Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Proposed Rule Change Relating to the Listing and Trading of the Shares of the Validea Market Legends ETF of the ETF Series Solutions ETF Trust, 58012-58019 [2014-22910]
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Federal Register / Vol. 79, No. 187 / Friday, September 26, 2014 / Notices
At any time within 60 days of the
filing of such proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
under Section 19(b)(2)(B) 19 of the Act to
determine whether the proposed rule
change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
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Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
BYX–2014–021 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Brent J. Fields, Secretary, Securities
and Exchange Commission, 100 F Street
NE., Washington, DC 20549–1090.
All submissions should refer to File
Number SR–BYX–2014–021. This file
number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street, NE.,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such
filing will also be available for
inspection and copying at the principal
19 15
U.S.C. 78s(b)(2)(B).
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office of the Exchange. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–BYX–
2014–021 and should be submitted on
or before October 17, 2014.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.20
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2014–22908 Filed 9–25–14; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–73178; File No. SR–
NASDAQ–2014–090]
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Proposed Rule Change Relating to the
Listing and Trading of the Shares of
the Validea Market Legends ETF of the
ETF Series Solutions ETF Trust
September 22, 2014.
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
September 11, 2014, The NASDAQ
Stock Market LLC (‘‘Nasdaq’’ or the
‘‘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 Nasdaq. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
Nasdaq proposes to list and trade the
shares of the Validea Market Legends
ETF (the ‘‘Fund’’) of ETF Series
Solutions (the ‘‘Trust’’) under Nasdaq
Rule 5735 (‘‘Managed Fund Shares’’).3
20 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 The Commission approved Nasdaq Rule 5735 in
Securities Exchange Act Release No. 57962 (June
13, 2008), 73 FR 35175 (June 20, 2008) (SR–
NASDAQ–2008–039). There are already multiple
actively-managed funds listed on the Exchange; see
e.g., Securities Exchange Act Release No. 72411
(June 17, 2014), 79 FR 35598 (June 23, 2014) (SR–
NASDAQ–2014–40) (order approving listing and
trading of Calamos Focus Growth ETF). The
Exchange believes the proposed rule change raises
1 15
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The shares of the Fund are collectively
referred to herein as the ‘‘Shares.’’
The text of the proposed rule change
is available at https://
nasdaq.cchwallstreet.com/, at Nasdaq’s
principal office, and at the
Commission’s Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission,
Nasdaq included statements concerning
the purpose of, and basis for, the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below.
Nasdaq has prepared summaries, set
forth in Sections A, B, and C below, of
the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to list and
trade the Shares of the Fund under
Nasdaq Rule 5735, which governs the
listing and trading of Managed Fund
Shares 4 on the Exchange. The Fund will
be an actively-managed exchange-traded
fund (‘‘ETF’’). The Shares will be
offered by the Trust, which was
established as a Delaware business trust
on February 9, 2012.5 The Trust is
registered with the Commission as an
investment company and has filed a
registration statement on Form N–1A
(‘‘Registration Statement’’) with the
Commission.6 The Fund is a series of
the Trust.
no significant issues not previously addressed in
those prior Commission orders.
4 A Managed Fund Share is a security that
represents an interest in an investment company
registered under the Investment Company Act of
1940, as amended (15 U.S.C. 80a–1) (the ‘‘1940
Act’’) organized as an open-end investment
company or similar entity that invests in a portfolio
of securities selected by its investment adviser
consistent with its investment objectives and
policies. In contrast, an open-end investment
company that issues Index Fund Shares, listed and
traded on the Exchange under Nasdaq Rule 5705,
seeks to provide investment results that correspond
generally to the price and yield performance of a
specific foreign or domestic stock index, fixed
income securities index or combination thereof.
5 The Trust has obtained, or will obtain prior to
listing Shares of the Fund on the Exchange, from
the Commission an order (the ‘‘Exemptive Order’’)
on which the Trust may rely, granting certain
exemptive relief to the Trust under the 1940 Act.
See Application for an Order (June 16, 2014) (File
No. 812–14322).
6 See Post-Effective Amendment No. 14 to the
Registration Statement on Form N–1A for the Trust,
dated July 16, 2014 (File Nos. 333–179562 and 811–
22668). The descriptions of the Fund and the
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Validea Capital Management, LLC
will be the investment adviser
(‘‘Adviser’’) to the Fund. Quasar
Distributors, LLC (the ‘‘Distributor’’)
will be the principal underwriter and
distributor of the Fund’s Shares. U.S.
Bancorp Fund Services, LLC (‘‘USBFS’’)
will act as the administrator, accounting
agent, and transfer agent to the Fund.
U.S. Bank National Association will act
as the custodian to the Fund.
Paragraph (g) of Rule 5735 provides
that if the investment adviser to the
investment company issuing Managed
Fund Shares is affiliated with a brokerdealer, such investment adviser shall
erect a ‘‘fire wall’’ between the
investment adviser and the brokerdealer with respect to access to
information concerning the composition
and/or changes to such investment
company portfolio.7 In addition,
paragraph (g) further requires that
personnel who make decisions on the
open-end fund’s portfolio composition
must be subject to procedures designed
to prevent the use and dissemination of
material, nonpublic information
regarding the open-end fund’s portfolio.
Rule 5735(g) is similar to Nasdaq Rule
5705(b)(5)(A)(i); however, paragraph (g)
in connection with the establishment of
a ‘‘fire wall’’ between the investment
adviser and the broker-dealer reflects
the applicable open-end fund’s
portfolio, not an underlying benchmark
index, as is the case with index-based
funds. The Adviser is not a brokerdealer, and is not affiliated with any
broker-dealer. In the event (a) the
Adviser becomes newly affiliated with a
broker-dealer or registers as a brokerShares contained herein are based, in part, on
information in the Registration Statement.
7 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
applicable federal securities laws as defined in Rule
204A–1(e)(4). Accordingly, procedures designed to
prevent the communication and misuse of
nonpublic information by an investment adviser
must be consistent with Rule 204A–1 under the
Advisers Act. In addition, Rule 206(4)–7 under the
Advisers Act makes it unlawful for an investment
adviser to provide investment advice to clients
unless such investment adviser has (i) adopted and
implemented written policies and procedures
reasonably designed to prevent violation, by the
investment adviser and its supervised persons, of
the Advisers Act and the Commission rules adopted
thereunder; (ii) implemented, at a minimum, an
annual review regarding the adequacy of the
policies and procedures established pursuant to
subparagraph (i) above and the effectiveness of their
implementation; and (iii) designated an individual
(who is a supervised person) responsible for
administering the policies and procedures adopted
under subparagraph (i) above.
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dealer, or (b) any new adviser or subadviser is a registered broker-dealer or
becomes affiliated with a broker-dealer,
it will implement a fire wall with
respect to its relevant personnel and/or
such broker-dealer affiliate, as
applicable, regarding access to
information concerning the composition
and/or changes to the portfolio and will
be subject to procedures designed to
prevent the use and dissemination of
material nonpublic information
regarding such portfolio. The Adviser
has no present intent or arrangement to
become newly affiliated with any
broker-dealer, and the Fund does not
currently intend to use a sub-adviser.
Validea Market Legends ETF
Principal Investments
The Fund is a non-diversified,
actively-managed ETF that intends to
qualify each year as a regulated
investment company under Subchapter
M of the Internal Revenue Code of 1986,
as amended.
The Fund’s primary investment
objective is to achieve capital
appreciation, with a secondary focus on
income. The Fund will pursue its
objectives by investing primarily, i.e. at
least 80% of its assets under normal
market conditions,8 in U.S. exchangelisted equity securities of U.S.
companies and foreign equity securities
traded on a U.S. exchange as American
Depositary Receipts (‘‘ADRs’’).
The Adviser will select securities
using a proprietary quantitative and
fundamentals-based system that
evaluates investment opportunities
based on the published investment
strategies of legendary investors whose
investment strategies have generally
been subject to significant academic or
media analysis, such as Warren Buffet,
Peter Lynch and David Dreman. The
Adviser’s system incorporates 17 stock
selection models, each intended to
replicate the strategy of a legendary
investor. The models incorporate over
300 unique fundamental metrics of
companies, including measures relating
to profitability, valuation, growth, cash
8 The term ‘‘under normal market conditions’’ as
used herein includes, but is not limited to, the
absence of adverse market, economic, political or
other conditions, including extreme volatility or
trading halts in the securities markets or the
financial markets generally; operational issues
causing dissemination of inaccurate market
information; or force majeure type events such as
systems failure, natural or man-made disaster, act
of God, armed conflict, act of terrorism, riot or labor
disruption or any similar intervening circumstance.
In periods of extreme market disturbance, the Fund
may take temporary defensive positions, by
overweighting its portfolio in cash/cash-like
instruments; however, to the extent possible, the
Adviser would continue to seek to achieve the
Fund’s investment objectives.
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58013
flow, financing and past performance,
among others. The Adviser scores over
6,000 companies based on the metrics of
its investor models and expects that the
Fund will generally hold approximately
100 securities.
Using historical data, the Adviser’s
system evaluates the long term
performance, risks, and correlation of
each model and blends some or all of
the models to identify the composite
strategy that the Adviser believes is
most likely to achieve the Fund’s
investment objectives while reducing
volatility. By utilizing various stock
picking methods in the creation of the
composite strategy, the Adviser will
seek to reduce the volatility of the
Fund’s returns in different market
environments and limit investment style
specific risk.
The Fund will invest at least 80% of
its assets in equity securities of U.S.
companies and foreign equity securities
traded on a U.S. exchange as ADRs.9
The Fund’s investment in ADRs may
include ADRs representing companies
in emerging markets. The Fund may
invest in the securities of companies of
any market capitalization, but the
Adviser expects that the Fund will have
a bias toward small-cap and mid-cap
companies. The Adviser also expects to
limit the Fund’s investment in any
individual economic sector to no more
than 40% of the Fund’s total assets.
The Adviser expects that the Fund
will regularly update or ‘‘rebalance’’ the
securities that it holds, but no more
often than once every 28 days and at
least 5 times per year. On each such
date, securities whose fundamental
scores no longer meet the Fund’s
requirements will be removed and
replaced with higher scoring securities.
A stock will only be sold in between
rebalance dates if the stock has
significantly underperformed the overall
market since the time the stock was
purchased.
The Fund’s investment in foreign
equity securities will be in the form of
ADRs. With respect to its investments in
exchange-listed common stocks and
ADRs, the Fund will invest in such
securities that trade in markets that are
members of the Intermarket
Surveillance Group (‘‘ISG’’).
9 ADRs are receipts, typically issued by a bank or
trust issuer, which evidence ownership of
underlying securities issued by a non-U.S. issuer.
For ADRs, the depository is typically a U.S.
financial institution and the underlying securities
are issued by a non-U.S. issuer. ADRs are not
necessarily denominated in the same currency as
their underlying securities.
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Other Investments
The Fund will generally invest in
sponsored ADRs that are listed on ISG
member exchanges and that the Adviser
deems as liquid at time of purchase. In
certain limited circumstances, the Fund
may invest in unlisted or unsponsored
ADRs or ADRs that the Adviser deems
illiquid at the time of purchase or for
which pricing information is not readily
available. The issuers of unlisted or
unsponsored ADRs are not obligated to
disclose material information in the
United States. Therefore, there may be
less information available regarding
such issuers and there may be no
correlation between available
information and the market value of the
ADRs.
The Fund may hold up to an aggregate
amount of 15% of its net assets in
illiquid securities or other illiquid assets
(calculated at the time of investment).
The Fund will monitor its portfolio
liquidity on an ongoing basis to
determine whether, in light of current
circumstances, an adequate level of
liquidity is being maintained, and will
consider taking appropriate steps in
order to maintain adequate liquidity if,
through a change in values, net assets,
or other circumstances, more than 15%
of the Fund’s net assets are held in
illiquid assets. Illiquid assets include
securities subject to contractual or other
restrictions on resale and other
instruments that lack readily available
markets as determined in accordance
with Commission staff guidance.10
The Fund may not invest more than
25% of the value of its total assets in
securities of issuers in any one industry
or group of industries. This restriction
does not apply to obligations issued or
guaranteed by the U.S. government, its
agencies or instrumentalities, or
securities of other registered investment
companies.11
10 The Commission has stated that long-standing
Commission guidelines have required open-end
funds to hold no more than 15% of their net assets
in illiquid securities and other illiquid assets. See
Investment Company Act Release No. 28193 (March
11, 2008), 73 FR 14618 (March 18, 2008), FN 34.
See also Investment Company Act Release No. 5847
(October 21, 1969), 35 FR 19989 (December 31,
1970) (Statement Regarding ‘‘Restricted
Securities’’); Investment Company Act Release No.
18612 (March 12, 1992), 57 FR 9828 (March 20,
1992) (Revisions of Guidelines to Form N–1A). A
fund’s portfolio security is illiquid if it cannot be
disposed of in the ordinary course of business
within seven days at approximately the value
ascribed to it by the fund. See Investment Company
Act Release No. 14983 (March 12, 1986), 51 FR
9773 (March 21, 1986) (adopting amendments to
Rule 2a–7 under the 1940 Act); Investment
Company Act Release No. 17452 (April 23, 1990),
55 FR 17933 (April 30, 1990) (adopting Rule 144A
under the Securities Act of 1933).
11 See Form N–1A, Item 9. The Commission has
taken the position that a fund is concentrated if it
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While the Fund under normal
circumstances will invest at least 80%
of its assets in U.S. exchange-listed
equity securities, the Fund may invest
the remaining assets in a variety of other
securities in support of its primary
investment strategy, including, but not
limited to: equity securities traded overthe-counter,12 equity securities of other
U.S. registered investment companies,
including open-end mutual funds,
money market mutual funds and
exchange-traded funds, and money
market instruments.13
The Shares
The Fund will issue and redeem
Shares only in Creation Units at the net
asset value (‘‘NAV’’) 14 next determined
after receipt of an order on a continuous
basis every day except weekends and
specified holidays. The NAV of the
Fund will be determined once each
business day, normally as of the close of
trading of the NYSE, generally, 4:00
p.m. Eastern time. Creation Unit sizes
will be at least 50,000 Shares per
Creation Unit. The Trust will issue and
sell Shares of the Fund only in Creation
Units on a continuous basis through the
Distributor, without a sales load (but
subject to transaction fees), at their NAV
per Share next determined after receipt
of an order, on any business day, in
proper form pursuant to the terms of the
agreement executed with each
invests more than 25% of the value of its total
assets in any one industry. See, e.g., Investment
Company Act Release No. 9011 (October 30, 1975),
40 FR 54241 (November 21, 1975).
12 The Fund’s investments in equity securities
traded over-the-counter include shares of common
stock and ADRs. Not more than 10% of the net
assets of the Fund, in the aggregate, will be invested
in (1) unlisted or unsponsored ADRs; (2) ADRs not
listed on an exchange that is not a member of ISG
or a party to a comprehensive surveillance sharing
agreement with the Exchange; or (3) unlisted
common stocks or commons stocks not listed on an
exchange that is a member of the ISG or a party to
a comprehensive surveillance sharing agreement
with the Exchange.
13 The term ‘‘money market instruments,’’ as used
herein, means (i) short-term obligations issued by
the U.S. Government; (ii) short term negotiable
obligations of commercial banks, fixed time
deposits and bankers’ acceptances of U.S. and
foreign banks and similar institutions; (iii)
commercial paper rated at the date of purchase
‘‘Prime–1’’ by Moody’s Investors Service, Inc. or
‘‘A–1+’’ or ‘‘A–1’’ by Standard & Poor’s or, if
unrated, of comparable quality, as the Adviser of
the Fund determines; and (iv) money market
mutual funds.
14 The NAV of the Fund’s Shares generally will
be calculated once daily Monday through Friday as
of the close of regular trading on the New York
Stock Exchange (‘‘NYSE’’), generally 4:00 p.m.
Eastern time (the ‘‘NAV Calculation Time’’). NAV
per Share will be calculated by dividing the Fund’s
net assets by the number of Fund Shares
outstanding. For more information regarding the
valuation of Fund investments in calculating the
Fund’s NAV, see Registration Statement.
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Authorized Participant (as defined
below).
The consideration for purchase of a
Creation Unit generally will consist of
either (i) the in-kind deposit of a
designated portfolio of securities (the
‘‘Deposit Securities’’) per each Creation
Unit and the Cash Component (as
defined below), computed as described
below or (ii) the cash value of all or a
portion of the Deposit Securities
(‘‘Deposit Cash’’) and the ‘‘Cash
Component,’’ computed as described
below. The Fund may, under certain
circumstances, effect a portion of
creations and redemptions for cash,
rather than in-kind securities, in
accordance with the Exemptive Order.
When accepting purchases of Creation
Units for cash, the Fund may incur
additional costs associated with the
acquisition of Deposit Securities that
would otherwise be provided by an inkind purchaser. Together, the Deposit
Securities or Deposit Cash, as
applicable, and the Cash Component
will constitute the ‘‘Fund Deposit,’’
which represents the minimum initial
and subsequent investment amount for
a Creation Unit of the Fund. The ‘‘Cash
Component’’ will be an amount equal to
the difference between the NAV of the
Shares (per Creation Unit) and the
market value of the Deposit Securities or
Deposit Cash, as applicable. If the Cash
Component is a positive number (i.e.,
the NAV per Creation Unit exceeds the
market value of the Deposit Securities or
Deposit Cash, as applicable), the Cash
Component will be such positive
amount. If the Cash Component is a
negative number (i.e., the NAV per
Creation Unit is less than the market
value of the Deposit Securities or
Deposit Cash, as applicable), the Cash
Component will be such negative
amount and the creator will be entitled
to receive cash in an amount equal to
the Cash Component. The Cash
Component will serve the function of
compensating for any difference
between the NAV per Creation Unit and
the market value of the Deposit
Securities or Deposit Cash, as
applicable.
To be eligible to place orders with
respect to creations and redemptions of
Creation Units, an entity must be (i) a
‘‘Participating Party,’’ i.e., a brokerdealer or other participant in the
clearing process through the Continuous
Net Settlement System of the National
Securities Clearing Corporation
(‘‘NSCC’’) or (ii) a Depository Trust
Company (‘‘DTC’’) Participant (a ‘‘DTC
Participant’’). In addition, each
Participating Party or DTC Participant
(each, an ‘‘Authorized Participant’’)
must execute an agreement that has
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been agreed to by the Distributor and
USBFS with respect to purchases and
redemptions of Creation Units.
USBFS, through the NSCC, will make
available on each business day,
immediately prior to the opening of
business on the Exchange’s Regular
Market Session (currently 9:30 a.m.
Eastern time), the list of the names and
the required number of shares of each
Deposit Security and/or the required
amount of Deposit Cash, as applicable,
to be included in the current Fund
Deposit (based on information at the
end of the previous business day) for the
Fund. Such Fund Deposit, subject to
any relevant adjustments, will be
applicable in order to effect purchases
of Creation Units of the Fund until such
time as the next announced composition
of the Deposit Securities and/or the
required amount of Deposit Cash, as
applicable, is made available.
Shares may be redeemed only in
Creation Units at their NAV next
determined after receipt of a redemption
request in proper form by the Fund
through USBFS and only on a business
day.
With respect to the Fund, USBFS,
through the NSCC, will make available
immediately prior to the opening of
business on the Exchange (9:30 a.m.
Eastern time) on each business day, the
list of the names and share quantities of
the Fund’s portfolio securities (‘‘Fund
Securities’’) and/or, if relevant, the
required cash value thereof that will be
applicable (subject to possible
amendment or correction) to
redemption requests received in proper
form on that day. Fund Securities
received on redemption may not be
identical to Deposit Securities.
Redemption proceeds for a Creation
Unit will be paid either in kind or in
cash or a combination thereof, as
determined by the Trust. With respect to
in kind redemptions of the Fund,
redemption proceeds for a Creation Unit
will consist of Fund Securities as
announced by USBFS on the business
day of the request for redemption
received in proper form plus cash in an
amount equal to the difference between
the NAV of the Shares being redeemed,
as next determined after a receipt of a
request in proper form, and the value of
the Fund Securities (the ‘‘Cash
Redemption Amount’’), less a fixed
redemption transaction fee and any
applicable additional variable charge as
set forth in the Registration Statement.
In the event that the Fund Securities
have a value greater than the NAV of the
Shares, a compensating cash payment
equal to the differential will be required
to be made by or through an Authorized
Participant by the redeeming
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shareholder. Notwithstanding the
foregoing, at the Trust’s discretion, an
Authorized Participant may receive the
corresponding cash value of the
securities in lieu of one or more Fund
Securities.
The creation/redemption order cut off
time for the Fund is expected to be 4:00
p.m. Eastern time for purchases of
Shares. On days when the Exchange
closes earlier than normal and in the
case of custom orders, the Fund may
require orders for Creation Units to be
placed earlier in the day.
Net Asset Value
The NAV per Share for the Fund will
be computed by dividing the value of
the net assets of the Fund (i.e., the value
of its total assets less total liabilities) by
the total number of Shares outstanding,
rounded to the nearest cent. Expenses
and fees, including the management
fees, will be accrued daily and taken
into account for purposes of
determining NAV. The NAV of the Fund
will be calculated by USBFS and
determined at the close of the regular
trading session on the NYSE (ordinarily
4:00 p.m. Eastern time) on each day that
such exchange is open. In calculating
the Fund’s NAV per Share, investments
will generally be valued by using market
valuations. A market valuation generally
means a valuation (i) obtained from an
exchange, a pricing service, or a major
market maker (or dealer) or (ii) based on
a price quotation or other equivalent
indication of value supplied by an
exchange, a pricing service, or a major
market maker (or dealer).15 Exchangetraded equities, exchange-traded ADRs
and other exchange-traded securities
will be valued at the official closing
price on their principal exchange or
board of trade, or lacking any current
reported sale at the time of valuation, at
the mean between the most recent bid
and asked quotations on its principal
exchange or board of trade. Portfolio
securities traded on more than one
securities exchange will be valued at the
last sale price or official closing price,
as applicable, on the business day as of
which such value is being determined at
the close of the exchange representing
the principal market for such securities.
Equity securities traded over-thecounter and ADRs traded over-thecounter will be valued at the mean
between the most recent bid and asked
quotations received from pricing
services; if the most recent bid and
asked quotations are not available, these
securities will be valued in accordance
15 Under normal market conditions, the Fund will
obtain pricing information on all of its assets from
these sources.
PO 00000
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58015
with the Fund’s fair valuation
procedures. Money market instruments
with maturities of less than 60 days will
be valued at amortized cost; money
market instruments with longer
maturities will be valued at the midpoint of the bid-ask prices. Investment
company shares will be valued at NAV,
unless the shares are exchange-traded,
in which case they will be valued at the
last sale or official closing price on the
market on which they primarily trade.
Notwithstanding the foregoing, in
determining the value of any security or
asset, the Fund may use a valuation
provided by a pricing vendor employed
by the Trust and approved by the Board
of Trustees of the Trust (the ‘‘Trust
Board’’). The pricing vendor may base
such valuations upon dealer quotes, by
analyzing the listed market, by utilizing
matrix pricing, by analyzing market
correlations and pricing and/or
employing sensitivity analysis.
The Adviser may use various pricing
services, or discontinue the use of any
pricing service, as approved by the
Trust Board from time to time. A price
obtained from a pricing service based on
such pricing service’s valuation matrix
may be considered a market valuation.
Any assets or liabilities denominated in
currencies other than the U.S. dollar
will be converted into U.S. dollars at the
current market rates on the date of
valuation as quoted by one or more
sources.
In the event that current market
valuations are not readily available or
such valuations do not reflect current
market value, the Trust’s procedures
require the Trust’s Valuation Committee
to determine a security’s fair value if a
market price is not readily available in
accordance with the 1940 Act.16 In
determining such value the Trust’s
Valuation Committee may consider,
among other things, (i) price
comparisons among multiple sources,
(ii) a review of corporate actions and
news events, and (iii) a review of
relevant financial indicators. In these
cases, the Fund’s NAV may reflect
certain portfolio securities’ fair values
rather than their market prices. Fair
value pricing may involve subjective
judgments and it is possible that the fair
value determination for a security is
materially different than the value that
16 The Valuation Committee of the Trust Board
will be responsible for the oversight of the pricing
procedures of the Fund and the valuation of the
Fund’s portfolio. The Fund has implemented
procedures designed to prevent the use and
dissemination of material, nonpublic information
regarding valuation and revaluation of any portfolio
investments.
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could be realized upon the sale of the
security.
mstockstill on DSK4VPTVN1PROD with NOTICES
Availability of Information
The Fund’s Web site
(www.valideafunds.com), which will be
publicly available prior to the public
offering of Shares, will include a form
of the prospectus for the Fund that may
be downloaded. The Web site will
include additional quantitative
information updated on a daily basis,
including, for the Fund: (1) the prior
business day’s reported NAV, mid-point
of the bid/ask spread at the time of
calculation of such NAV (the ‘‘Bid/Ask
Price’’),17 and a calculation of the
premium and discount of the Bid/Ask
Price against the NAV; and (2) data in
chart format displaying the frequency
distribution of discounts and premiums
of the daily Bid/Ask Price against the
NAV, within appropriate ranges, for
each of the four previous calendar
quarters. On each business day, before
commencement of trading in Shares in
the Regular Market Session 18 on the
Exchange, the Fund will disclose on its
Web site the identities and quantities of
the portfolio of securities and other
assets (the ‘‘Disclosed Portfolio’’) held
by the Fund that will form the basis for
the Fund’s calculation of NAV at the
end of the business day.19 On a daily
basis, the Disclosed Portfolio will
include each portfolio security and
other financial instruments of the Fund
with the following information on the
Fund’s Web site: ticker symbol, CUSIP
number or other identifier, if any; a
description of the holding (including
the type of holding); the identity of the
security, index, or other asset or
instrument underlying the holding, if
any; quantity held (as measured by, for
example, number of shares); maturity
date, if any; coupon rate, if any;
effective date, if any; market value of the
17 The Bid/Ask Price of the Fund will be
determined using the midpoint of the highest bid
and the lowest offer on the Exchange as of the time
of calculation of such Fund’s NAV. The records
relating to Bid/Ask Prices will be retained by the
Fund and its service providers.
18 See Nasdaq Rule 4120(b)(4) (describing the
three trading sessions on the Exchange: (1) PreMarket Session from 4 a.m. to 9:30 a.m. Eastern
time; (2) Regular Market Session from 9:30 a.m. to
4 p.m. or 4:15 p.m. Eastern time; and (3) PostMarket Session from 4 p.m. or 4:15 p.m. to 8 p.m.
Eastern time).
19 Under accounting procedures to be followed by
the Fund, trades made on the prior business day
(‘‘T’’) will be booked and reflected in NAV on the
current business day (‘‘T+1’’). Notwithstanding the
foregoing, portfolio trades that are executed prior to
the opening of the Exchange on any business day
may be booked and reflected in NAV on such
business day. Accordingly, the Fund will be able to
disclose at the beginning of the business day the
portfolio that will form the basis for the NAV
calculation at the end of the business day.
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19:14 Sep 25, 2014
Jkt 232001
holding; and the percentage weighting
of the holdings in the Fund’s portfolio.
The Web site information will be
publicly available at no charge.
In addition, for the Fund, an
estimated value, defined in Rule
5735(c)(3) as the ‘‘Intraday Indicative
Value,’’ that reflects an estimated
intraday value of the Fund’s portfolio,
will be disseminated. Moreover, the
Intraday Indicative Value, available on
the NASDAQ OMX Information LLC
proprietary index data service,20 will be
based upon the current value for the
components of the Disclosed Portfolio
and will be updated and widely
disseminated and broadly displayed at
least every 15 seconds during the
Regular Market Session. The Intraday
Indicative Value will be based on quotes
and closing prices from the securities’
local market and may not reflect events
that occur subsequent to the local
market’s close. Intra-day, executable
price quotations on the securities and
other assets held by the Fund will be
available from major broker-dealer
firms. Intra-day price information on the
securities and other assets held by the
Fund will also be available through
subscription or free services that can be
accessed by Authorized Participants and
other investors: (a) Pricing information
for exchange-traded equity securities;
investment company securities;
exchange-traded ADRs; or other
exchange-traded securities will be
publicly available from the Web sites of
the exchanges on which they trade, on
public financial Web sites, and through
subscription services such as Bloomberg
and Thompson Reuters; and (b) pricing
information regarding over-the-counter
equities (including over-the-counter
ADRs and certain investment company
securities) and money market
instruments, will be available through
subscription services such as Markit,
Bloomberg and Thompson Reuters.
Premiums and discounts between the
Intraday Indicative Value and the
market price of the Fund’s shares may
occur. This should not be viewed as a
‘‘real time’’ update of the NAV per
Share of the Fund, which is calculated
only once a day.
The dissemination of the Intraday
Indicative Value, together with the
Disclosed Portfolio, will allow investors
to determine the value of the underlying
20 Currently, the NASDAQ OMX Global Index
Data Service (‘‘GIDS’’) is the NASDAQ OMX global
index data feed service, offering real-time updates,
daily summary messages, and access to widely
followed indexes and Intraday Indicative Values for
ETFs. GIDS provides investment professionals with
the daily information needed to track or trade
NASDAQ OMX indexes, listed ETFs, or third-party
partner indexes and ETFs.
PO 00000
Frm 00148
Fmt 4703
Sfmt 4703
portfolio of the Fund on a daily basis
and will provide a close estimate of that
value throughout the trading day.
In addition, a basket composition file,
which includes the security names,
amounts and share quantities, as
applicable, required to be delivered in
exchange for the Fund’s Shares, together
with estimates and actual cash
components, will be publicly
disseminated daily prior to the opening
of Nasdaq via NSCC. The basket will
represent one Creation Unit of the Fund.
Investors will also be able to obtain
the Fund’s Statement of Additional
Information (‘‘SAI’’), the Fund’s annual
and semi-annual reports (together,
‘‘Shareholder Reports’’), and its Form
N–CSR and Form N–SAR. The Fund’s
SAI and Shareholder Reports will be
available free upon request from the
Fund, and those documents and the
Form N–CSR and Form N–SAR may be
viewed on-screen or downloaded from
the Commission’s Web site at
www.sec.gov. Information regarding
market price and volume of the Shares
will be continually available on a realtime basis throughout the day on
brokers’ computer screens and other
electronic services. Information
regarding the previous day’s closing
price and trading volume information
for the Shares will be published daily in
the financial section of newspapers.
Quotation and last sale information for
the Shares will be available via Nasdaq
proprietary quote and trade services and
via the Consolidated Tape Association
plans for the Shares. Similarly,
quotation and last sale information for
any underlying exchange-traded
products will also be available via the
quote and trade services of their
respective primary exchanges, as well as
in accordance with the Unlisted Trading
Privileges and the Consolidated Tape
Association plans, as applicable.
Additional information regarding the
Fund and the Shares, including
investment strategies, risks, creation and
redemption procedures, fees, Fund
holdings disclosure policies,
distributions and taxes is included in
the Registration Statement. All terms
relating to the Fund that are referred to,
but not defined in, this proposed rule
change are defined in the Registration
Statement.
Initial and Continued Listing
The Shares will be subject to Rule
5735, which sets forth the initial and
continued listing criteria applicable to
Managed Fund Shares. The Exchange
represents that, for initial and/or
continued listing, the Fund must be in
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compliance with Rule 10A–3 21 under
the Act. A minimum of 100,000 Shares
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 and that the NAV and
the Disclosed Portfolio will be made
available to all market participants at
the same time.
Trading Halts and Trading Pauses
With respect to trading halts, the
Exchange may consider all relevant
factors in exercising its discretion to
halt or suspend trading in the Shares of
the Fund. Nasdaq will halt or pause
trading in the Shares under the
conditions specified in Nasdaq Rules
4120 and 4121, including the trading
pauses under Nasdaq Rules 4120(a)(11)
and (12). Trading may be halted because
of market conditions or for reasons that,
in the view of the Exchange, make
trading in the Shares inadvisable. These
may include: (1) The extent to which
trading is not occurring in the securities
and/or the financial instruments
constituting the Disclosed Portfolio of
the Fund; or (2) whether other unusual
conditions or circumstances detrimental
to the maintenance of a fair and orderly
market are present. Trading in the
Shares also will be subject to Rule
5735(d)(2)(D), which sets forth
circumstances under which Shares of
the Fund may be halted.
Trading Rules
Nasdaq deems the Shares to be equity
securities, thus rendering trading in the
Shares subject to Nasdaq’s existing rules
governing the trading of equity
securities. Nasdaq will allow trading in
the Shares from 4:00 a.m. until 8:00
p.m. Eastern time. The Exchange has
appropriate rules to facilitate
transactions in the Shares during all
trading sessions. As provided in Nasdaq
Rule 5735(b)(3), the minimum price
variation for quoting and entry of orders
in Managed Fund Shares traded on the
Exchange is $0.01.
mstockstill on DSK4VPTVN1PROD with NOTICES
Surveillance
The Exchange represents that trading
in the Shares will be subject to the
existing trading surveillances,
administered by both Nasdaq and also
the Financial Industry Regulatory
Authority (‘‘FINRA’’) on behalf of the
Exchange, which are designed to detect
violations of Exchange rules and
applicable federal securities laws.22 The
21 See
17 CFR 240.10A–3.
surveils trading on the Exchange
pursuant to a regulatory services agreement. The
22 FINRA
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19:14 Sep 25, 2014
Jkt 232001
Exchange represents that these
procedures are adequate to properly
monitor Exchange trading of the Shares
in all trading sessions and to deter and
detect violations of Exchange rules and
applicable federal securities laws.
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. In addition, the
Exchange may obtain information from
the Trade Reporting and Compliance
Engine (‘‘TRACE’’), which is the FINRAdeveloped vehicle that facilitates
mandatory reporting of over-the-counter
secondary market transactions in
eligible fixed income securities.23
FINRA, on behalf of the Exchange,
will communicate as needed regarding
trading in the Shares; exchange-traded
equities, including ADRs; exchangelisted investment companies; or other
exchange-traded securities with other
markets and other entities that are ISG
members, and FINRA, on behalf of the
Exchange, may obtain trading
information regarding trading in the
Shares, exchange-traded equities,
including ADRs, exchange-listed
investment companies, or other
exchange-traded securities from such
markets and other entities. In addition,
the Exchange may obtain information
regarding trading in the Shares;
exchange-traded equities, including
ADRs; exchange-listed investment
companies; or other exchange-traded
securities from markets and other
entities that are members of ISG or with
which the Exchange has in place a
comprehensive surveillance sharing
agreement.24 FINRA, on behalf of the
Exchange, is able to access, as needed,
trade information for certain fixed
income securities held by the Fund
reported to FINRA’s TRACE.
Not more than 10% of the net assets
of the Fund, in the aggregate, will be
invested in (1) unlisted or unsponsored
ADRs; (2) ADRs not listed on an
exchange that is not a member of ISG or
a party to a comprehensive surveillance
sharing agreement with the Exchange; or
(3) unlisted common stocks or commons
stocks not listed on an exchange that is
Exchange is responsible for FINRA’s performance
under this regulatory services agreement.
23 All broker/dealers who are FINRA member
firms have an obligation to report transactions in
corporate bonds to TRACE.
24 For a list of the current members of ISG, see
www.isgportal.org.
PO 00000
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58017
a member of the ISG or a party to a
comprehensive surveillance sharing
agreement with the Exchange.
In addition, the Exchange also has a
general policy prohibiting the
distribution of material, nonpublic
information by its employees.
Information Circular
Prior to the commencement of
trading, 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 that Shares are not individually
redeemable); (2) Nasdaq Rule 2111A,
which imposes suitability obligations on
Nasdaq members with respect to
recommending transactions in the
Shares to customers; (3) the
dissemination of information regarding
the Intraday Indicative Value through
major index service providers such as
NASDAQ OMX proprietary index data
services or other major market
proprietary index services; (4) the risks
involved in trading the Shares during
the Pre-Market and Post-Market
Sessions when an updated Intraday
Indicative Value will not be calculated
or publicly disseminated; (5) the
requirement that members deliver a
prospectus to investors purchasing
newly issued Shares prior to or
concurrently with the confirmation of a
transaction; (6) trading information; and
(7) the dissemination of the Disclosed
Portfolio though the Fund’s Web site.
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
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.
Additionally, the Information Circular
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 of the
Fund and the applicable NAV
Calculation Time for the Shares. The
Information Circular will disclose that
information about the Shares of the
Fund will be publicly available on the
Fund’s Web site.
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mstockstill on DSK4VPTVN1PROD with NOTICES
2. Statutory Basis
Nasdaq believes that the proposal is
consistent with Section 6(b) of the Act 25
in general and Section 6(b)(5) of the
Act 26 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.
The Exchange believes that the
proposed rule change is designed to
prevent fraudulent and manipulative
acts and practices in that the Shares will
be listed and traded on the Exchange
pursuant to the initial and continued
listing criteria in Nasdaq Rule 5735. The
Exchange believes that its surveillance
procedures are adequate to properly
monitor the trading of the Shares on
Nasdaq during all trading sessions and
to deter and detect violations of
Exchange rules and the applicable
federal securities laws.
The exchange-traded equities;
exchange-listed investment companies;
or other exchange-traded securities in
which the Fund may invest will be
limited to U.S. exchanges that are
members of the ISG, which includes all
U.S. national securities exchanges and
certain foreign exchanges, or are parties
to a comprehensive surveillance sharing
agreement with the Exchange. 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. In addition, the Exchange
may obtain information from TRACE,
which is the FINRA-developed vehicle
that facilitates mandatory reporting of
over-the-counter secondary market
transactions in eligible fixed income
securities.
The Fund will pursue its objectives by
investing primarily, i.e., at least 80% of
its assets under normal market
conditions, in U.S. exchange-listed
equity securities. The equity securities
held by the Fund may include smalland mid-cap sized companies. The
equity securities held by the Fund may
also include publicly-traded exchangelisted common stocks of non-U.S.
issuers in the form of ADRs.
The Fund may hold up to an aggregate
amount of 15% of its net assets in
illiquid securities or other illiquid assets
(calculated at the time of investment).
25 15
26 15
U.S.C. 78f.
U.S.C. 78f(b)(5).
VerDate Sep<11>2014
19:14 Sep 25, 2014
Jkt 232001
The Fund may not invest 25% or more
of the value of its total assets in
securities of issuers in any one industry
or group of industries.
Not more than 10% of the net assets
of the Fund, in the aggregate, will be
invested in (1) unlisted or unsponsored
ADRs; (2) ADRs not listed on an
exchange that is a member of the ISG or
a party to a comprehensive surveillance
sharing agreement with the Exchange; or
(3) unlisted common stocks or common
stocks not listed on an exchange that is
a member of the ISG or a party to a
comprehensive surveillance sharing
agreement with the Exchange. The
Adviser is not a broker-dealer, and is
not affiliated with any broker-dealer. In
the event (a) the Adviser becomes newly
affiliated with a broker-dealer or
registers as a broker-dealer, or (b) any
new adviser or sub-adviser is a
registered broker-dealer or becomes
affiliated with a broker-dealer, it will
implement a fire wall with respect to its
relevant personnel and/or such brokerdealer affiliate, as applicable, regarding
access to information concerning the
composition and/or changes to the
Fund’s portfolio. In addition, paragraph
(g) of Nasdaq Rule 5735 further requires
that personnel who make decisions on
the open-end fund’s portfolio
composition must be subject to
procedures designed to prevent the use
and dissemination of material
nonpublic information regarding the
open-end fund’s portfolio.
The proposed rule change is designed
to promote just and equitable principles
of trade and to protect investors and the
public interest in that the Exchange will
obtain a representation from the Fund
that the NAV per Share will be
calculated daily and that the NAV and
the Disclosed Portfolio will be made
available to all market participants at
the same time. In addition, a large
amount of information will be publicly
available regarding the Fund and the
Shares, thereby promoting market
transparency. The Intraday Indicative
Value, available on the NASDAQ OMX
Information LLC proprietary index data
service, will be widely disseminated by
one or more major market data vendors
and broadly displayed at least every 15
seconds during the Regular Market
Session. On each business day, before
commencement of trading in Shares in
the Regular Market Session on the
Exchange, the Fund will disclose on its
Web site the Disclosed Portfolio that
will form the basis for the Fund’s
calculation of NAV at the end of the
business day. Information regarding
market price and trading volume of the
Shares will be continually available on
a real-time basis throughout the day on
PO 00000
Frm 00150
Fmt 4703
Sfmt 4703
brokers’ computer screens and other
electronic services, and quotation and
last sale information for the Shares will
also be available via Nasdaq proprietary
quote and trade services and via the
Consolidated Tape Association plans for
the Shares. Similarly, quotation and last
sale information for any underlying
exchange-traded products will also be
available via the quote and trade
services of their respective primary
exchanges, as well as in accordance
with the Unlisted Trading Privileges
and the Consolidated Tape Association
plans, as applicable. Intra-day,
executable price quotations of the
securities and other assets held by the
Fund will be available from major
broker-dealer firms or on the exchange
on which they are traded, if applicable.
Intra-day price information will also be
available through subscription services,
such as Bloomberg, Markit and
Thomson Reuters, which can be
accessed by Authorized Participants and
other investors.
The Web site for the Fund will
include the prospectus for the Fund and
additional data relating to NAV and
other applicable quantitative
information. Trading in Shares of the
Fund will be halted or paused under the
conditions specified in Nasdaq Rules
4120 and 4121, including the trading
pauses under Nasdaq Rules 4120(a)(11)
and (12). Trading may be halted because
of market conditions or for reasons that,
in the view of the Exchange, make
trading in the Shares inadvisable, and
trading in the Shares will be subject to
Nasdaq Rule 5735(d)(2)(D), which sets
forth circumstances under which Shares
of the Fund may be halted. In addition,
as noted above, investors will have
ready access to information regarding
the Fund’s holdings, the Intraday
Indicative Value, the Disclosed
Portfolio, and quotation and last sale
information for the Shares.
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 an additional type of activelymanaged exchange-traded product that
will enhance competition among market
participants, to the benefit of investors
and the marketplace. As noted above,
the Exchange has in place surveillance
procedures relating to trading in the
Shares and 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. In addition, as noted above,
investors will have ready access to
information regarding the Fund’s
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holdings, the Intraday Indicative Value,
the Disclosed Portfolio, and quotation
and last sale information for the Shares.
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 impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. The
Exchange believes that the proposed
rule change will facilitate the listing and
trading of an additional type of activelymanaged exchange-traded fund that will
enhance competition among market
participants, to the benefit of investors
and the marketplace.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
Written comments were neither
solicited nor received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Within 45 days of the date of
publication of this notice in the Federal
Register or within such longer period
up to 90 days (i) as the Commission may
designate if it finds such longer period
to be appropriate and publishes its
reasons for so finding or (ii) as to which
the self-regulatory organization
consents, the Commission will: (a) By
order approve or disapprove such
proposed rule change; or (b) institute
proceedings to determine whether the
proposed rule change should be
disapproved.
mstockstill on DSK4VPTVN1PROD with NOTICES
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 (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
NASDAQ–2014–090 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Brent J. Fields, Secretary, Securities
and Exchange Commission, 100 F Street
NE., Washington, DC 20549–1090.
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19:14 Sep 25, 2014
Jkt 232001
All submissions should refer to File
Number SR–NASDAQ–2014–090. This
file number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street, NE.,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–
NASDAQ–2014–090 and should be
submitted on or before October 17,
2014.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.27
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2014–22910 Filed 9–25–14; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–73190; File No. SR–BYX–
2014–022]
Self-Regulatory Organizations; BATS
Y-Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change to Rule 11.9 of BATS YExchange, Inc.
September 23, 2014.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
September 12, 2014, BATS Y-Exchange,
Inc. (the ‘‘Exchange’’ or ‘‘BYX’’) 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
Exchange has designated this proposal
as a ‘‘non-controversial’’ proposed rule
change pursuant to Section 19(b)(3)(A)
of the Act 3 and Rule 19b–4(f)(6)(iii)
thereunder,4 which renders it effective
upon filing with the Commission. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of the Substance
of the Proposed Rule Change
The Exchange filed a proposal to
provide additional functionality with
respect to Primary Pegged Orders
offered by the Exchange pursuant to
Rule 11.9(c)(8).
The text of the proposed rule change
is available at the Exchange’s Web site
at https://www.batstrading.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 parts of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
Earlier this year, the Exchange and its
affiliate BATS Exchange, Inc. (‘‘BZX’’)
received approval to effect a merger (the
‘‘Merger’’) of the Exchange’s parent
company, BATS Global Markets, Inc.,
with Direct Edge Holdings LLC, the
indirect parent of EDGX Exchange, Inc.
(‘‘EDGX’’) and EDGA Exchange, Inc.
(‘‘EDGA’’, and together with BZX, BYX
and EDGX, the ‘‘BGM Affiliated
27 17
1 15
PO 00000
Frm 00151
Fmt 4703
Sfmt 4703
58019
3 15
4 17
E:\FR\FM\26SEN1.SGM
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6)(iii).
26SEN1
]]>Agencies
[Federal Register Volume 79, Number 187 (Friday, September 26, 2014)]
[Notices]
[Pages 58012-58019]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-22910]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-73178; File No. SR-NASDAQ-2014-090]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Proposed Rule Change Relating to the Listing and Trading of
the Shares of the Validea Market Legends ETF of the ETF Series
Solutions ETF Trust
September 22, 2014.
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 September 11, 2014, The NASDAQ Stock Market LLC (``Nasdaq'' or the
``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 Nasdaq. The Commission is
publishing this notice to solicit comments on the proposed rule change
from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Nasdaq proposes to list and trade the shares of the Validea Market
Legends ETF (the ``Fund'') of ETF Series Solutions (the ``Trust'')
under Nasdaq Rule 5735 (``Managed Fund Shares'').\3\ The shares of the
Fund are collectively referred to herein as the ``Shares.''
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\3\ The Commission approved Nasdaq Rule 5735 in Securities
Exchange Act Release No. 57962 (June 13, 2008), 73 FR 35175 (June
20, 2008) (SR-NASDAQ-2008-039). There are already multiple actively-
managed funds listed on the Exchange; see e.g., Securities Exchange
Act Release No. 72411 (June 17, 2014), 79 FR 35598 (June 23, 2014)
(SR-NASDAQ-2014-40) (order approving listing and trading of Calamos
Focus Growth ETF). The Exchange believes the proposed rule change
raises no significant issues not previously addressed in those prior
Commission orders.
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The text of the proposed rule change is available at https://nasdaq.cchwallstreet.com/, at Nasdaq's principal office, and at the
Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, Nasdaq included statements
concerning the purpose of, and basis for, the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. Nasdaq has prepared summaries, set forth in Sections A,
B, and C below, of the most significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to list and trade the Shares of the Fund
under Nasdaq Rule 5735, which governs the listing and trading of
Managed Fund Shares \4\ on the Exchange. The Fund will be an actively-
managed exchange-traded fund (``ETF''). The Shares will be offered by
the Trust, which was established as a Delaware business trust on
February 9, 2012.\5\ The Trust is registered with the Commission as an
investment company and has filed a registration statement on Form N-1A
(``Registration Statement'') with the Commission.\6\ The Fund is a
series of the Trust.
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\4\ A Managed Fund Share is a security that represents an
interest in an investment company registered under the Investment
Company Act of 1940, as amended (15 U.S.C. 80a-1) (the ``1940 Act'')
organized as an open-end investment company or similar entity that
invests in a portfolio of securities selected by its investment
adviser consistent with its investment objectives and policies. In
contrast, an open-end investment company that issues Index Fund
Shares, listed and traded on the Exchange under Nasdaq Rule 5705,
seeks to provide investment results that correspond generally to the
price and yield performance of a specific foreign or domestic stock
index, fixed income securities index or combination thereof.
\5\ The Trust has obtained, or will obtain prior to listing
Shares of the Fund on the Exchange, from the Commission an order
(the ``Exemptive Order'') on which the Trust may rely, granting
certain exemptive relief to the Trust under the 1940 Act. See
Application for an Order (June 16, 2014) (File No. 812-14322).
\6\ See Post-Effective Amendment No. 14 to the Registration
Statement on Form N-1A for the Trust, dated July 16, 2014 (File Nos.
333-179562 and 811-22668). The descriptions of the Fund and the
Shares contained herein are based, in part, on information in the
Registration Statement.
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[[Page 58013]]
Validea Capital Management, LLC will be the investment adviser
(``Adviser'') to the Fund. Quasar Distributors, LLC (the
``Distributor'') will be the principal underwriter and distributor of
the Fund's Shares. U.S. Bancorp Fund Services, LLC (``USBFS'') will act
as the administrator, accounting agent, and transfer agent to the Fund.
U.S. Bank National Association will act as the custodian to the Fund.
Paragraph (g) of Rule 5735 provides that if the investment adviser
to the investment company issuing Managed Fund Shares is affiliated
with a broker-dealer, such investment adviser shall erect a ``fire
wall'' between the investment adviser and the broker-dealer with
respect to access to information concerning the composition and/or
changes to such investment company portfolio.\7\ In addition, paragraph
(g) further requires that personnel who make decisions on the open-end
fund's portfolio composition must be subject to procedures designed to
prevent the use and dissemination of material, nonpublic information
regarding the open-end fund's portfolio. Rule 5735(g) is similar to
Nasdaq Rule 5705(b)(5)(A)(i); however, paragraph (g) in connection with
the establishment of a ``fire wall'' between the investment adviser and
the broker-dealer reflects the applicable open-end fund's portfolio,
not an underlying benchmark index, as is the case with index-based
funds. The Adviser is not a broker-dealer, and is not affiliated with
any broker-dealer. In the event (a) the Adviser becomes newly
affiliated with a broker-dealer or registers as a broker-dealer, or (b)
any new adviser or sub-adviser is a registered broker-dealer or becomes
affiliated with a broker-dealer, it will implement a fire wall with
respect to its relevant personnel and/or such broker-dealer affiliate,
as applicable, regarding access to information concerning the
composition and/or changes to the portfolio and will be subject to
procedures designed to prevent the use and dissemination of material
nonpublic information regarding such portfolio. The Adviser has no
present intent or arrangement to become newly affiliated with any
broker-dealer, and the Fund does not currently intend to use a sub-
adviser.
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\7\ 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 applicable
federal securities laws as defined in Rule 204A-1(e)(4).
Accordingly, procedures designed to prevent the communication and
misuse of nonpublic information by an investment adviser must be
consistent with Rule 204A-1 under the Advisers Act. In addition,
Rule 206(4)-7 under the Advisers Act makes it unlawful for an
investment adviser to provide investment advice to clients unless
such investment adviser has (i) adopted and implemented written
policies and procedures reasonably designed to prevent violation, by
the investment adviser and its supervised persons, of the Advisers
Act and the Commission rules adopted thereunder; (ii) implemented,
at a minimum, an annual review regarding the adequacy of the
policies and procedures established pursuant to subparagraph (i)
above and the effectiveness of their implementation; and (iii)
designated an individual (who is a supervised person) responsible
for administering the policies and procedures adopted under
subparagraph (i) above.
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Validea Market Legends ETF
Principal Investments
The Fund is a non-diversified, actively-managed ETF that intends to
qualify each year as a regulated investment company under Subchapter M
of the Internal Revenue Code of 1986, as amended.
The Fund's primary investment objective is to achieve capital
appreciation, with a secondary focus on income. The Fund will pursue
its objectives by investing primarily, i.e. at least 80% of its assets
under normal market conditions,\8\ in U.S. exchange-listed equity
securities of U.S. companies and foreign equity securities traded on a
U.S. exchange as American Depositary Receipts (``ADRs'').
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\8\ The term ``under normal market conditions'' as used herein
includes, but is not limited to, the absence of adverse market,
economic, political or other conditions, including extreme
volatility or trading halts in the securities markets or the
financial markets generally; operational issues causing
dissemination of inaccurate market information; or force majeure
type events such as systems failure, natural or man-made disaster,
act of God, armed conflict, act of terrorism, riot or labor
disruption or any similar intervening circumstance. In periods of
extreme market disturbance, the Fund may take temporary defensive
positions, by overweighting its portfolio in cash/cash-like
instruments; however, to the extent possible, the Adviser would
continue to seek to achieve the Fund's investment objectives.
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The Adviser will select securities using a proprietary quantitative
and fundamentals-based system that evaluates investment opportunities
based on the published investment strategies of legendary investors
whose investment strategies have generally been subject to significant
academic or media analysis, such as Warren Buffet, Peter Lynch and
David Dreman. The Adviser's system incorporates 17 stock selection
models, each intended to replicate the strategy of a legendary
investor. The models incorporate over 300 unique fundamental metrics of
companies, including measures relating to profitability, valuation,
growth, cash flow, financing and past performance, among others. The
Adviser scores over 6,000 companies based on the metrics of its
investor models and expects that the Fund will generally hold
approximately 100 securities.
Using historical data, the Adviser's system evaluates the long term
performance, risks, and correlation of each model and blends some or
all of the models to identify the composite strategy that the Adviser
believes is most likely to achieve the Fund's investment objectives
while reducing volatility. By utilizing various stock picking methods
in the creation of the composite strategy, the Adviser will seek to
reduce the volatility of the Fund's returns in different market
environments and limit investment style specific risk.
The Fund will invest at least 80% of its assets in equity
securities of U.S. companies and foreign equity securities traded on a
U.S. exchange as ADRs.\9\ The Fund's investment in ADRs may include
ADRs representing companies in emerging markets. The Fund may invest in
the securities of companies of any market capitalization, but the
Adviser expects that the Fund will have a bias toward small-cap and
mid-cap companies. The Adviser also expects to limit the Fund's
investment in any individual economic sector to no more than 40% of the
Fund's total assets.
---------------------------------------------------------------------------
\9\ ADRs are receipts, typically issued by a bank or trust
issuer, which evidence ownership of underlying securities issued by
a non-U.S. issuer. For ADRs, the depository is typically a U.S.
financial institution and the underlying securities are issued by a
non-U.S. issuer. ADRs are not necessarily denominated in the same
currency as their underlying securities.
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The Adviser expects that the Fund will regularly update or
``rebalance'' the securities that it holds, but no more often than once
every 28 days and at least 5 times per year. On each such date,
securities whose fundamental scores no longer meet the Fund's
requirements will be removed and replaced with higher scoring
securities. A stock will only be sold in between rebalance dates if the
stock has significantly underperformed the overall market since the
time the stock was purchased.
The Fund's investment in foreign equity securities will be in the
form of ADRs. With respect to its investments in exchange-listed common
stocks and ADRs, the Fund will invest in such securities that trade in
markets that are members of the Intermarket Surveillance Group
(``ISG'').
[[Page 58014]]
Other Investments
The Fund will generally invest in sponsored ADRs that are listed on
ISG member exchanges and that the Adviser deems as liquid at time of
purchase. In certain limited circumstances, the Fund may invest in
unlisted or unsponsored ADRs or ADRs that the Adviser deems illiquid at
the time of purchase or for which pricing information is not readily
available. The issuers of unlisted or unsponsored ADRs are not
obligated to disclose material information in the United States.
Therefore, there may be less information available regarding such
issuers and there may be no correlation between available information
and the market value of the ADRs.
The Fund may hold up to an aggregate amount of 15% of its net
assets in illiquid securities or other illiquid assets (calculated at
the time of investment). The Fund will monitor its portfolio liquidity
on an ongoing basis to determine whether, in light of current
circumstances, an adequate level of liquidity is being maintained, and
will consider taking appropriate steps in order to maintain adequate
liquidity if, through a change in values, net assets, or other
circumstances, more than 15% of the Fund's net assets are held in
illiquid assets. Illiquid assets include securities subject to
contractual or other restrictions on resale and other instruments that
lack readily available markets as determined in accordance with
Commission staff guidance.\10\
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\10\ The Commission has stated that long-standing Commission
guidelines have required open-end funds to hold no more than 15% of
their net assets in illiquid securities and other illiquid assets.
See Investment Company Act Release No. 28193 (March 11, 2008), 73 FR
14618 (March 18, 2008), FN 34. See also Investment Company Act
Release No. 5847 (October 21, 1969), 35 FR 19989 (December 31, 1970)
(Statement Regarding ``Restricted Securities''); Investment Company
Act Release No. 18612 (March 12, 1992), 57 FR 9828 (March 20, 1992)
(Revisions of Guidelines to Form N-1A). A fund's portfolio security
is illiquid if it cannot be disposed of in the ordinary course of
business within seven days at approximately the value ascribed to it
by the fund. See Investment Company Act Release No. 14983 (March 12,
1986), 51 FR 9773 (March 21, 1986) (adopting amendments to Rule 2a-7
under the 1940 Act); Investment Company Act Release No. 17452 (April
23, 1990), 55 FR 17933 (April 30, 1990) (adopting Rule 144A under
the Securities Act of 1933).
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The Fund may not invest more than 25% of the value of its total
assets in securities of issuers in any one industry or group of
industries. This restriction does not apply to obligations issued or
guaranteed by the U.S. government, its agencies or instrumentalities,
or securities of other registered investment companies.\11\
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\11\ See Form N-1A, Item 9. The Commission has taken the
position that a fund is concentrated if it invests more than 25% of
the value of its total assets in any one industry. See, e.g.,
Investment Company Act Release No. 9011 (October 30, 1975), 40 FR
54241 (November 21, 1975).
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While the Fund under normal circumstances will invest at least 80%
of its assets in U.S. exchange-listed equity securities, the Fund may
invest the remaining assets in a variety of other securities in support
of its primary investment strategy, including, but not limited to:
equity securities traded over-the-counter,\12\ equity securities of
other U.S. registered investment companies, including open-end mutual
funds, money market mutual funds and exchange-traded funds, and money
market instruments.\13\
---------------------------------------------------------------------------
\12\ The Fund's investments in equity securities traded over-
the-counter include shares of common stock and ADRs. Not more than
10% of the net assets of the Fund, in the aggregate, will be
invested in (1) unlisted or unsponsored ADRs; (2) ADRs not listed on
an exchange that is not a member of ISG or a party to a
comprehensive surveillance sharing agreement with the Exchange; or
(3) unlisted common stocks or commons stocks not listed on an
exchange that is a member of the ISG or a party to a comprehensive
surveillance sharing agreement with the Exchange.
\13\ The term ``money market instruments,'' as used herein,
means (i) short-term obligations issued by the U.S. Government; (ii)
short term negotiable obligations of commercial banks, fixed time
deposits and bankers' acceptances of U.S. and foreign banks and
similar institutions; (iii) commercial paper rated at the date of
purchase ``Prime-1'' by Moody's Investors Service, Inc. or ``A-1+''
or ``A-1'' by Standard & Poor's or, if unrated, of comparable
quality, as the Adviser of the Fund determines; and (iv) money
market mutual funds.
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The Shares
The Fund will issue and redeem Shares only in Creation Units at the
net asset value (``NAV'') \14\ next determined after receipt of an
order on a continuous basis every day except weekends and specified
holidays. The NAV of the Fund will be determined once each business
day, normally as of the close of trading of the NYSE, generally, 4:00
p.m. Eastern time. Creation Unit sizes will be at least 50,000 Shares
per Creation Unit. The Trust will issue and sell Shares of the Fund
only in Creation Units on a continuous basis through the Distributor,
without a sales load (but subject to transaction fees), at their NAV
per Share next determined after receipt of an order, on any business
day, in proper form pursuant to the terms of the agreement executed
with each Authorized Participant (as defined below).
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\14\ The NAV of the Fund's Shares generally will be calculated
once daily Monday through Friday as of the close of regular trading
on the New York Stock Exchange (``NYSE''), generally 4:00 p.m.
Eastern time (the ``NAV Calculation Time''). NAV per Share will be
calculated by dividing the Fund's net assets by the number of Fund
Shares outstanding. For more information regarding the valuation of
Fund investments in calculating the Fund's NAV, see Registration
Statement.
---------------------------------------------------------------------------
The consideration for purchase of a Creation Unit generally will
consist of either (i) the in-kind deposit of a designated portfolio of
securities (the ``Deposit Securities'') per each Creation Unit and the
Cash Component (as defined below), computed as described below or (ii)
the cash value of all or a portion of the Deposit Securities (``Deposit
Cash'') and the ``Cash Component,'' computed as described below. The
Fund may, under certain circumstances, effect a portion of creations
and redemptions for cash, rather than in-kind securities, in accordance
with the Exemptive Order.
When accepting purchases of Creation Units for cash, the Fund may
incur additional costs associated with the acquisition of Deposit
Securities that would otherwise be provided by an in-kind purchaser.
Together, the Deposit Securities or Deposit Cash, as applicable, and
the Cash Component will constitute the ``Fund Deposit,'' which
represents the minimum initial and subsequent investment amount for a
Creation Unit of the Fund. The ``Cash Component'' will be an amount
equal to the difference between the NAV of the Shares (per Creation
Unit) and the market value of the Deposit Securities or Deposit Cash,
as applicable. If the Cash Component is a positive number (i.e., the
NAV per Creation Unit exceeds the market value of the Deposit
Securities or Deposit Cash, as applicable), the Cash Component will be
such positive amount. If the Cash Component is a negative number (i.e.,
the NAV per Creation Unit is less than the market value of the Deposit
Securities or Deposit Cash, as applicable), the Cash Component will be
such negative amount and the creator will be entitled to receive cash
in an amount equal to the Cash Component. The Cash Component will serve
the function of compensating for any difference between the NAV per
Creation Unit and the market value of the Deposit Securities or Deposit
Cash, as applicable.
To be eligible to place orders with respect to creations and
redemptions of Creation Units, an entity must be (i) a ``Participating
Party,'' i.e., a broker-dealer or other participant in the clearing
process through the Continuous Net Settlement System of the National
Securities Clearing Corporation (``NSCC'') or (ii) a Depository Trust
Company (``DTC'') Participant (a ``DTC Participant''). In addition,
each Participating Party or DTC Participant (each, an ``Authorized
Participant'') must execute an agreement that has
[[Page 58015]]
been agreed to by the Distributor and USBFS with respect to purchases
and redemptions of Creation Units.
USBFS, through the NSCC, will make available on each business day,
immediately prior to the opening of business on the Exchange's Regular
Market Session (currently 9:30 a.m. Eastern time), the list of the
names and the required number of shares of each Deposit Security and/or
the required amount of Deposit Cash, as applicable, to be included in
the current Fund Deposit (based on information at the end of the
previous business day) for the Fund. Such Fund Deposit, subject to any
relevant adjustments, will be applicable in order to effect purchases
of Creation Units of the Fund until such time as the next announced
composition of the Deposit Securities and/or the required amount of
Deposit Cash, as applicable, is made available.
Shares may be redeemed only in Creation Units at their NAV next
determined after receipt of a redemption request in proper form by the
Fund through USBFS and only on a business day.
With respect to the Fund, USBFS, through the NSCC, will make
available immediately prior to the opening of business on the Exchange
(9:30 a.m. Eastern time) on each business day, the list of the names
and share quantities of the Fund's portfolio securities (``Fund
Securities'') and/or, if relevant, the required cash value thereof that
will be applicable (subject to possible amendment or correction) to
redemption requests received in proper form on that day. Fund
Securities received on redemption may not be identical to Deposit
Securities.
Redemption proceeds for a Creation Unit will be paid either in kind
or in cash or a combination thereof, as determined by the Trust. With
respect to in kind redemptions of the Fund, redemption proceeds for a
Creation Unit will consist of Fund Securities as announced by USBFS on
the business day of the request for redemption received in proper form
plus cash in an amount equal to the difference between the NAV of the
Shares being redeemed, as next determined after a receipt of a request
in proper form, and the value of the Fund Securities (the ``Cash
Redemption Amount''), less a fixed redemption transaction fee and any
applicable additional variable charge as set forth in the Registration
Statement. In the event that the Fund Securities have a value greater
than the NAV of the Shares, a compensating cash payment equal to the
differential will be required to be made by or through an Authorized
Participant by the redeeming shareholder. Notwithstanding the
foregoing, at the Trust's discretion, an Authorized Participant may
receive the corresponding cash value of the securities in lieu of one
or more Fund Securities.
The creation/redemption order cut off time for the Fund is expected
to be 4:00 p.m. Eastern time for purchases of Shares. On days when the
Exchange closes earlier than normal and in the case of custom orders,
the Fund may require orders for Creation Units to be placed earlier in
the day.
Net Asset Value
The NAV per Share for the Fund will be computed by dividing the
value of the net assets of the Fund (i.e., the value of its total
assets less total liabilities) by the total number of Shares
outstanding, rounded to the nearest cent. Expenses and fees, including
the management fees, will be accrued daily and taken into account for
purposes of determining NAV. The NAV of the Fund will be calculated by
USBFS and determined at the close of the regular trading session on the
NYSE (ordinarily 4:00 p.m. Eastern time) on each day that such exchange
is open. In calculating the Fund's NAV per Share, investments will
generally be valued by using market valuations. A market valuation
generally means a valuation (i) obtained from an exchange, a pricing
service, or a major market maker (or dealer) or (ii) based on a price
quotation or other equivalent indication of value supplied by an
exchange, a pricing service, or a major market maker (or dealer).\15\
Exchange-traded equities, exchange-traded ADRs and other exchange-
traded securities will be valued at the official closing price on their
principal exchange or board of trade, or lacking any current reported
sale at the time of valuation, at the mean between the most recent bid
and asked quotations on its principal exchange or board of trade.
Portfolio securities traded on more than one securities exchange will
be valued at the last sale price or official closing price, as
applicable, on the business day as of which such value is being
determined at the close of the exchange representing the principal
market for such securities. Equity securities traded over-the-counter
and ADRs traded over-the-counter will be valued at the mean between the
most recent bid and asked quotations received from pricing services; if
the most recent bid and asked quotations are not available, these
securities will be valued in accordance with the Fund's fair valuation
procedures. Money market instruments with maturities of less than 60
days will be valued at amortized cost; money market instruments with
longer maturities will be valued at the mid-point of the bid-ask
prices. Investment company shares will be valued at NAV, unless the
shares are exchange-traded, in which case they will be valued at the
last sale or official closing price on the market on which they
primarily trade.
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\15\ Under normal market conditions, the Fund will obtain
pricing information on all of its assets from these sources.
---------------------------------------------------------------------------
Notwithstanding the foregoing, in determining the value of any
security or asset, the Fund may use a valuation provided by a pricing
vendor employed by the Trust and approved by the Board of Trustees of
the Trust (the ``Trust Board''). The pricing vendor may base such
valuations upon dealer quotes, by analyzing the listed market, by
utilizing matrix pricing, by analyzing market correlations and pricing
and/or employing sensitivity analysis.
The Adviser may use various pricing services, or discontinue the
use of any pricing service, as approved by the Trust Board from time to
time. A price obtained from a pricing service based on such pricing
service's valuation matrix may be considered a market valuation. Any
assets or liabilities denominated in currencies other than the U.S.
dollar will be converted into U.S. dollars at the current market rates
on the date of valuation as quoted by one or more sources.
In the event that current market valuations are not readily
available or such valuations do not reflect current market value, the
Trust's procedures require the Trust's Valuation Committee to determine
a security's fair value if a market price is not readily available in
accordance with the 1940 Act.\16\ In determining such value the Trust's
Valuation Committee may consider, among other things, (i) price
comparisons among multiple sources, (ii) a review of corporate actions
and news events, and (iii) a review of relevant financial indicators.
In these cases, the Fund's NAV may reflect certain portfolio
securities' fair values rather than their market prices. Fair value
pricing may involve subjective judgments and it is possible that the
fair value determination for a security is materially different than
the value that
[[Page 58016]]
could be realized upon the sale of the security.
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\16\ The Valuation Committee of the Trust Board will be
responsible for the oversight of the pricing procedures of the Fund
and the valuation of the Fund's portfolio. The Fund has implemented
procedures designed to prevent the use and dissemination of
material, nonpublic information regarding valuation and revaluation
of any portfolio investments.
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Availability of Information
The Fund's Web site (www.valideafunds.com), which will be publicly
available prior to the public offering of Shares, will include a form
of the prospectus for the Fund that may be downloaded. The Web site
will include additional quantitative information updated on a daily
basis, including, for the Fund: (1) the prior business day's reported
NAV, mid-point of the bid/ask spread at the time of calculation of such
NAV (the ``Bid/Ask Price''),\17\ and a calculation of the premium and
discount of the Bid/Ask Price against the NAV; and (2) data in chart
format displaying the frequency distribution of discounts and premiums
of the daily Bid/Ask Price against the NAV, within appropriate ranges,
for each of the four previous calendar quarters. On each business day,
before commencement of trading in Shares in the Regular Market Session
\18\ on the Exchange, the Fund will disclose on its Web site the
identities and quantities of the portfolio of securities and other
assets (the ``Disclosed Portfolio'') held by the Fund that will form
the basis for the Fund's calculation of NAV at the end of the business
day.\19\ On a daily basis, the Disclosed Portfolio will include each
portfolio security and other financial instruments of the Fund with the
following information on the Fund's Web site: ticker symbol, CUSIP
number or other identifier, if any; a description of the holding
(including the type of holding); the identity of the security, index,
or other asset or instrument underlying the holding, if any; quantity
held (as measured by, for example, number of shares); maturity date, if
any; coupon rate, if any; effective date, if any; market value of the
holding; and the percentage weighting of the holdings in the Fund's
portfolio. The Web site information will be publicly available at no
charge.
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\17\ The Bid/Ask Price of the Fund will be determined using the
midpoint of the highest bid and the lowest offer on the Exchange as
of the time of calculation of such Fund's NAV. The records relating
to Bid/Ask Prices will be retained by the Fund and its service
providers.
\18\ 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. Eastern time; (2) Regular Market Session from 9:30 a.m. to 4
p.m. or 4:15 p.m. Eastern time; and (3) Post-Market Session from 4
p.m. or 4:15 p.m. to 8 p.m. Eastern time).
\19\ Under accounting procedures to be followed by the Fund,
trades made on the prior business day (``T'') will be booked and
reflected in NAV on the current business day (``T+1'').
Notwithstanding the foregoing, portfolio trades that are executed
prior to the opening of the Exchange on any business day may be
booked and reflected in NAV on such business day. Accordingly, the
Fund will be able to disclose at the beginning of the business day
the portfolio that will form the basis for the NAV calculation at
the end of the business day.
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In addition, for the Fund, an estimated value, defined in Rule
5735(c)(3) as the ``Intraday Indicative Value,'' that reflects an
estimated intraday value of the Fund's portfolio, will be disseminated.
Moreover, the Intraday Indicative Value, available on the NASDAQ OMX
Information LLC proprietary index data service,\20\ will be based upon
the current value for the components of the Disclosed Portfolio and
will be updated and widely disseminated and broadly displayed at least
every 15 seconds during the Regular Market Session. The Intraday
Indicative Value will be based on quotes and closing prices from the
securities' local market and may not reflect events that occur
subsequent to the local market's close. Intra-day, executable price
quotations on the securities and other assets held by the Fund will be
available from major broker-dealer firms. Intra-day price information
on the securities and other assets held by the Fund will also be
available through subscription or free services that can be accessed by
Authorized Participants and other investors: (a) Pricing information
for exchange-traded equity securities; investment company securities;
exchange-traded ADRs; or other exchange-traded securities will be
publicly available from the Web sites of the exchanges on which they
trade, on public financial Web sites, and through subscription services
such as Bloomberg and Thompson Reuters; and (b) pricing information
regarding over-the-counter equities (including over-the-counter ADRs
and certain investment company securities) and money market
instruments, will be available through subscription services such as
Markit, Bloomberg and Thompson Reuters.
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\20\ Currently, the NASDAQ OMX Global Index Data Service
(``GIDS'') is the NASDAQ OMX global index data feed service,
offering real-time updates, daily summary messages, and access to
widely followed indexes and Intraday Indicative Values for ETFs.
GIDS provides investment professionals with the daily information
needed to track or trade NASDAQ OMX indexes, listed ETFs, or third-
party partner indexes and ETFs.
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Premiums and discounts between the Intraday Indicative Value and
the market price of the Fund's shares may occur. This should not be
viewed as a ``real time'' update of the NAV per Share of the Fund,
which is calculated only once a day.
The dissemination of the Intraday Indicative Value, together with
the Disclosed Portfolio, will allow investors to determine the value of
the underlying portfolio of the Fund on a daily basis and will provide
a close estimate of that value throughout the trading day.
In addition, a basket composition file, which includes the security
names, amounts and share quantities, as applicable, required to be
delivered in exchange for the Fund's Shares, together with estimates
and actual cash components, will be publicly disseminated daily prior
to the opening of Nasdaq via NSCC. The basket will represent one
Creation Unit of the Fund.
Investors will also be able to obtain the Fund's Statement of
Additional Information (``SAI''), the Fund's annual and semi-annual
reports (together, ``Shareholder Reports''), and its Form N-CSR and
Form N-SAR. The Fund's SAI and Shareholder Reports will be available
free upon request from the Fund, and those documents and the Form N-CSR
and Form N-SAR may be viewed on-screen or downloaded from the
Commission's Web site at www.sec.gov. Information regarding market
price and volume of the Shares will be continually available on a real-
time basis throughout the day on brokers' computer screens and other
electronic services. Information regarding the previous day's closing
price and trading volume information for the Shares will be published
daily in the financial section of newspapers. Quotation and last sale
information for the Shares will be available via Nasdaq proprietary
quote and trade services and via the Consolidated Tape Association
plans for the Shares. Similarly, quotation and last sale information
for any underlying exchange-traded products will also be available via
the quote and trade services of their respective primary exchanges, as
well as in accordance with the Unlisted Trading Privileges and the
Consolidated Tape Association plans, as applicable.
Additional information regarding the Fund and the Shares, including
investment strategies, risks, creation and redemption procedures, fees,
Fund holdings disclosure policies, distributions and taxes is included
in the Registration Statement. All terms relating to the Fund that are
referred to, but not defined in, this proposed rule change are defined
in the Registration Statement.
Initial and Continued Listing
The Shares will be subject to Rule 5735, which sets forth the
initial and continued listing criteria applicable to Managed Fund
Shares. The Exchange represents that, for initial and/or continued
listing, the Fund must be in
[[Page 58017]]
compliance with Rule 10A-3 \21\ under the Act. A minimum of 100,000
Shares 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 and that the
NAV and the Disclosed Portfolio will be made available to all market
participants at the same time.
---------------------------------------------------------------------------
\21\ See 17 CFR 240.10A-3.
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Trading Halts and Trading Pauses
With respect to trading halts, the Exchange may consider all
relevant factors in exercising its discretion to halt or suspend
trading in the Shares of the Fund. Nasdaq will halt or pause trading in
the Shares under the conditions specified in Nasdaq Rules 4120 and
4121, including the trading pauses under Nasdaq Rules 4120(a)(11) and
(12). Trading may be halted because of market conditions or for reasons
that, in the view of the Exchange, make trading in the Shares
inadvisable. These may include: (1) The extent to which trading is not
occurring in the securities and/or the financial instruments
constituting the Disclosed Portfolio of the Fund; or (2) whether other
unusual conditions or circumstances detrimental to the maintenance of a
fair and orderly market are present. Trading in the Shares also will be
subject to Rule 5735(d)(2)(D), which sets forth circumstances under
which Shares of the Fund may be halted.
Trading Rules
Nasdaq deems the Shares to be equity securities, thus rendering
trading in the Shares subject to Nasdaq's existing rules governing the
trading of equity securities. Nasdaq will allow trading in the Shares
from 4:00 a.m. until 8:00 p.m. Eastern time. The Exchange has
appropriate rules to facilitate transactions in the Shares during all
trading sessions. As provided in Nasdaq Rule 5735(b)(3), the minimum
price variation for quoting and entry of orders in Managed Fund Shares
traded on the Exchange is $0.01.
Surveillance
The Exchange represents that trading in the Shares will be subject
to the existing trading surveillances, administered by both Nasdaq and
also the Financial Industry Regulatory Authority (``FINRA'') on behalf
of the Exchange, which are designed to detect violations of Exchange
rules and applicable federal securities laws.\22\ The Exchange
represents that these procedures are adequate to properly monitor
Exchange trading of the Shares in all trading sessions and to deter and
detect violations of Exchange rules and applicable federal securities
laws.
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\22\ FINRA surveils trading on the Exchange pursuant to a
regulatory services agreement. The Exchange is responsible for
FINRA's performance under this regulatory services agreement.
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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. In addition,
the Exchange may obtain information from the Trade Reporting and
Compliance Engine (``TRACE''), which is the FINRA-developed vehicle
that facilitates mandatory reporting of over-the-counter secondary
market transactions in eligible fixed income securities.\23\
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\23\ All broker/dealers who are FINRA member firms have an
obligation to report transactions in corporate bonds to TRACE.
---------------------------------------------------------------------------
FINRA, on behalf of the Exchange, will communicate as needed
regarding trading in the Shares; exchange-traded equities, including
ADRs; exchange-listed investment companies; or other exchange-traded
securities with other markets and other entities that are ISG members,
and FINRA, on behalf of the Exchange, may obtain trading information
regarding trading in the Shares, exchange-traded equities, including
ADRs, exchange-listed investment companies, or other exchange-traded
securities from such markets and other entities. In addition, the
Exchange may obtain information regarding trading in the Shares;
exchange-traded equities, including ADRs; exchange-listed investment
companies; or other exchange-traded securities from markets and other
entities that are members of ISG or with which the Exchange has in
place a comprehensive surveillance sharing agreement.\24\ FINRA, on
behalf of the Exchange, is able to access, as needed, trade information
for certain fixed income securities held by the Fund reported to
FINRA's TRACE.
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\24\ For a list of the current members of ISG, see
www.isgportal.org.
---------------------------------------------------------------------------
Not more than 10% of the net assets of the Fund, in the aggregate,
will be invested in (1) unlisted or unsponsored ADRs; (2) ADRs not
listed on an exchange that is not a member of ISG or a party to a
comprehensive surveillance sharing agreement with the Exchange; or (3)
unlisted common stocks or commons stocks not listed on an exchange that
is a member of the ISG or a party to a comprehensive surveillance
sharing agreement with the Exchange.
In addition, the Exchange also has a general policy prohibiting the
distribution of material, nonpublic information by its employees.
Information Circular
Prior to the commencement of trading, 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 that Shares are not
individually redeemable); (2) Nasdaq Rule 2111A, which imposes
suitability obligations on Nasdaq members with respect to recommending
transactions in the Shares to customers; (3) the dissemination of
information regarding the Intraday Indicative Value through major index
service providers such as NASDAQ OMX proprietary index data services or
other major market proprietary index services; (4) the risks involved
in trading the Shares during the Pre-Market and Post-Market Sessions
when an updated Intraday Indicative Value will not be calculated or
publicly disseminated; (5) the requirement that members deliver a
prospectus to investors purchasing newly issued Shares prior to or
concurrently with the confirmation of a transaction; (6) trading
information; and (7) the dissemination of the Disclosed Portfolio
though the Fund's Web site.
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 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.
Additionally, the Information Circular 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 of the Fund and the applicable NAV Calculation Time
for the Shares. The Information Circular will disclose that information
about the Shares of the Fund will be publicly available on the Fund's
Web site.
[[Page 58018]]
2. Statutory Basis
Nasdaq believes that the proposal is consistent with Section 6(b)
of the Act \25\ in general and Section 6(b)(5) of the Act \26\ 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.
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\25\ 15 U.S.C. 78f.
\26\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that the proposed rule change is designed to
prevent fraudulent and manipulative acts and practices in that the
Shares will be listed and traded on the Exchange pursuant to the
initial and continued listing criteria in Nasdaq Rule 5735. The
Exchange believes that its surveillance procedures are adequate to
properly monitor the trading of the Shares on Nasdaq during all trading
sessions and to deter and detect violations of Exchange rules and the
applicable federal securities laws.
The exchange-traded equities; exchange-listed investment companies;
or other exchange-traded securities in which the Fund may invest will
be limited to U.S. exchanges that are members of the ISG, which
includes all U.S. national securities exchanges and certain foreign
exchanges, or are parties to a comprehensive surveillance sharing
agreement with the Exchange. 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. In addition, the Exchange may obtain information from TRACE,
which is the FINRA-developed vehicle that facilitates mandatory
reporting of over-the-counter secondary market transactions in eligible
fixed income securities.
The Fund will pursue its objectives by investing primarily, i.e.,
at least 80% of its assets under normal market conditions, in U.S.
exchange-listed equity securities. The equity securities held by the
Fund may include small- and mid-cap sized companies. The equity
securities held by the Fund may also include publicly-traded exchange-
listed common stocks of non-U.S. issuers in the form of ADRs.
The Fund may hold up to an aggregate amount of 15% of its net
assets in illiquid securities or other illiquid assets (calculated at
the time of investment). The Fund may not invest 25% or more of the
value of its total assets in securities of issuers in any one industry
or group of industries.
Not more than 10% of the net assets of the Fund, in the aggregate,
will be invested in (1) unlisted or unsponsored ADRs; (2) ADRs not
listed on an exchange that is a member of the ISG or a party to a
comprehensive surveillance sharing agreement with the Exchange; or (3)
unlisted common stocks or common stocks not listed on an exchange that
is a member of the ISG or a party to a comprehensive surveillance
sharing agreement with the Exchange. The Adviser is not a broker-
dealer, and is not affiliated with any broker-dealer. In the event (a)
the Adviser becomes newly affiliated with a broker-dealer or registers
as a broker-dealer, or (b) any new adviser or sub-adviser is a
registered broker-dealer or becomes affiliated with a broker-dealer, it
will implement a fire wall with respect to its relevant personnel and/
or such broker-dealer affiliate, as applicable, regarding access to
information concerning the composition and/or changes to the Fund's
portfolio. In addition, paragraph (g) of Nasdaq Rule 5735 further
requires that personnel who make decisions on the open-end fund's
portfolio composition must be subject to procedures designed to prevent
the use and dissemination of material nonpublic information regarding
the open-end fund's portfolio.
The proposed rule change is designed to promote just and equitable
principles of trade and to protect investors and the public interest in
that the Exchange will obtain a representation from the Fund that the
NAV per Share will be calculated daily and that the NAV and the
Disclosed Portfolio will be made available to all market participants
at the same time. In addition, a large amount of information will be
publicly available regarding the Fund and the Shares, thereby promoting
market transparency. The Intraday Indicative Value, available on the
NASDAQ OMX Information LLC proprietary index data service, will be
widely disseminated by one or more major market data vendors and
broadly displayed at least every 15 seconds during the Regular Market
Session. On each business day, before commencement of trading in Shares
in the Regular Market Session on the Exchange, the Fund will disclose
on its Web site the Disclosed Portfolio that will form the basis for
the Fund's calculation of NAV at the end of the business day.
Information regarding market price and trading volume of the Shares
will be continually available on a real-time basis throughout the day
on brokers' computer screens and other electronic services, and
quotation and last sale information for the Shares will also be
available via Nasdaq proprietary quote and trade services and via the
Consolidated Tape Association plans for the Shares. Similarly,
quotation and last sale information for any underlying exchange-traded
products will also be available via the quote and trade services of
their respective primary exchanges, as well as in accordance with the
Unlisted Trading Privileges and the Consolidated Tape Association
plans, as applicable. Intra-day, executable price quotations of the
securities and other assets held by the Fund will be available from
major broker-dealer firms or on the exchange on which they are traded,
if applicable. Intra-day price information will also be available
through subscription services, such as Bloomberg, Markit and Thomson
Reuters, which can be accessed by Authorized Participants and other
investors.
The Web site for the Fund will include the prospectus for the Fund
and additional data relating to NAV and other applicable quantitative
information. Trading in Shares of the Fund will be halted or paused
under the conditions specified in Nasdaq Rules 4120 and 4121, including
the trading pauses under Nasdaq Rules 4120(a)(11) and (12). Trading may
be halted because of market conditions or for reasons that, in the view
of the Exchange, make trading in the Shares inadvisable, and trading in
the Shares will be subject to Nasdaq Rule 5735(d)(2)(D), which sets
forth circumstances under which Shares of the Fund may be halted. In
addition, as noted above, investors will have ready access to
information regarding the Fund's holdings, the Intraday Indicative
Value, the Disclosed Portfolio, and quotation and last sale information
for the Shares.
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
an additional type of actively-managed exchange-traded product that
will enhance competition among market participants, to the benefit of
investors and the marketplace. As noted above, the Exchange has in
place surveillance procedures relating to trading in the Shares and 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. In addition, as noted above, investors
will have ready access to information regarding the Fund's
[[Page 58019]]
holdings, the Intraday Indicative Value, the Disclosed Portfolio, and
quotation and last sale information for the Shares.
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
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The Exchange believes that
the proposed rule change will facilitate the listing and trading of an
additional type of actively-managed exchange-traded fund that will
enhance competition among market participants, to the benefit of
investors and the marketplace.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
Written comments were neither solicited nor received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period up to 90 days (i) as the
Commission may designate if it finds such longer period to be
appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
(a) By order approve or disapprove such proposed rule change; or (b)
institute proceedings to determine whether the proposed rule change
should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-NASDAQ-2014-090 on the subject line.
Paper Comments
Send paper comments in triplicate to Brent J. Fields,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-NASDAQ-2014-090. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street, NE.,
Washington, DC 20549, on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-NASDAQ-2014-090 and should
be submitted on or before October 17, 2014.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\27\
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\27\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-22910 Filed 9-25-14; 8:45 am]
BILLING CODE 8011-01-P
