[Federal Register Volume 88, Number 63 (Monday, April 3, 2023)]
[Notices]
[Pages 19687-19693]
[FR Doc No: 2023-06782]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-97211; File No. SR-NASDAQ-2023-006]

Self-Regulatory Organizations; The Nasdaq Stock Market LLC;
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change
To List and Trade Shares of the SGI Dynamic Tactical ETF Under Nasdaq
Rule 5750 (``Proxy Portfolio Shares'')

March 28, 2023.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on March 17, 2023, The Nasdaq Stock Market LLC (``Nasdaq'' or
``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') the proposed rule change as described in
Items I and II below, which Items have been prepared by the Exchange.
The Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposed a rule change relating to the SGI Dynamic
Tactical ETF (the ``Fund'') of The RBB Fund, Inc. (the ``Company''), to
list and trade shares of the Fund under Nasdaq Rule 5750 (``Proxy
Portfolio Shares''). The shares of the Fund are collectively referred
to herein as the ``Shares.''

II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange has adopted Nasdaq Rule 5750, which governs the
listing and trading of Proxy Portfolio Shares on the Exchange.\3\
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    \3\ The Exchange adopted Nasdaq Rule 5750 in Securities Exchange
Act Release No. 89110 (June 22, 2020), 85 FR 38461 (June 26, 2020)
(SR-NASDAQ-2020-032).
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    The Fund is an actively-managed exchange-traded fund (``ETF''). The
Shares will be offered by the Company, which was established as a
Maryland corporation on February 29, 1988.\4\ The Company, which is
registered with the Commission as an investment company under the 1940
Act, has filed a registration statement on Form N-1A (``Registration
Statement'') relating to the Fund with the Commission.\5\ The Fund is a
series of the Company. Summit Global Investments, LLC (``Adviser'') is
the investment adviser to the Fund. SG Trading Solutions, LLC, is the
sub-adviser (``Sub-Adviser'') to the Fund. Quasar Distributors, LLC is
the principal underwriter and distributor of the Fund's Shares. U.S.
Bank Global Fund Services acts as the administrator, transfer agent and
provides fund accounting services to the Fund. U.S. Bank, N.A. acts as
the custodian to the Fund.
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    \4\ The Commission has issued an order, upon which the Company
may rely, granting certain exemptive relief under the Investment
Company Act of 1940 (the ``1940 Act''). See Investment Company Act
Release No. 34857 (March 15, 2023) (``Exemptive Order'').
Investments made by the Fund will comply with the conditions set
forth in the Application and the Exemptive Order. The description of
the operation of the Fund herein is based, in part, on the
Registration Statement and Exemptive Order. The Exchange will not
commence trading in the Fund's Proxy Portfolio Shares until the
Registration Statement is effective.
    \5\ The Registration Statement (File No. 811-05518) is available
on the Commission's website at https://www.sec.gov/Archives/edgar/data/0000831114/000139834422007151/fp0074774_485apos.htm.
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    Nasdaq Rule 5750(b)(5) provides that if the investment adviser to
the Investment Company (as defined herein) issuing Proxy Portfolio
Shares \6\ is registered as a broker-dealer or is affiliated with a
broker-dealer, such investment adviser will erect and maintain a ``fire
wall'' between the investment adviser and personnel of the broker-
dealer or broker-dealer affiliate, as applicable, with respect to
access to information concerning the composition of and/or changes to
the Fund Portfolio,\7\ the Proxy Basket and/or Custom Basket, as
applicable.\8\ In addition, Nasdaq Rule 5750(b)(5) further requires
that changes to the Fund Portfolio, the Proxy Basket and/or Custom
Basket must be subject to procedures designed to prevent the use and
dissemination of material nonpublic information regarding the Fund
Portfolio, and/or the Proxy Basket, and/or Custom Basket, as
applicable, or changes thereto.\9\
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    \6\ The term ``Proxy Portfolio Share'' means a security that:
(A) represents an interest in an investment company registered under
the Investment Company Act of 1940 (``Investment Company'')
organized as an open-end management investment company, that invests
in a portfolio of securities selected by the Investment Company's
investment adviser consistent with the Investment Company's
investment objectives and policies; (B) is issued in a specified
aggregate minimum number in return for a deposit of a specified
Proxy Basket or Custom Basket, as applicable, and/or a cash amount
with a value equal to the next determined net asset value; (C) when
aggregated in the same specified minimum number, may be redeemed at
a holder's request, which holder will be paid specified Proxy Basket
or Custom Basket, as applicable, and/or a cash amount with a value
equal to the next determined net asset value; and (D) the portfolio
holdings for which are disclosed within at least 60 days following
the end of every fiscal quarter.
    \7\ The term ``Fund Portfolio'' means the identities and
quantities of the securities and other assets held by the Investment
Company that will form the basis for the Investment Company's
calculation of net asset value at the end of the business day.
    \8\ The term ``Proxy Basket'' means the identities and
quantities of the securities and other assets included in a basket
that is designed to closely track the daily performance of the Fund
Portfolio, as provided in the exemptive relief under the 1940 Act
applicable to a series of Proxy Portfolio Shares. The website for
each series of Proxy Portfolio Shares shall disclose the following
information regarding the Proxy Basket as required under Rule 5750,
to the extent applicable: (A) Ticker symbol; (B) CUSIP or other
identifier; (C) Description of holding; (D) Quantity of each
security or other asset held; and (E) Percentage weight of the
holding in the portfolio. For purposes of this proposed rule change,
the term Custom Basket means a portfolio of securities that is
different from the Proxy Basket and is otherwise consistent with the
exemptive relief issued pursuant to the 1940 Act applicable to a
series of Proxy Portfolio Shares.
    \9\ An investment adviser to an open-end fund is required to be
registered under the Investment Advisers Act of 1940 (the ``Advisers
Act''). As a result, the Adviser, Sub-Adviser, 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. The Adviser and Sub-Adviser are
each not registered as a broker-dealer and are not affiliated with
broker-dealers. The Adviser and Sub-Adviser will each implement and
maintain a ``fire wall'' with respect to any future broker-dealer
affiliates regarding access to information concerning the
composition of and/or changes to the Fund Portfolio, Proxy
Portfolio, and/or Custom Basket, as applicable. In addition, Rule
206(4)-7 under the Advisers Act makes it unlawful for an investment
adviser to provide investment advice to clients unless such
investment adviser has (i) adopted and implemented written policies
and procedures reasonably designed to prevent violation, by the
investment adviser and its supervised persons, of the Advisers Act
and the Commission rules adopted thereunder; (ii) implemented, at a
minimum, an annual review regarding the adequacy of the policies and
procedures established pursuant to subparagraph (i) above and the
effectiveness of their implementation; and (iii) designated an
individual (who is a supervised person) responsible for
administering the policies and procedures adopted under subparagraph
(i) above.

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    In addition, in accordance with Nasdaq Rule 5750(b)(6), any person
or entity, including a custodian, Reporting Authority,\10\ distributor,
or administrator, who has access to nonpublic information regarding the
Fund Portfolio, the Proxy Basket or Custom Basket, as applicable, or
changes thereto, must be subject to procedures designed to prevent the
use and dissemination of material nonpublic information regarding the
applicable Fund Portfolio, the Proxy Basket or Custom Basket, as
applicable, or changes thereto. Moreover, if any such person or entity
is registered as a broker-dealer or affiliated with a broker-dealer,
such person or entity will erect and maintain a ``fire wall'' between
the person or entity and the broker-dealer with respect to access to
information concerning the composition of and/or changes to such Fund
Portfolio, Proxy Basket or Custom Basket, as applicable, or changes
thereto.
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    \10\ The term ``Reporting Authority'' in respect of a particular
series of Proxy Portfolio Shares means the Exchange, an institution,
or a reporting service designated by the Exchange or by the exchange
that lists a particular series of Proxy Portfolio Shares (if the
Exchange is trading such series pursuant to unlisted trading
privileges) as the official source for calculating and reporting
information relating to such series, including, but not limited to,
the Proxy Basket; the Fund Portfolio; Custom Basket; the amount of
any cash distribution to holders of Proxy Portfolio Shares, net
asset value, or other information relating to the issuance,
redemption or trading of Proxy Portfolio Shares. A series of Proxy
Portfolio Shares may have more than one Reporting Authority, each
having different functions.
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    The issuer represents that with respect to each Proxy Basket and
Custom Basket: (i) the Proxy Basket will be publicly disseminated at
least once daily and will be made available to all market participants
at the same time, and (ii) with respect to each Custom Basket utilized
by a series of Proxy Portfolio Shares, each business day, before the
opening of trading in the regular market session, the investment
company shall make publicly available on its website the composition of
any Custom Basket transacted on the previous business day, except a
Custom Basket that differs from the applicable Proxy Basket only with
respect to cash.
    In the event (a) the Adviser or Sub-Adviser registers as a broker-
dealer, 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 and will maintain a
fire wall with respect to its relevant personnel and/or such broker-
dealer affiliate, as applicable, regarding access to information
concerning the composition of and/or changes to the Fund Portfolio, the
Proxy Basket and/or Custom Basket, as applicable and will be subject to
procedures designed to prevent the use and dissemination of material
non-public information regarding the Fund Portfolio, the Proxy Basket,
and/or Custom Basket, as applicable, or changes thereto.
    The Fund intends to qualify each year as a regulated investment
company under Subchapter M of the Internal Revenue Code of 1986, as
amended.
The Fund's Principal Investment Strategies
    The investment objective of the Fund will be to seek to provide
long-term capital appreciation. Under normal market conditions,\11\ the
Fund will seek to achieve its investment objective by utilizing both
fundamental analysis and proprietary quantitative frameworks that help
inform the investment decision-making process regarding strategic
investment opportunities.
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    \11\ The term ``normal market conditions'' as used herein, is
defined in Nasdaq Rule 5750(c)(4). On a temporary basis, including
for defensive purposes, during the initial invest-up period and
during periods of high cash inflows or outflows, the Fund may depart
from its principal investment strategies; for example, it may hold a
higher than normal proportion of its assets in cash. During such
periods, the Fund may not be able to achieve its investment
objective. The Fund may adopt a defensive strategy when the Adviser
or Sub-Adviser believes securities in which the Fund normally
invests have elevated risks due to political or economic factors and
in other extraordinary circumstances.
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    Under the terms of the Exemptive Order,\12\ the Fund's investments
are limited to the following: ETFs traded on a U.S. exchange, exchange-
traded notes traded on a U.S. exchange, U.S. exchange-traded common
stocks, U.S. exchange-traded preferred stocks, U.S. exchange-traded
American Depositary Receipts, U.S. exchange-traded real estate
investment trusts, U.S. exchange-traded commodity pools, U.S. exchange-
traded metals trusts, U.S. exchange-traded currency trusts, and common
stocks listed on a foreign exchange that trade on such exchange
contemporaneously with the Fund's Shares, exchange-traded futures that
are traded on a U.S. futures exchange contemporaneously with the Fund's
Shares; and cash and cash equivalents (which are short-term U.S.
Treasury securities, government money market funds, and repurchase
agreements). The Fund will not borrow for investment purposes, hold
short positions, or purchase any securities that are illiquid
investments at the time of purchase.
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    \12\ See supra note 4.
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    The Fund's holdings will conform to the permissible investments as
set forth in the Registration Statement and Exemptive Order and the
holdings will be consistent with all requirements in the Registration
Statement and Exemptive Order. Any foreign common stocks held by the
Fund will be traded on an exchange that is a member of the Intermarket
Surveillance Group (``ISG'') or with which the Exchange has in place a
comprehensive surveillance sharing agreement. The Fund's investments,
including derivatives, will be consistent with its investment objective
and will not be used to enhance leverage (although certain derivatives
and other investments may result in leverage). That is, the Fund's
investments will not be used to seek performance that is the multiple
or inverse multiple (e.g., 2X or -3X) of the Fund's primary broad-based
securities benchmark index (as defined in Form N-1A).
Surveillance
    The Exchange represents that trading in the Proxy Portfolio Shares
will be subject to the existing trading surveillances, administered by
the Exchange, as well as cross-market surveillances administered by
Financial Industry Regulatory Authority (``FINRA''), on behalf of the
Exchange, which are designed to detect violations of Exchange rules and
applicable federal securities laws. The Exchange represents that these
surveillance procedures are adequate to properly monitor the trading of
Proxy Portfolio Shares on the Exchange during all trading sessions and
to deter and detect violations of Exchange rules and the applicable
federal securities laws. Trading of Proxy Portfolio Shares on the
Exchange will be subject to the Exchange's surveillance procedures for
derivative products. The Fund's investments, including derivatives,
will be consistent with its investment objective and will not be used
to enhance leverage (although certain derivatives and other investments
may result in leverage).
    The Exchange prior to the commencement of trading will require the
issuer of each series of Proxy Portfolio Shares listed on the Exchange
to represent to the Exchange that it will advise the Exchange of any
failure by

the Fund to comply with the continued listing requirements, and,
pursuant to its obligations under Section 19(g)(1) of the Act, the
Exchange will surveil for compliance with the continued listing
requirements. In addition, the Exchange will require the issuer to
represent that it will notify the Exchange of any failure to comply
with the terms of applicable exemptive and no-action relief. If the
Fund is not in compliance with the applicable listing requirements, the
Exchange will commence delisting procedures under the Nasdaq 5800
Series. In addition, the Exchange also has a general policy prohibiting
the distribution of material, non-public information by its employees.
    The Adviser will upon request make available to the Exchange and/or
FINRA, on behalf of the Exchange, the daily Fund Portfolio of each
series of Proxy Portfolio Shares. The Exchange believes that this is
appropriate because it will provide the Exchange and/or FINRA, on
behalf of the Exchange, with access to the daily Fund Portfolio of any
series of Proxy Portfolio Shares upon request on an as needed basis.
The Exchange believes that the ability to access the information on an
as needed basis will provide it and/or FINRA with sufficient
information to perform the necessary regulatory functions associated
with listing and trading series of Proxy Portfolio Shares on the
Exchange, including the ability to monitor compliance with the initial
and continued listing requirements as well as the ability to surveil
for manipulation of the Shares.
Trading Halts
    With respect to trading halts, the Exchange may consider all
relevant factors in exercising its discretion to halt or suspend
trading in the Shares of the Fund.\13\ 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 Shares of the Fund will be halted if the circuit breaker
parameters in Equity 4, Rule 4121 have been reached.
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    \13\ See Nasdaq Rules 4120 and 4121.
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    Trading may be halted because of market conditions or for reasons
that, in the view of the Exchange, make trading in the Proxy Portfolio
Shares inadvisable. These may include: (1) the extent to which trading
is not occurring in the securities and/or the financial instruments
composing the Proxy Basket or Fund Portfolio; or (2) whether other
unusual conditions or circumstances detrimental to the maintenance of a
fair and orderly market are present. Trading in the Proxy Portfolio
Shares also will be subject to Rule 5750(d)(2)(D), which sets forth
circumstances under which a series of Proxy Portfolio Shares may be
halted.
Trading Rules
    Nasdaq deems the Shares to be equity securities, thus rendering
trading in the Shares subject to Nasdaq's existing rules governing the
trading of equity securities. Nasdaq will allow trading in the Shares
from 4:00 a.m. until 8:00 p.m., Eastern Time in accordance with Equity
2, Section 8. The Exchange has appropriate rules to facilitate
transactions in the Shares during all trading sessions. As provided in
Nasdaq Rule 5750(b)(3), the minimum price variation for quoting and
entry of orders in Proxy Portfolio Shares traded on the Exchange is
$0.01. A ``Creation Unit'' will consist of at least 5,000 Shares.
    With respect to Proxy Portfolio Shares, all of the Exchange member
obligations relating to product description and prospectus delivery
requirements will continue to apply in accordance with Exchange rules
and federal securities laws, and the Exchange and FINRA will continue
to monitor Exchange members for compliance with such requirements.
Availability of Information
    The Fund's website (www.sgiam.com) will include a form of the
prospectus for the Fund that may be downloaded. The Exchange notes that
a significant amount of information about the Fund and its Fund
Portfolio is publicly available at all times and the website and
information will be publicly available at no charge. The Fund will
disclose the Proxy Basket, which is designed to closely track the daily
performance of the Fund Portfolio, on a daily basis on the Fund's
website (www.sgiam.com). With respect to each Custom Basket, each
business day, before the opening of trading in the regular market
session, the Investment Company shall make publicly available on its
website the composition of any Custom Basket transacted on the previous
business day, except a Custom Basket that differs from the applicable
Proxy Basket only with respect to cash. Intraday pricing information
for all constituents of the Proxy Basket that are exchange-traded,
which includes all eligible instruments except cash and cash
equivalents, will be available on the exchanges on which they are
traded and through subscription services. Intraday pricing information
for cash equivalents will be available through subscription services
and/or pricing services. Each series of Proxy Portfolio Shares will at
a minimum publicly disclose the entirety of its portfolio holdings,
including the name, identifier, market value and weight of each
security and instrument in the portfolio within at least 60 days
following the end of every fiscal quarter in a manner consistent with
normal disclosure requirements otherwise applicable to open-end
investment companies registered under the 1940 Act.
    The website will include additional quantitative information
updated on a daily basis, including, on a per Share basis for the Fund,
the prior business day's NAV and the closing price or bid/ask price at
the time of calculation of such NAV, and a calculation of the premium
or discount of the closing price or bid/ask price against such NAV. The
website will also disclose any other information regarding premiums and
discounts and the bid/ask spread for the Fund as may be required for
other ETFs under Rule 6c-11 under the 1940 Act, as amended. On each
business day, before the commencement of trading of Shares, the Fund
will publish on its website the Proxy Basket and the ``Guardrail
Amount'' (see description below) for that day.
    Form N-PORT requires reporting of a fund's complete portfolio
holdings on a position-by-position basis on a quarterly basis within 60
days after fiscal quarter end. Investors can obtain a fund's Statement
of Additional Information, its Shareholder Reports, its Form N-CSR,
filed twice a year, and its Form N-CEN, filed annually. A fund's SAI
and Shareholder Reports are available for free upon request from the
Investment Company, and those documents and the Form N-PORT, Form N-
CSR, and Form N-CEN may be viewed on-screen or downloaded from the
Commission's website at www.sec.gov. The Exchange also notes that the
Exemptive Order provides that the issuer of the Fund will comply with
Regulation Fair Disclosure. 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.
Proxy Basket and Custom Baskets
    Pursuant to the Exemptive Order, the Fund is permitted to use
Custom Baskets. For the Fund, the Proxy Basket will consist of all of
the Fund portfolio holdings but will be weighted differently, subject
to a minimum

weightings overlap of 90% with the Fund Portfolio at the beginning of
each business day. Intraday pricing information for all constituents of
the Proxy Basket that are exchange-traded, which includes all eligible
instruments except cash and cash equivalents, will be available on the
exchanges on which they are traded and through subscription services.
Intraday pricing information for cash equivalents will be available
through subscription services and/or pricing services. The Exchange
notes that the Fund's net asset value (``NAV'') will form the basis for
creations and redemptions for the Fund and creations and redemptions
will work in a manner substantively identical to that of series of
Managed Fund Shares.\14\ The Adviser expects that the Shares of the
Fund will generally be created and redeemed in-kind, with limited
exceptions. The names and quantities of the instruments that constitute
the basket of securities for creations and redemptions will be the same
as the Fund's Proxy Basket, except to the extent purchases and
redemptions are made entirely or in part on a cash basis. In addition,
in accordance with the Exemptive Order, the Fund may determine to use
Custom Baskets that differ from the Proxy Portfolio in that they
include instruments that are not in the Proxy Portfolio, or are
included in the Proxy Portfolio but in different weightings. In the
event that the value of the Proxy Basket is not the same as the Fund's
NAV, the creation and redemption baskets will consist of the securities
included in the Proxy Basket plus or minus an amount of cash equal to
the difference between the NAV and the value of the Proxy Basket.
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    \14\ See Nasdaq Rule 5735.
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    Nasdaq Rule 5750(c)(6) defines ``Custom Basket'' for the purposes
of Nasdaq Rule 5750 as a portfolio of securities that is different from
the Proxy Basket and is otherwise consistent with the exemptive relief
issued pursuant to the 1940 Act applicable to a series of Proxy
Portfolio Shares.
    The Proxy Basket will be constructed utilizing a proprietary
algorithmic process that will be applied to the Fund Portfolio on a
daily basis. The Proxy Basket holdings (including the identity and
quantity of investments in the Proxy Basket) will be publicly available
on the Fund's website before the commencement of trading in Fund Shares
on each business day, although the weightings of such holdings in the
Proxy Basket will differ from the Fund Portfolio. The Proxy Basket will
have a minimum overlap of 90% with the Fund Portfolio at the beginning
of each business day, with the precise percentage of aggregate overlap
in weightings from 90% to 100% to be randomly generated each day (the
overlap and tracking error will be available on the Fund's website
before the commencement of trading in Proxy Portfolio Shares on each
business day and discussed further below).
    In addition to the disclosure of the Proxy Basket, the Fund will
also publish the Guardrail Amount on its website on each business day
before the commencement of trading in the Proxy Portfolio Shares on the
Exchange. The Guardrail Amount is the maximum deviation between the
weightings of the specific instruments and cash positions in the Proxy
Basket from the weightings of those specific instruments and cash
positions in the Fund Portfolio. The Guardrail Amount is intended to
ensure that no individual security in the Proxy Basket will be
overweighted or underweighted by more than the publicly disclosed
percentage when compared to the actual weighting of each security
within the Fund Portfolio as of the beginning of each business day. The
Adviser expects the performance of the Proxy Basket and the Fund
Portfolio to be closely aligned in light of the construction of the
Proxy Basket, and does not expect the ``Tracking Error'' to exceed 1%
(available on the Fund's website before the commencement of trading in
Proxy Portfolio Shares on each business day). ``Tracking Error'' is
defined to mean the standard deviation over the past three months of
the daily difference, in percentage terms, between the Proxy Basket per
Share NAV and that of the Fund at the end of the business day.
    The Fund will also disclose the entirety of its Fund Portfolio,
including the name, identifier, market value and weight of each
security and instrument in the portfolio, no less than 60 days
following the end of every fiscal quarter.
Additional Information
    The Exchange represents that the Shares will conform to the initial
and continued listing criteria under Nasdaq Rule 5750, including the
dissemination of key information such as the Proxy Basket, the Custom
Basket, the Fund Portfolio, and NAV, suspension of trading or removal,
trading halts, surveillance, minimum price variation for quoting and
order entry, an information circular informing members of the special
characteristics and risks associated with trading in the series of
Proxy Portfolio Shares, and firewalls as set forth in the proposed
Exchange rules applicable to Proxy Portfolio Shares.
    Price information for the exchange-listed instruments held by the
Fund, including both U.S. and non-U.S. listed equity securities and
U.S. exchange-listed futures will be available through major market
data vendors or securities exchanges listing and trading such
securities. Moreover, U.S.-listed equity securities held by the Fund
will trade on markets that are a member of ISG or with which the
Exchange has in place a comprehensive surveillance sharing
agreement.\15\ Any foreign common stocks held by the Fund will be
traded on an exchange that is a member of ISG or with which the
Exchange has in place a comprehensive surveillance sharing agreement.
All futures contracts that the Fund may invest in will be traded on a
U.S. futures exchange. The Exchange or FINRA, on behalf of the
Exchange, or both, will communicate as needed regarding trading in the
Shares and underlying exchange-traded instruments with other markets
and other entities that are members of ISG, and the Exchange or FINRA,
on behalf of the Exchange, or both, may obtain trading information
regarding trading such instruments from such markets and other
entities. In addition, the Exchange may obtain information regarding
trading in the Shares and underlying exchange-traded instruments from
markets and other entities that are members of ISG or with which the
Exchange has in place a comprehensive surveillance sharing agreement.
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    \15\ For a list of the current members of ISG, see
www.isgportal.com. The Exchange notes that not all components of the
Fund may trade on markets that are members of ISG or with which the
Exchange has in place a comprehensive surveillance sharing
agreement.
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    All statements and representations made in this filing regarding
the description of the portfolio or reference assets, limitations on
portfolio holdings or reference assets, dissemination and availability
of reference assets (as applicable) such as the Fund Portfolio and the
Proxy Basket, the Custom Basket, and the applicability of Exchange
listing rules specified in this filing shall constitute continued
listing requirements for the Shares. A minimum of 100,000 Shares of the
Fund will be outstanding at the commencement of trading on the
Exchange. In addition, pursuant to Nasdaq Rule 5750(d)(1)(B), the
Exchange prior to the commencement of trading in the Proxy Portfolio
Shares, will obtain a representation from the issuer of the Shares of
the Fund that (i) the NAV per share for the Fund will be calculated
daily, (ii) each of the following will be made available to all market
participants at the same time

when disclosed: the NAV, the Proxy Basket, and the Fund Portfolio, and
(iii) the issuer and any person acting on behalf of the series of Proxy
Portfolio Shares will comply with Regulation Fair Disclosure under the
Act,\16\ including with respect to any Custom Basket.
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    \16\ 17 CFR 243.100-243.103. Regulation Fair Disclosure provides
that whenever an issuer, or any person acting on its behalf,
discloses material nonpublic information regarding that issuer or
its securities to certain individuals or entities--generally,
securities market professionals, such as stock analysts, or holders
of the issuer's securities who may well trade on the basis of the
information--the issuer must make public disclosure of that
information.
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    The issuer has represented to the Exchange that it will advise the
Exchange of any failure by the Fund or Shares to comply with the
continued listing requirements, and, pursuant to its obligations under
Section 19(g)(1) of the Act, the Exchange will surveil for compliance
with the continued listing requirements. FINRA conducts certain cross-
market surveillances on behalf of the Exchange pursuant to a regulatory
services agreement. The Exchange is responsible for FINRA's performance
under this regulatory services agreement. If a Fund is not in
compliance with the applicable listing requirements, the Exchange will
commence delisting procedures under the Nasdaq 5800 Series.
2. Statutory Basis
    Nasdaq believes that the proposal is consistent with Section 6(b)
of the Act in general and Section 6(b)(5) of the Act, in particular, in
that it is designed to prevent fraudulent and manipulative acts and
practices, to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in facilitating
transactions in securities, and to remove impediments to and perfect
the mechanism of a free and open market and, in general, to protect
investors and the public interest.
    The Fund's holdings will conform to the permissible investments as
set forth in the Registration Statement and Exemptive Order and the
holdings will be consistent with all requirements in the Registration
Statement and Exemptive Order. The Fund's investments, including
derivatives, will be consistent with its investment objective and will
not be used to enhance leverage (although certain derivatives and other
investments may result in leverage). That is, the Fund's investments
will not be used to seek performance that is the multiple or inverse
multiple (e.g., 2X or -3X) of the Fund's primary broad-based securities
benchmark index (as defined in Form N-1A).
    The Exchange believes that the particular instruments that may be
included in the Fund Portfolio and the Proxy Basket or Custom Basket do
not raise any concerns related to the Proxy Basket or Custom Basket
being able to closely track the NAV of the Fund because such
instruments include only instruments that trade on an exchange
contemporaneously with the Shares. In addition, the Fund's Proxy Basket
or Custom Basket is designed to reliably and consistently correlate to
the performance of the Fund.
    The Adviser anticipates that the returns between the Fund and its
respective Proxy Basket or Custom Basket will have a consistent
relationship and that the deviation in the returns between the Fund and
its Proxy Basket or Custom Basket will be sufficiently small such that
the Proxy Basket or Custom Basket will provide authorized participants,
arbitrageurs and other market participants (collectively, ``Market
Makers'') with a reliable hedging vehicle that they can use to
effectuate low-risk arbitrage trades in Fund Shares. The Exchange
believes that the disclosures provided by the Fund will allow Market
Makers to understand the relationship between the performance of the
Fund and its Proxy Basket or Custom Basket. Market Makers will be able
to estimate the value of and hedge positions in the Fund's Shares,
which the Exchange believes will facilitate the arbitrage process and
help ensure that the Fund's Shares normally will trade at market prices
close to their NAV. The Exchange also believes that competitive market
making, where traders are looking to take advantage of differences in
bid-ask spread, will aid in keeping spreads tight.
    The Exchange notes that a significant amount of information about
the Fund and its Fund Portfolio is publicly available at all times. The
Fund will disclose the Proxy Basket, which is designed to closely track
the daily performance of the Fund Portfolio, on a daily basis and will
be available on the Fund's website before the commencement of trading
in Proxy Portfolio Shares on each business day. With respect to each
Custom Basket, each business day, before the opening of trading in the
regular market session, the Investment Company shall make publicly
available on its website the composition of any Custom Basket
transacted on the previous business day, except a Custom Basket that
differs from the applicable Proxy Basket only with respect to cash.
Intraday pricing information for all constituents of the Proxy Basket
that are exchange-traded, which includes all eligible instruments
except cash and cash equivalents, will be available on the exchanges on
which they are traded and through subscription services. Intraday
pricing information for cash equivalents will be available through
subscription services and/or pricing services. The issuer of the Proxy
Portfolio Shares will at a minimum publicly disclose the entirety of
its portfolio holdings,\17\ including the name, identifier, market
value and weight of each security and instrument in the portfolio
within at least 60 days following the end of every fiscal quarter in a
manner consistent with normal disclosure requirements otherwise
applicable to open-end investment companies registered under the 1940
Act.
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    \17\ This information will be made available on the Fund's
website at www.sgiam.com.
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    The Fund's website will include additional quantitative information
updated on a daily basis,\18\ including, on a per Share basis for the
Fund, the prior business day's NAV and the closing price or bid/ask
price at the time of calculation of such NAV, and a calculation of the
premium or discount of the closing price or bid/ask price against such
NAV. The website will also disclose any other information regarding
premiums and discounts and the bid/ask spread for the Fund as may be
required for other ETFs under Rule 6c-11 under the 1940 Act, as
amended. On each business day, before the commencement of trading of
Shares, the Fund will publish on its website the Proxy Basket and the
Guardrail Amount for that day.
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    \18\ Id.
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    The Exchange represents that the Shares of the Fund will continue
to comply with all other proposed requirements applicable to Proxy
Portfolio Shares, including the dissemination of key information such
as the Proxy Basket, the Custom Basket, disclosure of the Fund
Portfolio quarterly, and NAV, suspension of trading or removal, trading
halts, surveillance, minimum price variation for quoting and order
entry, an information circular informing members of the special
characteristics and risks associated with trading in the series of
Proxy Portfolio Shares, and firewalls as set forth in the proposed
Exchange rules applicable to Proxy Portfolio Shares and the orders
approving such rules. Moreover, U.S.-listed equity securities,
exchange-traded futures that are traded on a U.S. futures exchange, and
non-U.S. listed equity securities held by the

Fund will trade on markets that are a member of ISG or with which the
Exchange has in place a comprehensive surveillance sharing
agreement.\19\
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    \19\ Supra note 15.
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    The daily dissemination of the identity and quantity of Proxy
Portfolio component investments, together with the right of Authorized
Participants to create and redeem each day at the NAV, will be
sufficient for market participants to value and trade Shares in a
manner that will not lead to significant deviations between the Shares'
Closing Price or Bid/Ask Price and NAV.
    All statements and representations made in this filing regarding
the description of the portfolio or reference assets, limitations on
portfolio holdings or reference assets, dissemination and availability
of reference asset (as applicable), and the applicability of Exchange
listing rules specified in this filing shall constitute continued
listing requirements for the Shares. The issuer has represented to the
Exchange that it will advise the Exchange of any failure by the Fund or
Shares to comply with the continued listing requirements, and, pursuant
to its obligations under Section 19(g)(1) of the Act, the Exchange will
surveil for compliance with the continued listing requirements. A
minimum of 100,000 Shares of the Fund will be outstanding at the
commencement of trading on the Exchange. The Exchange will obtain a
representation from the issuer of the Shares of the Fund that (i) the
NAV per share for the Fund will be calculated daily, (ii) each of the
following will be made available to all market participants at the same
time when disclosed: the NAV, the Proxy Basket, and the Fund Portfolio,
and (iii) the issuer and any person acting on behalf of the series of
Proxy Portfolio Shares will comply with Regulation Fair Disclosure
under the Act,\20\ including with respect to any Custom Basket.
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    \20\ See supra note 16.
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    FINRA conducts certain cross-market surveillances on behalf of the
Exchange pursuant to a regulatory services agreement. The Exchange is
responsible for FINRA's performance under this regulatory services
agreement. If a Fund is not in compliance with the applicable listing
requirements, the Exchange will commence delisting procedures under the
Nasdaq 5800 Series.
    For the above reasons, the Exchange believes that the proposed rule
change is consistent with the requirements of Section 6(b)(5) of the
Act.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. Rather, the Exchange notes
that the proposed rule change will facilitate the listing of a new type
of actively-managed exchange-traded product, thus enhancing competition
among both market participants and listing venues, to the benefit of
investors and the marketplace.

C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others

    No written comments were either solicited or received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

    Because the foregoing proposed rule change does not: (i)
significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A)(iii) of the Act \21\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\22\
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    \21\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \22\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires the Exchange to give the Commission written notice of its
intent to file the proposed rule change, along with a brief
description and text of the proposed rule change, at least five
business days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the Commission. The
Exchange has satisfied this requirement.
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    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the
Act normally does not become operative for 30 days after the date of
its filing. However, Rule 19b-4(f)(6)(iii) \23\ permits the Commission
to designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has
requested that the Commission waive the 30-day operative delay so that
the proposal may become operative immediately upon filing. The
Commission has noticed for immediate effectiveness proposed rule
changes to permit listing and trading of Proxy Portfolio Shares on the
Exchange and Active Proxy Portfolio Shares (which securities are
substantively similar to Proxy Portfolio Shares but listed on another
exchange) of numerous funds.\24\ The proposed listing rule for the Fund
raises no novel legal or regulatory issues. Thus, the Commission
believes that waiver of the 30-day operative delay is consistent with
the protection of investors and the public interest. Accordingly, the
Commission hereby waives the 30-day operative delay and designates the
proposed rule change operative upon filing.\25\
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    \23\ 17 CFR 240.19b-4(f)(6)(iii).
    \24\ See e.g., Securities Exchange Act Release No. 95082 (Feb 4,
2021), 88 FR 8972 (Feb. 10, 2021) (SR-NASDAQ-2021-005) (Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating
to the ALPS Active REIT ETF of ALPS ETF Trust To List and Trade
Shares of the Fund Under Nasdaq Rule 5750) (Proxy Portfolio Shares);
Securities Exchange Act Release Nos. 92104 (June 3, 2021), 86 FR
30635 (June 9, 2021) (SR-NYSEArca-2021-46) (Notice of Filing and
Immediate Effectiveness of Proposed Rule Change to List and Trade
Shares of the Nuveen Santa Barbara Dividend Growth ETF, Nuveen Small
Cap Select ETF, and Nuveen Winslow Large-Cap Growth ESG ETF Under
NYSE Arca Rule 8.601-E (Active Proxy Portfolio Shares)); 92958
(September 13, 2021), 86 FR 51933 (September 17, 2021) (SR-NYSEArca-
2021-77) (Notice of Filing and Immediate Effectiveness of Proposed
Rule Change To List and Trade Shares of the Nuveen Growth
Opportunities ETF Under NYSE Arca Rule 8.601-E (Active Proxy
Portfolio Shares)); and 93264 (October 6, 2021), 86 FR 56989
(October 13, 2021) (SR-NYSEArca-2021-84) (Notice of Filing and
Immediate Effectiveness of Proposed Rule Change To List and Trade
Shares of the Schwab Ariel ESG ETF Under NYSE Arca Rule 8.601-E
(Active Proxy Portfolio Shares)).
    \25\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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    At any time within 60 days of the filing of such proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include
File Number SR-NASDAQ-2023-006 on the subject line.

Paper Comments

     Send paper comments in triplicate to: Secretary,
Securities and Exchange

Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to File Number SR-NASDAQ-2023-006. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549 on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-NASDAQ-2023-006 and should be submitted
on or before April 24, 2023.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\26\
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    \26\ 17 CFR 200.30-3(a)(12), (59).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-06782 Filed 3-31-23; 8:45 am]
BILLING CODE 8011-01-P