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.
---------------------------------------------------------------------------

    \95\ See 17 CFR 240.10A-3.
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Trading Halts
    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 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 other assets 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
Nasdaq 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., E.T. 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 FINRA on behalf of the Exchange, which are designed to detect
violations of Exchange rules and applicable federal securities
laws.\96\ 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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    \96\ 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.
    FINRA, on behalf of the Exchange, will communicate as needed
regarding trading in the Shares and the exchange-listed securities and
instruments held by the Fund (including exchange-listed equities and
Exchange-Traded Derivatives) with other markets and other entities that
are members of ISG \97\ and with which the Exchange has comprehensive
surveillance sharing agreements,\98\ and FINRA and the Exchange both
may obtain information regarding trading in the Shares, the exchange-
listed securities, derivatives and other instruments held by the Fund
from markets and other entities that are members of ISG, which include
securities and futures exchanges and swap execution facilities, or with
which the Exchange has in place a comprehensive surveillance sharing
agreement.\99\ Moreover, FINRA, on behalf of the Exchange, will be able
to access, as needed, trade information for most of the fixed income
securities held by the Fund through reporting on FINRA's TRACE and,
with respect to municipal securities, EMMA.
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    \97\ Exchange-listed securities and Exchange-Traded Derivatives
held by the Fund that are listed and traded on a non-ISG member
exchange or on an exchange with which the Exchange does not have a
comprehensive surveillance sharing agreement together are limited to
10% of the assets of the Fund.
    \98\ For a list of the current members of ISG, see
www.isgportal.org. The Exchange notes that not all components of the
Disclosed Portfolio may trade on markets that are members of ISG or
with which the Exchange has in place a comprehensive surveillance
sharing agreement.
    \99\ As noted above, no more than 10% of the assets of the Fund
may be invested in Exchange-Traded Derivatives and exchange-listed
securities whose principal market is not a member of ISG or a market
with which the Exchange has a comprehensive surveillance sharing
agreement.
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    The majority of the Fund's investments in exchange-listed, equity
securities (i.e., Non-Convertible-Preferred Securities, Equity-Related
Warrants, and ETFs) will constitute securities that trade in markets
that are members of ISG or are parties to a comprehensive surveillance
sharing agreement with the Exchange. Up to 10% of the Fund's assets may
be held in exchange-listed securities and Exchange-Traded Derivatives
that are listed and traded on markets that are not members of ISG or a
market with which the Exchange does not have a comprehensive
surveillance sharing agreement.
    In addition, the Exchange also has a general policy prohibiting the
distribution of material, non-public information by its employees.
Information Circular
    Prior to the commencement of trading, 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) how information regarding
the Intraday Indicative Value and the Disclosed Portfolio is
disseminated; (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; and (6) trading information. The Information Circular will
also discuss any exemptive, no-action and interpretive relief granted
by the Commission from any rules under the Act.
    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
website.
Continued Listing Representations
    All statements and representations made in this filing regarding
(a) the description of the portfolio or reference assets, (b)
limitations on portfolio holdings or reference assets, (c)
dissemination and availability of the reference asset or intraday
indicative values, or (d) the applicability of Exchange listing rules
shall constitute continued listing requirements for listing the Shares
on the Exchange. In addition, the issuer has represented to the
Exchange that it will advise the Exchange of any failure by the Fund to
comply with the continued listing requirements, and, pursuant to its
obligations under Section 19(g)(1) of the Act, the Exchange will
monitor for compliance with the continued listing requirements. If the
Fund is not in compliance with the applicable listing requirements, the
Exchange will commence delisting procedures under the Nasdaq 5800
Series.
2. Statutory Basis
    The Exchange believes that the proposal is consistent with Section
6(b) of the Act in general and Section 6(b)(5) of the Act, 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, 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 will be listed and traded on the Exchange pursuant to the
initial and continued listing criteria in Nasdaq Rule 5735. The
Exchange represents that trading in the Shares will be subject to the
existing trading surveillances, administered by both the Exchange and
FINRA, on behalf of the Exchange, which are designed to deter and
detect violations of Exchange rules and applicable federal securities
laws and are adequate to properly monitor trading in the Shares in all
trading sessions.
    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 and maintain 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's portfolio. In
addition, paragraph (g) further requires that personnel who make
decisions on the investment company's portfolio composition must be
subject to procedures designed to prevent the use and dissemination of
material, non-public information regarding the investment company's
portfolio.
    Rule 5735(g) is similar to Nasdaq Rule 5705(b)(5)(A)(i); however,
paragraph (g) in connection with the establishment and maintenance of a
``fire wall'' between the investment adviser and the broker-dealer
reflects the applicable investment company's portfolio, not an
underlying benchmark index, as is the case with index-based funds. None
of the Manager or any of the Sub-Advisers is a broker-dealer, but each
is affiliated with the Distributor, a broker-dealer, and has
implemented and will maintain a fire wall with respect to its broker-
dealer affiliate regarding access to information concerning the
composition and/or changes to the portfolio.
    In addition, personnel who make decisions on the Fund's portfolio
composition will be subject to procedures designed to prevent the use
and dissemination of material non-public information regarding the
Fund's portfolio. In the event (a) the Manager or any of the Sub-
Advisers registers as a broker-dealer or becomes newly affiliated with
a broker-dealer, or (b) any new investment adviser or any new sub-
adviser to the Fund is a registered broker-dealer or becomes affiliated
with another broker-dealer, it will implement and maintain a fire wall
with respect to its relevant personnel and/or such broker-dealer
affiliate, as applicable, regarding access to information concerning
the composition and/or changes to the Fund's portfolio and will be
subject to procedures designed to prevent the use and dissemination of
material non-public information regarding such portfolio.
    The Fund's investments, including derivatives, will be consistent
with the Fund's investment objectives, applicable legal requirements
\100\ and will not be used for the purpose of seeking leveraged returns
or performance that is the multiple or inverse multiple of a benchmark
(although derivatives may have embedded leverage). Although the Fund
will be permitted to borrow as permitted under the 1940 Act, it will
not be operated as a ``leveraged ETF,'' i.e., it will not be operated
in a manner designed to seek leveraged returns or a multiple or inverse
multiple of the performance of an underlying reference index.\101\ The
Fund may engage in frequent and active trading of portfolio investments
to achieve its investment objective.
---------------------------------------------------------------------------

    \100\ As noted above, the Fund will limit its investments in
illiquid securities or other illiquid assets to an aggregate amount
of 15% of its net assets (calculated at the time of investment), as
required by the Commission.
    \101\ As noted above, the Fund will not invest in leveraged,
inverse or inverse leveraged ETFs.
---------------------------------------------------------------------------

    The Exchange believes that, notwithstanding that the Fund would not
meet all of the ``generic'' listing requirements of Nasdaq Rule
5735(b)(1), the Fund will not be subject to manipulation, the
investments of the Fund will be able to be monitored and surveilled by
the Exchange and risks will be mitigated by alternative limits imposed
by the Exchange and by the voluntary limits imposed by the Fund (see
supra ``Investment Restrictions''). As a result, it is in the public
interest to approve listing and trading of Shares of the Fund on the
Exchange pursuant to the requirements set forth herein. Deviations from
the generic requirements are necessary for the Fund to achieve its
investment objective in a cost-effective manner that maximizes
investors' returns and to manage the risks associated with its
investments, and the Exchange proposes that the Fund will be required
to comply with alternative requirements that are customized to address
the objectives of Section 6(b)(5) of the Act, as described herein.
Further, the strategy and investments of the Fund are substantially
similar to those of other ETFs previously approved by the Commission,
which have operated safely and without disrupting the market for
several years.\102\
---------------------------------------------------------------------------

    \102\ See, e.g., Securities Exchange Act Release Nos. 66321
(February 3, 2012) 77 FR 6850 (February 9, 2012) (SR-NYSEArca-2011-
95) (granting approval for the listing of shares of the PIMCO Total
Return Exchange Traded Fund); 72666 (July 24, 2014) (granting
approval to the use of derivatives by the PIMCO Total Return
Exchange Traded Fund); and 76719 (December 21, 2015) (granting
approval for the listing of shares of the Guggenheim Total Return
Bond ETF).
---------------------------------------------------------------------------

    The Fund will not comply with the requirements in Nasdaq Rule
5735(b)(1) regarding the use of aggregate gross notional value of
derivatives when calculating the weight of such derivatives or the
exposure that such derivatives provide to underlying reference assets,
including the requirements in Rules 5735(b)(1)(D)(i),
5735(b)(1)(D)(ii), 5735(b)(1)(E) and 5735(b)(1)(F). Instead, the
Exchange proposes that, except as otherwise provided herein, for the
purposes of any applicable requirements under Nasdaq Rule 5735(b)(1),
and any alternative requirements proposed by the Exchange, the Fund
will use the mark-to-market value of its derivatives in calculating the
weight of such derivatives or the exposure that such derivatives
provide to their reference assets. The Exchange believes that this
alternative requirement is appropriate because the mark-to-market value
is a more accurate measurement of the actual exposure incurred by the
Fund in connection with a derivatives position.\103\
---------------------------------------------------------------------------

    \103\ As previously noted, the mark-to-market approach is
consistent with the valuation methodology for derivatives for asset
coverage purposes advocated by the Commission in proposed Rule 18f-4
under the 1940 Act. See Derivatives Rule Proposing Release. In a
white paper published by staff of the Division of Economic and Risk
Analysis of the SEC (``DERA'') in connection with the proposal of
Rule 18f-4 under the 1940 Act, the staff of DERA noted that a
derivative's notional amount does not accurately reflect the risk of
the derivative. See Daniel Deli, Paul Hanouna, Christof Stahel, Yue
Tang and William Yost, Use of Derivatives by Registered Investment
Companies (December 2015) at 10 (``On the other hand, there are
drawbacks to using notional amounts. First, because of differences
in expected volatilities of the underlying assets, notional amounts
of derivatives across different underlying asset generally do not
represent the same unit of risk. For example, the level of risk
associated with a $100 million notional of a S&P 500 index futures
is not equivalent to the level of risk of a $100 million notional of
interest rate swaps, currency forwards or commodity futures.'').
---------------------------------------------------------------------------

    The Fund will not meet the requirement that at least 90% of the
fixed income weight of the Fund's portfolio meet one of the criteria in
Nasdaq Rule 5735(b)(1)(B)(iv) \104\ because some ABS/Private MBS cannot
satisfy the criteria in Nasdaq Rule 5735(b)(1)(B)(iv).\105\ The
Exchange proposes, in the alternative, to require the Fund to ensure
that all of the investments in the fixed income portion of the Fund's
portfolio, other than ABS/Private MBS, comply with the 90% requirement
in Nasdaq Rule

5735(b)(1)(B)(iv).\106\ The Exchange believes that this alternative
limitation is appropriate because Nasdaq Rule 5735(b)(1)(B)(iv) does
not appear to be designed for structured finance vehicles such as ABS/
Private MBS, and the overall weight of ABS/Private MBS held by the Fund
will be limited to 20% of the fixed income portion of the Fund's
portfolio, as described above. As discussed above, although ABS/Private
MBS will be excluded for the purposes of compliance with Nasdaq Rule
5735(b)(1)(B)(iv), the Fund's portfolio is consistent with the
statutory standard as a result of the diversification provided by the
investments and the Sub-Adviser's selection process, which closely
monitors investments to ensure maintenance of credit and liquidity
standards and relies on the higher investment levels in these
instruments during periods of U.S. economic strength.
---------------------------------------------------------------------------

    \104\ Nasdaq Rule 5735(b)(1)(B)(iv) provides that component
securities that in the aggregate account for at least 90% of the
fixed income weight of the Fund's portfolio must be either: (a) From
issuers that are required to file reports pursuant to Sections 13
and 15(d) of the Act; (b) from issuers that have a worldwide market
value of its outstanding common equity held by non-affiliates of
$700 million or more; (c) from issuers that have outstanding
securities that are notes, bonds, debentures, or evidence of
indebtedness having a total remaining principal amount of at least
$1 billion; (d) exempted securities as defined in Section 3(a)(12)
of the Act; or (e) from issuers that are a government of a foreign
country or a political subdivision of a foreign country.
    \105\ ABS/Private MBS are generally issued by special purpose
vehicles, so the criteria in Nasdaq Rule 5735(b)(1)(B)(iv) regarding
an issuer's market capitalization and the remaining principal amount
of an issuer's securities are typically unavailable with respect to
ABS/Private MBS, even though such ABS/Private MBS may own
significant assets.
    \106\ For purposes of this requirement, the weight of the Fund's
exposure to any fixed income securities referenced in derivatives
shall be calculated based on the mark-to-market value of such
derivatives. CDOs, in which the Fund invests, would comply with the
90% requirement in Nasdaq Rule 5735(b)(1)(B)(iv) but would be
limited in amount to 10% of the Fund's total assets. The Exchange
believes that the 10% limit on the Fund's holdings in CDOs will help
to ensure that the Fund maintains a diversified portfolio and will
mitigate the risk of manipulation.
---------------------------------------------------------------------------

    As discussed above, the Exchange has determined to make an
exception solely in respect of the Fund such that CDOs will not be
deemed to be included in the definition of ABS for purposes of the
limitation in Nasdaq Rule 5735(b)(1)(B)(v) and, as a result, will not
be subject to the restriction on aggregate holdings of ABS/Private MBS
contained in such Rule, which limits such holdings to no more than 20%
of the weight of the fixed income portion of the Fund's portfolio.
However, the Fund's holdings in CDOs will be limited such that they do
not account, in the aggregate, for more than 10% of the total assets of
the Fund. The Exchange believes that the 10% limit on the Fund's
holdings in CDOs will help to ensure that the Fund maintains a
diversified portfolio and will mitigate the risk of manipulation.
    The Exchange has classified bank loans as Debt for purposes of this
proposed rule change and not as ``fixed income securities'' as they are
classified in Nasdaq Rule 5735(b)(1)(B). As a result, the Fund's
investments in bank loans will comply with the limitations or
restrictions applicable to the Fund's investments in Debt as set forth
herein with respect to such holdings and not with the restrictions for
fixed income securities set forth in Nasdaq Rule 5735(b)(1)(B)(i)-
(v).\107\ The Exchange believes that this approach is appropriate given
that the ``generic'' listing requirements in Nasdaq Rule 5735(b)(1)(B)
generally appear to be tailored to fixed income instruments that are
``securities,'' as defined in the Act, rather than loans and other debt
instruments that are not characterized as ``securities'' under
applicable case law.
---------------------------------------------------------------------------

    \107\ For a listing of such restrictions, see supra ``Investment
Restrictions.''
---------------------------------------------------------------------------

    The Fund will not meet the equity requirements in Nasdaq Rule
5735(b)(1)(A) with respect to Non-Convertible Preferred Securities,
Work Out Securities and warrants.\108\ Instead, the Exchange proposes
that (i) the Fund's investments in equity securities other than Non-
Convertible Preferred Securities, Work Out Securities and Equity
Related Warrants shall comply with the equity requirements in Nasdaq
Rule 5735(b)(1)(A) \109\ and (ii) the weight of Non-Convertible
Preferred Securities, Work Out Securities and Equity-Related Warrants
in the Fund's portfolio shall together not exceed 30% of the Fund's
assets. The Exchange believes that these alternative limitations are
appropriate in light of the fact that the Non-Convertible Preferred
Securities, Equity-Related Warrants and Work Out Securities are
providing debt-oriented exposures or are received in connection with
the Fund's previous investment in Debt or fixed income securities, and
all of the other equity securities held by the Fund will comply with
the requirements of Nasdaq Rule 5735(b)(1)(A).\110\
---------------------------------------------------------------------------

    \108\ Nasdaq Rule 5735(b)(1)(A)(i)(e) generally requires the
U.S. equity securities to be listed on a national securities
exchange. The Exchange notes that shares of Money Market Funds are
not considered equity securities for the purposes of Nasdaq Rule
5735(b)(1)(A), and that there is no limitation on the percentage of
the Fund's portfolio invested in shares of Money Market Funds, in
accordance with Nasdaq Rule 5735(b)(1)(C)(i).
    \109\ These other equities will consist of ETFs (including money
market ETFs) that provide exposure to fixed income securities, Debt
and other Principal Investments. The weight of such ETFs in the
Fund's portfolio shall not be limited.
    \110\ As noted above, Fixed-Income Related Warrants are treated
as fixed income securities for purposes of this proposed rule change
and will be subject to and comply with the generic listing
requirements for fixed-income securities, rather than the generic
listing requirements for equity securities. See supra note 29.
---------------------------------------------------------------------------

    The Fund will not meet the requirement in Nasdaq Rule 5735(b)(1)(E)
that no more than 20% of the assets in the Fund's portfolio may be
invested in over-the-counter derivatives. The Fund proposes that no
limit be placed on Interest Rate and Currency Derivatives, which are
necessary and appropriate to allow the Manager and Sub-Advisers to risk
manage the Fund, but that the weight of all other OTC Derivatives
(e.g., credit default swaps) be limited to 10% of the assets in the
Fund's portfolio. For purposes of this 10% limit on OTC Derivatives,
the weight of such OTC Derivatives will be calculated based on the
mark-to-market value of such OTC Derivatives. The Exchange believes
that this exception for Interest Rate and Currency Derivatives, which
is generally consistent with the requirement in a previous filing for
the listing of an ETF approved by the Commission,\111\ is appropriate
in light of the fact that Interest Rate and Currency Derivatives are
among the most liquid investment instruments (including not only
derivatives but also securities) in the market \112\ (and the
instruments are even more liquid than most non-government or
government-guaranteed securities). Based on the data compiled by the
Sub-Adviser in respect to its liquidity policy, these derivatives are
among the most liquid investment instruments traded. In addition, most
Interest Rate Derivatives traded by the Fund are centrally cleared by
regulated clearing firms, and Interest Rate and Currency Derivatives
are subject to trade reporting,\113\ and other robust regulation.\114\
Given the size of

the trading market and the regulatory oversight of the markets, the
Exchange believes that Interest Rate and Currency Derivatives are not
readily subject to manipulation. The Exchange also believes that
allowing the Fund to risk manage its portfolio through the use of
Interest Rate and Currency Derivatives without limit is necessary to
allow the Fund to achieve its investment objective and protect
investors.
---------------------------------------------------------------------------

    \111\ See Securities Exchange Act Release No. 80657 (May 11,
2017), 82 FR 22702 (May 17, 2017) (SR-NYSEArca-2017-09) (approving
up to 50% of the fund's assets (calculated on the basis of aggregate
gross notional value) to be invested in over-the-counter derivatives
that are used to reduce currency, interest rate, or credit risk
arising from the fund's investments, including forwards, over-the-
counter options, and over-the-counter swaps).
    \112\ Trading in foreign exchange markets averaged $5.1 trillion
per day in April 2016, and 67% of this trading activity was in
derivatives contracts such as currency or foreign exchange forwards,
options and swaps (with the other 33% consisting of spot
transactions). See Bank for International Settlements, Triennal
Central Bank Survey, Foreign Exchange Turnover in April 2016,
available at http://www.bis.org/publ/rpfx16fx.pdf (accessed November
2017). Trading in OTC interest rate derivatives averaged $2.7
trillion per day in April 2016. See Bank for International
Settlements, Triennal Central Bank Survey, OTC Interest Rate
Derivatives Turnover in April 2016, available at http://www.bis.org/publ/rpfx16ir.pdf (accessed November 2017).
    \113\ Transactions in Interest Rate and Currency Derivatives are
required to be reported to a swap data repository, and transactions
in Interest Rate Derivatives and certain Currency Derivatives (i.e.,
Currency Derivatives that are not excluded from the definition of a
``swap'', as described below) are also publicly reported pursuant to
rules issued by the CFTC. See 17 CFR parts 43, 45 and 46. Pursuant
to Section 1(a)(47)(E) of the CEA and a related determination by the
Department of the Treasury, Excluded Currency Derivatives are
excluded from the definition of a ``swap'' under the CEA. See
Determination of Foreign Exchange Swaps and Foreign Exchange
Forwards Under the Commodity Exchange Act, 77 FR 69694 (Nov. 20,
2012). However, as noted above, transactions in such Excluded
Currency Derivatives are required to be reported to a swap data
repository, but they are not subject to the public reporting
requirements.
    \114\ Interest Rate Derivatives and Currency Derivatives other
than Excluded Currency Derivatives are comprehensively regulated as
swaps under the CEA and regulations issued thereunder by the CFTC
and other federal financial regulators. See, e.g., 17 CFR part 23
(capital and margin requirements for swap dealers, business conduct
standards for swap dealers, and swap documentation requirements); 17
CFR part 50 (clearing requirements for swaps). While Excluded
Currency Derivatives are not subject to all swap regulations, they
are subject to the ``business conduct standards'' adopted by the
CFTC pursuant to the CEA. See Section 1(a)(47)(E) of the CEA;
Determination of Foreign Exchange Swaps and Foreign Exchange
Forwards Under the Commodity Exchange Act, 77 FR 69694 (Nov. 20,
2012).
---------------------------------------------------------------------------

    The Fund will not comply with the requirement in Nasdaq Rule
5735(b)(1)(D)(i) that at least 90% of the weight of the Fund's holdings
in futures, exchange-traded options, and listed swaps shall, on both an
initial and continuing basis, consist of futures, options, and swaps
for which the Exchange may obtain information via the ISG from other
members or affiliates of the ISG, or for which the principal market is
a market with which the Exchange has a comprehensive surveillance
sharing agreement. Instead, the Exchange proposes that no more than 10%
of the assets of the Fund will be invested in Exchange-Traded
Derivatives and exchange-listed securities whose principal market is
not a member of ISG or is not a market with which the Exchange has a
comprehensive surveillance sharing agreement.\115\ The Exchange
believes that this alternative limitation is appropriate because the
overall limit on Exchange-Traded Derivatives and exchange-listed
securities whose principal market is not a member of ISG or is a market
with which the Exchange does not have a comprehensive surveillance
sharing agreement will still be low relative to the overall size of the
Fund.
---------------------------------------------------------------------------

    \115\ For purposes of this 10% limit, the weight of such
Exchange-Traded Derivatives will be calculated based on the mark-to-
market value of such Exchange-Traded Derivatives.
---------------------------------------------------------------------------

    The Fund will not meet the requirement in Nasdaq Rule
5735(b)(1)(D)(ii) that the aggregate gross notional value of listed
derivatives based on any five or fewer underlying reference assets
shall not exceed 65% of the weight of the Fund's portfolio (including
gross notional exposures), and the aggregate gross notional value of
listed derivatives based on any single underlying reference asset shall
not exceed 30% of the weight of the Fund's portfolio (including gross
notional exposures) because the Fund may maintain significant positions
in Eurodollar and G-7 Sovereign Futures and Options. The Manager has
indicated that obtaining exposure to these investments through futures
contracts is often the most cost efficient method to achieve such
exposure. The Exchange notes that Eurodollar and G-7 Sovereign Futures
and Options are highly liquid investments \116\ and are not subject to
the same concentration risks as Exchange-Traded Derivatives referencing
other assets because of such liquidity. Further, the Exchange notes
that the significantly diminished risk of Treasury Securities is
reflected in their exclusion from the concentration requirements
applicable to fixed income securities in Nasdaq Rule 5735(b)(1)(B)(ii).
The Exchange proposes that the Fund will comply with the concentration
requirements in Nasdaq Rule 5735(b)(1)(D)(ii) except with respect to
the Fund's investment in Eurodollar and G-7 Sovereign Futures and
Options.\117\ The Exchange believes that this alternative limitation is
appropriate to provide the Fund with sufficient flexibility and because
of the highly liquid and transparent nature of Eurodollar and G-7
Sovereign Futures and Options. Further, as described above, the G-7
Sovereign Futures and Options in which the Fund invests will be listed
on an exchange that is an ISG member or an exchange with which the
Exchange has a comprehensive surveillance sharing agreement.
---------------------------------------------------------------------------

    \116\ See CME Group, Interest Rate Futures Liquidity Metrics
Reach New Highs (October 6, 2017), available at http://www.cmegroup.com/education/interest-rates-liquidity-metrics-reach-new-highs.html (accessed November 2017) (providing statistics
regarding liquidity and open interest in futures and options on
eurodollars and Treasury Securities, including that during the first
three quarters of 2017, eurodollar futures and options traded
through CME Group had an average daily open interest of
approximately 53 million contracts and futures and options on
Treasury Securities had an average daily open interest of
approximately 15 million contracts); The Montreal Exchange,
Statistics for Interest Rate Derivatives, Index Derivatives and
Equity Derivatives (September 2017), available at https://www.m-x.ca/f_stat_en/1709_stats_en.pdf (accessed November 2017) (providing
statistics regarding liquidity and open interest in futures and
options on Canadian sovereign debt, including that, as of September
2017, the open interest in futures and options on Canadian sovereign
debt traded on The Montreal Exchange was approximately 560,000
contracts); Eurex Exchange, Benchmark Fixed Income Derivatives,
available at https://www.eurexchange.com/blob/115654/4c51e4b8bc77355475b3b6f46afc0ef1/data/factsheet_eurex_benchmark_fixed_income_derivatives.pdf (accessed
November 2017) (providing statistics regarding liquidity and open
interest in futures and options on German sovereign debt, including
that, as of July 2015, the open interest in futures on German
sovereign debt traded on Eurex was approximately 3,000,000 contracts
and the open interest in options on German sovereign debt futures
traded on Eurex was approximately 3,000,000 contracts); Eurex
Exchange, Eurex Exchange Euro-BTP Futures, Italian Government Bond
Futures, available at http://www.eurexchange.com/blob/115624/6a1281939d15ddbab960af40da6f11dc/data/factsheet_eurex_euro_btp_futures_on_italian_government_bonds.pdf
(accessed November 2017) (providing statistics regarding liquidity
and open interest in futures on Italian sovereign debt, including
that the open interest peaks in 2017 for futures on long-term and
short-term Italian sovereign debt traded on Eurex was approximately
450,000 and 270,000 contracts, respectively); Eurex Exchange, Euro-
OAT Derivatives, French Government Bond Futures and Options,
available at http://www.eurexchange.com/blob/115652/48198ec577f7b3b0ac44d4c5a39ed0de/data/factsheet_eurex_euro_oat_futures_on_french_government_bonds.pdf
(accessed November 2017) (providing statistics regarding liquidity
and open interest in futures on French sovereign debt, including
that, as of July 2017, the open interest in futures on long-term
French sovereign debt traded on Eurex was approximately 600,000
contracts); Intercontinental Exchange, Gilt Futures Overview,
available at https://www.theice.com/publicdocs/futures/Gilt_Futures_Overview.pdf (accessed November 2017) (providing
statistics regarding liquidity and open interest in futures on
British sovereign debt, including that, as of the third quarter of
2014, the open interest in futures on long-term British sovereign
debt traded on the Intercontinental Exchange was approximately
400,000 contracts); Osaka Exchange, Japanese Government Bond Futures
& Options, available at http://www.jpx.co.jp/english/derivatives/products/jgb/jgb-futures/tvdivq0000003n94-att/JGB_FUT_OP_E.pdf
(accessed November 2017) (providing statistics regarding liquidity
and open interest in futures and options on Japanese sovereign debt,
including that as of July 2016, the open interest in futures on 10-
year Japanese sovereign debt traded on the Osaka Exchange was
approximately 80,000 contracts). The Exchange also notes that the
Commission has previously granted exemptions under the Act to
facilitate the trading of futures on sovereign debt issued by each
of the Group of Seven countries (among other countries) and that
such exemptions were based in part on the Commission's assessment of
the sufficiency of the credit ratings and liquidity of such
sovereign debt. See 17 CFR 240.3a12-8; Securities Exchange Act
Release No. 41453 (May 26, 1999), 64 FR 29550 (June 2, 1999).
    \117\ For purposes of this requirement, the weight of the
applicable derivatives will be calculated based on the mark-to-
market value of such derivatives.
---------------------------------------------------------------------------

    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 issuer of the
Shares that the NAV per Share will be calculated daily every Business
Day that the Fund is traded, 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.

    Moreover, the Intraday Indicative Value, available on the Nasdaq
Information LLC proprietary index data service, will be widely
disseminated by one or more major market data vendors at least every 15
seconds during the Exchange's Regular Market Session. On each Business
Day, before commencement of trading in the Shares in the Regular Market
Session on the Exchange, the Fund will disclose on its website the
Disclosed Portfolio of the Fund that will form the basis for the Fund's
calculation of NAV at the end of the Business Day. 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. Information regarding market price and trading
volume of the Shares will be continually available on a real-time basis
throughout the Business Day on brokers' computer screens and other
electronic services. Quotation and last sale information for the Shares
will be available via Nasdaq proprietary quote and trade services, as
well as in accordance with the Unlisted Trading Privileges and the CTA
plans for the Shares and for the following U.S. securities, to the
extent they are exchange-listed: Work Out Securities, Non-Convertible
Preferred Securities, warrants, convertible fixed income securities and
ETFs. Price information for U.S. exchange-listed options will be
available via the Options Price Reporting Authority and for other U.S.
Exchange-Traded Derivatives will be available from the applicable
listing exchange and from major market data vendors. Price information
for restricted securities will be available from major market data
vendors, broker-dealers and trading platforms as well as for most fixed
income securities sold in transactions under Rule 144A under the
Securities Act, from TRACE and EMMA. Money Market Funds are typically
priced once each Business Day and their prices will be available
through the applicable fund's website or from major market data
vendors.
    For other exchange-listed securities (to be comprised primarily of
ETFs, warrants and structured notes and which may include exchange-
listed securities of both U.S. and non-U.S. issuers), equities traded
in the over-the-counter market (including Work Out Securities and Non-
Convertible Preferred Securities), Exchange-Traded Derivatives
(including U.S. or foreign), OTC Derivatives, Debt and fixed income
securities (including convertible fixed income securities) and the
small number of Securitized Products that are not reported to TRACE,
intraday price quotations will generally be available from broker-
dealers and trading platforms (as applicable). TRACE will be a source
of price information for most of the U.S. dollar denominated corporate
bonds,\118\ GSE-sponsored securities, Securitized Products and other
U.S. dollar denominated fixed income securities in which the Fund
invests.\119\ Intraday and other price information related to foreign
government securities, Money Market Funds, and other cash equivalents
that are traded over-the-counter and other Non-TRACE Eligible
Securities as well as prices for Treasury Securities, CDOs, commercial
mortgage-backed securities, or CMOs purchased through transactions that
do not qualify for periodic dissemination by FINRA \120\ will be
available through major market data vendors, such as Bloomberg, Markit,
IDC and Thomson Reuters, which can be accessed by APs and other
investors. EMMA will be a source of price information for municipal
bonds. Pricing for repurchase transactions and reverse repurchase
agreements entered into by the Fund are not publicly reported. Prices
are determined by negotiation at the time of entry with counterparty
brokers, dealers and banks.
---------------------------------------------------------------------------

    \118\ Broker-dealers that are FINRA member firms have an
obligation to report transactions in specified debt securities to
TRACE to the extent required under applicable FINRA rules.
Generally, such debt securities will have at issuance a maturity
that exceeds one calendar year. For fixed income securities that are
not reported to TRACE, (i) intraday price quotations will generally
be available from broker-dealers and trading platforms (as
applicable) and (ii) price information will be available from feeds
from market data vendors, published or other public sources, or
online information services, as described above.
    \119\ Broker-dealers that are FINRA member firms have an
obligation to report transactions in TRACE-Eligible Securities to
TRACE. For the definition of ``TRACE-Eligible Security,'' see FINRA
Rule 6710(a).
    \120\ See supra note 92.
---------------------------------------------------------------------------

    The Fund's website will include a form of the prospectus for the
Fund and additional data relating to NAV and other applicable
quantitative information. Moreover, 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. Trading in the Shares of the Fund will be halted
under the conditions specified in Nasdaq Rules 4120 and 4121 or 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 ETF that will enhance
competition among market participants, to the benefit of investors and
the marketplace.
    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 that
the proposed rule change will facilitate the listing and trading of an
additional type of actively-managed ETF 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

    No written comments were either solicited or received.

III. Discussion and Commission Findings

    After careful review, the Commission finds that the proposed rule
change, as modified by Amendment No. 3, is consistent with the Act and
the rules and regulations thereunder applicable to a national
securities exchange.\121\ In particular, the Commission finds that the
proposed rule change, as modified by Amendment No. 3, is consistent
with Section 6(b)(5) of the Act,\122\ which requires, among other
things, that the Exchange's rules be designed to prevent fraudulent and
manipulative acts and practices, to promote just and equitable
principles of trade, to remove impediments to and perfect the mechanism
of a free and open market and a national market system, and, in

general, to protect investors and the public interest.
---------------------------------------------------------------------------

    \121\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
    \122\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    As discussed above, the Fund will not comply with a number of the
generic requirements in the initial and continued listing standards for
Managed Fund Shares set forth in Nasdaq Rule 5735(b)(1). The Exchange
states that it will be able to appropriately monitor and surveil
trading in the underlying investments, including those that do not meet
the generic listing requirements.\123\ The Exchange also states that
any risks that may arise due to the Fund not meeting certain of the
generic listing requirements are fully mitigated and addressed through
alternative limits proposed by the Exchange.\124\ In addition, the
Exchange states that the Fund will be well diversified.\125\
---------------------------------------------------------------------------

    \123\ See supra ``Application of Generic Listing Requirements.''
    \124\ See supra ``Statutory Basis.''
    \125\ See supra ``Application of Generic Listing Requirements.''
---------------------------------------------------------------------------

    With respect to its investments in derivatives, the Fund will not
comply with the requirements in Nasdaq Rule 5735(b)(1) regarding the
use of aggregate gross notional value of derivatives when calculating
the weight of such derivatives or the exposure that such derivatives
provide to underlying reference assets. Instead, the Exchange proposes
that, for the purposes of any applicable requirements under Nasdaq Rule
5735(b)(1) and any alternative requirements proposed by the Exchange,
the Fund will use the mark-to-market value of derivatives in
calculating the weight of such derivatives or the exposure that such
derivatives provide to their reference assets. The Exchange states its
belief that mark-to-market value is a more accurate measurement of the
actual exposure incurred by the Fund in connection with a derivatives
position.\126\ In addition, the Exchange states that the proposed mark-
to-market methodology for valuing derivatives positions is consistent
with other Commission proposals and policies and is the measure on
which collateral posting is based under the ISDA Master Agreement.\127\
---------------------------------------------------------------------------

    \126\ See supra note 103 and accompanying text.
    \127\ See supra notes 56-59 and accompanying text.
---------------------------------------------------------------------------

    With respect to its investments in ABS/Private MBS, the Fund will
not meet the generic listing requirement that securities comprising at
least 90% of the fixed income weight of the Fund's portfolio meet one
of the criteria set forth in Nasdaq Rule 5735(b)(1)(B)(iv).\128\ The
Exchange represents that all fixed income securities held by the Fund
other than ABS/Private MBS will comply with the 90% requirement under
Nasdaq Rule 5735(b)(1)(B)(iv).\129\ In addition, the Exchange notes
that the Fund's investment portfolio will be diverse, and that the Sub-
Adviser closely monitors investments to ensure maintenance of credit
and liquidity standards.\130\
---------------------------------------------------------------------------

    \128\ See supra note 78.
    \129\ See supra ``Application of Generic Listing Requirements.''
As discussed above, the Exchange states that for purposes of this
requirement, the weight of the Fund's exposure to any fixed income
securities referenced in derivatives held by the Fund would be
calculated based on the mark-to-market value of such derivatives.
    \130\ See supra ``Statutory Basis.''
---------------------------------------------------------------------------

    The Exchange states that the Fund's investments in ABS/Private MBS
will, in accordance with Nasdaq Rule 5735(b)(1)(B)(v), be limited to
20% of the fixed income portion of the Fund's portfolio,\131\ except
with respect to CDOs. As discussed above, for purposes of this Fund,
the Exchange will exclude CDOs from the definition of ``ABS'' and, as a
result, CDOs will not be subject to the 20% limitation on aggregate
ABS/Private MBS holdings pursuant to Rule 5735(b)(1)(B)(v). In the
alternative, the Exchange represents that the Fund's investments in
CDOs will be limited to 10% of the total assets of the Fund. The
Exchange states that excluding CDOs from the definition of ``ABS'' and
limiting CDO investments to 10% of the Fund's total assets will help to
diversify the Fund's portfolio and mitigate the risk of
manipulation.\132\
---------------------------------------------------------------------------

    \131\ In the OIP, the Commission sought comment on whether the
Fund's proposed portfolio composition is sufficient to support a
determination that the proposal is consistent with the Act. The
Commission specifically noted that the Fund would not meet the
requirement in Nasdaq Rule 5735(b)(1)(B)(v) that Private ABS/MBS (as
defined in the OIP), in the aggregate, account for no more than 20%
of the weight of the fixed income portion of the Fund's portfolio,
and that, instead, the Exchange proposes to limit Private ABS/MBS to
30% of the weight of the fixed income portion of its portfolio. The
Commission asked for commenters' views on this aspect of the
proposal. See OIP, supra note 6, at 15888. The Commission notes that
in Amendment No. 3, the Exchange revised this aspect of the
proposal, as described above. See supra note 8. In addition, the
Commission notes that it received no comments in response to the
OIP.
    \132\ See supra ``Statutory Basis.''
---------------------------------------------------------------------------

    For purposes of this Fund, the Exchange proposes to classify bank
loans as Debt rather than ``fixed income securities'' (as they are
classified in Nasdaq Rule 5735(b)(1)(B)). As a result, the Fund's
investments in bank loans would comply with the proposed limitations
applicable to investments in Debt set forth above \133\ rather than
with the restrictions for fixed income securities set forth in Nasdaq
Rule 5735(b)(1)(B)(i)-(v).\134\
---------------------------------------------------------------------------

    \133\ See supra ``Investment Restrictions.''
    \134\ See supra note 70.
---------------------------------------------------------------------------

    The Fund will not comply with the listing requirements related to
investments in equities set forth in Nasdaq Rule 5735(b)(1)(A) \135\
with respect to its investments in Non-Convertible Preferred
Securities, Work Out Securities, and warrants. Instead, the Exchange
represents that (1) the Fund's investments in equity securities other
than Non-Convertible Preferred Securities, Work Out Securities, and
Equity-Related Warrants will comply with the requirements in Nasdaq
Rule 5735(b)(1)(A); \136\ and (2) the weight of Non-Convertible
Preferred Securities, Work Out Securities, and Equity-Related Warrants
in the Fund's portfolio in the aggregate will not exceed 30% of the
Fund's assets.\137\ The Exchange believes this alternative limitation
is appropriate because the Non-Convertible Preferred Securities,
Equity-Related Warrants, and Work Out Securities will provide debt-
oriented exposures or are received in connection with the Fund's
previous investments in Debt or fixed income securities.\138\
---------------------------------------------------------------------------

    \135\ See supra notes 80-81.
    \136\ The Exchange states that these other equity investments
will consist of ETFs (including money market ETFs). See supra note
82. As discussed above, the Exchange states that Fixed-Income
Related Warrants are treated as fixed income securities for purposes
of the proposed rule change and would be subject to and comply with
the generic listing requirements for fixed income securities, rather
than the generic listing requirements for equity securities. See
supra note 29.
    \137\ In the OIP, the Commission sought comment on whether the
Fund's proposed portfolio composition is sufficient to support a
determination that the proposal is consistent with the Act. The
Commission specifically noted that the Fund's investments in Non-
Convertible Preferred Securities, Work Out Securities, and Equity-
Related Warrants, which may constitute up to 30% of the Fund's net
assets, would not comply with the generic listing requirements for
portfolio investments in equity securities set forth in Nasdaq Rule
5735(b)(1)(A). The Commission asked for commenters' views on this
aspect of the proposal. See OIP, supra note 6, at 15888. The
Commission notes that it received no comments in response to the
OIP.
    \138\ See supra ``Statutory Basis.''
---------------------------------------------------------------------------

    The Fund will not comply with the requirement in Nasdaq Rule
5735(b)(1)(E) that no more than 20% of the assets in the Fund's
portfolio may be invested in over-the-counter derivatives. Instead, the
Exchange proposes that there would be no limit on the Fund's
investments in Interest Rate and Currency Derivatives, and that the
aggregate weight of all OTC Derivatives other than Interest Rate and
Currency Derivatives will not exceed 10% of the Fund's assets.\139\ The
Exchange states

that allowing the Fund to invest an unlimited amount of its assets in
Interest Rate and Currency Derivatives is necessary and appropriate to
allow the Fund to risk manage its portfolio.\140\ In addition, the
Exchange states its belief that Interest Rate and Currency Derivatives
are not readily subject to manipulation given the size, liquidity, and
regulatory oversight of the trading market for such instruments.\141\
---------------------------------------------------------------------------

    \139\ As discussed above, for purposes of this 10% limit on OTC
Derivatives, the weight of such OTC Derivatives would be calculated
based on the mark-to-market value of such OTC Derivatives.
    \140\ See supra ``Statutory Basis.''
    \141\ See id.
---------------------------------------------------------------------------

    The Fund will not comply with the requirement in Nasdaq Rule
5735(b)(1)(D)(i) that at least 90% of the weight of the Fund's holdings
in futures, exchange-traded options, and listed swaps shall, on both an
initial and continuing basis, consist of futures, options, and swaps
for which the Exchange may obtain information via the ISG from other
members or affiliates of the ISG, or for which the principal market is
a market with which the Exchange has a CSSA. Instead, the Exchange
proposes that no more than 10% of the net assets of the Fund will be
invested in Exchange-Traded Derivatives and exchange-listed securities
whose principal market is not a member of ISG or is not a market with
which the Exchange has a CSSA.\142\ The Exchange believes that this
alternative limit is appropriate because, relative to the overall size
of the Fund, the Fund's investment in non-ISG/CSSA derivatives and
exchange-listed securities will be small.\143\
---------------------------------------------------------------------------

    \142\ As discussed above, for purposes of this 10% limit, the
weight of such Exchange-Traded Derivatives will be calculated based
on the mark-to-market value of such Exchange-Traded Derivatives.
    \143\ See supra ``Statutory Basis.''
---------------------------------------------------------------------------

    Finally, the Exchange states that the Fund may maintain significant
positions in Eurodollar and G-7 Sovereign Futures and Options, and that
as a result, the Fund will not comply with the requirement in Nasdaq
Rule 5735(b)(1)(D)(ii) that the aggregate gross notional value of
listed derivatives based on any five or fewer underlying reference
assets not exceed 65% of the weight of the Fund's portfolio (including
gross notional exposures), and the aggregate gross notional value of
listed derivatives based on any single underlying reference asset not
exceed 30% of the weight of the Fund's portfolio (including gross
notional exposures). The Exchange states that Eurodollar and G-7
Sovereign Futures and Options are highly liquid investments and are not
subject to the same concentration risks as Exchange-Traded Derivatives
referencing other assets because of such liquidity.\144\ In addition,
the Exchange represents that the G-7 Sovereign Futures and Options in
which the Fund will invest will be listed on an exchange that is an ISG
member or an exchange with which the Exchange has a CSSA.\145\ The
Exchange represents that, except with respect to its investments in
Eurodollar and G-7 Sovereign Futures and Options, the Fund's
investments in Exchange-Traded Derivatives will comply with the
concentration requirements in Nasdaq Rule 5735(b)(1)(D)(ii).\146\
---------------------------------------------------------------------------

    \144\ See supra note 116 and accompanying text.
    \145\ See supra ``Statutory Basis.''
    \146\ See supra note 117 and accompanying text. As discussed
above, for purposes of this requirement, the weight of the
applicable Exchange-Traded Derivatives will be calculated based on
the mark-to-market value of such Exchange-Traded Derivatives.
---------------------------------------------------------------------------

    Other than as described above, the Fund will meet all the
requirements of Nasdaq Rule 5735. For the reasons articulated by the
Exchange above, the Commission believes that these proposed initial and
continued listing requirements, including the alternative limitations
on the Fund's proposed holdings described above, are designed to
mitigate the potential for manipulation of the Shares.
    The Commission finds that the proposal is consistent with Section
11A(a)(1)(C)(iii) of the Act,\147\ which sets forth Congress's finding
that it is in the public interest and appropriate for the protection of
investors and the maintenance of fair and orderly markets to assure the
availability to brokers, dealers, and investors of information with
respect to quotations for, and transactions in, securities. Quotation
and last sale information for the Shares will be available via Nasdaq
proprietary quote and trade services, as well as in accordance with the
Unlisted Trading Privileges (``UTP'') and the CTA plans. Further, as
required by Nasdaq Rule 5735(d)(2)(A), the Intraday Indicative Value,
available on the Nasdaq Information LLC proprietary index data
service,\148\ will be widely disseminated by one or more major market
data vendor at least every 15 seconds during the Exchange's Regular
Market Session. 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. 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. In addition, the Fund's website
will include a form of the prospectus for the Fund and additional data
relating to NAV and other applicable quantitative information.
---------------------------------------------------------------------------

    \147\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
    \148\ See supra note 90.
---------------------------------------------------------------------------

    Quotation and last sale information for exchange-listed Work Out
Securities, Non-Convertible Preferred Securities, warrants, convertible
fixed income securities, and ETFs will be available via Nasdaq
proprietary quote and trade services, as well as in accordance with the
UTP and the CTA Plans. Price information for U.S. exchange listed
options will be available via the Options Price Reporting Authority and
price information for other U.S. Exchange-Traded Derivatives will be
available from the applicable listing exchange and from major market
data vendors. Price information for TRACE-Eligible Securities sold in
transactions under Rule 144A under the Securities Act will generally be
available through TRACE and information regarding transactions in non-
TRACE-Eligible Securities or transactions not otherwise subject to
TRACE reporting will be available from major market data vendors and
broker-dealers. For most of the U.S. dollar denominated corporate
bonds, GSE-sponsored securities, Securitized Products, and other U.S.
dollar denominated fixed income securities in which the Fund invests,
price information will be available from TRACE and EMMA.\149\ For those
instruments for which FINRA does not disseminate price information from
TRACE, such as CDOs and fixed income securities denominated in foreign
currencies, pricing information will be available from major market
data vendors and broker-dealers. For other exchange-listed securities
(to be comprised primarily of ETFs, warrants, and structured notes and
which may include exchange-listed securities of both U.S. and non-U.S.
issuers), equities traded in the over-the-counter market (including
Work Out Securities and Non-Convertible Preferred Securities),
Exchange-Traded Derivatives (including U.S. or foreign), OTC
Derivatives, Debt, fixed income securities (including convertible fixed
income securities), and Securitized Products that are not reported to
TRACE, intraday price quotations will generally be available from
broker-dealers and trading platforms (as applicable). Price information
for such securities and instruments will also be available from feeds
from major market data vendors, published or other public sources, or
online information services. Intraday and other price information
related to

foreign government securities, Money Market Funds, and other cash
equivalents that are traded over-the-counter, and other Non-TRACE
Eligible Securities, as well as prices for Treasury Securities, CDOs,
commercial mortgage-backed securities, or CMOs purchased through
transactions that do not qualify for periodic dissemination by FINRA
will be available through major market data vendors, such as Bloomberg,
Markit, IDC, and Thomson Reuters, which can be accessed by APs and
other investors. Price information for Money Market Funds will also be
available through the applicable fund's website. Pricing information
for repurchase transactions and reverse repurchase agreements entered
into by the Fund is not publicly reported.
---------------------------------------------------------------------------

    \149\ See supra note 92.
---------------------------------------------------------------------------

    The Commission also believes that the proposal is reasonably
designed to promote fair disclosure of information that may be
necessary to price the Shares appropriately and to prevent trading when
a reasonable degree of transparency cannot be assured. The Exchange
states that it 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.\150\ In addition, the Exchange
represents that on each Business Day, before commencement of trading in
the Shares in the Regular Market Session on the Exchange, the Fund will
disclose on its website the Disclosed Portfolio of the Fund that will
form the basis for the Fund's calculation of NAV at the end of the
Business Day, and that this website information will be available free
of charge. Further, trading in the Shares may be halted because of
market conditions or for reasons that, in the view of the Exchange,
make trading in the Shares inadvisable. Trading in the Shares will also
be subject to Nasdaq Rule 5735(d)(2)(D), which sets forth circumstances
under which Shares of a fund may be halted.
---------------------------------------------------------------------------

    \150\ See Nasdaq Rule 5735(d)(1)(B).
---------------------------------------------------------------------------

    The Exchange states that it has a general policy prohibiting the
distribution of material, non-public information by its employees. The
Exchange states that the neither the Manager nor any of the Sub-
Advisers is a broker-dealer, but that each is affiliated with a broker-
dealer and has implemented, and will maintain, a fire wall with respect
to its broker-dealer affiliate regarding access to information
concerning proposed changes to the composition and/or changes to the
Fund's portfolio prior to implementation. Further, the Commission notes
that the Reporting Authority that provides the Disclosed Portfolio must
implement and maintain, or be subject to, procedures designed to
prevent the use and dissemination of material, non-public information
regarding the actual components of the portfolio.\151\
---------------------------------------------------------------------------

    \151\ See Nasdaq Rule 5735(d)(2)(B)(ii). The term ``Reporting
Authority'' is defined in Nasdaq Rule 5735(c)(4).
---------------------------------------------------------------------------

    In the OIP, the Commission sought public comment on how the cutoff
time for redemption requests and creation orders, as originally
proposed, would affect the opportunity for and effective and efficient
arbitrage process and whether the proposed cutoff time would be
consistent with the maintenance of fair and orderly markets and the
requirements of Section 6(b)(5) of the Act.\152\ The Commission notes
that in Amendment No. 3, the Exchange revised the proposed cutoff time
for creation orders and redemption requests so that orders to create or
redeem Creation Units would be required to be received between 9 a.m.,
E.T. and 10 a.m., E.T. on a given Business Day in order to receive the
NAV determined on the Business Day on which the order is placed.\153\
In addition, Amendment No. 3 states that when the Fund permits Creation
Units to be issued in-kind, the Fund will cause to be published,
through the NSCC, on each Business Day, at or before 9:00 a.m., E.T.,
the identity and the required principal amount or number of each
Deposit Security and the amount of the Cash Component (if any) to be
included in the current Fund Deposit. The Commission notes that, as a
result of these amendments, a market participant that submits an order
to create or redeem Creation Units between 9 a.m., E.T., and 10 a.m.,
E.T., would know the contents of the deposit/redemption securities that
would be applicable to its creation order or redemption request before
it makes such request. Further, such market participant would receive
the NAV determined on the same Business Day on which its order is
placed. The Commission further notes that it received no comments in
response to the OIP.
---------------------------------------------------------------------------

    \152\ See OIP, supra note 6, at 15888. As originally proposed,
all redemption requests and creation orders for Creation Units of
the Fund would have been required to be received by the Distributor
within one hour after the closing time of the regular trading
session on the Exchange (ordinarily between 4:00 p.m., E.T., and
5:00 p.m., E.T.) in order to receive the NAV on the next Business
Day immediately following the date the order was placed. As
proposed, the Exchange would cause to be published, through the
NSCC, on each Business Day, prior to the opening of trading on the
Exchange (currently, 9:30 a.m., E.T.), the identity and the required
number (as applicable) of deposit/redemption securities and the
amount of cash applicable to creation orders and redemption requests
received in proper form. In the OIP, the Commission noted that
market participants that submit redemption requests or creation
orders on a given Business Day would not know the contents of the
deposit/redemption securities that would be applicable to their
request until the following Business Day and would receive the
following Business Day's NAV. See id.
    \153\ See supra note 8.
---------------------------------------------------------------------------

    The Exchange deems the Shares to be equity securities, thus
rendering trading in the Shares subject to the Exchange's existing
rules governing the trading of equity securities. In support of this
proposal, the Exchange represents that:
    (1) The Shares will be subject to Nasdaq Rule 5735, which sets
forth the initial and continued listing criteria applicable to Managed
Fund Shares. Other than as described above, the Fund will meet all
requirements of Nasdaq Rule 5735(b)(1). The Fund's investments will be
subject to the limitations described in Section II.A above.
    (2) A minimum of 100,000 Shares of the Fund will be outstanding at
the commencement of trading on the Exchange.
    (3) Trading in the Shares will be subject to the existing trading
surveillances, administered by both Nasdaq and also FINRA on behalf of
the Exchange, and 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.
    (4) FINRA, on behalf of the Exchange, will communicate as needed
regarding trading in the Shares and the exchange-listed securities and
instruments held by the Fund with other markets and other entities that
are members of ISG and with which the Exchange has CSSAs, and FINRA and
the Exchange both may obtain information regarding trading in the
Shares, the exchange-listed securities, derivatives, and other
instruments held by the Fund from markets and other entities that are
members of ISG, which include securities and futures exchanges and swap
execution facilities, or with which the Exchange has in place a CSSA.
FINRA, on behalf of the Exchange, will be able to access, as needed,
trade information for most of the fixed income securities held by the
Fund through reporting on TRACE and, with respect to municipal
securities, EMMA.
    (5) 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: (i) The procedures for

purchases and redemptions of Shares in Creation Units (and that Shares
are not individually redeemable); (ii) Nasdaq Rule 2111A, which imposes
suitability obligations on Nasdaq members with respect to recommending
transactions in the Shares to customers; (iii) how information
regarding the Intraday Indicative Value and the Disclosed Portfolio is
disseminated; (iv) 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; (v) the
requirement that members deliver a prospectus to investors purchasing
newly issued Shares prior to or concurrently with the confirmation of a
transaction; and (vi) trading information.
    (6) The Exchange has appropriate rules to facilitate transactions
in the Shares during all trading sessions.
    (7) For initial and continued listing, the Fund must be in
compliance with Rule 10A-3 under the Act.\154\
---------------------------------------------------------------------------

    \154\ See 17 CFR 240.10A-3.
---------------------------------------------------------------------------

    (8) The Fund's investments, including derivatives, will be
consistent with the Fund's investment objectives, and will not be used
to seek leveraged returns or performance that is the multiple or
inverse multiple of a benchmark (although derivatives may have embedded
leverage). Although the Fund will be permitted to borrow as permitted
under the 1940 Act, it will not be operated in a manner designed to
seek leveraged returns or a multiple or inverse multiple of the
performance of an underlying reference index.
    The Exchange represents that all statements and representations
made in the filing regarding: (1) The description of the portfolio or
reference assets; (2) limitations on portfolio holdings or reference
assets; (3) dissemination and availability of the reference asset or
Intraday Indicative Values; or (4) the applicability of Exchange
listing rules specified in the rule filing constitute continued listing
requirements for listing the Shares on the Exchange. In addition, the
issuer has represented to the Exchange that it will advise the Exchange
of any failure by the Fund to comply with the continued listing
requirements and, pursuant to its obligations under Section 19(g)(1) of
the Act, the Exchange will monitor for compliance with the continued
listing requirements. If the Fund is not in compliance with the
applicable listing requirements, the Exchange will commence delisting
procedures under the Nasdaq 5800 Series.
    This approval order is based on all of the Exchange's statements
and representations, including those set forth above and in Amendment
No. 3.
    For the foregoing reasons, the Commission finds that the proposed
rule change, as modified by Amendment No. 3, is consistent with Section
6(b)(5) of the Act \155\ and Section 11A(a)(1)(C)(iii) of the Act \156\
and the rules and regulations thereunder applicable to a national
securities exchange.
---------------------------------------------------------------------------

    \155\ 15 U.S.C. 78f(b)(5).
    \156\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
---------------------------------------------------------------------------

IV. Solicitation of Comments on Amendment No. 3 to the Proposed Rule
Change

    Interested persons are invited to submit written data, views, and
arguments concerning whether Amendment No. 3 to the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include
File Number SR-NASDAQ-2017-128 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-2017-128. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-NASDAQ-2017-128, and should be submitted
on or before October 3, 2018.

V. Accelerated Approval of the Proposed Rule Change, as Modified by
Amendment No. 3

    The Commission finds good cause to approve the proposed rule
change, as modified by Amendment No. 3, prior to the thirtieth day
after the date of publication of notice of the filing of Amendment No.
3 in the Federal Register. The Commission notes that Amendment No. 3
clarifies the proposed investments of the Fund, including any
limitations on such investments. Amendment No. 3 also provides other
clarifications and additional information to the proposed rule
change.\157\ The changes and additional information in Amendment No. 3
assists the Commission in finding that the proposal is consistent with
the Act. Accordingly, the Commission finds good cause, pursuant to
Section 19(b)(2) of the Act,\158\ to approve the proposed rule change,
as modified by Amendment No. 3, on an accelerated basis.
---------------------------------------------------------------------------

    \157\ See supra note 8.
    \158\ 15 U.S.C. 78s(b)(2).
---------------------------------------------------------------------------

VI. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\159\ that the proposed rule change (SR-NASDAQ-2017-128), as
modified by Amendment No. 3, be, and it hereby is, approved on an
accelerated basis.
---------------------------------------------------------------------------

    \159\ Id.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\160\
Eduardo A. Aleman,
Assistant Secretary.
---------------------------------------------------------------------------

    \160\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

[FR Doc. 2018-19774 Filed 9-11-18; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register: June 20, 2007 (Volume 72, Number 118)]
[Notices]
[Page 34006]
[DOCID:fr20jn07-86]

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ENVIRONMENTAL PROTECTION AGENCY

[EPA-HQ-OPP-2006-0847; FRL-8123-4]

Colorado State Plan for Certification of Applicators of
Restricted Use Pesticides; Notice of Approval

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice.

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SUMMARY: In the Federal Register of December 22, 2006, EPA issued a
notice announcing its intent to approve an amended Colorado State Plan
for the certification of applicators of restricted use pesticides
contingent upon Colorado's promulgation of appropriate revised State
Rules and Regulations pertaining to the Administration and Enforcement
of the Colorado Pesticide Applicators' Act by January 1, 2007. In that
notice, EPA solicited comments from the public on the proposed action
to approve the amended Colorado State Plan. The amended Certification
Plan Colorado submitted to EPA contained several statutory, regulatory,
and programmatic changes to its current Certification Plan. The
proposed amendments provide details for the certification of both
private and commercial pesticide applicators and subsequent enforcement
of pesticide laws and regulations pursuant to the Colorado Pesticide
Applicator's Act. In addition, the amended State Plan adds three new
commercial pesticide applicator subcategories. No comments were
received in response to that Federal Register notice and Colorado
promulgated the appropriate revised State Rules and Regulations
pertaining to the Administration and Enforcement of the Colorado
Pesticide Applicators' Act on January 1, 2007. Therefore, EPA hereby
approves the amended Colorado State Plan.

FOR FURTHER INFORMATION CONTACT: Peg Perreault, EPA Region 8, Pollution
Prevention, Pesticides, and Toxics Program, 8P-P3T, 1595 Wynkoop St.,
Denver, CO 80202-1129; telephone number:<PHONE_NUMBER>; e-mail
address<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

I. General Information

A. Does this Action Apply to Me?

    This action is directed to the public in general. This action may,
however, be of interest to those involved in agriculture and anyone
involved with the distribution and application of pesticides for
agricultural purposes. Others involved with pesticides in a non-
agricultural setting may also be affected. In addition, it may be of
interest to others, such as, those persons who are or may be required
to conduct testing of chemical substances under the Federal Food, Drug,
and Cosmetic Act (FFDCA), or the Federal Insecticide, Fungicide, and
Rodenticide Act (FIFRA). Since other entities may also be interested,
the Agency has not attempted to describe all the specific entities that
may be affected by this action. If you have any questions regarding the
applicability of this action to a particular entity, consult the person
listed under FOR FURTHER INFORMATION CONTACT.

B. How Can I Get Copies of this Document and Other Related Information?

    1. Docket. EPA has established a docket for this action under
docket identification (ID) number EPA-HQ-OPPT-2006-0847. Publicly
available docket materials are available either in the electronic
docket at http://www.regulations.gov, or, if only available in hard

copy, at the Office of Pesticide Programs (OPP) Regulatory Public
Docket in Rm. S-4400, One Potomac Yard (South Building), 2777 S.
Crystal Drive, Arlington, VA. The hours of operation of this Docket
facility are from 8:30 a.m. to 4 p.m., Monday through Friday, excluding
legal holidays. The Docket facility telephone number is<PHONE_NUMBER>.
    2. Electronic access. You may access this Federal Register document
electronically through the EPA Internet under the ``Federal Register''
listings at http://www.epa.gov/fedrgstr.

II. What Action is the Agency Taking?

    EPA is approving the amended Colorado State Certification Plan.
This approval is based upon EPA's review of the Colorado State Plan and
finding it in compliance with FIFRA and its implementing regulations at
40 CFR part 171. Further, there were no public comments submitted in
response to the earlier Federal Register notice (71 FR 77014) (FRL-
8102-8) soliciting comments and Colorado promulgated the appropriate
revised State Rules and Regulations pertaining to the Administration
and Enforcement of Colorado Pesticide Applicators' Act. Therefore, the
amended Colorado State Certification Plan is hereby approved.

List of Subjects

    Environmental protection, Education, Pests and pesticides.

    Dated: May 30, 2007.
Robert E. Roberts,
Regional Administrator, Region 8.
[FR Doc. E7-11945 Filed 6-19-07; 8:45 am]

BILLING CODE 6560-50-S