83 FR 20111 - Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to List and Trade Exchange-Traded Managed Fund Shares of the Gabelli Pet Parent Fund Under Nasdaq Rule 5745

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 83, Issue 88 (May 7, 2018)

Page Range		20111-20118
FR Document		2018-09572
Federal Register, Volume 83 Issue 88 (Monday, May 7, 2018)
[Federal Register Volume 83, Number 88 (Monday, May 7, 2018)]
[Notices]
[Pages 20111-20118]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-09572]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-83142; File No. SR-NASDAQ-2018-032]


Self-Regulatory Organizations; The Nasdaq Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change to 
List and Trade Exchange-Traded Managed Fund Shares of the Gabelli Pet 
Parent Fund Under Nasdaq Rule 5745

May 1, 2018.
    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 April 18, 2018, 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

[[Page 20112]]

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

    The Exchange proposes to list and trade under Nasdaq Rule 5745 
(Exchange-Traded Managed Fund Shares) the common shares (``Shares'') of 
the exchange-traded managed fund described herein (the ``Fund'').\3\
---------------------------------------------------------------------------

    \3\ Except for the specific Fund information set forth below, 
this rule filing conforms to the rule filing, as modified by 
amendments 1 and 2 thereto, relating to the listing and trading on 
Nasdaq of the shares of 18 series of the Eaton Vance ETMF Trust and 
the Eaton Vance ETMF Trust II, as approved by the Commission in 
Securities Exchange Act Release No. 75499 (Jul. 21, 2015) (SR-
NASDAQ-2015-036) and to the rule filing, as modified by amendment 1 
thereto, relating to the listing and trading on Nasdaq of the shares 
of 5 series of the Gabelli NextShares Trust, as approved by the 
Commission in Securities Exchange Act Release No. 79377 (Nov. 22, 
2016) (SR-NASDAQ-2016-134).
---------------------------------------------------------------------------

    The text of the proposed rule change is available on the Exchange's 
website 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
    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), on the Exchange.\4\ The Fund listed below is registered 
with the Commission as an open-end investment company and has filed a 
registration statement on Form N-1A (``Registration Statement'') with 
the Commission. The Fund is a series of the Gabelli 
NextShares^TM Trust (the ``Trust'') and will be advised by an 
investment adviser registered under the Investment Advisers Act of 1940 
(``Adviser''), as described below. The Fund will be actively managed 
and will pursue the principal investment strategy noted below.\5\
---------------------------------------------------------------------------

    \4\ The Commission approved Nasdaq Rule 5745 in Securities 
Exchange Act Release No. 34-73562 (Nov. 7, 2014), 79 FR 68309 (Nov. 
14, 2014) (SR-NASDAQ-2014-020).
    \5\ Additional information regarding the Fund will be available 
on one of two free public websites (www.gabelli.com or 
www.nextshares.com, as indicated more fully below), as well as in 
the Registration Statement for the Fund.
---------------------------------------------------------------------------

Gabelli NextShares^TM Trust
    The Trust is registered with the Commission as an open-end 
investment company and has filed a Registration Statement with the 
Commission.\6\ The following Fund is a series of the Trust.\7\
---------------------------------------------------------------------------

    \6\ See Registration Statement on Form N-1A for the Trust dated 
April 4, 2018 (File Nos. 333-211881 and 811-23160). The descriptions 
of the Fund and the Shares contained herein conform to the 
Registration Statement.
    \7\ The Commission has issued an order granting the Trust and 
certain affiliates exemptive relief under the Investment Company 
Act. See Investment Company Act Release No. 31608 (May 19, 2015) 
(File No. 812-14438).
---------------------------------------------------------------------------

    Gabelli Funds, LLC will be the Adviser to the Fund. The Adviser is 
not a registered broker-dealer, although it is affiliated with a 
broker-dealer. Gabelli Funds, LLC will also act as administrator to the 
Fund. The Adviser has implemented and will maintain a firewall with 
respect to its affiliated broker-dealer regarding access to information 
concerning the composition of and/or changes to the Fund's 
portfolio.\8\ In addition, 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.
---------------------------------------------------------------------------

    \8\ An investment adviser to an open-end fund is required to be 
registered under the Investment Advisers Act of 1940 (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.
---------------------------------------------------------------------------

    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 a sub-adviser to the Fund is a registered broker-dealer or becomes 
affiliated with a broker-dealer, it will implement and maintain a 
firewall with respect to its relevant personnel and/or such broker-
dealer affiliate, if applicable, regarding access to information 
concerning the composition of and/or changes to the relevant Fund's 
portfolio and will be subject to procedures designed to prevent the use 
and dissemination of material non-public information regarding such 
portfolio. G.distributors, LLC, will be the principal underwriter and 
distributor of the Fund's Shares. The Bank of New York Mellon will act 
as custodian and transfer agent. BNY Mellon Investment Servicing (US) 
Inc. will act as the sub-administrator to the Fund. Interactive Data 
Pricing and Reference Data, Inc. will be the IIV calculator to the 
Fund.
    The Fund will be actively managed and will pursue the principal 
investment strategy described below.\9\
---------------------------------------------------------------------------

    \9\ See footnote 5.
---------------------------------------------------------------------------

1. Gabelli Pet Parent Fund^TM--Companion Pets, Their Parents, 
and The Ecosystems (the ``Gabelli Pet Parent Fund'')
    The Gabelli Pet Parent Fund seeks to provide capital appreciation. 
Under normal market conditions, the Gabelli Pet Parent Fund invests at 
least 80% of its net assets, plus borrowings for investment purposes, 
in common and preferred shares of publicly traded domestic and foreign 
companies of all capitalization ranges in the pet industry. The pet 
industry includes companies that offer services, support, and products 
for pets and pet parents including, without limitation, the following 
specific sectors: Food, healthcare, veterinary services, 
pharmaceuticals, wellness, nutrition, equipment, medical and dental 
supplies and services, recreation and entertainment, agriculture, 
infrastructure related to parks, toys and games, exercise, consumer 
products that support these sectors, and any other sector which 
supports the well-being of pets and pet parents.
Creations and Redemptions of Shares
    Shares will be issued and redeemed on a daily basis for the Fund at 
the next-

[[Page 20113]]

determined net asset value (``NAV'') \10\ in specified blocks of Shares 
called ``Creation Units.'' A Creation Unit will consist of at least 
25,000 Shares. Creation Units may be purchased and redeemed by or 
through ``Authorized Participants.'' \11\ Purchases and sales of Shares 
in amounts less than a Creation Unit may be effected only in the 
secondary market, as described below, and not directly with the Fund.
---------------------------------------------------------------------------

    \10\ As with other registered open-end investment companies, NAV 
generally will be calculated daily Monday through Friday as of the 
close of regular trading on the New York Stock Exchange, normally 
4:00 p.m. Eastern Time (``E.T.''). NAV will be calculated by 
dividing the Fund's net asset value by the number of Shares 
outstanding. Information regarding the valuation of investments in 
calculating the Fund's NAV will be contained in the Registration 
Statement for its Shares.
    \11\ ``Authorized Participants'' will be either: (1) 
``participating parties,'' i.e., brokers or other participants in 
the Continuous Net Settlement System (``CNS System'') of the 
National Securities Clearing Corporation (``NSCC''), a clearing 
agency registered with the Commission and affiliated with the 
Depository Trust Company (``DTC''), or (2) DTC participants, which 
in either case have executed participant agreements with the Fund's 
distributor and transfer agent regarding the creation and redemption 
of Creation Units. Investors will not have to be Authorized 
Participants in order to transact in Creation Units, but must place 
an order through and make appropriate arrangements with an 
Authorized Participant for such transactions.
---------------------------------------------------------------------------

    The creation and redemption process for Funds [sic] may be effected 
``in kind,'' in cash, or in a combination of securities and cash. 
Creation ``in kind'' means that an Authorized Participant--usually a 
brokerage house or large institutional investor-- purchases the 
Creation Unit with a basket of securities equal in value to the 
aggregate NAV of the Shares in the Creation Unit. When an Authorized 
Participant redeems a Creation Unit in kind, it receives a basket of 
securities equal in value to the aggregate NAV of the Shares in the 
Creation Unit.\12\
---------------------------------------------------------------------------

    \12\ In compliance with Nasdaq Rule 5745(b)(5), which applies to 
Shares based on an international or global portfolio, the Trust's 
application for exemptive relief under the Investment Company Act 
states that the Fund will comply with the federal securities laws in 
accepting securities for deposits and satisfying redemptions with 
securities, including that the securities accepted for deposits and 
the securities used to satisfy redemption requests are sold in 
transactions that would be exempt from registration under the 
Securities Act of 1933, as amended (15 U.S.C. 77a).
---------------------------------------------------------------------------

Composition File
    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 NSCC 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.\13\ Because the Fund seeks 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. 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 their 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. When creating and redeeming Shares 
in kind, the Fund 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.\14\
---------------------------------------------------------------------------

    \13\ The free website containing the Composition File will be 
www.nextshares.com.
    \14\ 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.
---------------------------------------------------------------------------

Transaction Fees
    All persons purchasing or redeeming Creation Units of the Fund are 
expected to incur a transaction fee to cover the estimated cost to that 
Fund of processing the transaction, including the costs of clearance 
and settlement charged to it by NSCC or DTC, and the estimated trading 
costs (i.e., brokerage commissions, bid-ask spread, and market impact) 
to be incurred in converting the Composition File to or from the 
desired portfolio holdings. The transaction fee is determined daily and 
will be limited to amounts determined by the Adviser to be appropriate 
to defray the expenses that the Fund incurs in connection with the 
purchase or redemption of Creation Units.
    The purpose of transaction fees is to protect the Fund's existing 
shareholders from the dilutive costs associated with the purchase and 
redemption of Creation Units. Transaction fees will differ among funds 
and may vary over time for a given fund depending on the estimated 
trading costs for its portfolio positions and Composition File, 
processing costs and other considerations. Funds that specify greater 
amounts of cash in their Composition File may impose higher transaction 
fees.
    In addition, funds that include in their Composition File 
instruments that clear through DTC may impose higher transaction fees 
than funds with a Composition File consisting solely of instruments 
that clear through NSCC, because DTC may charge more than NSCC in 
connection with Creation Unit transactions.\15\ The transaction fees 
applicable to the Fund's purchases and redemptions on a given business 
day will be disseminated through the NSCC prior to the open of market 
trading on that day and also will be made available to the public each 
day on a free website.\16\ In all cases, the transaction fees will be 
limited in accordance with the requirements of the Commission 
applicable to open-end management investment companies offering 
redeemable securities.
---------------------------------------------------------------------------

    \15\ Authorized Participants that participate in the CNS System 
of the NSCC are expected to be able to use the enhanced NSCC/CNS 
process for effecting in-kind purchases and redemptions of ETFs (the 
``NSCC Process'') to purchase and redeem Creation Units of the Fund 
that limit the composition of their baskets to include only NSCC 
Process-eligible instruments (generally domestic equity securities 
and cash). Because the NSCC Process is generally more efficient than 
the DTC clearing process, NSCC is likely to charge the Fund less 
than DTC to settle purchases and redemptions of Creation Units.
    \16\ The free website will be www.nextshares.com.
---------------------------------------------------------------------------

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 new trading protocol 
called ``NAV-Based Trading.'' \17\ 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). 
The Fund's NAV will be determined each business day, normally

[[Page 20114]]

as of 4:00 p.m., E.T. 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.
---------------------------------------------------------------------------

    \17\ Aspects of NAV-Based Trading are protected intellectual 
property subject to issued and pending U.S. patents held by 
NextShares Solutions LLC (``NextShares Solutions''), a wholly owned 
subsidiary of Eaton Vance Corp. Nasdaq has entered into a license 
agreement with NextShares Solutions to allow for NAV-Based Trading 
on the Exchange of exchange-traded managed funds that have 
themselves entered into license agreements with NextShares 
Solutions.
---------------------------------------------------------------------------

Trading Premiums and Discounts
    Bid and offer prices for Shares will be quoted throughout the day 
relative to NAV. 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. Reflecting such market 
factors, prices for Shares in the secondary market may be above, at or 
below NAV. Funds with higher transaction fees may trade at wider 
premiums or discounts to NAV than other funds with lower transaction 
fees, reflecting the added costs to market makers of managing their 
Share inventory positions through purchases and redemptions of Creation 
Units.
    Because making markets in Shares will be simple to manage and low 
risk, competition among market makers seeking to earn reliable, low-
risk profits should enable the Shares to routinely trade at tight bid-
ask spreads and narrow premiums/discounts to NAV. As noted below, the 
Fund will maintain a public website that will be updated on a daily 
basis to show current and historical trading spreads and premiums/
discounts of Shares trading in the secondary market.\18\
---------------------------------------------------------------------------

    \18\ The website containing this information will be 
www.gabelli.com.
---------------------------------------------------------------------------

Transmitting and Processing Orders
    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.\19\ 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).
---------------------------------------------------------------------------

    \19\ As noted below, 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.
---------------------------------------------------------------------------

    To avoid potential investor confusion, Nasdaq 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 made available to the investing public follow the 
``NAV-$0.01/NAV+$0.01'' (or similar) display format. All Shares listed 
on the Exchange will have a unique identifier associated with their 
ticker symbols, which would indicate that the Shares are traded using 
NAV-Based Trading. 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 could 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 could 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. As noted below, 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.
Intraday Reporting of Quotes and Trades
    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 \20\ and separately disseminated to member firms and market data 
services through the Exchange data feeds listed above. The Exchange 
will also provide the member firms participating in each Share trade 
with a contemporaneous notice of trade execution, indicating the number 
of Shares bought or sold and the executed premium/discount to NAV.\21\
---------------------------------------------------------------------------

    \20\ Due to systems limitations, the Consolidated Tape will 
report intraday execution prices and quotes for Shares using a proxy 
price format. As noted, Nasdaq 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.
    \21\ 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.
---------------------------------------------------------------------------

Final Trade Pricing, Reporting, and Settlement
    All executed Share trades will be recorded and stored intraday by 
Nasdaq to await the calculation of the Fund's end-of- day NAV and the 
determination of final trade pricing. After the Fund's NAV is 
calculated and provided to the Exchange, 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 an 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.\22\ After the pricing is finalized, Nasdaq will deliver 
the Share trading data to NSCC for clearance and settlement, following 
the same processes used for the clearance and settlement of trades in 
other exchange-traded securities.
---------------------------------------------------------------------------

    \22\ File Transfer Protocol (``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.
---------------------------------------------------------------------------

Availability of Information
    Prior to the commencement of market trading in Shares, the Fund 
will be required to establish and maintain a public website through 
which its current prospectus may be downloaded.\23\ In addition, a 
separate website (www.nextshares.com) will include additional 
information concerning the Fund 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 (the 
``Closing Bid/Ask Midpoint''); and (c) the spread between highest bid 
and lowest offer prices as of the close of Exchange trading (the 
``Closing Bid/Ask

[[Page 20115]]

Spread.''). The www.nextshares.com 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.
---------------------------------------------------------------------------

    \23\ See footnote 18.
---------------------------------------------------------------------------

    The Composition File will be disseminated through the NSCC before 
the open of trading in Shares on each business day and also will be 
made available to the public each day on a free website as noted 
above.\24\ 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 
their discretion.
---------------------------------------------------------------------------

    \24\ See footnote 13.
---------------------------------------------------------------------------

    Reports of Share transactions will be disseminated to the market 
and delivered to the member firms participating in the trade 
contemporaneous with execution. 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 an 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.
    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.
Initial and Continued Listing
    Shares will conform to the initial and continued listing criteria 
as set forth under Nasdaq Rule 5745. 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. 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 that 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 (``MFDS'') so all firms will receive the NAV per 
share at the same time. The Reporting Authority \25\ also will 
implement and maintain, or 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.
---------------------------------------------------------------------------

    \25\ See Nasdaq Rule 5745(c)(4).
---------------------------------------------------------------------------

    For the Fund, an estimated value of an individual Share, defined in 
Nasdaq Rule 5745(c)(2) as the ``Intraday Indicative Value,'' will be 
calculated and disseminated at intervals of not more than 15 minutes 
throughout the Regular Market Session \26\ when Shares trade on the 
Exchange. The Exchange will obtain a representation from the issuer of 
the Shares that the IIV will be calculated on an intraday basis and 
provided to Nasdaq for dissemination via the Nasdaq Global Index 
Service (``GIDS'').
---------------------------------------------------------------------------

    \26\ See Nasdaq Rule 4120(b)(4) (describing the three trading 
sessions on the Exchange: (1) Pre-Market Session from 4 a.m. to 9:30 
a.m. E.T.; (2) Regular Market Session from 9:30 a.m. to 4 p.m. or 
4:15 p.m. E.T.; and (3) Post-Market Session from 4 p.m. or 4:15 p.m. 
to 8 p.m. E.T.).
---------------------------------------------------------------------------

    The IIV will be based on current information regarding the value of 
the securities and other assets held by the Fund.\27\ The purpose of 
the IIVs 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 (e.g., if an investor wants to 
acquire approximately $5,000 of the Fund, how many Shares should the 
investor buy?).\28\
---------------------------------------------------------------------------

    \27\ IIVs disseminated throughout each trading day would 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.
    \28\ Because, in NAV-Based Trading, 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 Fund's Registration Statement, website and any advertising or 
marketing materials will include prominent disclosure of this fact. 
Although IIVs 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.
---------------------------------------------------------------------------

    The Adviser is not a registered broker-dealer, although it is 
affiliated with a broker-dealer. The Adviser has implemented and will 
maintain a firewall with respect to its broker-dealer affiliate 
regarding access to information concerning the composition of and/or 
changes to the Fund's portfolio. In addition, 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.
    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 a sub-adviser to the Fund is a registered broker-dealer or becomes 
affiliated with a broker-dealer, it will implement and will maintain a 
firewall with respect to its relevant personnel and/or such broker-
dealer affiliate, if 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.
Trading Halts
    The Exchange may consider all relevant factors in exercising its 
discretion to halt or suspend trading in Shares. Nasdaq will halt 
trading in Shares under the conditions specified in Nasdaq Rule 4120 
and in Nasdaq Rule 5745(d)(2)(C). Additionally, Nasdaq may cease 
trading Shares if other unusual conditions or circumstances exist 
which, in the opinion of Nasdaq, make further dealings on Nasdaq 
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. Because, in 
NAV-Based Trading, all trade execution prices are linked to end-of-day 
NAV, buyers and sellers of Shares should be less exposed to risk of 
loss due to intraday trading halts than buyers and sellers of 
conventional exchange-traded funds (``ETFs'') and other exchange-traded 
securities.
Trading Rules
    Nasdaq deems Shares to be equity securities, thus rendering trading 
in Shares to be subject to Nasdaq's existing rules governing the 
trading of equity securities. Nasdaq will allow trading in Shares from 
9:30 a.m. until 4:00 p.m. E.T.
    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 threshold for the life of the order and whereby the 
order will be cancelled at any point if it exceeds $101.00 or falls 
below $99.00, the established thresholds.\29\ With certain exceptions,

[[Page 20116]]

each order also must contain the applicable order attributes, including 
routing instructions and time-in-force information, as described in 
Nasdaq Rule 4703.\30\
---------------------------------------------------------------------------

    \29\ See Nasdaq Rule 5745(h).
    \30\ See Nasdaq Rule 5745(b)(6).
---------------------------------------------------------------------------

Surveillance
    The Exchange represents that trading in 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.\31\ The Exchange represents 
that these 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.
---------------------------------------------------------------------------

    \31\ FINRA provides surveillance of trading on the Exchange 
pursuant to a regulatory services agreement. The Exchange is 
responsible for FINRA's performance under this regulatory services 
agreement.
---------------------------------------------------------------------------

    The surveillances referred to above generally focus on detecting 
securities trading outside their normal patterns, which could be 
indicative of manipulative or other violative activity. When such 
situations are detected, surveillance analysis follows and 
investigations are opened, where appropriate, to review the behavior of 
all relevant parties for all relevant trading violations.
    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'') \32\ 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.
---------------------------------------------------------------------------

    \32\ 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.
---------------------------------------------------------------------------

    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.
    In addition, the Exchange also has a general policy prohibiting the 
distribution of material non-public information by its employees.
Information Circular
    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. 
Specifically, the Information Circular will discuss the following: (1) 
The procedures for purchases and redemptions of Shares in Creation 
Units (and noting that Shares are not individually redeemable); (2) 
Nasdaq Rule 2111A, which imposes suitability obligations on Nasdaq 
members with respect to recommending transactions in Shares to 
customers; (3) how information regarding the IIV and Composition File 
is disseminated; (4) the requirement that members deliver a prospectus 
to investors purchasing Shares prior to or concurrently with the 
confirmation of a transaction; and (5) information regarding NAV-Based 
Trading protocols.
    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. The Information 
Circular will discuss the effect of this characteristic on existing 
order types. The Information Circular also will identify the specific 
Nasdaq data feeds from which intraday Share prices in proxy price 
format may be obtained.
    In addition, the Information Circular will advise members, prior to 
the commencement of trading, of the prospectus delivery requirements 
applicable to the Fund. Members purchasing Shares from the Fund for 
resale to investors will deliver a summary prospectus to such 
investors. The Information Circular will also discuss any exemptive, 
no-action and interpretive relief granted by the Commission from any 
rules under the Act.
    The Information Circular also will reference that the Fund is 
subject to various fees and expenses described in the Registration 
Statement. The Information Circular will also disclose the trading 
hours of the Shares and the applicable NAV calculation time for the 
Shares. The Information Circular will disclose that information about 
the Shares will be publicly available at www.nextshares.com.
    Information regarding the Fund's trading protocols will be 
disseminated to Nasdaq members in accordance with current processes for 
newly listed products. Nasdaq intends to provide its members with a 
detailed explanation of NAV-Based Trading through a Trading Alert 
issued prior to the commencement of trading in Shares on the Exchange.
Continued Listing Representations
    All statements and representations made in this filing regarding 
(a) the description of the portfolio, (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.
2. Statutory Basis
    Nasdaq believes that the proposal is consistent with Section 6(b) 
of the Act,\33\ in general, and Section 6(b)(5) of the Act,\34\ in 
particular, in that it 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 facilitating transactions in securities, and to 
remove impediments to and perfect the mechanism of a free and open 
market and a national market system.
---------------------------------------------------------------------------

    \33\ 15 U.S.C. 78f(b).
    \34\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange believes that the proposed rule change is designed to 
prevent fraudulent and manipulative acts and practices in that the 
Shares would be listed and traded on the Exchange pursuant to the 
initial and continued listing criteria in Nasdaq Rule 5745. The 
Exchange believes that its surveillance procedures are adequate to 
properly monitor the trading of Shares on Nasdaq and to deter and 
detect violations of Exchange rules and the applicable federal 
securities laws. The Adviser is not registered as a broker-dealer, but 
it is affiliated with a broker-dealer. The Adviser has implemented

[[Page 20117]]

and will maintain a ``firewall'' between the Adviser and its broker-
dealer affiliate with respect to access to information concerning the 
composition of and/or changes to the Fund's portfolio holdings. The 
Exchange may obtain information via ISG from other exchanges that are 
members of ISG or with which the Exchange has entered into a 
comprehensive surveillance sharing agreement, to the extent necessary.
    The proposed rule change is designed to promote just and equitable 
principles of trade and to protect investors and the public interest. 
The Exchange will obtain a representation from the issuer of Shares 
that the NAV per Share will be calculated on each business day that the 
New York Stock Exchange is open for trading and that the NAV will be 
made available to all market participants at the same time. In 
addition, a large amount of information would be publicly available 
regarding the Fund and the Shares, thereby promoting market 
transparency.
    Prior to the commencement of market trading in Shares, the Fund 
will be required to establish and maintain a public website through 
which its current prospectus may be downloaded.\35\ In addition, a 
separate website (www.nextshares.com) will display additional 
information concerning the Fund 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 Closing Bid/Ask Midpoint; and (c) the Closing Bid/Ask Spread.
---------------------------------------------------------------------------

    \35\ See footnote 18.
---------------------------------------------------------------------------

    The www.nextshares.com 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. The 
Composition File will be disseminated through the NSCC before the open 
of trading in Shares on each business day and also will be made 
available to the public each day on a free website, as noted above.\36\ 
The Exchange will obtain a representation from the issuer of the Shares 
that the IIV will be calculated and disseminated on an intraday basis 
at intervals of not more than 15 minutes during trading on the Exchange 
and provided to Nasdaq for dissemination via GIDS. A complete list of 
current portfolio positions for the Fund 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.
---------------------------------------------------------------------------

    \36\ See footnote 13.
---------------------------------------------------------------------------

    Transactions in Shares will be reported to the Consolidated Tape at 
the time of execution in proxy price format and will be disseminated to 
member firms and market data services through Nasdaq's trading service 
and market data interfaces, as defined above. Once the Fund's daily NAV 
has been calculated and the final price of its intraday Share trades 
has been determined, Nasdaq will deliver a confirmation with final 
pricing to the transacting parties. At the end of the day, Nasdaq will 
also post a newly created FTP file with the final transaction data for 
the trading and market data services.
    The Exchange expects that information regarding NAV-based trading 
prices and volumes of Shares traded will be continuously available on a 
real-time basis throughout each trading day on brokers' computer 
screens and other electronic services. Because Shares will trade at 
prices based on the next-determined NAV, investors will be able to buy 
and sell individual Shares at a known premium or discount to NAV that 
they can limit by using limit orders at the time of order entry. 
Trading in Shares will be subject to Nasdaq Rules 5745(d)(2)(B) and 
(C), which provide for the suspension of trading or trading halts under 
certain circumstances, including if, in the view of the Exchange, 
trading in Shares becomes inadvisable.
    The proposed rule change is designed to perfect the mechanism of a 
free and open market and, in general, to protect investors and the 
public interest in that it will facilitate the listing and trading of 
the Fund, which seeks to provide investors with access to a broad range 
of actively managed investment strategies in a structure that offers 
the cost and tax efficiencies and shareholder protections of ETFs, 
while removing the requirement for daily portfolio holdings disclosure 
to ensure a tight relationship between market trading prices and NAV.
    For the above 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 
result in any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act. In fact, the 
Exchange believes that the introduction of the Fund will promote 
competition by making available to investors an actively managed 
investment strategy in a structure that offers the cost and tax 
efficiencies and shareholder protections of ETFs, while removing the 
requirement for daily portfolio holdings disclosure to ensure a tight 
relationship between market trading prices and NAV. Moreover, the 
Exchange believes that the proposed method of Share trading would 
provide investors with transparency of trading costs, and the ability 
to control trading costs using limit orders, that is not available for 
conventionally traded ETFs.
    These developments could significantly enhance competition to the 
benefit of the markets and investors.

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 \37\ and Rule 19b-
4(f)(6) thereunder.\38\
---------------------------------------------------------------------------

    \37\ 15 U.S.C. 78s(b)(3)(A).
    \38\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change, along 
with a brief description and 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. 
The Exchange has satisfied this requirement.
---------------------------------------------------------------------------

    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act \39\ normally does not become operative for 30 days after the date 
of its filing. However, Rule 19b-4(f)(6)(iii) \40\ 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 requested that the Commission waive the 30-day operative delay so 
that the proposed rule change may become operative upon filing. The 
Commission notes that it has approved a number of filings by the 
Exchange to list and trade NextShares filings under Exchange Rule

[[Page 20118]]

5745.\41\ This proposed rule change is consistent with those filings 
and raises no novel issues. The Shares will be purchased and sold in 
the secondary market at prices directly linked to the Fund's next-
determined NAV using the trading protocol called ``NAV-Based Trading,'' 
and the Fund's permitted investments will be consistent with those 
approved in prior filings. Accordingly, the Commission believes that 
waiver of the 30-day operative delay is consistent with the protection 
of investors and the public interest and hereby waives the operative 
delay and designates the proposed rule change operative upon 
filing.\42\
---------------------------------------------------------------------------

    \39\ 17 CFR 240.19b-4(f)(6).
    \40\ 17 CFR 240.19b-4(f)(6)(iii).
    \41\ See, e.g., Securities Exchange Act Release Nos. 82730 (Feb. 
16, 2018), 83 FR 8118 (Feb. 23, 2018) (SR-NASDAQ-2017-131) (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) and 82564 (Jan. 22, 2018), 83 FR 3842 (Jan. 26, 
2018) (SR-NASDAQ-2017-123) (Order Granting Approval of a Proposed 
Rule Change, as Modified by Amendment No. 1, To List and Trade 
Shares of the Causeway International Value NextShares^TM 
and the Causeway Global Value NextShares^TM Under Nasdaq 
Rule 5745).
    \42\ For purposes only of waiving the 30-day operative delay, 
the Commission also 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.

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 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-2018-032 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-2018-032. 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 website (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 website 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 the Exchange. All comments 
received will be posted without change. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-NASDAQ-2018-032, and should be submitted 
on or before May 29, 2018.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\43\
---------------------------------------------------------------------------

    \43\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-09572 Filed 5-4-18; 8:45 am]
 BILLING CODE 8011-01-P
Federal Register / Vol. 83, No. 88 / Monday, May 7, 2018 / Notices 20111

acts and practices, to promote just and C. Self-Regulatory Organization’s rules/sro.shtml). Copies of the
equitable principles of trade, to foster Statement on Comments on the submission, all subsequent
cooperation and coordination with Proposed Rule Change Received From amendments, all written statements
persons engaged in regulating, clearing, Members, Participants, or Others with respect to the proposed rule
settling, processing information with No written comments were solicited change that are filed with the
respect to, and facilitating transactions or received with respect to the proposed Commission, and all written
in securities, to remove impediments to, rule change. communications relating to the
and perfect the mechanisms of, a free proposed rule change between the
III. Date of Effectiveness of the Commission and any person, other than
and open market and a national market
Proposed Rule Change and Timing for those that may be withheld from the
system and, in general, to protect Commission Action public in accordance with the
investors and the public interest.
The foregoing rule change is effective provisions of 5 U.S.C. 552, will be
The Exchange believes that the upon filing pursuant to Section available for website viewing and
proposed non-substantive change would 19(b)(3)(A) 9 of the Act and printing in the Commission’s Public
remove impediments to, and perfect the subparagraph (f)(2) of Rule 19b–4 10 Reference Room, 100 F Street NE,
mechanisms of, a free and open market thereunder, because it establishes a due, Washington, DC 20549 on official
and a national market system and, in fee, or other charge imposed by the business days between the hours of
general, protect investors and the public Exchange. 10:00 a.m. and 3:00 p.m. Copies of the
interest because they are designed to At any time within 60 days of the filing also will be available for
provide greater specificity and clarity to filing of such proposed rule change, the inspection and copying at the principal
the Price List, thereby removing Commission summarily may office of the Exchange. All comments
impediments to and perfecting the temporarily suspend such rule change if received will be posted without change.
mechanism of a free and open market it appears to the Commission that such Persons submitting comments are
and a national market system, and, in action is necessary or appropriate in the cautioned that we do not redact or edit
general, protecting investors and the public interest, for the protection of personal identifying information from
investors, or otherwise in furtherance of comment submissions. You should
public interest. The proposed change to
the purposes of the Act. If the submit only information that you wish
footnote 10 would not alter the to make available publicly. All
application of any fees or rebates on the Commission takes such action, the
Commission shall institute proceedings submissions should refer to File
Price List. As such, the proposed Number SR–NYSE–2018–16 and should
changes would foster cooperation and under Section 19(b)(2)(B) 11 of the Act to
determine whether the proposed rule be submitted on or before May 29, 2018.
coordination with persons engaged in
change should be approved or For the Commission, by the Division of
facilitating transactions in securities and Trading and Markets, pursuant to delegated
disapproved.
would remove impediments to and authority.12
perfect the mechanism of a free and IV. Solicitation of Comments Eduardo A. Aleman,
open market and a national exchange Interested persons are invited to Assistant Secretary.
system. In particular, the Exchange submit written data, views, and [FR Doc. 2018–09575 Filed 5–4–18; 8:45 am]
believes that the proposed change arguments concerning the foregoing, BILLING CODE 8011–01–P
would provide greater clarity to including whether the proposed rule
members and member organizations and change is consistent with the Act.
the public regarding the Exchange’s Comments may be submitted by any of SECURITIES AND EXCHANGE
Rules. It is in the public interest for the following methods: COMMISSION
rules to be accurate and concise so as to Electronic Comments [Release No. 34–83142; File No. SR–
eliminate the potential for confusion. NASDAQ–2018–032]
• Use the Commission’s internet
For the foregoing reasons, the comment form (http://www.sec.gov/
Exchange believes that the proposal is Self-Regulatory Organizations; The
rules/sro.shtml); or Nasdaq Stock Market LLC; Notice of
consistent with the Act. • Send an email to rule-comments@ Filing and Immediate Effectiveness of
B. Self-Regulatory Organization’s sec.gov. Please include File Number SR– Proposed Rule Change to List and
Statement on Burden on Competition NYSE–2018–16 on the subject line. Trade Exchange-Traded Managed
Paper Comments Fund Shares of the Gabelli Pet Parent
In accordance with Section 6(b)(8) of Fund Under Nasdaq Rule 5745
the Act,8 the Exchange believes that the • Send paper comments in triplicate
proposed rule change would not impose to Brent J. Fields, Secretary, Securities May 1, 2018.
and Exchange Commission, 100 F Street Pursuant to Section 19(b)(1) of the
any burden on competition that is not
NE, Washington, DC 20549–1090. Securities Exchange Act of 1934
necessary or appropriate in furtherance
of the purposes of the Act. Instead, the All submissions should refer to File (‘‘Act’’),1 and Rule 19b–4 thereunder,2
Number SR–NYSE–2018–16. This file notice is hereby given that on April 18,
proposed changes will have no impact
number should be included on the 2018, The Nasdaq Stock Market LLC
on competition as they are not designed
subject line if email is used. To help the (‘‘Nasdaq’’ or ‘‘Exchange’’) filed with the
to address any competitive issues but
Commission process and review your Securities and Exchange Commission
rather are designed to make non- comments more efficiently, please use (‘‘Commission’’) the proposed rule
daltland on DSKBBV9HB2PROD with NOTICES

substantive technical corrections and only one method. The Commission will change as described in Items I and II
update the Exchange’s Price List. post all comments on the Commission’s below, which Items have been prepared
internet website (http://www.sec.gov/ by the Exchange. The Commission is
9 15 U.S.C. 78s(b)(3)(A). 12 17 CFR 200.30–3(a)(12).
10 17 CFR 240.19b–4(f)(2). 1 15 U.S.C. 78s(b)(1).
8 15 U.S.C. 78f(b)(8). 11 15 U.S.C. 78s(b)(2)(B). 2 17 CFR 240.19b–4.

VerDate Sep<11>2014 17:38 May 04, 2018 Jkt 244001 PO 00000 Frm 00080 Fmt 4703 Sfmt 4703 E:\FR\FM\07MYN1.SGM 07MYN1
20112 Federal Register / Vol. 83, No. 88 / Monday, May 7, 2018 / Notices

publishing this notice to solicit the Commission. The Fund is a series of and dissemination of material, non-
comments on the proposed rule change the Gabelli NextSharesTM Trust (the public information regarding the open-
from interested persons. ‘‘Trust’’) and will be advised by an end fund’s portfolio.
investment adviser registered under the In the event that (a) the Adviser
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of Investment Advisers Act of 1940 registers as a broker-dealer or becomes
the Proposed Rule Change (‘‘Adviser’’), as described below. The newly affiliated with a broker-dealer, or
Fund will be actively managed and will (b) any new adviser or a sub-adviser to
The Exchange proposes to list and pursue the principal investment strategy
trade under Nasdaq Rule 5745 the Fund is a registered broker-dealer or
noted below.5 becomes affiliated with a broker-dealer,
(Exchange-Traded Managed Fund
Shares) the common shares (‘‘Shares’’) Gabelli NextSharesTM Trust it will implement and maintain a
of the exchange-traded managed fund firewall with respect to its relevant
The Trust is registered with the
described herein (the ‘‘Fund’’).3 personnel and/or such broker-dealer
Commission as an open-end investment
The text of the proposed rule change affiliate, if applicable, regarding access
company and has filed a Registration
is available on the Exchange’s website at to information concerning the
Statement with the Commission.6 The
http://nasdaq.cchwallstreet.com, at the composition of and/or changes to the
following Fund is a series of the Trust.7
principal office of the Exchange, and at Gabelli Funds, LLC will be the relevant Fund’s portfolio and will be
the Commission’s Public Reference Adviser to the Fund. The Adviser is not subject to procedures designed to
Room. a registered broker-dealer, although it is prevent the use and dissemination of
affiliated with a broker-dealer. Gabelli material non-public information
II. Self-Regulatory Organization’s regarding such portfolio. G.distributors,
Statement of the Purpose of, and Funds, LLC will also act as
administrator to the Fund. The Adviser LLC, will be the principal underwriter
Statutory Basis for, the Proposed Rule and distributor of the Fund’s Shares.
Change has implemented and will maintain a
firewall with respect to its affiliated The Bank of New York Mellon will act
In its filing with the Commission, the broker-dealer regarding access to as custodian and transfer agent. BNY
Exchange included statements information concerning the composition Mellon Investment Servicing (US) Inc.
concerning the purpose of and basis for of and/or changes to the Fund’s will act as the sub-administrator to the
the proposed rule change and discussed portfolio.8 In addition, personnel who Fund. Interactive Data Pricing and
any comments it received on the make decisions on the Fund’s portfolio Reference Data, Inc. will be the IIV
proposed rule change. The text of these calculator to the Fund.
composition must be subject to
statements may be examined at the The Fund will be actively managed
procedures designed to prevent the use
places specified in Item IV below. The and will pursue the principal
Exchange has prepared summaries, set 5 Additional information regarding the Fund will investment strategy described below.9
forth in sections A, B, and C below, of be available on one of two free public websites
the most significant aspects of such (www.gabelli.com or www.nextshares.com, as 1. Gabelli Pet Parent FundTM—
statements. indicated more fully below), as well as in the Companion Pets, Their Parents, and The
Registration Statement for the Fund. Ecosystems (the ‘‘Gabelli Pet Parent
A. Self-Regulatory Organization’s 6 See Registration Statement on Form N–1A for
Fund’’)
Statement of the Purpose of, and the Trust dated April 4, 2018 (File Nos. 333–211881
and 811–23160). The descriptions of the Fund and
Statutory Basis for, the Proposed Rule the Shares contained herein conform to the The Gabelli Pet Parent Fund seeks to
Change Registration Statement. provide capital appreciation. Under
1. Purpose
7 The Commission has issued an order granting normal market conditions, the Gabelli
the Trust and certain affiliates exemptive relief Pet Parent Fund invests at least 80% of
The Exchange proposes to list and under the Investment Company Act. See Investment
its net assets, plus borrowings for
trade the Shares of the Fund under Company Act Release No. 31608 (May 19, 2015)
(File No. 812–14438). investment purposes, in common and
Nasdaq Rule 5745, which governs the 8 An investment adviser to an open-end fund is preferred shares of publicly traded
listing and trading of exchange-traded required to be registered under the Investment domestic and foreign companies of all
managed fund shares, as defined in Advisers Act of 1940 (the ‘‘Advisers Act’’). As a capitalization ranges in the pet industry.
Nasdaq Rule 5745(c)(1), on the result, the Adviser and its related personnel are
subject to the provisions of Rule 204A–1 under the The pet industry includes companies
Exchange.4 The Fund listed below is Advisers Act relating to codes of ethics. This Rule that offer services, support, and
registered with the Commission as an requires investment advisers to adopt a code of products for pets and pet parents
open-end investment company and has ethics that reflects the fiduciary nature of the including, without limitation, the
filed a registration statement on Form relationship to clients as well as compliance with
other applicable securities laws. Accordingly, following specific sectors: Food,
N–1A (‘‘Registration Statement’’) with procedures designed to prevent the communication healthcare, veterinary services,
3 Except for the specific Fund information set
and misuse of non-public information by an pharmaceuticals, wellness, nutrition,
investment adviser must be consistent with Rule equipment, medical and dental supplies
forth below, this rule filing conforms to the rule 204A–1 under the Advisers Act. In addition, Rule
filing, as modified by amendments 1 and 2 thereto, 206(4)–7 under the Advisers Act makes it unlawful and services, recreation and
relating to the listing and trading on Nasdaq of the for an investment adviser to provide investment entertainment, agriculture,
shares of 18 series of the Eaton Vance ETMF Trust advice to clients unless such investment adviser has infrastructure related to parks, toys and
and the Eaton Vance ETMF Trust II, as approved (i) adopted and implemented written policies and
by the Commission in Securities Exchange Act
games, exercise, consumer products that
procedures reasonably designed to prevent
Release No. 75499 (Jul. 21, 2015) (SR–NASDAQ– violation, by the investment adviser and its support these sectors, and any other
2015–036) and to the rule filing, as modified by supervised persons, of the Advisers Act and the sector which supports the well-being of
daltland on DSKBBV9HB2PROD with NOTICES

amendment 1 thereto, relating to the listing and Commission rules adopted thereunder; (ii) pets and pet parents.
trading on Nasdaq of the shares of 5 series of the implemented, at a minimum, an annual review
Gabelli NextShares Trust, as approved by the regarding the adequacy of the policies and Creations and Redemptions of Shares
Commission in Securities Exchange Act Release No. procedures established pursuant to subparagraph (i)
79377 (Nov. 22, 2016) (SR–NASDAQ–2016–134). above and the effectiveness of their Shares will be issued and redeemed
4 The Commission approved Nasdaq Rule 5745 in implementation; and (iii) designated an individual on a daily basis for the Fund at the next-
Securities Exchange Act Release No. 34–73562 (who is a supervised person) responsible for
(Nov. 7, 2014), 79 FR 68309 (Nov. 14, 2014) (SR– administering the policies and procedures adopted
NASDAQ–2014–020). under subparagraph (i) above. 9 See footnote 5.

VerDate Sep<11>2014 17:38 May 04, 2018 Jkt 244001 PO 00000 Frm 00081 Fmt 4703 Sfmt 4703 E:\FR\FM\07MYN1.SGM 07MYN1
Document Created: 2018-05-05 02:48:04
Document Modified: 2018-05-05 02:48:04
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		83 FR 20111