokers, or dealers. --------------------------------------------------------------------------- \6\ 15 U.S.C. 78f. \7\ 15 U.S.C. 78f(b)(4) and (5). --------------------------------------------------------------------------- Nasdaq believes that inclusion of NextShares in the LMM Program is reasonable because the new ETP is novel, and offering incentives to market makers to provide liquidity in the product will help ensure its successful launch. The LMM Program is designed to improve liquidity in ETPs by allocating rebates to LMMs that quote at the national best bid and best offer for certain percentages of time. As additional incentive, the LMM Program [[Page 7622]] also provides different levels of fee caps on the fees assessed for participation in the Opening and Closing Crosses on Nasdaq. The LMM Program has been successful at improving market quality in the securities covered by the program. Thus Nasdaq believes the program will be effective at providing incentive to market makers on Nasdaq to become LMMs in NextShares thereby improving market quality in those securities. Nasdaq believes that the proposed change to Rule 7014(f) is an equitable allocation and is not unfairly discriminatory because all market makers that are elected to be designated as LMMs and meet the minimum performance criteria have the opportunity to qualify for a rebate and fee cap under the program in NextShares. Nasdaq believes that the proposed rule change will protect investors and the public interest because it may increase market maker participation in NextShares, which would in turn make the market in NextShares deeper and more liquid than it would be if NextShares were not included in the program. Deep and liquid markets protect investors and promote the public interest by allowing market participants to buy and sell securities quickly at competitive prices. Lastly, Nasdaq believes that the proposed use of the term exchange- traded product in lieu of the terms exchange-traded fund and index- linked security is consistent with the protection of investors and the public interest because it clarifies the rule text with a more commonly-used term to describe the securities eligible to be Qualified Securities under the LMM Program and does not change the type of securities eligible to be included in the program. B. Self-Regulatory Organization's Statement on Burden on Competition Nasdaq does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act, as amended. Specifically, the change is designed to improve market quality through the application of an ETP incentive program to a type of ETP that is currently not part of the program. A new ETP product, NextShares, may have comparatively low liquidity upon listing. Including NextShares in the LMM Program is designed to improve market quality in NextShares. Lastly, to the extent market quality in NextShares improves from inclusion in the LMM Program, the proposed change may promote competition among exchanges for new NextShares listings and similar incentive programs, to the benefit of all market participants trading NextShares. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act \8\ and Rule 19b- 4(f)(6) thereunder.\9\ --------------------------------------------------------------------------- \8\ 15 U.S.C. 78s(b)(3)(A). \9\ 17 CFR 240.19b-4(f)(6). As required under Rule 19b- 4(f)(6)(iii), the Exchange provided the Commission with written notice of its intent to file the proposed rule change, along with a brief description and the text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. --------------------------------------------------------------------------- A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the Act \10\ normally does not become operative for 30 days after the date of its filing. However, Rule 19b-4(f)(6)(iii) \11\ permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange has asked the Commission to waive the 30-day operative delay so that NextShares may be included as Qualified Securities in the LMM Program on February 26, 2016, the first day of trading for NextShares on Nasdaq. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest because it could allow NextShares investors to benefit from potential increased liquidity that an LMM could provide in a Qualified Security as early as the first day of trading for NextShares on Nasdaq. Therefore, the Commission hereby waives the operative delay and designates the proposed rule change operative upon filing.\12\ --------------------------------------------------------------------------- \10\ 17 CFR 240.19b-4(f)(6). \11\ 17 CFR 240.19b-4(f)(6)(iii). \12\ For purposes only of waiving the 30-day operative delay, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). --------------------------------------------------------------------------- At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or 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 CommentsUse the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or Send an email to [email protected]. Please include File Number SR-NASDAQ-2016-019 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-NASDAQ-2016-019. 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 Web site (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 Web site 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 Nasdaq. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR- [[Page 7623]] NASDAQ-2016-019 and should be submitted on or before March 4, 2016. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\13\ --------------------------------------------------------------------------- \13\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Robert W. Errett, Deputy Secretary. [FR Doc. 2016-02840 Filed 2-11-16; 8:45 am] BILLING CODE 8011-01-P
![7620 Federal Register / Vol. 81, No. 29 / Friday, February 12, 2016 / Notices
Funds’’) to acquire shares of Underlying are the concerns underlying the limits publishing this notice to solicit
Funds 2 in excess of the limits in in sections 12(d)(1)(A), (B), and (C) of comments on the proposed rule change
sections 12(d)(1)(A) and (C) of the Act the Act. from interested persons.
and (b) the Underlying Funds that are 3. Section 12(d)(1)(J) of the Act
provides that the Commission may I. Self-Regulatory Organization’s
registered open-end investment
exempt any person, security, or Statement of the Terms of Substance of
companies or series thereof, their
principal underwriters and any broker transaction, or any class or classes of the Proposed Rule Change
or dealer registered under the Exchange persons, securities, or transactions, from Nasdaq proposes to add NextShares to
Act to sell shares of the Underlying any provision of section 12(d)(1) if the the list of securities eligible to be
Fund to the Fund of Funds in excess of exemption is consistent with the public Qualified Securities under the Lead
the limits in section 12(d)(1)(B) of the interest and the protection of investors. Market Maker Program of Rule 7014(f)
Act.3 Applicants also request an order of Section 17(b) of the Act authorizes the and to make a technical change to the
exemption under sections 6(c) and 17(b) Commission to grant an order rule. Nasdaq will implement the
of the Act from the prohibition on permitting a transaction otherwise proposed rule change on February 26,
certain affiliated transactions in section prohibited by section 17(a) if it finds 2016.
17(a) of the Act to the extent necessary that (a) the terms of the proposed The text of the proposed rule change
to permit the Underlying Funds to sell transaction are fair and reasonable and is available on the Nasdaq’s Web site at
their shares to, and redeem their shares do not involve overreaching on the part http://nasdaq.cchwallstreet.com, at the
from, the Funds of Funds.4 Applicants of any person concerned; (b) the principal office of Nasdaq, and at the
state that such transactions will be proposed transaction is consistent with Commission’s Public Reference Room.
consistent with the policies of each the policies of each registered
II. Self-Regulatory Organization’s
Fund of Funds and each Underlying investment company involved; and (c)
the proposed transaction is consistent Statement of the Purpose of, and
Fund and with the general purposes of Statutory Basis for, the Proposed Rule
the Act and will be based on the net with the general purposes of the Act.
Section 6(c) of the Act permits the Change
asset values of the Underlying Funds.
2. Applicants agree that any order Commission to exempt any persons or In its filing with the Commission,
granting the requested relief will be transactions from any provision of the Nasdaq included statements concerning
subject to the terms and conditions Act if such exemption is necessary or the purpose of and basis for the
stated in the application. Such terms appropriate in the public interest and proposed rule change and discussed any
and conditions are designed to, among consistent with the protection of comments it received on the proposed
other things, help prevent any potential investors and the purposes fairly rule change. The text of these statements
(i) undue influence over an Underlying intended by the policy and provisions of may be examined at the places specified
Fund that is not in the same ‘‘group of the Act. in Item IV below. Nasdaq has prepared
investment companies’’ as the Fund of For the Commission, by the Division of summaries, set forth in sections A, B,
Funds through control or voting power, Investment Management, pursuant to and C below, of the most significant
or in connection with certain services, delegated authority. aspects of such statements.
transactions, and underwritings, (ii) Robert W. Errett, A. Self-Regulatory Organization’s
excessive layering of fees, and (iii) Deputy Secretary. Statement of the Purpose of, and
overly complex fund structures, which [FR Doc. 2016–02834 Filed 2–11–16; 8:45 am] Statutory Basis for, the Proposed Rule
BILLING CODE 8011–01–P Change
investment companies’’ as the Trusts (each, a
‘‘Fund’’). For purposes of the requested order, 1. Purpose
‘‘successor’’ is limited to an entity that results from
a reorganization into another jurisdiction or a SECURITIES AND EXCHANGE Background
change in the type of business organization. For COMMISSION
purposes of the request for relief, the term ‘‘group
Nasdaq is proposing to include
of investment companies’’ means any two or more [Release No. 34–77080; File No. SR– NextShares, listed under Rule 5745, to
registered investment companies, including closed- NASDAQ–2016–019] the list of securities eligible to be treated
end investment companies, that hold themselves as a Qualified Security under the Lead
out to investors as related companies for purposes Self-Regulatory Organizations; The Market Maker (‘‘LMM’’) Program of Rule
of investment and investor services. NASDAQ Stock Market LLC; Notice of
2 Certain of the Underlying Funds have obtained 7014(f).
Filing and Immediate Effectiveness of The LMM Program is designed to
exemptions from the Commission necessary to
permit their shares to be listed and traded on a Proposed Rule Change To Include provide incentive to market makers to
national securities exchange at negotiated prices NextShares in the Lead Market Maker make markets in certain relatively
and, accordingly, to operate as an exchange-traded Program illiquid exchange-traded products
fund (‘‘ETF’’).
3 Applicants do not request relief for the Funds February 8, 2016. (‘‘ETPs’’). To achieve this goal, Nasdaq
of Funds to invest in reliance on the order in Pursuant to Section 19(b)(1) of the provides credits to a designated LMM
closed-end investment companies that are not listed Securities Exchange Act of 1934 for execution of a Qualified Security.
and traded on a national securities exchange.
4 A Fund of Funds generally would purchase and (‘‘Act’’),1 and Rule 19b–4 thereunder,2 Under Rule 7014(f)(1), a security may be
sell shares of an Underlying Fund that operates as notice is hereby given that on February designated as a ‘‘Qualified Security’’ if:
an ETF through secondary market transactions 2, 2016, The NASDAQ Stock Market (A) It is an exchange-traded fund or
asabaliauskas on DSK9F6TC42PROD with NOTICES2
rather than through principal transactions with the LLC (‘‘Nasdaq’’) filed with the Securities index-linked security listed on Nasdaq
Underlying Fund. Applicants nevertheless request pursuant to Nasdaq Rules 5705, 5710,
relief from section 17(a) to permit a Fund of Funds
and Exchange Commission (‘‘SEC’’ or
to purchase or redeem shares from the ETF. A Fund ‘‘Commission’’) the proposed rule 5720, or 5735; and (B) it has at least one
of Funds will purchase and sell shares of an change as described in Items I and II LMM.
Underlying Fund that is a closed-end fund through below, which Items have been prepared An LMM is a registered Nasdaq
secondary market transactions at market prices market maker for a Qualified Security
rather than through principal transactions with the
by Nasdaq. The Commission is
closed-end fund. Accordingly, applicants are not
that has committed to maintain
requesting section 17(a) relief with respect to 1 15 U.S.C. 78s(b)(1). minimum performance standards,
transactions in shares of closed-end funds. 2 17 CFR 240.19b–4. which are based on certain percentages
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![Federal Register / Vol. 81, No. 29 / Friday, February 12, 2016 / Notices 7621
of time that the LMM is quoting at the premiums/discounts associated with the best proxy price bid and offer in
national best bid and offer (‘‘NBBO’’). day’s transactions will be applied to the comparison to an LMM’s quoting at the
An LMM is selected by Nasdaq based on day’s NAV to create the final transaction time to determine whether it meets the
several factors including, but not price. Trade executions using NAV- performance criteria. Nasdaq will list
limited to, experience with making Based Trading will be binding at the and trade the first NextShares product
markets in exchange-traded funds and time orders are matched on Nasdaq’s on February 26, 2016 and plans to
index-linked securities, adequacy of facilities, with the transaction prices include NextShares in the LMM
capital, willingness to promote Nasdaq contingent upon the determination of Program as Qualified Securities effective
as a marketplace, issuer preference, the NextShares’ NAV at the end of the that day.
operational capacity, support personnel, business day. Nasdaq represents that an Nasdaq is also proposing to make a
and history of adherence to Nasdaq [sic] NextShares’ next-determined NAV technical change to rule text in Rule
rules and securities laws. Nasdaq may will be represented by a proxy price 7014(f). Currently, Nasdaq describes
limit the number of LMMs in a security, (e.g., 100.00) and a premium/discount of Qualified Securities as being ‘‘exchange-
or modify a previously established limit, a stated amount to the next-determined traded fund or index-linked security
upon prior written notice to members. NAV to [sic] be represented by the same listed on Nasdaq pursuant to Nasdaq
increment/decrement from the proxy Rules 5705, 5710, 5720, or 5735.’’ 5
Proposed Change to Rule 7014(f) Nasdaq is proposing to replace
price used to denote NAV (e.g.,
As previously noted, Nasdaq NAV¥$0.01 would be represented as references to exchange-traded funds and
currently includes in the program 99.99; NAV+$0.01 as 100.01). To index-linked securities under
Portfolio Depository Receipts, Index convert proxy prices used to represent subparagraphs (f)(1)(A) and (f)(2) of Rule
Fund Shares, Securities Linked to the intraday bids, offers, and execution 7014 with the term ‘‘exchange-traded
Performance of Indexes and prices into prices expressed in relation product,’’ which is a broader term that
Commodities (Including Currencies), to the next-determined NAV, member incorporates exchange-traded funds,
Trust Issued Receipts, and Managed firms would subtract from the reported index-linked securities, and NextShares
Fund Shares. Nasdaq is proposing to proxy price (e.g., 99.99) the proxy for within its meaning. The new term does
add another ETP, NextShares, as eligible NAV (e.g., 100.00) and insert ‘‘NAV’’ in not change what is eligible to be a
to be a Qualified Security under the front of the calculated number Qualified Security under the rule.
LMM Program. expressed in dollars (e.g., 99.99¥100.00
The term NextShares means a security 2. Statutory Basis
= ¥0.01, expressed as ‘‘NAV¥$0.01’’).
that (a) represents an interest in a Nasdaq will report intraday bids, offers, Nasdaq believes that the proposed
registered investment company and trades for NextShares in real-time to rule change is consistent with the
(‘‘NextShares Fund’’) organized as an the Consolidated Tape using the proxy provisions of Section 6 of the Act,6 in
open-end management investment price format. In addition, Nasdaq will general, and with Sections 6(b)(4) and
company that invests in a portfolio of disseminate intraday NextShares bids, 6(b)(5) of the Act,7 in particular, in that
securities and other assets selected and offers, and trades through a proprietary it provides for the equitable allocation
managed by the NextShares Fund’s exchange data feed using the NAV + of reasonable dues, fees and other
investment adviser consistent with the $.01/NAV¥$.01 format. Nasdaq will charges among its members and issuers
NextShares Fund’s investment also provide the member firms and other persons using its facilities,
objectives and policies; (b) is issued in participating in each NextShares trade and is designed to prevent fraudulent
a specified aggregate unit quantity in with a contemporaneous notice of trade and manipulative acts and practices, to
return for a deposit of a specified execution, indicating the number promote just and equitable principles of
portfolio of securities and/or a cash NextShares bought or sold and the trade, to foster cooperation and
amount with a value per NextShare executed premium/discount to NAV. coordination with persons engaged in
equal to the NextShares Fund’s net asset All orders to buy or sell NextShares that regulating, clearing, settling, processing
value; (c) when aggregated in the same are not executed on the day the order is information with respect to, and
specified unit quantity, may be submitted would be automatically facilitating transactions in securities, to
redeemed for a specified portfolio of cancelled as of the close of trading on remove impediments to and perfect the
securities and/or cash with a value per such day.4 mechanism of a free and open market
NextShare equal to the NextShares As a new and novel ETP, Nasdaq is and a national market system, and, in
Fund’s net asset value; and (d) is traded proposing to include NextShares in its general, to protect investors and the
on Nasdaq or another national securities LMM Program to provide incentive to public interest; and is not designed to
exchange using net asset value market makers to make markets in permit unfair discrimination between
(‘‘NAV’’)-Based Trading.3 NextShares NextShares, which will help to ensure customers, issuers, brokers, or dealers.
will trade on Nasdaq using a new that adequate liquidity is provided in Nasdaq believes that inclusion of
trading protocol called ‘‘NAV-Based the novel product. This will benefit NextShares in the LMM Program is
Trading.’’ In NAV-Based Trading, all market participants interested in buying reasonable because the new ETP is
bids, offers and execution prices will be or selling these ETPs. As noted above, novel, and offering incentives to market
expressed as a premium/discount the LMM Program’s performance criteria makers to provide liquidity in the
(which may be zero) to the NextShares’ are based on an LMM’s quoting at the product will help ensure its successful
next-determined NAV (e.g., NAV¥$ NBBO. For purposes of the LMM launch. The LMM Program is designed
asabaliauskas on DSK9F6TC42PROD with NOTICES2
0.01; NAV+$ 0.01). A NextShares’ next- Program, Nasdaq will use a NextShares’ to improve liquidity in ETPs by
determined NAV will be represented at allocating rebates to LMMs that quote at
the beginning of each trading day by a 4 For a description of NAV-Based Trading and the national best bid and best offer for
proxy price of 100.00. A NextShares’ proxy price, see Rule 5745(b)(3); see also Securities certain percentages of time. As
NAV will be determined each business Exchange Act Release No. 73562 (November 7, additional incentive, the LMM Program
day, normally no later than 6:45 p.m. 2014), 79 FR 68309 (November 14, 2014) (SR–
NASDAQ–2014–020) and Securities Exchange Act
Eastern Time. At this time, the day’s Release No. 75815 (September 2, 2015), 80 FR
5 Rule 7014(f)(1)(A).
6 15 U.S.C. 78f.
54349 (September 9, 2015) (SR–NASDAQ–2015–
3 See Rule 5745(c)(1). 103). 7 15 U.S.C. 78f(b)(4) and (5).
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![Federal Register / Vol. 81, No. 29 / Friday, February 12, 2016 / Notices 7623
NASDAQ–2016–019 and should be Percent The following areas have been
submitted on or before March 4, 2016. determined to be adversely affected by
For the Commission, by the Division of Non-Profit Organizations With the disaster:
Trading and Markets, pursuant to delegated Credit Available Elsewhere ... 2.625 Primary Counties: Sarasota.
authority.13 Non-Profit Organizations With- Contiguous Counties:
out Credit Available Else-
Robert W. Errett, Florida: Charlotte, Desoto, Manatee.
where ..................................... 2.625
Deputy Secretary. For Economic Injury: The Interest Rates are:
[FR Doc. 2016–02840 Filed 2–11–16; 8:45 am] Businesses & Small Agricultural
Cooperatives Without Credit Percent
BILLING CODE 8011–01–P
Available Elsewhere .............. 4.000
Non-Profit Organizations With- For Physical Damage:
out Credit Available Else- Homeowners With Credit Avail-
SMALL BUSINESS ADMINISTRATION where ..................................... 2.625 able Elsewhere ...................... 3.625
Homeowners Without Credit
[Disaster Declaration #14614 and # 14615] Available Elsewhere .............. 1.813
The number assigned to this disaster
Businesses With Credit Avail-
Florida Disaster #FL–00110 for physical damage is 14614 C and for able Elsewhere ...................... 6.000
economic injury is 14615 0. Businesses Without Credit
AGENCY: U.S. Small Business
The State which received an EIDL Available Elsewhere .............. 4.000
Administration.
Declaration # is Florida. Non-Profit Organizations With
ACTION: Notice. Credit Available Elsewhere ... 2.625
(Catalog of Federal Domestic Assistance
Non-Profit Organizations With-
SUMMARY: This is a notice of an Number 59008)
out Credit Available Else-
Administrative declaration of a disaster Dated: February 5, 2016. where ..................................... 2.625
for the State of Florida dated 02/05/ Maria Contreras-Sweet, For Economic Injury:
2016. Administrator. Businesses & Small Agricultural
Incident: Tornado Cooperatives Without Credit
Incident Period: 01/09/2016. [FR Doc. 2016–02874 Filed 2–11–16; 8:45 am]
Available Elsewhere .............. 4.000
Effective Date: 02/05/2016. BILLING CODE 8025–01–P Non-Profit Organizations With-
Physical Loan Application Deadline out Credit Available Else-
Date: 04/05/2016. where ..................................... 2.625
Economic Injury (EIDL) Loan SMALL BUSINESS ADMINISTRATION
Application Deadline Date: 11/07/2016. The number assigned to this disaster
ADDRESSES: Submit completed loan [Disaster Declaration #14616 and #14617] for physical damage is 14616 C and for
applications to: U.S. Small Business economic injury is 14617 0.
Administration, Processing and Florida Disaster #FL–00111 The State which received an EIDL
Disbursement Center, 14925 Kingsport Declaration # is Florida.
AGENCY: U.S. Small Business
Road, Fort Worth, TX 76155. Administration. (Catalog of Federal Domestic Assistance
FOR FURTHER INFORMATION CONTACT: A. Number 59008)
ACTION: Notice.
Escobar, Office of Disaster Assistance, Dated: February 5, 2016.
U.S. Small Business Administration, SUMMARY:This is a notice of an Maria Contreras-Sweet,
409 3rd Street, SW., Suite 6050, Administrative declaration of a disaster Administrator.
Washington, DC 20416. for the State of Florida dated 02/05/ [FR Doc. 2016–02873 Filed 2–11–16; 8:45 am]
SUPPLEMENTARY INFORMATION: Notice is 2016.
BILLING CODE 8025–01–P
hereby given that as a result of the Incident: Severe Storms and a
Administrator’s disaster declaration, Tornado.
applications for disaster loans may be Incident Period: 01/15/2016 through SMALL BUSINESS ADMINISTRATION
filed at the address listed above or other 01/17/2016.
locally announced locations. Effective Date: 02/05/2016. [Disaster Declaration #14620]
The following areas have been Physical Loan Application Deadline
determined to be adversely affected by Michigan Disaster #MI–00054
Date: 04/05/2016. Declaration of Economic Injury
the disaster: Economic Injury (EIDL) Loan
Primary Counties: Lee. Application Deadline Date: 11/07/2016. AGENCY: U.S. Small Business
Contiguous Counties: Administration.
Florida: Charlotte, Collier, Glades, ADDRESSES: Submit completed loan
applications to: U.S. Small Business ACTION: Notice.
Hendry.
Administration, Processing and
The Interest Rates are: SUMMARY: This is a notice of an
Disbursement Center, 14925 Kingsport
Economic Injury Disaster Loan (EIDL)
Road, Fort Worth, TX 76155.
Percent declaration for the State of Michigan,
FOR FURTHER INFORMATION CONTACT: A. dated 02/05/2016.
For Physical Damage: Escobar, Office of Disaster Assistance, Incident: Contaminated Public Water
Homeowners With Credit Avail- U.S. Small Business Administration,
asabaliauskas on DSK9F6TC42PROD with NOTICES2
Supply.
able Elsewhere ...................... 3.625 409 3rd Street SW., Suite 6050, Incident Period: 10/01/2015 and
Homeowners Without Credit Washington, DC 20416. continuing.
Available Elsewhere .............. 1.813
Businesses With Credit Avail- SUPPLEMENTARY INFORMATION: Notice is Effective Date: 02/05/2016.
able Elsewhere ...................... 6.000 hereby given that as a result of the EIDL Loan Application Deadline Date:
Businesses Without Credit Administrator’s disaster declaration, 11/07/2016.
Available Elsewhere .............. 4.000 applications for disaster loans may be ADDRESSES: Submit completed loan
filed at the address listed above or other applications to: U.S. Small Business
13 17 CFR 200.30–3(a)(12). locally announced locations. Administration, Processing and
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Document Created: 2016-02-12 01:24:02
Document Modified: 2016-02-12 01:24:02
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| FR Citation | 81 FR 7620 |
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