[Federal Register Volume 79, Number 130 (Tuesday, July 8, 2014)]
[Notices]
[Pages 38631-38639]
[FR Doc No: 2014-15794]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-72506; File No. SR-NASDAQ-2014-050]

Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Order
Granting Approval of Proposed Rule Change Relating to the Listing and
Trading of the Shares of the First Trust Strategic Income ETF of First
Trust Exchange-Traded Fund IV

July 1, 2014.

I. Introduction

    On May 5, 2014, The NASDAQ Stock Market LLC (``Exchange'' or
``Nasdaq'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to list and trade shares (``Shares'') of the First
Trust Strategic Income ETF (``Fund'') of First Trust Exchange-Traded
Fund IV (``Trust'') under Nasdaq Rule 5735, which governs the listing
and trading of Managed Fund Shares on the Exchange. The proposed rule
change was published for comment in the Federal Register on May 21,
2014.\3\ The Commission received no comments on the proposed rule
change. This order grants approval of the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 72169 (May 15,
2014), 79 FR 29247 (``Notice'').
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II. Description of Proposed Rule Change

    The Exchange has made the following representations and statements
in describing the Fund and its investment strategies, including other
portfolio holdings and investment restrictions.\4\
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    \4\ The Commission notes that additional information regarding
the Trust, the Fund, and the Shares, including investment
strategies, risks, net asset value (``NAV'') calculation, creation
and redemption procedures, fees, Fund holdings disclosure policies,
distributions, and taxes, among other information, is included in
the Notice and the Registration Statement, as applicable. See Notice
and Registration Statement, supra note 3 and infra note 5,
respectively.
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General

    The Fund will be an actively-managed exchange-traded fund
(``ETF''). The Shares will be offered by the Trust, which was
established as a Massachusetts business trust on September 15, 2010.\5\
The Trust is registered with the Commission as an investment company
and has filed a registration statement on Form N-1A (``Registration
Statement'') with the Commission.\6\ The Fund will be a series of the
Trust. The Fund intends to qualify each year as a regulated investment
company under Subchapter M of the Internal Revenue Code of 1986, as
amended.
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    \5\ The Commission has issued an order granting certain
exemptive relief under the Investment Company Act of 1940 (15 U.S.C.
80a-1) (``1940 Act''). See Investment Company Act Release No. 30029
(April 10, 2012) (File No. 812-13795) (the ``Exemptive Relief''). In
addition, the Commission has issued no-action relief pertaining to
the Fund's ability to invest in derivatives notwithstanding certain
representations in the application for the Exemptive Relief. See
Commission No-Action Letter (December 6, 2012).
    \6\ See Post-Effective Amendment No. 67 to Registration
Statement on Form N-1A for the Trust, dated May 2, 2014 (File Nos.
333-174332 and 811-22559).
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    First Trust Advisors L.P. will be the investment adviser
(``Adviser'') to the Fund. The following will serve as investment sub-
advisers (each a ``Sub-Adviser'') to the Fund: First Trust Global
Portfolios Ltd (``First Trust Global''); Energy Income Partners, LLC
(``EIP''); Stonebridge Advisors LLC (``Stonebridge''); and Richard
Bernstein Advisors LLC (``RBA'').\7\ First Trust Portfolios L.P.
(``Distributor'') will be the principal underwriter and distributor of
the Fund's Shares. The Bank of New York Mellon Corporation (``BNY'')
will act as the administrator, accounting agent, custodian and transfer
agent to the Fund.
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    \7\ The Exchange states that neither the Adviser nor any Sub-
Adviser is a broker-dealer, although the Adviser, First Trust
Global, EIP and Stonebridge are each affiliated with a broker-
dealer. The Exchange states that RBA is currently not affiliated
with a broker-dealer. The Exchange states that the Adviser and the
broker-dealer affiliated Sub-Advisers have each implemented a fire
wall with respect to their respective broker-dealer affiliate
regarding access to information concerning the composition and/or
changes to the portfolio. In addition, the Exchange states that
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. Furthermore, the Exchange states that in the event
(a) the Adviser or a Sub-Adviser becomes, or becomes newly
affiliated with, a broker-dealer, or (b) any new adviser or sub-
adviser is a registered broker-dealer or becomes affiliated with a
broker-dealer, it will implement a fire wall with respect to its
relevant personnel and/or such broker-dealer affiliate, as
applicable, regarding access to information concerning the
composition and/or changes to the portfolio and will be subject to
procedures designed to prevent the use and dissemination of material
non-public information regarding such portfolio.
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    The primary investment objective of the Fund will be to seek risk-
adjusted

income and its secondary objective will be capital appreciation. Under
normal market conditions,\8\ the Fund will seek to achieve its
investment objectives by following a strategic and tactical asset
allocation process that will provide diversified exposure to income-
producing asset classes.
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    \8\ The term ``under normal market conditions'' as used herein
includes, but is not limited to, the absence of adverse market,
economic, political or other conditions, including extreme
volatility or trading halts in the securities markets or the
financial markets generally; operational issues causing
dissemination of inaccurate market information; or force majeure
type events such as systems failure, natural or man-made disaster,
act of God, armed conflict, act of terrorism, riot or labor
disruption or any similar intervening circumstance.
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    The Fund will be a multi-manager, multi-strategy actively-managed
exchange-traded fund. The Adviser will determine the Fund's strategic
allocation among various general investment categories and allocate the
Fund's assets to portfolio management teams comprised of personnel of
the Adviser and/or a Sub-Adviser (each a ``Management Team''), which
will employ their respective investment strategies. The Fund's
investment categories, which are described in more detail below, will
be: (i) High yield corporate bonds and first lien senior secured
floating rate bank loans (referred to as ``senior loans''); (ii)
mortgage-related investments; (iii) preferred securities; (iv)
international sovereign bonds; (v) equity securities of Energy
Infrastructure Companies (as defined below); (vi) dividend paying
domestic equity securities and Depositary Receipts (as defined below),
together with a related option overlay strategy; and (vii) other
derivative instruments.
    The Fund may add or remove investment categories or Management
Teams at the Adviser's discretion. The Fund will seek to provide income
and total return by having each Management Team focus on those
securities within its respective investment category. The Fund may
invest in securities directly or, alternatively, may invest in other
ETFs that generally provide exposure to the various investment
categories.\9\ The Adviser expects that the Fund may at times invest
significantly (and, potentially, may invest up to 50% of its net
assets) in other ETFs, including but not limited to, other ETFs that
are advised by the Adviser; however, the Fund does not intend to
operate principally as a ``fund of funds.'' Any other ETFs in which the
Fund invests to gain exposure to an investment category may be subject
to investment parameters that differ in certain respects from those
that have been established for the Fund for such investment category,
as set forth below.
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    \9\ An ETF is an investment company registered under the 1940
Act that holds a portfolio of securities. Many ETFs are designed to
track the performance of a securities index, including industry,
sector, country and region indexes. ETFs included in the Fund will
be listed and traded in the U.S. on registered exchanges. The Fund
may invest in the securities of ETFs in excess of the limits imposed
under the 1940 Act pursuant to exemptive orders obtained by other
ETFs and their sponsors from the Commission. In addition, the Fund
may invest in the securities of certain other investment companies,
including ETFs, in excess of the limits imposed under the 1940 Act
pursuant to an exemptive order obtained by the Trust and the Adviser
from the Commission. See Investment Company Act Release No. 30377
(February 5, 2013) (File No. 812-13895). The ETFs in which the Fund
may invest include Index Fund Shares (as described in Nasdaq Rule
5705), Portfolio Depository Receipts (as described in Nasdaq Rule
5705), and Managed Fund Shares (as described in Nasdaq Rule 5735).
While the Fund may invest in inverse ETFs, the Fund will not invest
in leveraged or inverse leveraged (e.g., 2X or -3X) ETFs.
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    To enhance expected return, the Adviser's investment committee
will, on a generally periodic basis, tactically adjust investment
category weights. Security selection will be performed for the Fund by
the Adviser and/or a Sub-Adviser.
    With respect to each investment category, the liquidity of a
security will be a substantial factor in the Fund's security selection
process. The Fund will not purchase any securities or other assets
that, in the opinion of the applicable Management Team, are illiquid
if, as a result, more than 15% of the value of the Fund's net assets
will be invested in illiquid assets (``15% Limitation'').\10\ Illiquid
assets include securities subject to contractual or other restrictions
on resale and other instruments that lack readily available markets as
determined in accordance with Commission staff guidance. The Adviser
will communicate with the various Management Teams regarding the Fund's
ongoing compliance with the 15% Limitation.
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    \10\ In reaching liquidity decisions, the Adviser and/or
Management Team may consider the following factors: the frequency of
trades and quotes for the security; the number of dealers wishing to
purchase or sell the security and the number of other potential
purchasers; dealer undertakings to make a market in the security;
and the nature of the security and the nature of the marketplace in
which it trades (e.g., the time needed to dispose of the security,
the method of soliciting offers and the mechanics of transfer).
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    Except as specifically provided herein, the fixed income and equity
securities in which the Fund will invest may be issued by U.S. and non-
U.S. issuers of all kinds and of any capitalization range and credit
quality. The Fund represents that its portfolio will include a minimum
of 13 non-affiliated issuers of fixed income securities. In addition,
the fixed income securities in which the Fund will invest may have
effective or final maturities of any length. At least 90% of the Fund's
net assets that are invested in exchange-traded equity securities of
both domestic and foreign issuers, exchange-traded products and
exchange-traded derivatives (in the aggregate) will be invested in
investments that trade in markets that are members of the Intermarket
Surveillance Group (``ISG''), which includes all U.S. national
securities exchanges and certain foreign exchanges, or are parties to a
comprehensive surveillance sharing agreement with the Exchange.\11\
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    \11\ For a list of the current members of ISG, see
www.isgportal.org.
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    The Fund may invest in the equity securities (including without
limitation preferred securities) of foreign issuers, either directly or
through investments that are in the form of American Depositary
Receipts (``ADRs'') or Global Depositary Receipts (``GDRs'' and,
together with ADRs, ``Depositary Receipts'').\12\ The Depositary
Receipts in which the Fund invests will be exchange-traded and will not
include unsponsored Depositary Receipts.
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    \12\ ADRs are U.S. dollar denominated receipts typically issued
by U.S. banks and trust companies that evidence ownership of
underlying securities issued by a foreign issuer. GDRs are receipts
issued throughout the world that evidence a similar arrangement.
ADRs and GDRs may trade in currencies that differ from the currency
in which the underlying security trades. Generally, ADRs, in
registered form, are designed for use in the U.S. securities
markets. GDRs, in registered form, are traded both in the United
States and in Europe and are designed for use throughout the world.
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    The Fund's exposure to any single country (outside of the U.S.)
will generally be limited to 20% of the Fund's net assets. The portion
of the Fund's net assets that may be denominated in currencies other
than the U.S. dollar is not expected to exceed 30%. To the extent the
Fund invests in such assets, the value of the assets of the Fund as
measured in U.S. dollars will be affected by changes in exchange rates.
    The Fund may from time to time purchase securities on a ``when-
issued'' or other delayed-delivery basis. To the extent required under
applicable federal securities laws (including the 1940 Act), rules, and
interpretations thereof, the Fund will ``set aside'' liquid assets or
engage in other measures to ``cover'' open positions held in connection
with the foregoing types of transactions.
    The investment categories in which the Fund intends to invest and
the investment strategies that the applicable Management Teams are
expected to pursue are described below:

     High Yield Corporate Bonds and Senior Loans. The Fund
intends to invest between 0% and 30%, but may invest up to 50%, of its
net assets in a combination of high yield corporate bonds and senior
loans.\13\ Such bonds and loans in which the Fund invests directly will
be issued by entities domiciled in the United States. Under normal
market conditions, the Fund will seek to invest at least 75% of its net
assets that are invested in such bonds and loans (in the aggregate) in
bonds and loans that, at the time of original issuance, have at least
$100 million par amount outstanding.
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    \13\ For the avoidance of doubt, this investment category and
these percentages will not include so-called baby bonds, which are
included in ``Preferred Securities'' (described below).
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    The high yield corporate bonds in which the Fund will invest will
be rated below investment grade \14\ at the time of purchase or unrated
and deemed by the Adviser and/or the applicable Management Team to be
of comparable quality,\15\ commonly referred to as ``junk'' bonds. For
purposes of determining whether a security is below investment grade,
the lowest available rating will be considered. High yield debt may be
issued, for example, by companies without long track records of sales
and earnings or by issuers that have questionable credit strength.
Corporate bonds may carry fixed or floating rates of interest.
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    \14\ Securities rated below investment grade include securities
that are rated Ba1/BB+/BB+ or below by Moody's Investors Service,
Inc. (``Moody's''), Fitch Ratings (``Fitch''), or Standard & Poor's
Ratings Services, a division of The McGraw-Hill Companies, Inc.
(``S&P Ratings''), respectively, or another nationally recognized
statistical rating organization (``NRSRO'').
    \15\ Comparable quality of unrated securities will be determined
by the Adviser and/or the applicable Management Team based on
fundamental credit analysis of the unrated security and comparable
NRSRO-rated securities. On a best efforts basis, the Adviser and/or
the applicable Management Team will attempt to make a rating
determination based on publicly available data. In making a
``comparable quality'' determination, the Adviser and/or the
applicable Management Team may consider, for example, whether the
issuer of the security has issued other rated securities, the nature
and provisions of the relevant security, whether the obligations
under the relevant security are guaranteed by another entity and the
rating of such guarantor (if any), relevant cash flows,
macroeconomic analysis, and/or sector or industry analysis.
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    The senior loans in which the Fund will invest will represent
amounts borrowed by companies or other entities from banks and other
lenders. In many cases, senior loans are issued in connection with
recapitalizations, acquisitions, leveraged buyouts, and refinancings. A
significant portion of the senior loans in which the Fund will invest
are expected to be rated below investment grade or unrated.
    A senior loan is considered senior to all other unsecured claims
against the borrower, and senior to or pari passu with all other
secured claims, meaning that in the event of a bankruptcy, the senior
loan, together with all other first lien claims, is entitled to be the
first to be repaid out of the proceeds of the assets securing the
loans, before other existing unsecured claims or interests receive
repayment. However, in bankruptcy proceedings, there may be other
claims, such as taxes or additional advances, which take precedence.
    Senior loans have interest rates that reset periodically. The
interest rates on senior loans are generally based on a percentage
above the London Interbank Offered Rate (LIBOR), a U.S bank's prime or
base rate, the overnight federal funds rate, or another rate. Senior
loans may be structured and administered by a financial institution
that acts as the agent of the lenders participating in the senior loan.
The Fund may acquire senior loans directly from a lender or through the
agent, as an assignment from another lender who holds a senior loan, or
as a participation interest in another lender's senior loan or portion
thereof.
    The Fund will generally invest in senior loans that the Adviser
and/or the applicable Management Team deems to be liquid with readily
available prices.
    The Management Team does not intend to purchase senior loans that
are in default; however, the Fund may hold a senior loan that has
defaulted subsequent to the purchase by the Fund.
     Mortgage-Related Investments. The Fund intends to invest
between 0% and 30%, but may invest up to 50%, of its net assets in the
mortgage-related debt securities and other mortgage-related instruments
described below (collectively, ``Mortgage-Related Investments'').
    The Mortgage-Related Investments in which the Fund invests will
primarily consist of investment grade securities (i.e., securities with
credit ratings within the four highest rating categories of an NRSRO at
the time of purchase or securities that are unrated and deemed by the
Adviser and/or the applicable Management Team to be of comparable
quality \16\ at the time of purchase). If a security is rated by
multiple NRSROs and receives different ratings, the Fund will treat the
security as being rated in the highest rating category received from an
NRSRO. In addition, if a security experiences a decline in credit
quality and falls below investment grade, the Fund may continue to hold
the security.
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    \16\ See supra note 15.
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    The types of Mortgage-Related Investments in which the Fund will
invest are described in the following three paragraphs:
    The Fund will invest in mortgage-backed securities, such as
residential mortgage-backed securities (``RMBS'') and commercial
mortgage-backed securities (``CMBS''). Mortgage-backed securities
represent an interest in a pool of mortgage loans made by banks and
other financial institutions to finance purchases of homes, commercial
buildings and other real estate. The individual mortgage loans are
packaged or ``pooled'' together for sale to investors. As the
underlying mortgage loans are paid off, investors receive principal and
interest payments.\17\
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    \17\ Mortgage-backed securities may be fixed rate or adjustable
rate mortgage-backed securities (``ARMS''). Certain mortgage-backed
securities (including RMBS and CMBS), where mortgage payments are
divided up between paying the loan's principal and paying the loan's
interest, are referred to as stripped mortgage-backed securities
(``SMBS''). Further, mortgage-backed securities can also be
categorized as collateralized mortgage obligations (``CMOs'') or
real estate mortgage investment conduits (``REMICs'') where they are
divided into multiple classes with each class being entitled to a
different share of the principal and/or interest payments received
from the pool of underlying assets.
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    The mortgage-backed securities in which the Fund will invest may
be, but are not required to be, issued or guaranteed by the U.S.
government, its agencies or instrumentalities, such as Ginnie Mae and
U.S. government-sponsored entities, such as Fannie Mae and Freddie Mac
(the U.S. government, its agencies and instrumentalities, and U.S.
government-sponsored entities are referred to collectively as
``Government Entities'').\18\ The Fund, however, will limit its
investments in mortgage-backed securities that are not issued or
guaranteed by Government Entities to 20% of its net assets. Many
mortgage-backed securities are pass-through securities, which means
they provide

investors with monthly payments consisting of a pro rata share of both
regular interest and principal payments as well as unscheduled
prepayments on the underlying mortgage loans. Because prepayment rates
of individual mortgage pools vary widely, the average life of a
particular pool cannot be predicted accurately. Adjustable rate
mortgage-backed securities include ARMS and other mortgage-backed
securities with interest rates that adjust periodically to reflect
prevailing market rates.
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    \18\ Securities issued or guaranteed by Government Entities have
different levels of credit support. For example, Ginnie Mae
securities carry a guarantee as to the timely repayment of principal
and interest that is backed by the full faith and credit of the U.S.
government. However, the full faith and credit guarantee does not
apply to the market prices and yields of the Ginnie Mae securities
or to the net asset value, trading price or performance of the Fund,
which will vary with changes in interest rates and other market
conditions. Fannie Mae and Freddie Mac pass-through mortgage
certificates are backed by the credit of the respective Government
Entity and are not guaranteed by the U.S. government. Other
securities issued by Government Entities (other than the U.S.
government) may only be backed by the creditworthiness of the
issuing institution, not the U.S. government, or the issuers may
have the right to borrow from the U.S. Treasury to meet their
obligations.
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    Additionally, the Fund may invest in mortgage dollar rolls.\19\ The
Fund intends to enter into mortgage dollar rolls only with high quality
securities dealers and banks, as determined by the Adviser. The Fund
may also invest in to-be-announced transactions (``TBA
Transactions'').\20\ Further, the Fund may enter into short sales as
part of its overall portfolio management strategies or to offset a
potential decline in the value of a security; however, the Fund does
not expect, under normal market conditions, to engage in short sales
with respect to more than 30% of the value of its net assets that are
invested in Mortgage-Related Investments. To the extent required under
applicable federal securities laws, rules, and interpretations thereof,
the Fund will ``set aside'' liquid assets or engage in other measures
to ``cover'' open positions and short positions held in connection with
the foregoing types of transactions.
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    \19\ In a mortgage dollar roll, the Fund will sell (or buy)
mortgage-backed securities for delivery on a specified date and
simultaneously contract to repurchase (or sell) substantially
similar (same type, coupon and maturity) securities on a future
date. During the period between a sale and repurchase, the Fund will
forgo principal and interest paid on the mortgage-backed securities.
The Fund will earn or lose money on a mortgage dollar roll from any
difference between the sale price and the future purchase price. In
a sale and repurchase, the Fund will also earn money on the interest
earned on the cash proceeds of the initial sale.
    \20\ A TBA Transaction is a method of trading mortgage-backed
securities. TBA Transactions generally are conducted in accordance
with widely-accepted guidelines which establish commonly observed
terms and conditions for execution, settlement and delivery. In a
TBA Transaction, the buyer and the seller agree on general trade
parameters such as agency, settlement date, par amount and price.
The actual pools delivered generally are determined two days prior
to the settlement date. The mortgage TBA market is liquid and
positions can be easily added, rolled or closed. According to the
Financial Industry Regulatory Authority (``FINRA'') Trade Reporting
and Compliance Engine (``TRACE'') data, TBA Transactions represented
approximately 93% of total trading volume for agency mortgage-backed
securities in the month of January 2014.
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     Preferred Securities. The Fund intends to invest between
0% and 30%, but may invest up to 50%, of its net assets in preferred
securities issued by U.S. and non-U.S. issuers.\21\ Under normal market
conditions, the Fund will seek to invest at least 75% of its net assets
that are invested in preferred securities in preferred securities that
have a minimum initial issuance amount of at least $100 million.
Initially, at least 50% of the Fund's net assets that are invested in
preferred securities will be invested in exchange-listed preferred
securities, although this percentage may decrease in the future.
Preferred securities held by the Fund will generally pay fixed or
adjustable rate distributions to investors and will have preference
over common stock in the payment of distributions and the liquidation
of a company's assets, which means that a company typically must pay
dividends or interest on its preferred securities before paying any
dividends on its common stock. Preferred securities are generally
junior to all forms of the company's debt, including both senior and
subordinated debt.
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    \21\ For the avoidance of doubt, this investment category and
these percentages will not include those investments in preferred
securities that are included in ``Equity Securities of Energy
Infrastructure Companies'' (described below). Certain of the
preferred securities in which the Fund will invest will be
traditional preferred stocks that issue dividends that qualify for
the dividends received deduction under which ``qualified'' domestic
corporations are able to exclude a percentage of the dividends
received from their taxable income. Other preferred securities in
which the Fund will invest will be preferred stocks that do not
issue dividends that qualify for the dividends received deduction or
generate qualified dividend income. Additionally, certain of the
preferred securities in which the Fund will invest may be so-called
baby bonds (i.e., small denomination, typically $25 par value, bonds
that often have certain characteristics associated with fixed income
securities sold to retail investors (for example, they typically pay
a quarterly coupon and are typically investment grade)). Hybrid
preferred securities, another type of preferred securities, are
typically junior and fully subordinated liabilities of an issuer or
the beneficiary of a guarantee that is junior and fully subordinated
to the other liabilities of the guarantor.
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     International Sovereign Bonds. The Fund intends to invest
between 0% and 30%, but may invest up to 50%, of its net assets in debt
securities, including inflation-linked bonds,\22\ issued by foreign
governments or their subdivisions, agencies and government-sponsored
enterprises (``Sovereign Debt'').\23\ At least 50% of the Fund's net
assets that are invested in Sovereign Debt will be invested in
securities of issuers rated investment grade (BBB-/Baa3 or higher) at
the time of purchase by at least one NRSRO and unrated securities
judged to be of comparable quality \24\ by the Adviser and/or the
applicable Management Team. Up to 50% of its net assets invested in
Sovereign Debt may be invested in securities of issuers rated below
investment grade at the time of purchase (i.e., ``junk'' bonds). If a
security or issuer is rated by multiple NRSROs and receives different
ratings, the Fund will treat the security or issuer (as applicable) as
being rated in the highest rating category received from an NRSRO. In
addition, if a security or issuer (as applicable) experiences a decline
in credit quality and falls below investment grade, the Fund may
continue to hold the security and it will not count toward the
investment limit; however, the security will be taken into account for
purposes of determining whether purchases of additional securities will
cause the Fund to violate such limit.
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    \22\ Inflation-linked bonds are fixed income securities that are
structured to provide protection against inflation. The value of the
inflation-linked bond's principal or the interest income paid on the
bond is adjusted to track changes in an official inflation measure.
The value of inflation-linked bonds is expected to change in
response to changes in real interest rates. Real interest rates are
tied to the relationship between nominal interest rates and the rate
of inflation. If nominal interest rates increase at a faster rate
than inflation, real interest rates may rise, leading to a decrease
in the value of inflation-linked bonds.
    \23\ For the avoidance of doubt, Sovereign Debt includes debt
obligations denominated in local currencies or U.S. dollars.
Moreover, given that it includes debt issued by subdivisions,
agencies and government-sponsored enterprises, Sovereign Debt may
include debt commonly referred to as ``quasi-sovereign debt.''
Sovereign Debt may also include issues denominated in emerging
market local currencies that are issued by ``supranational
issuers,'' such as the International Bank for Reconstruction and
Development and the International Finance Corporation, as well as
development agencies supported by other national governments.
According to the Adviser and the applicable Management Team, while
there is no universally accepted definition of what constitutes an
``emerging market,'' in general, emerging market countries are
characterized by developing commercial and financial infrastructure
with significant potential for economic growth and increased capital
market participation by foreign investors.
    \24\ See supra note 15.
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    The Fund intends to invest in Sovereign Debt of issuers in both
developed and emerging markets.\25\ In addition, the Fund expects that,
under normal market conditions, at least 80% of the Sovereign Debt in
which it invests will be issued by issuers with outstanding debt of at
least $200 million

(or the foreign currency equivalent thereof).
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    \25\ The Fund intends, initially, to invest in Sovereign Debt of
the following issuers: Argentina; Brazil; Chile; Colombia; Costa
Rica; Dubai (United Arab Emirates); Hungary; Indonesia; Malaysia;
Mexico; Nigeria; Peru; Philippines; Poland; Qatar; Romania; Russia;
South Africa; South Korea; Sri Lanka; Thailand; Turkey; Venezuela;
and Vietnam, although this list may change based on market
developments. The percentage of Fund assets invested in a specific
region, country or issuer will change from time to time.
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     Equity Securities of Energy Infrastructure Companies. The
Fund intends to invest between 0% and 50% of its net assets in
exchange-traded equity securities of companies deemed by the applicable
Management Team to be engaged in the energy infrastructure sector.
These companies principally include publicly-traded master limited
partnerships and limited liability companies taxed as partnerships
(``MLPs'') (described below), MLP affiliates (described below),
``Canadian Income Equities,'' which are successor companies to Canadian
income trusts,\26\ pipeline companies, utilities, and other companies
that derive at least 50% of their revenues from operating or providing
services in support of infrastructure assets such as pipelines, power
transmission and petroleum and natural gas storage in the petroleum,
natural gas and power generation industries (collectively, ``Energy
Infrastructure Companies'').
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    \26\ The term ``Canadian income trusts'' refers to qualified
income trusts designated by the Canada Revenue Agency that derive
income and gains from the exploration, development, mining or
production, processing, refining, transportation (including
pipelines transporting gas, oil or products thereof), or the
marketing of any mineral or natural resources.
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    As indicated above, the Fund may invest in the equity securities of
MLPs. MLPs are limited partnerships whose shares (or units) are listed
and traded on a U.S. securities exchange. MLP units may be common or
subordinated.\27\ In addition, the Fund may invest in I-Shares,\28\
which represent an ownership interest issued by an affiliated party of
an MLP. The MLP affiliate uses the proceeds from the sale of I-Shares
to purchase limited partnership interests in the MLP in the form of i-
units. I-units have similar features as MLP common units in terms of
voting rights, liquidation preference and distributions. However,
rather than receiving cash, the MLP affiliate receives additional i-
units in an amount equal to the cash distributions received by MLP
common units. Similarly, holders of I-Shares will receive additional I-
Shares, in the same proportion as the MLP affiliates' receipt of i-
units, rather than cash distributions. I-Shares themselves have limited
voting rights which are similar to those applicable to MLP common
units. I-Shares are listed and traded on a U.S. national securities
exchange.
---------------------------------------------------------------------------

    \27\ MLPs generally have two classes of owners, the general
partner and limited partners. The general partner, which is
generally a major energy company, investment fund or the management
of the MLP, typically controls the MLP through a 2% general partner
equity interest in the MLP plus common units and subordinated units.
Limited partners own the remainder of the partnership, through
ownership of common units, and have a limited role in the
partnership's operations and management.
    \28\ As a matter of clarification, the ``I-Shares'' referred to
herein are not ``iShares'' ETFs.
---------------------------------------------------------------------------

     Dividend Paying Domestic Equity Securities and Depositary
Receipts and Related Option Overlay Strategy. The Fund intends to
invest between 0% and 30%, but may invest up to 50%, of its net assets
in dividend paying U.S. exchange-traded equity securities (including
common stock) of companies domiciled in the United States and
Depositary Receipts.\29\ In connection with its investments in dividend
paying domestic equity securities, the Fund may use an option overlay
strategy (``Option Overlay Strategy'').\30\ To implement this strategy,
the Fund will write (sell) covered U.S. exchange-traded call options in
order to seek additional cash flow in the form of premiums on the
options. The market value of the Option Overlay Strategy may be up to
30% of the Fund's overall net asset value and the notional value of the
calls written may be up to 30% of the overall Fund. The maturity of the
options utilized will generally be between one week and three months.
The options written may be in-the-money, at-the-money or out-of-the-
money.
---------------------------------------------------------------------------

    \29\ For the avoidance of doubt, this investment category and
these percentages will not include investments in preferred
securities (described above under ``Preferred Securities''),
investments in those equity securities that are included in ``Equity
Securities of Energy Infrastructure Companies'' (described above),
or investments in ETFs that are intended to provide exposure to any
of the other five investment categories.
    \30\ The Fund's investments in options in connection with the
Option Overlay Strategy will not be included for purposes of
determining compliance with the 20% Limitation (defined below).
---------------------------------------------------------------------------

     Derivative Instruments:
    As described below, the Fund may invest in derivative
instruments.\31\ Not including the Option Overlay Strategy, no more
than 20% of the value of the Fund's net assets will be invested in
derivative instruments (``20% Limitation'').\32\ In general, the Fund
may invest in exchange-listed futures contracts, exchange-listed
options, exchange-listed options on futures contracts, and exchange-
listed stock index options.\33\
---------------------------------------------------------------------------

    \31\ The Fund may invest in derivative instruments for various
purposes, such as to seek to enhance return, to hedge some of the
risks of its investments in securities, as a substitute for a
position in the underlying asset, to reduce transaction costs, to
maintain full market exposure (which means to adjust the
characteristics of its investments to more closely approximate those
of the markets in which it invests), to manage cash flows, to limit
exposure to losses due to changes to non-U.S. currency exchange
rates or to preserve capital.
    \32\ Because the Option Overlay Strategy will be excluded from
the 20% Limitation, the Fund's total investments in derivative
instruments may exceed 20% of the value of its net assets. The Fund
will limit its direct investments in futures and options on futures
to the extent necessary for the Adviser to claim the exclusion from
regulation as a ``commodity pool operator'' with respect to the Fund
under Rule 4.5 promulgated by the Commodity Futures Trading
Commission (``CFTC''), as such rule may be amended from time to
time. Under Rule 4.5 as currently in effect, the Fund will limit its
trading activity in futures and options on futures (excluding
activity for ``bona fide hedging purposes,'' as defined by the CFTC)
such that it will meet one of the following tests: (i) Aggregate
initial margin and premiums required to establish its futures and
options on futures positions will not exceed 5% of the liquidation
value of the Fund's portfolio, after taking into account unrealized
profits and losses on such positions; or (ii) aggregate net notional
value of its futures and options on futures positions will not
exceed 100% of the liquidation value of the Fund's portfolio, after
taking into account unrealized profits and losses on such positions.
    \33\ Any exchange-traded derivatives in which the Fund invests
will trade in markets that are members of ISG or are parties to a
comprehensive surveillance sharing agreement with the Exchange. The
exchange-listed futures and options contracts in which the Fund may
invest will be listed on exchanges in the U.S., Europe, London, Hong
Kong, Singapore, Australia or Canada. The United Kingdom's primary
financial markets regulator (the Financial Conduct Authority), Hong
Kong's primary financial markets regulator (the Securities and
Futures Commission), Singapore's primary financial markets regulator
(the Monetary Authority of Singapore), Australia's primary financial
markets regulator (the Australian Securities and Investments
Commission), and certain Canadian financial markets regulators
(including the Alberta Securities Commission, the British Columbia
Securities Commission, the Ontario Securities Commission, and
Autorite des marches financiers (Quebec)) are signatories to the
International Organization of Securities Commissions (``IOSCO'')
Multilateral Memorandum of Understanding (``MMOU''), which is a
multi-party information sharing arrangement among financial
regulators. Both the Commission and the Commodity Futures Trading
Commission are signatories to the IOSCO MMOU.
---------------------------------------------------------------------------

    Primarily in connection with its investments in Sovereign Debt
(but, to the extent applicable, in connection with other investments),
the Fund may actively manage its foreign currency exposures, including
through the use of forward currency contracts, non-deliverable forward
currency contracts, exchange-listed currency futures and exchange-
listed currency options; such derivatives use will be included for
purposes of determining compliance with the 20% Limitation. The Fund
may, for instance, enter into forward currency contracts in order to
``lock in'' the exchange rate between the currency it will deliver and
the currency it will receive for the duration of the contract \34\

and may buy or sell exchange-listed futures contracts on U.S. Treasury
securities, non-U.S. government securities and major non-U.S.
currencies.
---------------------------------------------------------------------------

    \34\ The Fund will invest only in currencies, and instruments
that provide exposure to such currencies, that have significant
foreign exchange turnover and are included in the Bank for
International Settlements, Triennial Central Bank Survey, Global
Foreign Exchange Market Turnover in 2013 (``BIS Survey''). The Fund
may invest in currencies, and instruments that provide exposure to
such currencies, selected from the top 40 currencies (as measured by
percentage share of average daily turnover for the applicable month
and year) included in the BIS Survey.
---------------------------------------------------------------------------

    The Fund will comply with the regulatory requirements of the
Commission to maintain assets as ``cover,'' maintain segregated
accounts, and/or make margin payments when it takes positions in
derivative instruments involving obligations to third parties (i.e.,
instruments other than purchase options). If the applicable guidelines
prescribed under the 1940 Act so require, the Fund will earmark or set
aside cash, U.S. government securities, high grade liquid debt
securities and/or other liquid assets permitted by the Commission in a
segregated custodial account in the amount prescribed.
    The Fund will only enter into transactions in derivative
instruments with counterparties that the Adviser and/or the applicable
Management Team reasonably believes are capable of performing under the
applicable contract.\35\
---------------------------------------------------------------------------

    \35\ The Fund will seek, where possible, to use counterparties,
as applicable, whose financial status is such that the risk of
default is reduced; however, the risk of losses resulting from
default is still possible. The Adviser and/or the applicable
Management Team will evaluate the creditworthiness of counterparties
on an ongoing basis. In addition to information provided by credit
agencies, the Adviser's and/or Management Team's analysis will
evaluate each approved counterparty using various methods of
analysis and may consider the Adviser's and/or Management Team's
past experience with the counterparty, its known disciplinary
history and its share of market participation.
---------------------------------------------------------------------------

    The Fund's investments in derivative instruments will be consistent
with the Fund's investment objectives and the 1940 Act and will not be
used to seek to achieve a multiple or inverse multiple of an index.

Other Investments

    Under normal market conditions, the Fund will invest substantially
all of its assets to meet its investment objectives and, as described
above, the Fund may invest in derivative instruments. In addition, the
Fund may invest its remaining assets in other securities and financial
instruments, as generally described below.
    The Fund may invest up to 20% of its net assets in short-term debt
securities, money market funds and other cash equivalents, or it may
hold cash. The percentage of the Fund invested in such holdings will
vary and will depend on several factors, including market conditions.
For temporary defensive purposes, during the initial invest-up period
and during periods of high cash inflows or outflows, the Fund (as a
whole or with respect to one or more investment categories) may depart
from its principal investment strategies and invest part or all of its
assets in these securities or it may hold cash. During such periods,
the Fund may not be able to achieve its investment objectives. The Fund
(as a whole or with respect to one or more investment categories) may
adopt a defensive strategy when the Adviser and/or a Management Team
believe securities in which the Fund normally invests have elevated
risks due to political or economic factors and in other extraordinary
circumstances.
    Short-term debt securities are securities from issuers having a
long-term debt rating of at least A by S&P Ratings, Moody's or Fitch
and having a maturity of one year or less. The use of temporary
investments will not be a part of a principal investment strategy of
the Fund.
    Short-term debt securities are the following: (1) Fixed rate and
floating rate U.S. government securities, including bills, notes and
bonds differing as to maturity and rates of interest, which are either
issued or guaranteed by the U.S. Treasury or by U.S. government
agencies or instrumentalities; (2) short-term securities issued or
guaranteed by non-U.S. governments or by their agencies or
instrumentalities; \36\ (3) certificates of deposit issued against
funds deposited in a bank or savings and loan association; (4) bankers'
acceptances, which are short-term credit instruments used to finance
commercial transactions; (5) repurchase agreements,\37\ which involve
purchases of debt securities; (6) bank time deposits, which are monies
kept on deposit with banks or savings and loan associations for a
stated period of time at a fixed rate of interest; (7) commercial
paper, which is short-term unsecured promissory notes; and (8) other
securities that are similar to the foregoing. The Fund may only invest
in commercial paper rated A-1 or higher by S&P Ratings, Prime-1 or
higher by Moody's or F1 or higher by Fitch.
---------------------------------------------------------------------------

    \36\ The relevant non-U.S. government, agency or instrumentality
must have a long-term debt rating of at least A by S&P Ratings,
Moody's or Fitch.
    \37\ The Fund intends to enter into repurchase agreements only
with financial institutions and dealers believed by the Adviser and/
or the applicable Management Team to present minimal credit risks in
accordance with criteria approved by the Board of Trustees of the
Trust (``Trust Board''). The Adviser and/or the Management Team will
review and monitor the creditworthiness of such institutions. The
Adviser and/or the Management Team will monitor the value of the
collateral at the time the transaction is entered into and at all
times during the term of the repurchase agreement.
---------------------------------------------------------------------------

    In addition, to manage foreign currency exposures, the Fund may
invest directly in foreign currencies, including without limitation in
the form of bank and financial institution deposits, certificates of
deposit, and bankers' acceptances denominated in a specified non-U.S.
currency.
    The Fund may invest in the securities of money market funds. The
Fund may also invest in the securities of other ETFs that invest
primarily in short-term debt securities, in addition to any investments
in other ETFs described above.\38\
---------------------------------------------------------------------------

    \38\ See supra note 9.
---------------------------------------------------------------------------

    The Fund may invest up to 15% of its net assets in secured loans
that are not first lien loans or loans that are unsecured (collectively
referred to as ``junior loans''). Junior loans have the same
characteristics as senior loans except that junior loans are not first
in priority of repayment and/or may not be secured by collateral.
Accordingly, the risks associated with junior loans are higher than the
risks for loans with first priority over the collateral. Because junior
loans are lower in priority and/or unsecured, they are subject to the
additional risk that the cash flow of the borrower may be insufficient
to meet scheduled payments after giving effect to the secured
obligations of the borrower or in the case of a default, recoveries may
be lower for unsecured loans than for secured loans.\39\
---------------------------------------------------------------------------

    \39\ Junior loans generally have greater price volatility than
senior loans and may be less liquid. There is also a possibility
that originators will not be able to sell participations in junior
loans, which would create greater credit risk exposure for the
holders of such loans. Junior loans share the same risks as other
below investment grade instruments.
---------------------------------------------------------------------------

    In accordance with the 15% Limitation described above, the Fund may
hold up to an aggregate amount of 15% of its net assets in illiquid
assets (calculated at the time of investment), including Rule 144A
securities deemed illiquid by the Adviser and/or the applicable
Management Team.\40\ The Fund will monitor its portfolio liquidity on
an ongoing basis to determine whether, in light of current
circumstances, an adequate level of liquidity is being maintained, and
will consider taking appropriate steps in order to maintain adequate
liquidity if, through a change in values, net assets, or other
circumstances, more than 15% of the Fund's net assets are held in
illiquid assets.
---------------------------------------------------------------------------

    \40\ See supra note 10 and accompanying text.

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

    The Fund will not concentrate in any one industry. For the
avoidance of any doubt, however, this will not limit the Fund's
investments in (a) obligations issued or guaranteed by the U.S.
government, its agencies or instrumentalities or (b) securities of
other investment companies.

III. Discussion and Commission's Findings

    After careful review, the Commission finds that the proposed rule
change is consistent with the requirements of Section 6 of the Act \41\
and the rules and regulations thereunder applicable to a national
securities exchange.\42\ In particular, the Commission finds that the
proposal is consistent with Section 6(b)(5) of the Act,\43\ which
requires, among other things, that the Exchange's rules be designed 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. The Commission notes that the Fund and the Shares must comply
with the initial and continued listing criteria in NASDAQ Rule 5735 for
the Shares to be listed and traded on the Exchange.
---------------------------------------------------------------------------

    \41\ 15 U.S.C. 78f.
    \42\ 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).
    \43\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Commission finds that the proposal to list and trade the Shares
on the Exchange is consistent with Section 11A(a)(1)(C)(iii) of the
Act,\44\ which sets forth Congress' 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 and the Consolidated Tape Association
(``CTA'') plans for the Shares. In addition, the Intraday Indicative
Value,\45\ as defined in Nasdaq Rule 5735(c)(3), will be available on
the NASDAQ OMX Information LLC proprietary index data service,\46\ and
will be widely disseminated by one or more major market data vendors
and broadly displayed at least every 15 seconds during the Regular
Market Session.\47\ On each business day, before commencement of
trading in Shares in the Regular Market Session on the Exchange, the
Fund will disclose on its Web site the identities and quantities of the
portfolio of securities and other assets (``Disclosed Portfolio'') held
by the Fund that will form the basis for the Fund's calculation of NAV
at the end of the business day.\48\ The Fund's custodian, through the
National Securities Clearing Corporation, will make available on each
business day, prior to the opening of business on the Exchange, the
list of the names and quantities of instruments, as well as the
estimated amount of cash, comprising the creation basket of the Fund
for that day. The NAV of the Fund will be determined as of the close of
trading (normally, 4:00 p.m., Eastern Time) on each day the New York
Stock Exchange is open for business.\49\ 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. Quotation and
last sale information for the underlying U.S. exchange-listed equity
securities will be available via the CTA high-speed line, and will be
available from the national securities exchange on which they are
listed. Pricing information for the underlying exchange-traded equity
securities (including ETFs, exchange-traded preferred securities, and
the exchange-traded equity securities described under ``Dividend Paying
Domestic Equity Securities and Depositary Receipts and Related Option
Overlay Strategy'' and ``Equity Securities of Energy Infrastructure
Companies''), exchange-traded derivative instruments and Depositary
Receipts will be available from the exchanges on which they trade and
from major market data vendors. Pricing information for corporate
bonds, senior loans, non-exchange traded preferred securities,
Sovereign Debt, Mortgage-Related Investments, forward currency
contracts, non-deliverable forward currency contracts, and debt
securities in which the Fund may invest that are described under
``Other Investments'' will be available from major broker-dealer firms
and/or major market data vendors and/or pricing services. An additional
source of price information for certain fixed income securities is
FINRA's TRACE. Information relating to U.S. exchange-listed options
will be available via the Options Price Reporting Authority. The Fund's
Web site will include a form of the prospectus for the Fund and
additional data relating to NAV and other applicable quantitative
information.
---------------------------------------------------------------------------

    \44\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
    \45\ According to the Exchange, the Intraday Indicative Value
reflects an estimated intraday value of the Fund's Disclosed
Portfolio, and will be based upon the current value for the
components of the Disclosed Portfolio. The Intraday Indicative Value
will be based on quotes and closing prices from the securities'
local market and may not reflect events that occur subsequent to the
local market's close. Premiums and discounts between the Intraday
Indicative Value and the market price may occur. The Intraday
Indicative Value should not be viewed as a ``real time'' update of
the NAV per Share of the Fund, which is calculated only once a day.
    \46\ Currently, the NASDAQ OMX Global Index Data Service
(``GIDS'') is the NASDAQ OMX global index data feed service,
offering real-time updates, daily summary messages, and access to
widely followed indexes and Intraday Indicative Values for ETFs.
GIDS provides investment professionals with the daily information
needed to track or trade NASDAQ OMX indexes, listed ETFs, or third-
party partner indexes and ETFs.
    \47\ See Nasdaq Rule 4120(b)(4) (describing the three trading
sessions on the Exchange: (1) Pre-Market Session from 4 a.m. to 9:30
a.m., Eastern time; (2) Regular Market Session from 9:30 a.m. to 4
p.m. or 4:15 p.m., Eastern time; and (3) Post-Market Session from 4
p.m. or 4:15 p.m. to 8 p.m., Eastern time).
    \48\ The Disclosed Portfolio will include, as applicable, the
names, quantities, percentage weightings and market values of the
portfolio securities, financial instruments, and other assets held
by the Fund. The Web site information will be publicly available at
no charge.
    \49\ NAV will be calculated for the Fund by taking the market
price of the Fund's total assets, including interest or dividends
accrued but not yet collected, less all liabilities, and dividing
such amount by the total number of Shares outstanding.
---------------------------------------------------------------------------

    The Commission further believes that the proposal to list and trade
the Shares 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 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. 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 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,\50\ and trading in

the Shares will be subject to Nasdaq Rule 5735(d)(2)(D), which sets
forth additional circumstances under which trading in the Shares of the
Fund may be halted. The Exchange states that it has a general policy
prohibiting the distribution of material, non-public information by its
employees. 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.\51\ The Adviser and certain Sub-Advisers are affiliated
with broker-dealers and have each implemented a fire wall with respect
to their respective broker-dealer affiliate regarding access to
information concerning the composition and/or changes to the Fund's
portfolio.\52\ 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.\53\ The Exchange further 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. Moreover, prior to the
commencement of trading, the Exchange states that it will inform its
members in an Information Circular of the special characteristics and
risks associated with trading the Shares.
---------------------------------------------------------------------------

    \50\ These reasons may include: (1) The extent to which trading
is not occurring in the securities and/or the other assets composing
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. 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.
    \51\ See Nasdaq Rule 5735(d)(2)(B)(ii).
    \52\ See supra note 7. The Exchange states that an investment
adviser to an open-end fund is required to be registered under the
Investment Advisers Act of 1940 (``Advisers Act''). As a result, the
Adviser and the Sub-Advisers and their related personnel are subject
to the provisions of Rule 204A-1 under the Advisers Act relating to
codes of ethics. This Rule requires investment advisers to adopt a
code of ethics that reflects the fiduciary nature of the
relationship to clients, as well as compliance with other applicable
securities laws. Accordingly, procedures designed to prevent the
communication and misuse of non-public information by an investment
adviser must be consistent with Rule 204A-1 under the Advisers Act.
In addition, Rule 206(4)-7 under the Advisers Act makes it unlawful
for an investment adviser to provide investment advice to clients
unless such investment adviser has (i) adopted and implemented
written policies and procedures reasonably designed to prevent
violation, by the investment adviser and its supervised persons, of
the Advisers Act and the Commission rules adopted thereunder; (ii)
implemented, at a minimum, an annual review regarding the adequacy
of the policies and procedures established pursuant to subparagraph
(i) above and the effectiveness of their implementation; and (iii)
designated an individual (who is a supervised person) responsible
for administering the policies and procedures adopted under
subparagraph (i) above.
    \53\ The Exchange states that FINRA surveils trading on the
Exchange pursuant to a regulatory services agreement and that the
Exchange is responsible for FINRA's performance under this
regulatory services agreement.
---------------------------------------------------------------------------

    The Exchange represents that the Shares are deemed 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 has made representations,
including the following:
    (1) The Shares will be subject to Nasdaq Rule 5735, which sets
forth the initial and continued listing criteria applicable to Managed
Fund Shares.
    (2) The Exchange has appropriate rules to facilitate transactions
in the Shares during all trading sessions.
    (3) FINRA, on behalf of the Exchange, will communicate as needed
regarding trading in the Shares and the exchange-traded securities and
instruments held by the Fund with other markets and other entities that
are members of ISG, and FINRA may obtain trading information regarding
trading in the Shares and the exchange-traded securities and
instruments held by the Fund from such markets and other entities. In
addition, the Exchange may obtain information regarding trading in the
Shares and the exchange-traded securities and instruments held by the
Fund from markets and other entities that are members of ISG, which
includes securities and futures exchanges, or with which the Exchange
has in place a comprehensive surveillance sharing agreement. Moreover,
FINRA, on behalf of the Exchange, will be able to access, as needed,
trade information for certain fixed income securities held by the Fund
reported to FINRA's TRACE.
    (4) 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: (a) The procedures for
purchases and redemptions of Shares in creation units (and that Shares
are not individually redeemable); (b) Nasdaq Rule 2111A, which imposes
suitability obligations on Nasdaq members with respect to recommending
transactions in the Shares to customers; (c) how information regarding
the Intraday Indicative Value is disseminated; (d) 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; (e) the requirement that members deliver a
prospectus to investors purchasing newly issued Shares prior to or
concurrently with the confirmation of a transaction; and (f) trading
information.
    (5) For initial and continued listing, the Fund must be in
compliance with Rule 10A-3 under the Act.\54\
---------------------------------------------------------------------------

    \54\ 17 CFR 240.10A-3.
---------------------------------------------------------------------------

    (6) The Fund may hold up to an aggregate amount of 15% of its net
assets in illiquid assets (calculated at the time of investment),
including Rule 144A securities deemed illiquid by the Adviser and/or
the applicable Management Team. The Fund will not purchase any
securities or other assets that, in the opinion of the applicable
Management Team, are illiquid if, as a result, more than 15% of the
value of the Fund's net assets will be invested in illiquid assets.
    (7) At least 90% of the Fund's net assets that are invested in
exchange-traded equity securities of both domestic and foreign issuers,
exchange-traded products and exchange-traded derivatives (in the
aggregate) will be invested in investments that trade in markets that
are members of ISG or are parties to a comprehensive surveillance
sharing agreement with the Exchange. The Depositary Receipts in which
the Fund invests will be exchange-traded and will not include
unsponsored Depositary Receipts. Any exchange-traded derivatives in
which the Fund invests will trade in markets that are members of ISG or
are parties to a comprehensive surveillance sharing agreement with the
Exchange.
    (8) The Fund represents that its portfolio will include a minimum
of 13 non-affiliated issuers of fixed income securities.
    (9) The Fund's exposure to any single country (outside of the U.S.)
will generally be limited to 20% of the Fund's net assets. The portion
of the Fund's net assets that may be denominated in currencies other
than the U.S. dollar is not expected to exceed 30%.
    (10) In connection with its investments in high yield corporate
bonds and senior loans, under normal market conditions, the Fund will
seek to invest at least 75% of its net assets that are invested in such
bonds and loans (in the aggregate) in bonds and loans that, at the time
of original issuance, have at least $100 million par amount
outstanding.
    (11) The Fund may invest up to 15% of its net assets in junior
loans.
    (12) The Fund will limit its investments in mortgage-backed

securities that are not issued or guaranteed by Government Entities to
20% of its net assets.
    (13) Under normal market conditions, the Fund will seek to invest
at least 75% of its net assets that are invested in preferred
securities in preferred securities that have a minimum initial issuance
amount of at least $100 million. Initially, at least 50% of the Fund's
net assets that are invested in preferred securities will be invested
in exchange-listed preferred securities, although this percentage may
decrease in the future.
    (14) Under normal market conditions, at least 80% of the Sovereign
Debt in which the Fund invests will be issued by issuers with
outstanding debt of at least $200 million (or the foreign currency
equivalent thereof).
    (15) Not including the Option Overlay Strategy, no more than 20% of
the value of the Fund's net assets will be invested in derivative
instruments. The Fund will only enter into transactions in derivative
instruments with counterparties that the Adviser and/or the applicable
Management Team reasonably believes are capable of performing under the
applicable contract. The Fund's investments in derivative instruments
will be consistent with the Fund's investment objectives and the 1940
Act and will not be used to seek to achieve a multiple or inverse
multiple of an index.
    (16) A minimum of 100,000 Shares will be outstanding at the
commencement of trading on the Exchange.
    This approval order is based on all of the Exchange's
representations, including those set forth above and in the Notice, and
the Exchange's description of the Fund.
    For the foregoing reasons, the Commission finds that the proposed
rule change is consistent with Section 6(b)(5) of the Act \55\ and the
rules and regulations thereunder applicable to a national securities
exchange.
---------------------------------------------------------------------------

    \55\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\56\ that the proposed rule change (SR-NASDAQ-2014-050) be, and it
hereby is, approved.
---------------------------------------------------------------------------

    \56\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\57\
---------------------------------------------------------------------------

    \57\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2014-15794 Filed 7-7-14; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 87, Number 220 (Wednesday, November 16, 2022)]
[Notices]
[Pages 68774-68776]
[FR Doc No: 2022-24958]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-96297; File No. SR-FINRA-2022-021]

Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Order Instituting Proceedings To Determine Whether To
Approve or Disapprove a Proposed Rule Change To Adopt Supplementary
Material .18 (Remote Inspections Pilot Program) Under FINRA Rule 3110
(Supervision)

November 10, 2022.

I. Introduction

    On July 28, 2022, the Financial Industry Regulatory Authority, Inc.
(``FINRA'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change SR-FINRA-2022-021 pursuant to
Section 19(b)(1) of the Securities Exchange Act of 1934 (``Exchange
Act'') \1\ and Rule 19b-4 \2\ thereunder to adopt a voluntary, three-
year remote inspection pilot program (``Pilot'') to allow broker-
dealers to elect to fulfill their obligation under Rule 3110(c)
(Internal Inspections) by conducting inspections of some or all branch
offices and non-branch locations remotely without an on-site visit to
such office or location, subject to specified terms.\3\ The proposed
rule change was published for public comment in the Federal Register on
August 15, 2022.\4\ On September 23, 2022, FINRA consented to an
extension of the time period in which the Commission must approve the
proposed rule change, disapprove the proposed rule change, or institute
proceedings to determine whether to approve or disapprove the proposed
rule change to November 11, 2022.\5\ On November 9, 2022, FINRA filed a
letter stating it was still considering the comments to the Notice, and
anticipates submitting a response to comments and amendments to the
Notice in the near future.\6\
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See infra note 4.
    \4\ Exchange Act Release No. 95452 (Aug. 9, 2022), 87 FR 50144
(Aug. 15, 2022) (File No. SR-FINRA-2022-021) (``Notice'').
    \5\ See letter from Sarah Kwak, Associate General Counsel,
Office of General Counsel, FINRA, to Daniel Fisher, Branch Chief,
Division of Trading and Markets, Commission, dated September 23,
2022.
    \6\ See letter from Sarah Kwak, Associate General Counsel,
FINRA, to Vanessa Countryman, Secretary, Commission, dated November
9, 2022, available at https://www.finra.org/sites/default/files/2022-11/FINRA-2022-021-Response-to-Comments-11-09-2022.pdf.
---------------------------------------------------------------------------

    The Commission is publishing this order pursuant to Section
19(b)(2)(B) of the Exchange Act \7\ to solicit comments on the proposed
rule change and to institute proceedings to determine whether to
approve or disapprove the proposed rule change.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

II. Description of the Proposed Rule Change

A. Background

    As stated in the Notice, the COVID-19 pandemic prompted FINRA to
provide temporary relief to member firms from certain regulatory
requirements.\8\ For example, FINRA adopted temporary Rule 3110.17,
effective since November 2020, to provide member firms the option to
conduct inspections of their branch offices and non-branch locations
remotely, subject to specified terms \9\ FINRA stated in the Notice
that it believes now is the time to assess possible longer-term rule
changes regarding its inspection program and is, therefore, proposing a
voluntary, three-year remote inspections pilot program.\10\
---------------------------------------------------------------------------

    \8\ See Notice at 50147 and notes 28 and 29.
    \9\ See Exchange Act Release No. 90454 (Nov. 18, 2020), 85 FR
75097 (Nov. 24, 2020) (Notice of Filing and Immediate Effectiveness
of File No. SR-FINRA-2020-040). See also Exchange Act Release No.
93002 (Sept. 15, 2021), 86 FR 52508 (Sept. 21, 2021) (Notice of
Filing and Immediate Effectiveness of File No. SR-FINRA-2021-023);
Exchange Act Release No. 94018 (Jan. 20, 2022), 87 FR 4072 (Jan. 26,
2022) (Notice of Filing and Immediate Effectiveness of File No. SR-
FINRA-2022-001); Exchange Act Release No. 96241 (Nov. 4, 2022)
(Notice of Filing and Immediate Effectiveness of File No. SR-FINRA-
2022-030). If the proposed rule change is approved, Rule 3110.17
would automatically sunset on the effective date of proposed Rule
3110.18, if it has not already expired by its own terms. See Notice
at 50152.
    \10\ See Notice at 50145.
---------------------------------------------------------------------------

B. The Proposed Rule Change

    The Notice states that Rule 3110(c)(1) currently provides that an
inspection of an office or location must occur on a designated
frequency, and that the periodicity of the required inspection varies
depending on the classification of the location as an office of
supervisory jurisdiction (``OSJ''), branch office, or non-branch
location.\11\ FINRA is proposing to amend FINRA Rule 3110 (Supervision)
to adopt a voluntary, three-year remote inspection pilot program to
allow member firms to elect to fulfill their obligation under Rule
3110(c) (Internal Inspections) by conducting inspections of some or all
branch offices and non-branch locations remotely without an on-site
visit to such office or location, subject to specified terms described
below (such members hereinafter referred to as ``participating
members'').
---------------------------------------------------------------------------

    \11\ See id. at 50146.
---------------------------------------------------------------------------

i. Scope of Pilot
    Proposed Rule 3110.18(b)(1) would provide that a participating
member may elect to conduct the inspection of an office or location
during the pilot period remotely when the member reasonably determines
that the purposes of the rule can be accomplished by conducting such
required inspection remotely. Proposed Rule 3110.18(b)(1) would require
a participating member to develop a reasonable risk-based approach to
using remote inspections and conduct and document a risk assessment for
an office or location prior to electing to conduct a remote inspection
for that office or location. The risk assessment must document the
factors considered, including the factors set forth in Rule 3110.12,
and must take into account any higher risk activities that take place
or higher risk associated persons that are assigned to that
location.\12\
---------------------------------------------------------------------------

    \12\ See id. at 50148-49.
---------------------------------------------------------------------------

ii. Inelegible Offices and Locations
    Under proposed Rule 3110.18(b)(2)(A), a member firm would be
ineligible to conduct remote inspections of any of its offices or
locations if any time during the period of the proposed pilot program,
the member is or becomes designated as: (1) a Restricted Firm under
Rule 4111

(Restricted Firm Obligations); or (2) a Taping Firm under Rule 3170
(Tape Recording of Registered Persons by Certain Firms). Under proposed
Rule 3110.18(b)(2)(B), a specific office or location of an otherwise
eligible member would be ineligible for a remote inspection if at any
time during the period of the proposed pilot program, an associated
person at such office or location is or becomes: (1) subject to a
mandatory heightened supervisory plan under the rules of the
Commission, FINRA, or state regulatory agency; (2) statutorily
disqualified, unless such disqualified person has been approved (or is
otherwise permitted pursuant to FINRA rules and the federal securities
laws) to associate with a member and is not subject to a mandatory
heightened supervisory plan under proposed Rule 3110.18(b)(2)(B)(i) or
otherwise as a condition to approval or permission for such
association; (3) subject to Rule 1017(a)(7) as a result of one or more
associated persons at such location; or (4) one or more associated
persons at such location has an event in the prior three years that
required a ``yes'' response to any item in Questions 14A(1)(a) and
2(a), 14B(1)(a) and 2(a), 14C, 14D and 14E on Form U4.\13\
---------------------------------------------------------------------------

    \13\ See id.
---------------------------------------------------------------------------

iii. Written Supervisory Procedures
    Proposed Rule 3110.18(c) would require a participating firm to
adopt written supervisory procedures (``WSPs'') regarding conducting
remote inspections that are reasonably designed to detect and prevent
violations of and achieve compliance with applicable securities laws
and regulations, and with applicable FINRA rules. Proposed Rule
3110.18(c) also states that reasonably designed procedures for
conducting remote inspections of offices or locations should include,
among other things: (1) a description of the methodology, including
technology, that may be used to conduct remote inspections; (2) the
factors considered in the risk assessment made for each applicable
office or location pursuant to proposed Rule 3110.18(b); and (3) the
use of other risk-based systems employed generally by the participating
member to identify and prioritize for review those areas that pose the
greatest risk of potential violations of applicable securities laws and
regulations, and of applicable FINRA rules.\14\
---------------------------------------------------------------------------

    \14\ See id. at 50150.
---------------------------------------------------------------------------

iv. Effective Supervisory System
    Proposed Rule 3110.18(d) would reiterate that the requirement to
conduct inspections of offices and locations is one part of a member's
overall obligation to have an effective supervisory system, and
therefore a member must continue with its ongoing review of the
activities and functions occurring at all offices and locations,
whether or not the member conducts inspections remotely. In addition,
proposed Rule 3110.18(d) would provide that a participating member's
remote inspection of an office or location would be held to the same
standards for review applicable to on-site inspections as set forth
under Rule 3110.12. Further, proposed Rule 3110.18(d) would provide
that where a participating member's remote inspection of an office or
location identifies any indicators of irregularities or misconduct
(i.e., ``red flags''), the member may need to impose additional
supervisory procedures for that office or location, or may need to
provide for more frequent monitoring of that office or location,
including potentially a subsequent physical, on-site visit on an
announced or unannounced basis.\15\
---------------------------------------------------------------------------

    \15\ See id.
---------------------------------------------------------------------------

v. Documentation
    Proposed Rule 3110.18(e) would require a participating member to
maintain and preserve a centralized record for each of the ``pilot
years'' \16\ that separately identifies: (1) all offices or locations
that were inspected remotely; and (2) any offices or locations for
which the member determined to impose additional supervisory procedures
or more frequent monitoring, as provided in proposed Rule 3110.18(d).
In addition, under proposed Rule 3110.18(e) a participating member's
documentation of the results of a remote inspection for an office or
location must identify any additional supervisory procedures or more
frequent monitoring for that office or location that were imposed as a
result of the remote inspection, including whether an on-site
inspection was conducted at such office.\17\
---------------------------------------------------------------------------

    \16\ Proposed Rule 3110.18(h) would define the term ``pilot
year.''
    \17\ See Notice at 50150.
---------------------------------------------------------------------------

vi. Data and Information To Be Provided to FINRA
a. Data Collection
    Proposed Rule 3110.18(f)(1) would require a participating member to
collect separate counts for OSJs, supervisory branch offices, non-
supervisory branch offices, and non-branch locations, consistent with
Rule 3110(c)(1), of:
    (A) the number of locations with an inspection--on-site or remote--
completed during each calendar quarter;
    (B) the number of locations in item (A) that were inspected
remotely;
    (C) the number of locations in item (A) that were inspected on-
site;
    (D) the number of locations in item (C) that were inspected on-site
because of a ``finding''; \18\
---------------------------------------------------------------------------

    \18\ Proposed Rule 3110.18(f) would define ``finding'' as an
item that led to any remedial action or was listed on the member's
inspection report. See Notice at 50151.
---------------------------------------------------------------------------

    (E) the number of locations in item (B) where findings were
identified, the number of those findings, and a list of the most
significant findings; and
    (F) the number of locations in item (C) where findings were
identified, the number of those findings, and a list of the most
significant findings. (Hereinafter collectively referred to as the
``Collected Data'').\19\
---------------------------------------------------------------------------

    \19\ See Notice at 50150-51. If ``pilot year one'', as defined
by proposed Rule 3110.18(h), covers a period that is less than a
full calendar year, proposed Rule 3110.18(f)(2) would require a
participating member to collect separate counts for OSJs,
supervisory branch offices, non-supervisory branch offices, and non-
branch locations, consistent with Rule 3110(c)(1), of: (A) the
number of locations with an inspection completed during the full
calendar year of pilot year one; (B) the number of locations in item
(A) that were inspected remotely during the full calendar year of
pilot year one; and (C) the number of locations in item (A) that
were inspected on-site during the full calendar year of pilot year
one. (Hereinafter collectively referred to as the ``Pilot Year One
Collected Data''). Proposed Rule 3110.18(f)(2) would require a
participating member to provide Pilot Year One Collected Data to
FINRA no later than December 31 of such first pilot year, and in a
manner and format determined by FINRA. See Notice at 50151.
---------------------------------------------------------------------------

    Proposed Rule 3110.18(f)(1) would require a participating member to
provide the Collected Data to FINRA, on a periodic basis (not to exceed
quarterly), and in a manner and format determined by FINRA.\20\
---------------------------------------------------------------------------

    \20\ See Notice at 50150-51.
---------------------------------------------------------------------------

b. Written Supervisory Procedures
    Proposed Rule 3110.18(f)(1) would also require participating
members to provide FINRA the requirements of their WSPs for remote
inspections that account for: (1) procedures for escalating significant
findings; (2) procedures for new hires; (3) procedures for supervising
brokers with a significant history of misconduct; and (4) procedures
related to outside business activities and ``doing business as'' (DBA)
designations. Proposed Rule 3110.18(f) would require participating
members to provide FINRA this information with the first delivery of
the Collected Data, and thereafter with the first delivery of Collected
Data made

after any amendments to their WSPs for remote inspections.\21\
---------------------------------------------------------------------------

    \21\ See id. at 50151.
---------------------------------------------------------------------------

    In addition, proposed Rule 3110.18(f)(3) would require
participating members to establish, maintain and enforce written
policies and procedures that are reasonably designed to comply with the
data and information collection, and transmission requirements of
proposed Rule 3110.18(f).\22\
---------------------------------------------------------------------------

    \22\ See id.
---------------------------------------------------------------------------

vii. Notice of Opting In and Opting Out of Proposed Pilot Program
    Proposed Rule 3110.18(g) would require a participating member, at
least five calendar days before the beginning each pilot year,\23\ to
provide FINRA an opt-in notice in the manner and format determined by
FINRA. By providing such opt-in notice to FINRA, the participating
member agrees to participate in the proposed pilot program for the
duration of the pilot year and to comply with the requirements of Rule
3110.18. A participating member that provides the opt-in notice for a
pilot year would be automatically deemed to have elected and agreed to
participate in the proposed pilot program for subsequent pilot years
until the pilot program expires. Proposed Rule 3110.18(g) would also
require a participating member withdrawing from subsequent pilot years
to, at least five calendar days before the end of the then current
pilot year, provide FINRA with an opt-out notice in the manner and
format determined by FINRA.\24\
---------------------------------------------------------------------------

    \23\ See supra note 16.
    \24\ See Notice at 50151. Proposed Rule 3110.18(g) would give
FINRA authority to waive the applicable timeframes for the required
opt-in or opt-out notices in exceptional cases and where good cause
is shown. See id.
---------------------------------------------------------------------------

viii. Failure To Satisfy Conditions
    Under proposed Rule 3110.18(i), a member firm that fails to satisfy
the conditions of proposed Rule 3110.18 would be ineligible to
participate in the proposed pilot program and must conduct on-site
inspections of each office and location on the required cycle in
accordance with Rule 3110(c).\25\
---------------------------------------------------------------------------

    \25\ See Notice at 50151-52.
---------------------------------------------------------------------------

III. Proceedings To Determine Whether To Approve or Disapprove File No.
SR-FINRA-2022-021 and Grounds for Disapproval Under Consideration

    The Commission is instituting proceedings pursuant to Section
19(b)(2)(B) of the Exchange Act to determine whether the proposed rule
change should be approved or disapproved.\26\ Institution of
proceedings is appropriate at this time in view of the legal and policy
issues raised by the proposed rule change. Institution of proceedings
does not indicate that the Commission has reached any conclusions with
respect to the proposed rule change.
---------------------------------------------------------------------------

    \26\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

    Pursuant to Section 19(b)(2)(B) of the Exchange Act,\27\ the
Commission is providing notice of the grounds for disapproval under
consideration. The Commission is instituting proceedings to allow for
additional analysis and input concerning whether the proposed rule
change is consistent with the Exchange Act and the rules thereunder.
---------------------------------------------------------------------------

    \27\ Id.
---------------------------------------------------------------------------

IV. Request for Written Comments

    The Commission requests that interested persons provide written
submissions of their views, data, and arguments with respect to the
issues identified above, as well as any other concerns they may have
with the proposed rule change. In particular, the Commission invites
the written views of interested persons concerning whether the proposed
rule change is consistent with the Exchange Act and the rules
thereunder.
    Although there do not appear to be any issues relevant to approval
or disapproval that would be facilitated by an oral presentation of
views, data, and arguments, the Commission will consider, pursuant to
Rule 19b-4, any request for an opportunity to make an oral
presentation.\28\
---------------------------------------------------------------------------

    \28\ Section 19(b)(2) of the Exchange Act, as amended by the
Securities Acts Amendments of 1975, Public Law 94-29, 89 Stat. 97
(1975), grants the Commission flexibility to determine what type of
proceeding--either oral or notice and opportunity for written
comments--is appropriate for consideration of a particular proposal
by a self-regulatory organization. See Securities Acts Amendments of
1975, Report of the Senate Committee on Banking, Housing and Urban
Affairs to Accompany S. 249, S. Rep. No. 75, 94th Cong., 1st Sess.
30 (1975).
---------------------------------------------------------------------------

    Interested persons are invited to submit written data, views, and
arguments regarding whether the proposed rule change should be approved
or disapproved by December 7, 2022. Any person who wishes to file a
rebuttal to any other person's submission must file that rebuttal by
December 21, 2022.
    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 No. SR-FINRA-2022-021 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 No. SR-FINRA-2022-021. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet 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 such filing also will be available for inspection
and copying at the principal office of FINRA. 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 No. SR-FINRA-2022-021 and
should be submitted on or before December 7, 2022. If comments are
received, any rebuttal comments should be submitted on or before
December 21, 2022.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\29\
---------------------------------------------------------------------------

    \29\ 17 CFR 200.30-3(a)(12); 17 CFR 200.30-3(a)(57).
---------------------------------------------------------------------------

Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2022-24958 Filed 11-15-22; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 76, Number 200 (Monday, October 17, 2011)]
[Notices]
[Pages 64135-64136]
[FR Doc No: 2011-26921]

=======================================================================
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SECURITIES AND EXCHANGE COMMISSION

Sunshine Act Meeting

    Notice is hereby given, pursuant to the provisions of the
Government in the Sunshine Act, Public Law 94-409, that the Securities
and Exchange Commission will hold a Closed Meeting on Thursday, October
20, 2011 at 10 a.m.
    Commissioners, Counsel to the Commissioners, the Secretary to the
Commission, and recording secretaries will attend the Closed Meeting.
Certain staff members who have an interest in the matters also may be
present.
    The General Counsel of the Commission, or his designee, has
certified that, in his opinion, one or more of the exemptions set forth
in 5 U.S.C. 552b(c)(5), (7), 9(B) and (10) and 17 CFR 200.402(a)(5),
(7), 9(ii) and (10) permit consideration of the scheduled matter at the
Closed Meeting.
    Commissioner Aguilar, as duty officer, voted to consider the items
listed for the Closed Meeting in a closed session.
    The subject matter of the Closed Meeting scheduled for Thursday,
October 20, 2011 will be: Settlement of injunctive actions;institution
and settlement of administrative proceedings; andother matters relating
to enforcement proceedings.

    At times, changes in Commission priorities require alterations in
the scheduling of meeting items.
    For further information and to ascertain what, if any, matters have
been added, deleted or postponed, please contact: The Office of the
Secretary at<PHONE_NUMBER>.

    Dated: October 13, 2011.
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-26921 Filed 10-13-11; 4:15 pm]
BILLING CODE 8011-01-P