82 FR 26205 - Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 5735

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 107 (June 6, 2017)

[Federal Register Volume 82, Number 107 (Tuesday, June 6, 2017)]
[Notices]
[Pages 26205-26206]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-11505]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80810; File No. SR-NASDAQ-2017-052]


 Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend Rule 5735

May 30, 2017.
    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 May 24, 2017, The NASDAQ Stock Market LLC (``Nasdaq'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II below, which Items have been prepared by the Exchange. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to correct rule language added by a previous 
filing \3\ that, in part, amended Nasdaq Rule 5735 (Managed Fund 
Shares).
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    \3\ See Securities Exchange Act Release No. 80708 (May 17, 
2017), 82 FR 23690 (May 23, 2017) (SR-NASDAQ-2017-040).
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    The text of the proposed rule change is available on the Exchange's 
Web site at http://nasdaq.cchwallstreet.com, at the principal office of 
the Exchange, 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, the Exchange 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. The Exchange 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
    Earlier this year, the Commission approved a Nasdaq filing (the 
``Initial Filing'') to amend, among other things, the continued listing 
requirements for exchange-traded products (``ETPs'') in the Nasdaq Rule 
5700 Series.\4\ Subsequently, the Exchange submitted a filing \5\ (the 
``Subsequent Filing'') containing a number of housekeeping and 
conforming changes to the Initial Filing. The proposed amendment makes 
a correction to language added as part of the Subsequent Filing.
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    \4\ See Securities Exchange Act Release No. 79784 (Jan. 12, 
2017), 82 FR 6664 (Jan. 19, 2017) (SR-NASDAQ-2016-135).
    \5\ Supra note 3.
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    Specifically, the Exchange proposes to correct under the 
applicability section of Nasdaq Rule 5735(b)(1) (Managed Fund Shares) 
\6\ that any of the statements or representations regarding not just 
the description of the portfolio, but also of reference assets, among 
other things, will constitute continued listing requirements for 
listing of shares. This correction will result in the language 
mirroring that added by the Subsequent Filing in the initial and 
continued listing requirements section of Nasdaq Rule 5735 \7\ as 
intended.
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    \6\ See Nasdaq Rule 5735(b)(1).
    \7\ See Nasdaq Rule 5735(d)(2)(C)(iv).
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2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\8\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\9\ in particular, in that it is designed to promote 
just and equitable principles of trade, 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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    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the proposed rule change to correct 
Nasdaq Rule 5735(b)(1) to require that any of the statements or 
representations regarding not just the description of the portfolio, 
but also of reference assets, will constitute continued listing 
requirements for listing of shares will provide clarity and accurately 
reflect the intent of the rule to the benefit of investors and the 
public interest.
    For these reasons, Nasdaq believes the proposed rule change is 
consistent with the requirements of Section 6(b)(5) of the Act.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act, as amended. The Exchange 
believes that the proposed rule change may enhance competition since it 
corrects and makes more consistent the applicability of listing 
requirements for ETPs.

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) \10\ of the Act and Rule 19b-
4(f)(6) thereunder.\11\
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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 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.
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    The Exchange has asked the Commission to waive the 30-day operative 
delay, making this proposal operative upon filing. The Commission 
believes that waiver of the operative delay is consistent with the 
protection of investors and the public interest. The proposal will 
modify Nasdaq Rule 5735(b)(1) to provide that any of the statements or 
representations regarding not just the description of the portfolio, 
but also the description of reference assets, among other things, 
constitute continued listing requirements for Managed Fund Shares. This 
aligns the

[[Page 26206]]

requirements in Nasdaq Rule 5735(b)(1) with the requirements in Nasdaq 
Rule 5735(d)(2)(C)(iv) \12\ and ensures that the listing requirements 
for Managed Fund Shares are consistent across the Exchange's rules, 
reducing potential investor confusion. Therefore, the Commission 
designates the proposed rule change to be operative upon filing.\13\
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    \12\ See Securities Exchange Act Release No. 79784, supra note 
4.
    \13\ 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). The Commission notes that the changes in the Subsequent 
Filing become operative on October 1, 2017. See Securities Exchange 
Act Release No. 80708, supra note 3, at 23691. Since this filing 
proposes to modify rule text in the Subsequent Filing, the change 
proposed herein will also be operative October 1, 2017.
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    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: (i) 
Necessary or appropriate in the public interest; (ii) for the 
protection of investors; or (iii) 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.

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 Comments

     Use 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-2017-052 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NASDAQ-2017-052. 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 such filing also will be available 
for inspection and copying at the principal office of the Exchange. 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-NASDAQ-2017-052 and should 
be submitted on or before June 27, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-11505 Filed 6-5-17; 8:45 am]
 BILLING CODE 8011-01-P