83 FR 3842 - Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Order Granting Approval of a Proposed Rule Change, as Modified by Amendment No. 1, To List and Trade Shares of the Causeway International Value NextSharesTM

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 83, Issue 18 (January 26, 2018)

Page Range		3842-3845
FR Document		2018-01418

Federal Register, Volume 83 Issue 18 (Friday, January 26, 2018)

[Federal Register Volume 83, Number 18 (Friday, January 26, 2018)]
[Notices]
[Pages 3842-3845]
From the Federal Register Online [www.thefederalregister.org]
[FR Doc No: 2018-01418]

[[Page 3842]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-82564; File No. SR-NASDAQ-2017-123]

Self-Regulatory Organizations; The Nasdaq Stock Market LLC; 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

January 22, 2018.

I. Introduction

On November 28, 2017, The Nasdaq Stock Market LLC (``Nasdaq'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to list and trade common shares (``Shares'') of
the Causeway International Value NextShares^TM
(``International Value NextShares'') and the Causeway Global Value
NextShares^TM (``Global Value NextShares'') (each, a
``Fund,'' and collectively, the ``Funds'') under Nasdaq Rule 5745. The
proposed rule change was published for comment in the Federal Register
on December 15, 2017.\3\ On January 4, 2018, the Exchange filed
Amendment No. 1 to the proposed rule change, which replaced and
superseded the original filing.\4\ The Commission received no comments
on the proposed rule change. This order grants approval of the proposed
rule change, as modified by Amendment No. 1.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 82290 (December 11,
2017), 82 FR 59687.
\4\ In Amendment No. 1, the Exchange: (a) Clarified the
investments of the Funds; (b) stated that it will obtain a
representation from the issuer of the Shares that the Funds' net
asset value (``NAV'') will be made available to all market
participants at the same time; and (c) made other technical, non-
substantive changes in the proposed rule change. Amendment No. 1 is
available at: https://www.sec.gov/comments/sr-nasdaq-2017-123/nasdaq2017123-2872828-161765.pdf. Because Amendment No. 1 does not
materially alter the substance of the proposed rule change or raise
unique or novel regulatory issues, Amendment No. 1 is not subject to
notice and comment.
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II. Exchange's Description of the Proposed Rule Change, as Modified by
Amendment No. 1

The Exchange proposes to list and trade the Shares of the Funds
under Nasdaq Rule 5745, which governs the listing and trading of
Exchange-Traded Managed Fund Shares, as defined in Nasdaq Rule
5745(c)(1). Each Fund is a series of the Causeway ETMF Trust
(``Trust''). The Exchange represents that the Trust is registered with
the Commission as an open-end investment company and that it has filed
a registration statement on Form N-1A (``Registration Statement'') with
the Commission with respect to the Funds.\5\
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\5\ See initial Registration Statement on Form N-1A for Causeway
ETMF Trust dated September 20, 2017 (File Nos. 333-220536 and 811-
23294). According to the Exchange, the Commission has issued an
order granting the Trust and certain affiliates exemptive relief
under the Investment Company Act of 1940 (``1940 Act''). See
Investment Company Act Release No. 32485 (February 22, 2017) (File
No. 812-14729). 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 1940 Act states
that the Trust 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.
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Causeway Capital Management LLC (``Adviser'') will be the adviser
to the Funds. SEI Investments Distribution Co. (``SIDCO'') will be the
principal underwriter and distributor of each Fund's Shares; SEI
Investments Global Funds Services, Inc. will act as the administrator
and accounting agent to each Fund; The Bank of New York Mellon will act
as transfer agent and custodian to the Funds; and ICE Data Indices, LLC
will calculate intraday indicative values (``IIVs'') for each Fund.
The Exchange has made the following representations and statements
in describing the Funds.\6\ According to the Exchange, each Fund will
be actively managed and will pursue the principal investment strategies
described below.\7\
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\6\ The Commission notes that additional information regarding
the Trust, the Funds, and the Shares, including investment
strategies, risks, creation and redemption procedures, calculation
of NAV, fees, distributions, and taxes, among other things, can be
found in Amendment No. 1 and the Registration Statement, as
applicable. See supra notes 4 and 5, respectively.
\7\ According to the Exchange, additional information regarding
the Funds will be available on a free public website for the Funds
(www.causewayfunds.com, which may contain links for certain
information to www.nextshares.com) and in the Registration Statement
for the Funds.
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A. Principal Investment Strategies

International Value NextShares
The investment objective of the International Value NextShares is
to seek long-term growth of capital and income. Under normal market
conditions, the International Value NextShares will invest primarily in
equity securities of companies in developed countries outside the U.S.
Normally, the International Value NextShares will invest at least 80%
of its total assets in equity securities of companies in a number of
foreign countries and normally will invest the majority of its total
assets in equity securities of companies that pay dividends or
repurchase their shares. The International Value NextShares may invest
in equity securities of companies in emerging (less developed) markets.
The International Value NextShares considers a country to be an
emerging market if the country is included in the MSCI Emerging Markets
Index. The International Value NextShares may invest in equity
securities of companies of any market capitalization, and will not be
required to invest a minimum amount and will not be limited to
investing a maximum amount in any particular country.
Global Value NextShares
The investment objective of the Global Value NextShares is to seek
long-term growth of capital and income. Under normal market conditions,
the Global Value NextShares will invest primarily in equity securities
of companies in developed and emerging or frontier countries outside
the U.S. and of companies in the U.S. Normally, the Global Value
NextShares will invest the majority of its total assets in equity
securities of companies that pay dividends or repurchase their shares.
Under normal circumstances, the Global Value NextShares will invest at
least 40% of its total assets in a number of countries outside the U.S.
The Global Value NextShares may invest in equity securities of
companies in emerging (less developed) markets. The Global Value
NextShares considers a country to be an emerging market if the country
is included in the MSCI Emerging Markets Index. The Global Value
NextShares may also invest in equity securities of companies in
frontier markets. The Global Value NextShares considers a country to be
a frontier market if the country is classified by MSCI, based on a
country's economic development, size, liquidity and market
accessibility, as a frontier market. The Global Value NextShares may
invest in equity securities of companies of any market capitalization,
and will not be required to invest a minimum amount and will not be
limited to investing a maximum amount in any particular country.

B. Portfolio Disclosure and Composition File

Consistent with the disclosure requirements that apply to
traditional open-end investment companies, a

[[Page 3843]]

complete list of current portfolio positions for each Fund will be made
available at least once each calendar quarter, with a reporting lag of
not more than 60 days. A Fund may provide more frequent disclosures of
portfolio positions at its discretion.
As defined in Nasdaq Rule 5745(c)(3), the Composition File is the
specified portfolio of securities and/or cash that a Fund will accept
as a deposit in issuing a creation unit of Shares, and the specified
portfolio of securities and/or cash that a Fund will deliver in a
redemption of a creation unit of Shares. The Composition File will be
disseminated through the National Securities Clearing Corporation once
each business day before the open of trading in Shares on such day and
also will be made available to the public each day on a free public
website.\8\ Because each Fund seeks to preserve the confidentiality of
its current portfolio trading program, a 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 relevant Fund, but the Composition File
generally will not include all of the securities in that 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 a Fund generally will not be represented in the Fund's Composition
File until the purchase has been completed. Similarly, securities that
are held in a Fund's portfolio but are in the process of being sold may
not be removed from its Composition File until the sale is
substantially completed. To the extent that a Fund creates or redeems
Shares in kind, it will use cash amounts to supplement the in-kind
transactions to the extent necessary to ensure that creation units are
purchased and redeemed at NAV. The Composition File also may consist
entirely of cash, in which case it will not include any of the
securities in a Fund's portfolio.
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\8\ The Exchange represents that the free public website
containing the Composition File will be www.nextshares.com.
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C. IIV

An estimated value of an individual Share, defined in Nasdaq Rule
5745(c)(2) as the IIV, will be calculated and disseminated at intervals
of not more than 15 minutes throughout the Regular Market Session \9\
when Shares trade on the Exchange. The Exchange will obtain a
representation from the issuer of the Shares that the IIV for each Fund
will be calculated on an intraday basis and provided to Nasdaq for
dissemination via the Nasdaq Global Index Service. The IIV for each
Fund will be based on current information regarding the value of the
securities and other assets held by a Fund.\10\ The purpose of the IIV
for each Fund is to enable investors to estimate the next-determined
NAV so they can determine the number of Shares to buy or sell if they
want to transact in an approximate dollar amount.\11\
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\9\ See Nasdaq Rule 4120(b)(4) (describing the three trading
sessions on the Exchange: (1) Pre-Market Session from 4:00 a.m. to
9:30 a.m. Eastern Time (``E.T.''); (2) Regular Market Session from
9:30 a.m. to 4:00 p.m. or 4:15 p.m. E.T.; and (3) Post-Market
Session from 4:00 p.m. or 4:15 p.m. to 8:00 p.m. E.T.).
\10\ The IIVs for each Fund disseminated throughout each trading
day would be based on the same portfolio as used to calculate that
day's NAV. A Fund will reflect purchases and sales of portfolio
positions in its NAV the next business day after trades are
executed.
\11\ In NAV-Based Trading (as referenced herein), prices of
executed trades are not determined until the reference NAV is
calculated, so buyers and sellers of Shares during the trading day
will not know the final value of their purchases and sales until the
end of the trading day. The Exchange represents that the
Registration Statement, the Funds' free public website, and any
advertising or marketing materials will include prominent disclosure
of this fact. The Exchange states that although the IIV for a Fund
may provide useful estimates of the value of intraday trades, it
cannot be used to calculate with precision the dollar value of the
Shares to be bought or sold.
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D. NAV-Based Trading

Because Shares will be listed and traded on the Exchange, Shares
will be available for purchase and sale on an intraday basis. Shares
will be purchased and sold in the secondary market at prices directly
linked to a Fund's next-determined NAV using a trading protocol called
``NAV-Based Trading.'' All bids, offers, and execution prices of Shares
will be expressed as a premium/discount (which may be zero) to a Fund's
next-determined NAV (e.g., NAV-$0.01, NAV+$0.01).\12\ A Fund's NAV will
be determined daily (on each day the New York Stock Exchange is open
for trading), as of 4:00 p.m. 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. The
Exchange represents that all Shares listed on the Exchange will have a
unique identifier associated with their ticker symbols, which will
indicate that the Shares are traded using NAV-Based Trading.
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\12\ According to the Exchange, the premium or discount to NAV
at which Share prices are quoted and transactions are executed will
vary depending on market factors, including the balance of supply
and demand for Shares among investors, transaction fees, and other
costs in connection with creating and redeeming creation units of
Shares, the cost and availability of borrowing Shares, competition
among market makers, the Share inventory positions and inventory
strategies of market makers, the profitability requirements and
business objectives of market makers, and the volume of Share
trading.
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According to the Exchange, member firms will utilize certain
existing order types and interfaces to transmit Share bids and offers
to Nasdaq, which will process Share trades like trades in shares of
other listed securities.\13\ In the systems used to transmit and
process transactions in Shares, a 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 will be represented by the
same increment/decrement from the proxy price used to denote NAV (e.g.,
NAV-$0.01 would be represented as 99.99; NAV+$0.01 as 100.01).
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\13\ According to the Exchange, all orders to buy or sell Shares
that are not executed on the day the order is submitted will be
automatically cancelled as of the close of trading on that day.
Prior to the commencement of trading in a Fund, the Exchange will
inform its members in an Information Circular of the effect of this
characteristic on existing order types.
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To avoid potential investor confusion, the Exchange represents that
it will work with member firms and providers of market data services to
seek to ensure that representations of intraday bids, offers, and
execution prices of Shares that are made available to the investing
public follow the ``NAV-$0.01/NAV+$0.01'' (or similar) display format.
Nasdaq makes available to member firms and market data services certain
proprietary data feeds that are designed to supplement the market
information disseminated through the consolidated tape (``Consolidated
Tape''). Specifically, the Exchange will use the Nasdaq Basic and
Nasdaq Last Sale data feeds to disseminate intraday price and quote
data for Shares in real time in the ``NAV-$0.01/NAV+$0.01'' (or
similar) display format. Member firms may use the Nasdaq Basic and
Nasdaq Last Sale data feeds to source intraday Share prices for
presentation to the investing public in the ``NAV-$0.01/NAV+$0.01'' (or
similar) display format.
Alternatively, member firms may source intraday Share prices in
proxy price format from the Consolidated Tape and other Nasdaq data
feeds (e.g., Nasdaq TotalView and Nasdaq Level 2) and use a simple
algorithm to convert prices into the ``NAV-$0.01/NAV+$0.01'' (or
similar) display format. Prior to the commencement of trading in a
Fund, the Exchange will inform its members in an Information Circular
of the identities of the specific Nasdaq data

[[Page 3844]]

feeds from which intraday Share prices in proxy price format may be
obtained.

III. Discussion and Commission Findings

After careful review, the Commission finds that the Exchange's
proposal to list and trade the Shares is consistent with the Act and
the rules and regulations thereunder applicable to a national
securities exchange.\14\ In particular, the Commission finds that the
proposed rule change, as modified by Amendment No. 1, is consistent
with Section 6(b)(5) of the Act,\15\ which requires, among other
things, that the Exchange's rules be designed to prevent fraudulent and
manipulative acts and practices, to promote just and equitable
principles of trade, to foster cooperation and coordination with
persons engaged in facilitating transactions in securities, to remove
impediments to and perfect the mechanism of a free and open market and
a national market system, and, in general, to protect investors and the
public interest.
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\14\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
\15\ 15 U.S.C. 78f(b)(5).
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The Shares will conform to the initial and continued listing
criteria applicable to Exchange-Traded Managed Fund Shares set forth in
Nasdaq Rule 5745. A minimum of 50,000 Shares for each Fund and no less
than two creation units of each Fund will be outstanding at the
commencement of trading on the Exchange.
The Exchange deems the Shares to be equity securities, thus
rendering trading in the Shares subject to the Exchange's existing
rules governing the trading of equity securities. Every order to trade
Shares of a Fund is subject to the proxy price protection threshold of
plus/minus $1.00, which determines the lower and upper thresholds for
the life of the order and provides that the order will be cancelled at
any point if it exceeds $101.00 or falls below $99.00.\16\ With certain
exceptions, each order also must contain the applicable order
attributes, including routing instructions and time-in-force
information, as described in Nasdaq Rule 4703.\17\
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\16\ See Nasdaq Rule 5745(g).
\17\ See Nasdaq Rule 5745(b)(6).
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The Exchange represents that trading in the Shares will be subject
to the existing trading surveillances, administered by both Nasdaq and
the Financial Industry Regulatory Authority, Inc. (``FINRA'') on behalf
of the Exchange, which are designed to detect violations of Exchange
rules and applicable federal securities laws.\18\ The Exchange
represents that these surveillance procedures are adequate to properly
monitor trading of Shares on the Exchange and to deter and detect
violations of Exchange rules and applicable federal securities laws.
FINRA, on behalf of the Exchange, will communicate as needed with, and
may obtain information from, other markets and other entities that are
members of the Intermarket Surveillance Group (``ISG'') regarding
trading in the Shares, and in exchange-traded securities and
instruments held by a Fund (to the extent those exchange-traded
securities and instruments are known through the publication of the
Composition File and periodic public disclosures of a Fund's portfolio
holdings). In addition, the Exchange may obtain information regarding
trading in the Shares, and in exchange-traded securities and
instruments held by a Fund (to the extent those exchange-traded
securities and instruments are known through the publication of the
Composition File and periodic public disclosures of a Fund's portfolio
holdings), from markets and other entities that are members of ISG, or
with which the Exchange has in place a comprehensive surveillance
sharing agreement.
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\18\ The Exchange states that FINRA provides surveillance of
trading on the Exchange pursuant to a regulatory services agreement
and that the Exchange is responsible for FINRA's performance under
this regulatory services agreement.
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Prior to the commencement of trading in a Fund, the Exchange will
inform its members in an Information Circular of the special
characteristics and risks associated with trading the Shares of each
Fund. Specifically, the Information Circular will discuss the
following: (a) The procedures for purchases and redemptions of Shares
in creation units (and that Shares are not individually redeemable);
(b) Nasdaq Rule 2111A, which imposes suitability obligations on Nasdaq
members with respect to recommending transactions in the Shares to
customers; (c) how information regarding the IIV and Composition File
is disseminated; (d) the requirement that members deliver a prospectus
to investors purchasing Shares prior to or concurrently with the
confirmation of a transaction; and (e) information regarding NAV-Based
Trading protocols.
The Information Circular also will identify the specific Nasdaq
data feeds from which intraday Share prices in proxy price format may
be obtained. As noted above, all orders to buy or sell Shares that are
not executed on the day the order is submitted will be automatically
cancelled as of the close of trading on that day, and the Information
Circular will discuss the effect of this characteristic on existing
order types. In addition, Nasdaq intends to provide its members with a
detailed explanation of NAV-Based Trading through a Trader Alert issued
prior to the commencement of trading in Shares on the Exchange.
The Exchange represents that the Adviser is not a registered
broker-dealer and is not affiliated with a broker-dealer, and that
personnel who make decisions on a Fund's portfolio composition must be
subject to procedures designed to prevent the use and dissemination of
material non-public information regarding the portfolio.\19\ In the
event that (a) the Adviser registers as a broker-dealer or becomes
newly affiliated with a broker-dealer, or (b) any new adviser or sub-
adviser to a Fund is a registered broker-dealer or is affiliated with a
broker-dealer, such adviser or sub-adviser will implement and will
maintain a fire wall with respect to its relevant personnel and/or such
broker-dealer affiliate, as applicable, regarding access to information
concerning the composition of, and/or changes to, a Fund's portfolio
and will be subject to procedures designed to prevent the use and
dissemination of material non-public information regarding the
portfolio. The Reporting Authority \20\ will implement and maintain, or
will ensure that the Composition File will be subject to, procedures
designed to prevent the use and dissemination of material non-public
information regarding a Fund's portfolio positions and changes in the
positions. In addition, the Exchange represents that it has a general
policy prohibiting the distribution of material non-public information
by its employees.
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\19\ The Exchange also represents that an investment adviser to
an open-end fund is required to be registered under the Investment
Advisers Act of 1940.
\20\ See Nasdaq Rule 5745(c)(4).
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The Commission finds that the proposal to list and trade the Shares
on the Exchange is consistent with Section 11A(a)(1)(C)(iii) of the
Act,\21\ which sets forth Congress's finding that it is in the public
interest and appropriate for the protection of investors and the
maintenance of fair and orderly markets to assure the availability to
brokers, dealers, and investors of information with respect to
quotations for, and transactions in, securities. Information regarding
NAV-Based Trading prices, best bids and offers for Shares, and volume
of Shares traded will be continuously available on a real-time

[[Page 3845]]

basis throughout each trading day on brokers' computer screens and
other electronic services. All bids and offers for Shares and all Share
trade executions will be reported intraday in real time by the Exchange
to the Consolidated Tape \22\ and separately disseminated to member
firms and market data services through Exchange data feeds.
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\21\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
\22\ Due to systems limitations, the Consolidated Tape will
report intraday execution prices and quotes for Shares using a proxy
price format. Nasdaq has represented that it will separately report
real-time execution prices and quotes to member firms and providers
of market data services in the ``NAV-$0.01/NAV+$0.01'' (or similar)
display format, and will otherwise seek to ensure that
representations of intraday bids, offers, and execution prices for
Shares that are made available to the investing public follow the
same display format.
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The Commission notes that once a Fund's daily NAV has been
calculated and disseminated, Nasdaq will price each Share trade entered
into during the day at the relevant Fund's NAV plus/minus the trade's
executed premium/discount. Using the final trade price, each executed
Share trade will then be disseminated to member firms and market data
services via a File Transfer Protocol (``FTP'') file \23\ that will be
created for exchange-traded managed funds and will be confirmed to the
member firms participating in the trade to supplement the previously
provided information with final pricing.
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\23\ According to Nasdaq, FTP is a standard network protocol
used to transfer computer files on the internet. Nasdaq will arrange
for the daily dissemination of an FTP file with executed Share
trades to member firms and market data services.
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The Exchange will obtain a representation from the issuer of the
Shares that the NAV per Share will be calculated daily (on each day 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 and provided
to Nasdaq via the Mutual Fund Quotation Service (``MFQS'') by the fund
accounting agent. As soon as the NAV is entered into MFQS, Nasdaq will
disseminate the NAV to market participants and market data vendors via
the Mutual Fund Dissemination Service so that all firms will receive
the NAV per Share at the same time.
The Exchange further represents that it may consider all relevant
factors in exercising its discretion to halt or suspend trading in the
Shares. The Exchange will halt trading in the Shares under the
conditions specified in Nasdaq Rules 4120 and 5745(d)(2)(D).
Additionally, Nasdaq may cease trading the Shares if other unusual
conditions or circumstances exist that, 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.
Prior to the commencement of market trading in the Shares, each
Fund will be required to establish and maintain a free public website
through which its current prospectus may be downloaded.\24\ The free
public website will include directly or through a link additional
information concerning the Funds updated on a daily basis, including
the prior business day's NAV, and the following trading information for
that business day expressed as premiums/discounts to NAV: (a) Intraday
high, low, average, and closing prices of Shares in Exchange trading;
(b) the midpoint of the highest bid and lowest offer prices as of the
close of Exchange trading, expressed as a premium/discount to NAV
(``Closing Bid/Ask Midpoint''); and (c) the spread between highest bid
and lowest offer prices as of the close of Exchange trading (``Closing
Bid/Ask Spread.'').\25\ The free public website will also contain
charts showing the frequency distribution and range of values of
trading prices, Closing Bid/Ask Midpoints, and Closing Bid/Ask Spreads
over time.
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\24\ The Exchange represents that the free public website
containing this information will be www.causewayfunds.com.
\25\ The Exchange represents that the free public website
containing a Fund's NAV will be www.causewayfunds.com and all other
information listed will be made available on www.nextshares.com,
which can be accessed directly and via a link on
www.causewayfunds.com.
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The Exchange represents that all statements and representations
made in the filing regarding (a) the description of the portfolios or
reference assets, (b) limitations on portfolio holdings or reference
assets, (c) dissemination and availability of the reference asset or
intraday indicative values, or (d) the applicability of Exchange
listing rules shall constitute continued listing requirements for
listing the Shares on the Exchange. The issuer has represented to the
Exchange that it will advise the Exchange of any failure by either 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.\26\ If
a Fund is not in compliance with the applicable listing requirements,
the Exchange will commence delisting procedures under the Nasdaq 5800
Series.
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\26\ The Commission notes that certain proposals for the listing
and trading of exchange-traded products include a representation
that the exchange will ``surveil'' for compliance with the continued
listing requirements. See, e.g., Securities Exchange Act Release No.
77499 (April 1, 2016), 81 FR 20428, 20432 (April 7, 2016) (SR-BATS-
2016-04). In the context of this representation, it is the
Commission's view that ``monitor'' and ``surveil'' both mean ongoing
oversight of a fund's compliance with the continued listing
requirements. Therefore, the Commission does not view ``monitor'' as
a more or less stringent obligation than ``surveil'' with respect to
the continued listing requirements.
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This approval order is based on all of the Exchange's
representations, including those set forth above and in Amendment No.
1.\27\ In particular, the Commission notes that, although the Shares
will be available for purchase and sale on an intraday basis, the
Shares will be purchased and sold at prices directly linked to the
relevant Fund's next-determined NAV. Further, the Commission notes that
the Funds and the Shares must comply with the requirements of Nasdaq
Rule 5745 and the conditions set forth in this proposed rule change to
be listed and traded on the Exchange on an initial and continuing
basis.
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\27\ See supra note 4.
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For the foregoing reasons, the Commission finds that the proposed
rule change, as modified by Amendment No. 1, is consistent with Section
6(b)(5) \28\ and Section 11A(a)(1)(C)(iii) \29\ of the Act, and the
rules and regulations thereunder applicable to a national securities
exchange.
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\28\ 15 U.S.C. 78f(b)(5).
\29\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
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IV. Conclusion

It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\30\ that the proposed rule change (SR-NASDAQ-2017-123), as
modified by Amendment No. 1, be, and it hereby is, approved.
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\30\ 15 U.S.C. 78s(b)(2).
\31\ 17 CFR 200.30-3(a)(12).

For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\31\
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-01418 Filed 1-25-18; 8:45 am]
BILLING CODE 8011-01-P

Document Created: 2018-10-26 10:06:17
Document Modified: 2018-10-26 10:06:17

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 3842