Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to the Elkhorn Commodity Rotation Strategy ETF of the Elkhorn ETF Trust, 59257-59259 [2016-20577]
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Federal Register / Vol. 81, No. 167 / Monday, August 29, 2016 / Notices
designates October 12, 2016, as the date
by which the Commission shall either
approve or disapprove or institute
proceedings to determine whether to
disapprove the proposed rule change
(File Number SR–BatsBZX–2016–30).
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.7
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016–20576 Filed 8–26–16; 8:45 am]
BILLING CODE 8011–01–P
Commission finds that it is appropriate
to designate a longer period within
which to take action on the proposed
rule change so that it has sufficient time
to consider the proposed rule change.
Accordingly, the Commission,
pursuant to Section 19(b)(2) of the Act,5
designates October 10, 2016, as the date
by which the Commission shall either
approve or disapprove or institute
proceedings to determine whether to
disapprove the proposed rule change
(File Number SR–BatsBZX–2016–26).
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.6
Robert W. Errett,
Deputy Secretary.
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–78640; File No. SR–
BatsBZX–2016–26]
[FR Doc. 2016–20571 Filed 8–26–16; 8:45 am]
BILLING CODE 8011–01–P
Self-Regulatory Organizations; Bats
BZX Exchange, Inc.; Notice of
Designation of a Longer Period for
Commission Action on Proposed Rule
Change to BZX Rule 14.11(d) To Add
the EURO STOXX 50® Volatility
Futures to the Definition of Futures
Reference Asset
jstallworth on DSK7TPTVN1PROD with NOTICES
August 23, 2016.
On June 23, 2016, Bats BZX Exchange,
Inc. (‘‘BZX’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’), pursuant to Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’) 1 and Rule 19b–4
thereunder,2 a proposed rule change to
amend BZX Rule 14.11(d) by adding the
EURO STOXX 50® Volatility
(VSTOXX®) Futures to the definition of
Futures Reference Asset. The proposed
rule change was published for comment
in the Federal Register on July 12,
2016.3 The Commission has received no
comment letters on the proposed rule
change.
Section 19(b)(2) of the Act 4 provides
that, within 45 days of the publication
of notice of the filing of a proposed rule
change, or within such longer period up
to 90 days as the Commission may
designate if it finds such longer period
to be appropriate and publishes its
reasons for so finding or as to which the
self-regulatory organization consents,
the Commission shall either approve the
proposed rule change, disapprove the
proposed rule change, or institute
proceedings to determine whether the
proposed rule change should be
disapproved. The Commission is
extending this 45-day time period. The
7 17
CFR 200.30–3(a)(31).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 See Securities Exchange Act Release No. 78236
(Jul. 6, 2016), 81 FR 45185.
4 15 U.S.C. 78s(b)(2).
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–78654; File No. SR–
NASDAQ–2016–117]
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change Relating to the
Elkhorn Commodity Rotation Strategy
ETF of the Elkhorn ETF Trust
August 23, 2016.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on August
11, 2016, The NASDAQ Stock Market
LLC (‘‘Nasdaq’’ or ‘‘Exchange’’) filed
with the Securities and Exchange
Commission (‘‘SEC’’ or ‘‘Commission’’)
the proposed rule change as described
in Items I and II below, which Items
have been prepared by Nasdaq. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
Nasdaq proposes a rule change
relating to the Elkhorn Commodity
Rotation Strategy ETF (formerly, the
Elkhorn Dorsey Wright Commodity
Rotation Portfolio) (the ‘‘Fund’’) of
Elkhorn ETF Trust (the ‘‘Trust’’), the
shares of which have been approved by
the Commission for listing and trading
under Nasdaq Rule 5735 (‘‘Managed
Fund Shares’’). The proposed rule
change reflects (i) a change to the name
1 15
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5 Id.
6 17
CFR 200.30–3(a)(31).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
PO 00000
Frm 00080
Fmt 4703
59257
of the Fund, and (ii) a change to the
name and ownership of the benchmark
index applicable to the Fund. 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 and discussed any
comments it received on the proposed
rule change. The text of these statements
may be examined at the places specified
in Item IV below. Nasdaq has prepared
summaries, set forth in Sections A, B,
and C below, of the most significant
aspects of such statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Commission previously approved
the listing and trading of the Shares
under Nasdaq Rule 5735, which governs
the listing and trading of Managed Fund
Shares on the Exchange.3 However, no
Shares are currently listed and traded
on the Exchange. The Exchange believes
the proposed rule change reflects no
significant issues not previously
addressed in the Prior Release.
The Fund is an actively managed
exchange-traded fund (‘‘ETF’’). The
Shares will be offered by the Trust,
which was organized as a Massachusetts
business trust on December 12, 2013.
The Trust, which is registered with the
Commission as an investment company,
has filed a registration statement on
Form N–1A (‘‘Registration Statement’’)
relating to the Fund with the
Commission.4
3 The Commission approved Nasdaq Rule 5735
(formerly Nasdaq Rule 4420(o)) in Securities
Exchange Act Release No. 57962 (June 13, 2008), 73
FR 35175 (June 20, 2008) (SR–NASDAQ–2008–039).
The Commission previously approved the listing
and trading of the Shares of the Fund. See
Securities Exchange Act Release No. 77688 (April
22, 2016), 81 FR 25467 (April 28, 2016) (SR–
NASDAQ–2016–030) (‘‘Prior Order’’). See also
Securities Exchange Act Release No. 77338 (March
10, 2016), 81 FR 14142 (March 16, 2016) (SR–
NASDAQ–2016–030) (‘‘Prior Notice,’’ and together
with the Prior Order, the ‘‘Prior Release’’).
4 See Registration Statement on Form N–1A for
the Trust, dated February 18, 2016 (File Nos. 333–
201473 and 811–22926) (the ‘‘Registration
Statement’’). The descriptions of the Shares and the
Continued
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Federal Register / Vol. 81, No. 167 / Monday, August 29, 2016 / Notices
jstallworth on DSK7TPTVN1PROD with NOTICES
As indicated in the Prior Release,
Elkhorn Investments, LLC will be the
investment adviser (the ‘‘Adviser’’) to
the Fund and will monitor the Fund’s
investment portfolio. It is currently
anticipated that day-to-day portfolio
management for the Fund will be
provided by the Adviser. However, the
Fund and the Adviser may contract with
an investment sub-adviser (a ‘‘SubAdviser’’) to provide day-to-day
portfolio management for the Fund.
ALPS Distributors, Inc. will be the
principal underwriter and distributor of
the Fund’s Shares. The Fund will
contract with unaffiliated third parties
to provide administrative, custodial and
transfer agency services to the Fund.
The Prior Release identified the name
of the Fund as the Elkhorn Dorsey
Wright Commodity Rotation Portfolio.
Subsequent to the Commission’s
approval of the listing and trading of the
Shares, the Fund determined to change
its name to the Elkhorn Commodity
Rotation Strategy ETF following the
request from the SEC’s Division of
Investment Management to remove the
reference to ‘‘Dorsey Wright’’ from the
Fund’s name. In this proposed rule
change, the Exchange proposes to reflect
the change to the name of the Fund.
The Prior Release provided that the
Fund’s investment objective would be to
provide total return which exceeds that
of the ‘‘DWA Commodity Rotation
Index’’ (the ‘‘Original Benchmark’’). The
Prior Release indicated that the Original
Benchmark was developed, maintained
and sponsored by Dorsey, Wright &
Associates, LLC (‘‘Dorsey Wright’’). In
this proposed rule change, the Exchange
proposes to reflect a change to the name
and ownership of the benchmark index
applicable to the Fund. The new
benchmark will be called the ‘‘Elkhorn
Dorsey Wright Commodity Rotation
Index’’ (‘‘New Benchmark’’).
Accordingly, the Fund’s investment
objective will be to provide total return
which exceeds that of the New
Benchmark and, except as provided
herein, the term ‘‘Benchmark,’’ as set
forth in the Prior Release, will generally
be deemed to refer to the New
Benchmark.
Fund contained herein are based, in part, on
information in the Registration Statement. Before
Shares are publicly offered, the Trust will file a
post-effective amendment to its Registration
Statement that reflects the changes in this proposed
rule change. The descriptions of the operation of
the Trust and the Fund will be reflected in any such
filing. The changes in this proposed rule change
will not be implemented for the Fund until the
post-effective amendment to the Registration
Statement becomes effective. The Adviser
represents that the Adviser will not implement the
changes described herein until the instant proposed
rule change is operative.
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15:27 Aug 26, 2016
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The New Benchmark is a proprietary
index that will be owned by the
Adviser. Consistent with the Prior
Release, the New Benchmark (like the
Original Benchmark) will track a
proprietary model of futures contracts
on commodities (the ‘‘Benchmark
Model’’) that is developed, maintained
and sponsored by Dorsey Wright. The
Benchmark Model will be licensed to
the Adviser.
In connection with the Benchmark
Model, Dorsey Wright applies a relative
strength methodology to rank twentyfive to thirty single commodity futures,
each represented by single commodity
futures index with an embedded
dynamic roll strategy, and selects a
subset of commodity futures that
demonstrate relative strength
characteristics. The methodology takes
into account, among other
characteristics, the performance of a
commodity as compared to the broad
commodity market, the relative
performance of each single commodity
versus all of the other commodities, and
the liquidity of the underlying
commodities.
The Fund will not be sponsored,
endorsed, sold or promoted by Dorsey
Wright. Dorsey Wright’s only
relationship to the Fund will be the
licensing of certain service marks and
service names of Dorsey Wright and the
licensing of the Benchmark Model to the
Adviser. Dorsey Wright will have no
obligation to take the needs of the
Adviser, any Sub-Adviser or the Fund
into consideration in connection with
the Benchmark Model or its application
of the related methodology.
Except for the changes noted above,
all of the representations made in the
Prior Release remain unchanged.
2. Statutory Basis
The Exchange believes that the
proposal is consistent with Section 6(b)
of the Act 5 in general and Section
6(b)(5) of the Act 6 in particular in that
it is designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
trade, to remove impediments to and
perfect the mechanism of a free and
open market and, in general, to protect
investors and the public interest.
The Exchange believes that the
proposed rule change is designed to
prevent fraudulent and manipulative
acts and practices in that the Shares
would be listed and traded on the
Exchange pursuant to the initial and
continued listing criteria in Nasdaq Rule
5735. The Exchange notes that Shares
5 15
6 15
PO 00000
U.S.C. 78f.
U.S.C. 78f(b)(5).
Frm 00081
Fmt 4703
Sfmt 4703
have not yet been listed on the
Exchange. Consistent with the Prior
Release, the Exchange represents that
trading in the Shares would 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 and
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 proposed rule change is designed
to promote just and equitable principles
of trade and to protect investors and the
public interest in that the Adviser
represents that, other than to change the
Original Benchmark to the New
Benchmark, there is no change to the
Fund’s investment objective. The
Adviser represents that the purpose of
the proposed change is to reflect a
change to the name of the Fund and the
name and ownership of the benchmark
index applicable to the Fund.
Accordingly, the Fund’s investment
objective will be to provide total return
which exceeds that of the New
Benchmark and, except as provided
herein, the term ‘‘Benchmark,’’ as set
forth in the Prior Release, will generally
be deemed to refer to the New
Benchmark. The Adviser represents
that, other than the changes to the name
and ownership of the Benchmark, there
are no other changes to the Benchmark,
including to its methodology, as
described in the Prior Release. Except as
provided herein, none of the
representations of the Fund or the
Adviser made in the Prior Release have
changed.
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. As
noted above, the proposed rule change
is intended to reflect a change to the
name of the Fund and the name and
ownership of the benchmark index
applicable to the Fund. Further, the
Exchange notes that the Fund does not
yet have publicly offered Shares and
does not yet have Shares listed and
traded on the Exchange. Before Shares
are publicly offered, the Trust will file
a post-effective amendment to its
Registration Statement that reflects the
changes in the proposed rule change.
The Shares will not be publicly offered
until the post-effective amendment to
the Registration Statement becomes
effective.
E:\FR\FM\29AUN1.SGM
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Federal Register / Vol. 81, No. 167 / Monday, August 29, 2016 / Notices
59259
For the above reasons, the Exchange
believes the proposed rule change is
consistent with the requirements of
Section 6(b)(5) of the Act.
Comments may be submitted by any of
the following methods:
SECURITIES AND EXCHANGE
COMMISSION
Electronic Comments
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 the proposed rule
change will accommodate the listing
and trading of Managed Fund Shares for
an additional actively managed
exchange-traded product, thereby
enhancing competition among issues of
Managed Fund Shares.
• 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–2016–117 on the subject line.
[Release No. 34–78641; File No. SR–NYSE–
2016–44]
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
Because the foregoing proposed rule
change does not: (i) Significantly affect
the protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate, it has
become effective pursuant to Section
19(b)(3)(A) of the Act 7 and Rule 19b–
4(f)(6) thereunder.8
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
should be approved or disapproved.
jstallworth on DSK7TPTVN1PROD 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.
7 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). As required under Rule
19b–4(f)(6)(iii), the Exchange provided the
Commission with written notice of its intent to file
the proposed rule change, along with a brief
description and the text of the proposed rule
change, at least five business days prior to the date
of filing of the proposed rule change, or such
shorter time as designated by the Commission.
8 17
VerDate Sep<11>2014
15:27 Aug 26, 2016
Jkt 238001
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE.,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–NASDAQ–2016–117. 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
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–2016–117 and should be
submitted on or before September 19,
2016.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.9
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016–20577 Filed 8–26–16; 8:45 am]
BILLING CODE 8011–01–P
9 17
PO 00000
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Designation of a Longer Period for
Commission Action on a Proposed
Rule Change, as Modified by
Amendment No. 1 Thereto, Allowing
the Exchange To Trade Pursuant To
Unlisted Trading Privileges for Any
NMS Stock Listed on Another National
Securities Exchange; Establishing
Listing and Trading Requirements for
Exchange Traded Products; and
Adopting New Equity Trading Rules
Relating To Trading Halts of Securities
Traded Pursuant to UTP on the Pillar
Platform
August 23, 2016.
On June 30, 2016, New York Stock
Exchange LLC (‘‘Exchange’’) filed with
the Securities and Exchange
Commission (‘‘Commission’’), pursuant
to Section 19(b)(1) of the Securities
Exchange Act of 1934 (‘‘Act’’) 1 and Rule
19b–4 thereunder,2 a proposed rule
change to (1) allow the Exchange to
trade pursuant to unlisted trading
privileges (‘‘UTP’’) any NMS Stock
listed on another national securities
exchange; (2) establish listing and
trading requirements for exchangetraded products (‘‘ETPs’’); and (3) adopt
new equity trading rules relating to
trading halts of securities traded
pursuant to UTP on the Pillar platform.
The proposed rule change was
published for comment in the Federal
Register on July 14, 2016.3 On July 26,
2016, the Exchange filed Amendment
No. 1 to the proposed rule change.4 The
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Securities Exchange Act Release No. 78263
(Jul. 8, 2016), 81 FR 45580.
4 In Amendment No. 1, the Exchange: (1) Added
a bullet point stating that ‘‘[b]ecause the Exchange’s
rules regarding the production of books and records
are described in Rule 440, the Exchange is
proposing to refer to Rule 440 in its proposed rules
wherever NYSE Arca Equities Rule 4.4 is referenced
in the rules of NYSE Arca Equities proposed in this
filing;’’ (2) deleted the sentence stating that ‘‘[i]f an
exchange has approved trading rules, procedures
and listing standards in place that have been
approved by the Commission for the product class
that would include a new derivative securities
product, the listing and trading of such ‘new
derivative securities product,’ does not require a
proposed rule change under Section 19b–4 of the
Act’’ and made conforming changes to the rest of
that paragraph; (3) deleted the bullet point that
stated ‘‘[c]orrection of a typographical error in
NYSE Arca Equities Rule 8.400(a) so that proposed
Rule 8.400(a) reads ‘as such terms are used in Rule
5.1(b)’ in the last sentence, rather than ‘as such
terms are used in the Rule 5.1(b)’ as is currently
drafted in NYSE Arca Equities Rule 8.400(a);’’ and
2 17
CFR 200.30–3(a)(12).
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]]>Agencies
[Federal Register Volume 81, Number 167 (Monday, August 29, 2016)]
[Notices]
[Pages 59257-59259]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-20577]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-78654; File No. SR-NASDAQ-2016-117]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Relating to the Elkhorn Commodity Rotation Strategy ETF of the Elkhorn
ETF Trust
August 23, 2016.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on August 11, 2016, The NASDAQ Stock Market LLC (``Nasdaq'' or
``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') the proposed rule change as described in
Items I and II below, which Items have been prepared by Nasdaq. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Nasdaq proposes a rule change relating to the Elkhorn Commodity
Rotation Strategy ETF (formerly, the Elkhorn Dorsey Wright Commodity
Rotation Portfolio) (the ``Fund'') of Elkhorn ETF Trust (the
``Trust''), the shares of which have been approved by the Commission
for listing and trading under Nasdaq Rule 5735 (``Managed Fund
Shares''). The proposed rule change reflects (i) a change to the name
of the Fund, and (ii) a change to the name and ownership of the
benchmark index applicable to the Fund. 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 and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. Nasdaq has prepared summaries, set forth in Sections A,
B, and C below, of the most significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Commission previously approved the listing and trading of the
Shares under Nasdaq Rule 5735, which governs the listing and trading of
Managed Fund Shares on the Exchange.\3\ However, no Shares are
currently listed and traded on the Exchange. The Exchange believes the
proposed rule change reflects no significant issues not previously
addressed in the Prior Release.
---------------------------------------------------------------------------
\3\ The Commission approved Nasdaq Rule 5735 (formerly Nasdaq
Rule 4420(o)) in Securities Exchange Act Release No. 57962 (June 13,
2008), 73 FR 35175 (June 20, 2008) (SR-NASDAQ-2008-039). The
Commission previously approved the listing and trading of the Shares
of the Fund. See Securities Exchange Act Release No. 77688 (April
22, 2016), 81 FR 25467 (April 28, 2016) (SR-NASDAQ-2016-030)
(``Prior Order''). See also Securities Exchange Act Release No.
77338 (March 10, 2016), 81 FR 14142 (March 16, 2016) (SR-NASDAQ-
2016-030) (``Prior Notice,'' and together with the Prior Order, the
``Prior Release'').
---------------------------------------------------------------------------
The Fund is an actively managed exchange-traded fund (``ETF''). The
Shares will be offered by the Trust, which was organized as a
Massachusetts business trust on December 12, 2013. The Trust, which is
registered with the Commission as an investment company, has filed a
registration statement on Form N-1A (``Registration Statement'')
relating to the Fund with the Commission.\4\
---------------------------------------------------------------------------
\4\ See Registration Statement on Form N-1A for the Trust, dated
February 18, 2016 (File Nos. 333-201473 and 811-22926) (the
``Registration Statement''). The descriptions of the Shares and the
Fund contained herein are based, in part, on information in the
Registration Statement. Before Shares are publicly offered, the
Trust will file a post-effective amendment to its Registration
Statement that reflects the changes in this proposed rule change.
The descriptions of the operation of the Trust and the Fund will be
reflected in any such filing. The changes in this proposed rule
change will not be implemented for the Fund until the post-effective
amendment to the Registration Statement becomes effective. The
Adviser represents that the Adviser will not implement the changes
described herein until the instant proposed rule change is
operative.
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[[Page 59258]]
As indicated in the Prior Release, Elkhorn Investments, LLC will be
the investment adviser (the ``Adviser'') to the Fund and will monitor
the Fund's investment portfolio. It is currently anticipated that day-
to-day portfolio management for the Fund will be provided by the
Adviser. However, the Fund and the Adviser may contract with an
investment sub-adviser (a ``Sub-Adviser'') to provide day-to-day
portfolio management for the Fund. ALPS Distributors, Inc. will be the
principal underwriter and distributor of the Fund's Shares. The Fund
will contract with unaffiliated third parties to provide
administrative, custodial and transfer agency services to the Fund.
The Prior Release identified the name of the Fund as the Elkhorn
Dorsey Wright Commodity Rotation Portfolio. Subsequent to the
Commission's approval of the listing and trading of the Shares, the
Fund determined to change its name to the Elkhorn Commodity Rotation
Strategy ETF following the request from the SEC's Division of
Investment Management to remove the reference to ``Dorsey Wright'' from
the Fund's name. In this proposed rule change, the Exchange proposes to
reflect the change to the name of the Fund.
The Prior Release provided that the Fund's investment objective
would be to provide total return which exceeds that of the ``DWA
Commodity Rotation Index'' (the ``Original Benchmark''). The Prior
Release indicated that the Original Benchmark was developed, maintained
and sponsored by Dorsey, Wright & Associates, LLC (``Dorsey Wright'').
In this proposed rule change, the Exchange proposes to reflect a change
to the name and ownership of the benchmark index applicable to the
Fund. The new benchmark will be called the ``Elkhorn Dorsey Wright
Commodity Rotation Index'' (``New Benchmark''). Accordingly, the Fund's
investment objective will be to provide total return which exceeds that
of the New Benchmark and, except as provided herein, the term
``Benchmark,'' as set forth in the Prior Release, will generally be
deemed to refer to the New Benchmark.
The New Benchmark is a proprietary index that will be owned by the
Adviser. Consistent with the Prior Release, the New Benchmark (like the
Original Benchmark) will track a proprietary model of futures contracts
on commodities (the ``Benchmark Model'') that is developed, maintained
and sponsored by Dorsey Wright. The Benchmark Model will be licensed to
the Adviser.
In connection with the Benchmark Model, Dorsey Wright applies a
relative strength methodology to rank twenty-five to thirty single
commodity futures, each represented by single commodity futures index
with an embedded dynamic roll strategy, and selects a subset of
commodity futures that demonstrate relative strength characteristics.
The methodology takes into account, among other characteristics, the
performance of a commodity as compared to the broad commodity market,
the relative performance of each single commodity versus all of the
other commodities, and the liquidity of the underlying commodities.
The Fund will not be sponsored, endorsed, sold or promoted by
Dorsey Wright. Dorsey Wright's only relationship to the Fund will be
the licensing of certain service marks and service names of Dorsey
Wright and the licensing of the Benchmark Model to the Adviser. Dorsey
Wright will have no obligation to take the needs of the Adviser, any
Sub-Adviser or the Fund into consideration in connection with the
Benchmark Model or its application of the related methodology.
Except for the changes noted above, all of the representations made
in the Prior Release remain unchanged.
2. Statutory Basis
The Exchange believes that the proposal is consistent with Section
6(b) of the Act \5\ in general and Section 6(b)(5) of the Act \6\ in
particular in that it is designed to prevent fraudulent and
manipulative acts and practices, to promote just and equitable
principles of trade, to remove impediments to and perfect the mechanism
of a free and open market and, in general, to protect investors and the
public interest.
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\5\ 15 U.S.C. 78f.
\6\ 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 would be listed and traded on the Exchange pursuant to the
initial and continued listing criteria in Nasdaq Rule 5735. The
Exchange notes that Shares have not yet been listed on the Exchange.
Consistent with the Prior Release, the Exchange represents that trading
in the Shares would 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 and 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 proposed rule change is designed to promote just and equitable
principles of trade and to protect investors and the public interest in
that the Adviser represents that, other than to change the Original
Benchmark to the New Benchmark, there is no change to the Fund's
investment objective. The Adviser represents that the purpose of the
proposed change is to reflect a change to the name of the Fund and the
name and ownership of the benchmark index applicable to the Fund.
Accordingly, the Fund's investment objective will be to provide total
return which exceeds that of the New Benchmark and, except as provided
herein, the term ``Benchmark,'' as set forth in the Prior Release, will
generally be deemed to refer to the New Benchmark. The Adviser
represents that, other than the changes to the name and ownership of
the Benchmark, there are no other changes to the Benchmark, including
to its methodology, as described in the Prior Release. Except as
provided herein, none of the representations of the Fund or the Adviser
made in the Prior Release have changed.
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. As noted above, the proposed rule change is intended
to reflect a change to the name of the Fund and the name and ownership
of the benchmark index applicable to the Fund. Further, the Exchange
notes that the Fund does not yet have publicly offered Shares and does
not yet have Shares listed and traded on the Exchange. Before Shares
are publicly offered, the Trust will file a post-effective amendment to
its Registration Statement that reflects the changes in the proposed
rule change. The Shares will not be publicly offered until the post-
effective amendment to the Registration Statement becomes effective.
[[Page 59259]]
For the above reasons, the Exchange 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 the
proposed rule change will accommodate the listing and trading of
Managed Fund Shares for an additional actively managed exchange-traded
product, thereby enhancing competition among issues of Managed Fund
Shares.
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
Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \7\ and Rule 19b-
4(f)(6) thereunder.\8\
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\7\ 15 U.S.C. 78s(b)(3)(A).
\8\ 17 CFR 240.19b-4(f)(6). As required under Rule 19b-
4(f)(6)(iii), the Exchange provided the Commission with written
notice of its intent to file the proposed rule change, along with a
brief description and the text of the proposed rule change, at least
five business days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the Commission.
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic 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-2016-117 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-NASDAQ-2016-117. 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 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-2016-117 and should
be submitted on or before September 19, 2016.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\9\
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\9\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-20577 Filed 8-26-16; 8:45 am]
BILLING CODE 8011-01-P
