[Federal Register Volume 80, Number 98 (Thursday, May 21, 2015)]
[Notices]
[Pages 29359-29364]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-12284]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-74979; File No. SR-NASDAQ-2015-049]


Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing of Proposed Rule Change Relating to the Listing and 
Trading of the Shares of the PowerShares DB Optimum Yield Diversified 
Commodity Strategy Portfolio, PowerShares Agriculture Commodity 
Strategy Portfolio, PowerShares Precious Metals Commodity Strategy 
Portfolio, PowerShares Energy Commodity Strategy Portfolio, PowerShares 
Base Metals Commodity Strategy Portfolio and PowerShares Bloomberg 
Commodity Strategy Portfolio, Each a Series of PowerShares Actively 
Managed Exchange-Traded Commodity Fund Trust

May 15, 2015.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934

[[Page 29360]]

(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on April 30, 2015, The NASDAQ Stock Market LLC (``Nasdaq'' or the 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in in Items I 
and II below, which Items have been prepared by Nasdaq. The Commission 
is publishing this notice to solicit comments on the proposed rule 
change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Nasdaq proposes a rule change with respect to PowerShares DB 
Optimum Yield Diversified Commodity Strategy Portfolio, PowerShares 
Agriculture Commodity Strategy Portfolio, PowerShares Precious Metals 
Commodity Strategy Portfolio, PowerShares Energy Commodity Strategy 
Portfolio, PowerShares Base Metals Commodity Strategy Portfolio and 
PowerShares Bloomberg Commodity Strategy Portfolio (each, a ``Fund,'' 
and collectively, the ``Funds''), each a series of PowerShares Actively 
Managed Exchange-Traded Commodity Fund Trust (the ``Trust'').
    The rule change is being filed to reflect a proposed change to the 
current principal investment strategies of each Fund (which are set 
forth in detail in an order previously granted by the Commission \3\) 
to permit each Fund to invest in additional instruments and asset types 
as part of their principal investment strategies, in addition to the 
investments permitted by the Prior Order.
---------------------------------------------------------------------------

    \3\ See Securities Exchange Act Release No. 73078 (Sept. 11, 
2014), 79 FR 55851 (Sept. 17, 2014) (SR-NASDAQ-2014-80) (the ``Prior 
Notice''); see also Securities Exchange Act Release No. 73471 
(October 30, 2014), 79 FR 65751 (Nov. 5, 2014) (SR-NASDAQ-2014-080) 
(the ``Prior Order,'' and, together with the Prior Notice, the 
``Prior Release'').
---------------------------------------------------------------------------

    Except for the changes discussed below, all other facts presented 
and representations made in the Prior Release remain unchanged and in 
full effect. All capitalized terms referenced but not defined herein 
have the same meaning as in the Prior Release.
    The text of the proposed rule change is available at http://nasdaq.cchwallstreet.com/, at Nasdaq's principal office, and at the 
Commission's Public Reference Room.

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

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

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

1. Purpose
    Each Fund is an actively managed exchange-traded fund (``ETF'') 
whose shares (``Shares'') are offered, or will be offered, by the 
Trust, a statutory trust organized under the laws of Delaware. The 
Trust is registered with the Commission as an investment company and 
has filed a registration statement on Form N-1A with the Commission.\4\ 
The Commission previously approved the listing and trading on the 
Exchange of the Shares of each Fund \5\ under Nasdaq Rule 5735, which 
governs the listing and trading of Managed Fund Shares \6\ on the 
Exchange.\7\ Shares of PowerShares DB Optimum Yield Diversified 
Commodity Strategy Portfolio have commenced listing and trading on the 
Exchange; Shares of the other Funds have not.
---------------------------------------------------------------------------

    \4\ A description of each Fund's investment strategy is set 
forth in the Trust's registration statement on Form N-1A that the 
Trust filed with the Commission (the ``Registration Statement''). 
See Pre-effective Amendment No. 1 to the Registration Statement for 
the Trust, dated May 20, 2014 (File Nos. 333-193135 and 811-22927) 
(for each of PowerShares Agriculture Commodity Strategy Portfolio, 
PowerShares Precious Metals Commodity Strategy Portfolio, 
PowerShares Energy Commodity Strategy Portfolio and PowerShares Base 
Metals Commodity Strategy Portfolio). The descriptions of the Funds 
and the Shares contained herein are based, in part, on information 
in the Registration Statement.
    \5\ See supra, note 4 [sic].
    \6\ A Managed Fund Share is a security that represents an 
interest in an investment company registered under the Investment 
Company Act of 1940 (15 U.S.C. 80a-1) (the ``1940 Act'') organized 
as an open-end investment company or similar entity that invests in 
a portfolio of securities selected by its investment adviser 
consistent with its investment objectives and policies. In contrast, 
an open-end investment company that issues Index Fund Shares, listed 
and traded on the Exchange under Nasdaq Rule 5705, seeks to provide 
investment results that correspond generally to the price and yield 
performance of a specific foreign or domestic stock index, fixed 
income securities index or combination thereof.
    \7\ The Commission approved Nasdaq Rule 5735 in Securities 
Exchange Act Release No. 57962 (June 13, 2008), 73 FR 35175 (June 
20, 2008) (SR- NASDAQ-2008-039).
---------------------------------------------------------------------------

    In this proposed rule change, the Exchange proposes to permit the 
listing or continued listing of the Shares if the Funds revise their 
investment strategies to include additional instruments in their 
portfolios to implement their investment objectives.\8\
---------------------------------------------------------------------------

    \8\ The changes described herein will be effective contingent 
upon effectiveness of a post-effective amendment to the Registration 
Statement of the Trust, on behalf of each Fund. The changes 
described herein will not be implemented until such proposed rule 
change is declared operative.
---------------------------------------------------------------------------

Principal Investments
    As stated in the Prior Release, each Fund's investment objective is 
to seek long-term capital appreciation. The Prior Release states that 
each Fund seeks to achieve its investment objective by investing, under 
normal circumstances,\9\ in a combination of: (i) A wholly-owned 
subsidiary organized under the laws of the Cayman Islands (each, a 
``Subsidiary,'' and collectively, the ``Subsidiaries''), (ii) 
``exchange-traded products or exchange-traded commodity pools,'' \10\ 
and (iii) U.S. Treasury Securities, money market mutual funds, high 
quality commercial paper and similar instruments (``Collateral 
Instruments'').\11\
---------------------------------------------------------------------------

    \9\ The term ``under normal circumstances'' includes, but is not 
limited to, the absence of extreme volatility or trading halts in 
the equity, commodities and futures 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 manmade disaster, act of God, armed conflict, 
act of terrorism, riot or labor disruption, or any similar 
intervening circumstance.
    \10\ Specifically, the Prior Release noted that the Funds will 
invest in: (1) ETFs that provide exposure to commodities as would be 
listed under Nasdaq Rules 5705 and 5735; (2) exchange-traded notes 
(``ETNs'') that provide exposure to commodities as would be listed 
under Nasdaq Rule 5710; or (3) exchange-traded pooled investment 
vehicles that invest primarily in commodities and commodity-linked 
instruments as would be listed under Nasdaq Rules 5711(b), (d), (f), 
(g), (h), (i), and (j) (``Commodity Pool'' or ``Commodity Pools'').
    \11\ For a Fund's purposes, money market instruments will 
include: Short-term, high quality securities issued or guaranteed by 
non-U.S. governments, agencies, and instrumentalities; non-
convertible corporate debt securities with remaining maturities of 
not more than 397 days that satisfy ratings requirements under Rule 
2a-7 of the 1940 Act; money market mutual funds; and deposits and 
other obligations of U.S. and non-U.S. banks and financial 
institutions.
---------------------------------------------------------------------------

    The Prior Release also states that each Subsidiary will invest in 
exchange-traded futures contracts linked to commodities (``Commodities 
Futures'') to provide its parent Fund with additional indirect exposure 
to the commodities markets. Each Fund's investment in its Subsidiary is 
designed to help the Fund obtain exposure to Commodities Futures 
returns in a

[[Page 29361]]

manner consistent with the federal tax requirements applicable to 
regulated investment companies, such as the Funds, which limit the 
ability of investment companies to invest directly in derivative 
instruments such as the Commodities Futures.
    In this proposed rule change, the Funds seek the ability for the 
Funds and the Subsidiaries, as applicable, to also invest in a variety 
of other securities and instruments beyond those set forth in the Prior 
Release, as follows:
     Each Fund, which already may invest in ETFs, ETNs and 
Commodity Pools, seeks to also invest in: (i) Other investment 
companies,\12\ to the extent permitted under the 1940 Act,\13\ and (ii) 
exchange-traded commodity-linked equity securities \14\ (collectively, 
these are ``Commodity-Related Assets'').
---------------------------------------------------------------------------

    \12\ In addition to ETFs, the other investment companies will 
consist of non-exchange traded U.S. registered open-end investment 
companies (mutual funds), closed-end investment companies traded on 
U.S. exchanges, or exchange-traded non-U.S. investment companies 
traded on foreign exchanges.
    \13\ Each Fund's investment in securities of other investment 
companies may exceed the limits permitted under the 1940 Act, in 
accordance with certain terms and conditions set forth in a 
Commission exemptive order issued to an affiliate of the Trust 
(which applies equally to the Trust) pursuant to Section 12(d)(1)(J) 
of the 1940 Act. See Investment Company Act Release No. 30029 (Apr. 
10, 2012) (File No. 812-13795) or, in the case of non-U.S. 
investment companies, pursuant to SEC No-Action relief. See Red 
Rocks Capital, LLC (pub. avail. June 3, 2011).
    \14\ Exchange-traded commodity-linked equity securities 
(``Equity Securities'') will be comprised of exchange-traded common 
stocks of companies that operate in commodities, natural resources 
and energy businesses, and in associated businesses, as well as 
companies that provide services or have exposure to such businesses.
---------------------------------------------------------------------------

     Each Subsidiary, which already may invest in Commodities 
Futures, now also seeks to invest in: (i) Exchange traded futures 
contracts on commodity indices, (ii) commodity-linked notes,\15\ (iii) 
ETNs, (iv) exchange-traded options on Commodities Futures 
(``Options''),\16\ (v) centrally-cleared or over the counter (``OTC'') 
swaps on commodities (``Swaps'') and (vi) commodity-related forward 
contracts (``Forwards'') (collectively, these are ``Commodity-Linked 
Instruments''), which provide exposure to the investment returns of the 
commodities markets, without investing directly in physical 
commodities.
---------------------------------------------------------------------------

    \15\ Such commodity-linked notes generally will not be exchange-
traded; however it is possible that in the future some of those 
instruments could be listed for trading on an exchange.
    \16\ The Prior Release noted that with respect to Commodities 
Futures held indirectly through a Subsidiary, not more than 10% of 
the weight of such Commodities Futures in the aggregate shall 
consist of instruments whose principal trading market is not a 
member of the Intermarket Surveillance Group (``ISG'') or a market 
with which the Exchange does not have a comprehensive surveillance 
sharing agreement. The Funds now clarify that Options and commodity 
index futures will be subject to the same restrictions as 
Commodities Futures, and that Options and commodity index futures 
will be considered in the aggregate with Commodities Futures. 
Therefore, with respect to Commodities Futures, commodity index 
futures and Options, not more than 10% of the weight of such 
Commodities Futures, commodity index futures, and Options, in the 
aggregate, shall consist of instruments whose principal trading 
market is not a member of the ISG or a market with which the 
Exchange does not have a comprehensive surveillance sharing 
agreement. This 10% limitation applicable to Commodities Futures, 
commodity index futures, and Options, in the aggregate, is separate 
from the 10% limitation applicable to exchange traded equity 
securities described infra, and is determined separately from this 
other limitation.
---------------------------------------------------------------------------

     In addition, each Fund may hold instruments that its 
respective Subsidiary is entitled to hold, and vice versa, to the 
extent consistent with federal tax requirements.
    The Prior Release noted that all of the exchange-traded securities 
held by a Fund will be traded in a principal trading market that is a 
member of ISG or a market with which the Exchange has a comprehensive 
surveillance sharing agreement. The Funds propose to invest in Equity 
Securities, closed-end funds, ETFs, ETNs, Commodity Pools and non-U.S. 
investment companies that are not traded in a principal trading market 
that is a member of ISG or a market with which the Exchange has a 
comprehensive surveillance sharing agreement; however, not more than 
10% of each Fund's investments in these investments (in the aggregate) 
will be invested in instruments that trade in markets that are not 
members of the ISG or that are not parties to a comprehensive 
surveillance sharing agreement with the Exchange.
    These additional instruments are intended to support each Fund's 
principal investment strategy by providing each Fund with the 
flexibility to obtain additional exposure to the investment returns of 
the commodities markets within the limits of applicable federal tax 
requirements and without investing directly in physical commodities. 
Each Fund, either directly or through its respective Subsidiary, will 
only invest in those commodity-linked notes, OTC Swaps, Forwards, or 
other over-the-counter instruments that are based on the price of 
relevant Commodities Futures, as applicable, and tend to exhibit 
trading prices or returns that correlate with any Commodities Futures 
and that will further the investment objective of such Fund.\17\ The 
Funds represent that the descriptions of the original asset types 
included in the Prior Release remain unchanged, and that the Funds and 
their Subsidiaries will adhere to all investment restrictions set forth 
in the Prior Release as they apply to the original asset types. The 
Funds also represent that the investments in these additional asset 
types will be consistent with each Fund's investment objective.
---------------------------------------------------------------------------

    \17\ Each Fund will enter into swap agreements and other over-
the-counter transactions only with large, established and well 
capitalized financial institutions that meet certain credit quality 
standards and monitoring policies. Each Fund will use various 
techniques to minimize credit risk, including early termination, or 
reset and payment of such investments, the use of different 
counterparties or limiting the net amount due from any individual 
counterparty.
---------------------------------------------------------------------------

    In conjunction with this proposed change to add various instruments 
to the Funds' principal investment strategies, the following 
information supplements or updates, as applicable, the information 
contained in the Prior Release. Except for these changes, all other 
facts presented and representations made in the Prior Release remain 
unchanged and in full effect.
Net Asset Value
    As stated in the Prior Release, the Funds' administrator will 
calculate each Fund's net asset value (``NAV'') per Share as of the 
close of regular trading (normally 4:00 p.m., Eastern time (``E.T.'')) 
on each day Nasdaq is open for business. NAV per Share is calculated by 
taking the market price of a 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 
Prior Release describes how various securities and instruments held by 
each Fund or its Subsidiary--including ETFs, ETNs and Commodities 
Futures--will be valued to calculate each Fund's NAV.
    The Funds now represent that, in addition to the foregoing as set 
forth in the Prior Release: (i) Equity Securities, ETNs, and futures on 
commodity indices will be valued at the last sales price or the 
official closing price on the exchange where such securities 
principally trade; (ii) investment companies will be valued using such 
company's end of the day NAV per share, unless the shares are exchange-
traded, in which case they will be valued at the last sales price or 
official closing price on the exchanges on which they primarily trade; 
(iii) Options generally will be valued at the closing price (and, if no 
closing price is available, at the mean of the last bid/ask quotations) 
generally from the exchange where such instruments principally

[[Page 29362]]

trade; and (iv) Swaps, commodity-linked notes and Forwards generally 
will be valued based on quotations from a pricing vendor (such 
quotations being derived from available market- and company-specific 
data), all in accordance with valuation procedures adopted by the Board 
of Trustees of the Trust.
    All other valuation procedures pertaining to the Funds, and as set 
forth in the Prior Release, are unchanged.
Availability of Information
    The Prior Release states that, on each business day, before 
commencement of trading in Shares in the Regular Market Session \18\ on 
the Exchange, each Fund will disclose on its Web site the identities 
and quantities of its portfolio of securities and other assets (the 
``Disclosed Portfolio'' as defined in Nasdaq Rule 5735(c)(2)) held by 
such Fund and its Subsidiary, which will form the basis for each Fund's 
calculation of NAV at the end of the business day. The Prior Release 
also stated that the Disclosed Portfolio will include, as applicable, 
the names, quantity, percentage weighting, and other characteristics of 
securities and other assets held by a Fund and its Subsidiary. 
Additionally, the Prior Release includes information on where investors 
may obtain quotation and last sale information for the various 
securities and instruments held by a Fund, including that quotation and 
last sale information for any underlying Commodities Futures is 
available via the quote and trade service of such Commodities Futures' 
primary exchanges.
---------------------------------------------------------------------------

    \18\ See Nasdaq Rule 4120(b)(4) (describing the three trading 
sessions on the Exchange: (1) Pre-Market Session from 4 a.m. to 9:30 
a.m. E.T.; (2) Regular Market Session from 9:30 a.m. to 4 p.m. or 
4:15 p.m. E.T.; and (3) Post-Market Session from 4 p.m. or 4:15 p.m. 
to 8 p.m. E.T.).
---------------------------------------------------------------------------

    In addition to the foregoing, the Funds will disclose on a daily 
basis on the Funds' Web site the following information regarding each 
portfolio holding, as applicable to the type of holding: Ticker symbol, 
CUSIP number or other identifier, if any; a description of the holding 
(including the type of holding), the identity of the security or other 
asset or instrument underlying the holding, if any; for options, the 
option strike price; for Swaps, a description of the type of Swap; 
quantity held (as measured by, for example, par value, notional value 
or number of shares, contracts or units); maturity date, if any; coupon 
rate, if any; effective date, if any; market value of the holding; and 
percentage weighting of the holding in the Fund's portfolio. The Web 
site information will be publicly available at no charge.
    Intra-day price information on the exchange-traded assets held by 
the Fund and the Subsidiary, including the Equity Securities, ETNs, 
Options, exchange-traded investment companies (including closed-end 
funds) and exchange-traded futures contracts on commodity indices will 
be available via the quote and trade service of the respective 
exchanges on which they principally trade. Additionally, price 
information on Swaps, commodity-linked notes, Forwards and non-exchange 
traded investment companies will be available from major broker-dealer 
firms or through subscription services, such as Bloomberg, Markit and 
Thomson Reuters, which can be accessed by entities that have entered 
into an authorized participant agreement with the Trust and other 
investors.
Surveillance
    First, as noted in the Prior Release, trading in the Shares will be 
subject to the existing trading surveillances, administered by both 
Nasdaq and also the Financial Industry Regulatory Authority 
(``FINRA''), on behalf of the Exchange, which are designed to detect 
violations of Exchange rules and applicable federal securities 
laws.\19\ FINRA, on behalf of the Exchange, will communicate as needed 
regarding trading in the Commodities Futures, ETFs, ETNs and Commodity 
Pools held by a Fund or a Fund's Subsidiary, as applicable, with other 
markets and other entities that are members of the ISG.\20\ FINRA and 
the Exchange each may obtain trading information regarding trading in 
the Commodities Futures, ETFs, ETNs and Commodity Pool held by such 
Fund or its Subsidiary, as applicable, from such markets and other 
entities (as long as, for the Exchange, such markets and other entities 
are members of ISG or have in place a comprehensive surveillance 
sharing agreement with the Exchange). FINRA and the Exchange will 
similarly be able to obtain information regarding the spot market 
prices of the commodities underlying any commodity-linked notes, OTC 
Swaps, or forward contracts.
---------------------------------------------------------------------------

    \19\ FINRA surveils trading on the Exchange pursuant to a 
regulatory services agreement. The Exchange is responsible for 
FINRA's performance under this regulatory services agreement.
    \20\ For a list of the current members of ISG, see 
www.isgportal.org. The Exchange notes that not all components of the 
Disclosed Portfolio may trade on markets that are members of ISG or 
with which the Exchange has in place a comprehensive surveillance 
sharing agreement.
---------------------------------------------------------------------------

    In addition to the foregoing: (i) FINRA, on behalf of the Exchange, 
will communicate as needed regarding trading information it can obtain 
relating to exchange-traded or centrally-cleared equity securities and 
assets held by a Fund or its Subsidiary, as applicable, which include 
exchange-traded Commodity-Related Assets and exchange-traded or 
centrally-cleared Commodity-Linked Instruments, with other markets and 
other entities that are members of the ISG; (ii) FINRA may obtain 
trading information regarding trading in exchange-traded equity 
securities and other assets held by each Fund and each Subsidiary, as 
applicable, from such markets and other entities; and (iii) the 
Exchange may obtain information regarding trading in exchange-traded 
equity securities and other assets held by each Fund and each 
Subsidiary from such markets and other entities (as long as such 
markets and other entities are members of ISG or have in place a 
comprehensive surveillance sharing agreement with the Exchange). The 
Exchange has a general policy prohibiting the distribution of material, 
non-public information by its employees.
    Second, the Prior Release states that all of the exchange-traded 
equity securities held by a Fund will be traded in a principal trading 
market that is a member of the ISG or a market with which the Exchange 
has a comprehensive surveillance sharing agreement, and that with 
respect to Commodities Futures held indirectly through a Subsidiary, 
not more than 10% of the weight of such Commodities Futures, in the 
aggregate, shall consist of instruments whose principal trading market 
is not a member of the ISG or a market with which the Exchange does not 
have a comprehensive surveillance sharing agreement. The Funds now 
clarify that Options and commodity index futures will be subject to the 
same restrictions as Commodities Futures, and that Options and 
commodity index futures will be considered in the aggregate with 
Commodities Futures. Therefore, with respect to Commodities Futures, 
commodity index futures and Options, not more than 10% of the weight 
\21\ of such Commodities Futures, commodity index futures, and Options, 
in the aggregate, shall consist of instruments whose principal trading 
market is not a member of the ISG or a market with which the Exchange 
does not have a comprehensive surveillance sharing agreement. 
Additionally, not more than 10% of each Fund's investments in Equity 
Securities, closed-end funds, ETFs, ETNs,

[[Page 29363]]

Commodity Pools and non-U.S. investment companies (in the aggregate) 
will be invested in securities that trade in markets that are not 
members of the ISG or that are not parties to a comprehensive 
surveillance sharing agreement with the Exchange.
---------------------------------------------------------------------------

    \21\ To be calculated as the value of the contract divided by 
the total absolute notional value of a Subsidiary's instruments.
---------------------------------------------------------------------------

    Beyond the changes described above, there are no changes to any 
other information included in the Prior Release, and all other facts 
presented and representations made in the Prior Release remain true and 
in effect. The Trust confirms that each Fund will continue to comply 
with all initial and continued listing requirements under Nasdaq Rule 
5735.
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 Exchange believes that the proposed rule change is designed to 
prevent fraudulent and manipulative acts and practices in that the 
Shares will continue to be listed and traded on the Exchange pursuant 
to the initial and continued listing criteria in Nasdaq Rule 5735. The 
Exchange represents that trading in the Shares will be subject to the 
existing trading surveillances, administered by both Nasdaq and FINRA, 
on behalf of the Exchange, which are designed to detect violations of 
Exchange rules and applicable federal securities laws and are adequate 
to properly monitor trading in the Shares in all trading sessions. In 
addition, paragraph (g) of Nasdaq Rule 5735 further requires that 
personnel who make decisions on the open-end fund's portfolio 
composition must be subject to procedures designed to prevent the use 
and dissemination of material, non-public information regarding the 
open-end fund's portfolio. Each Fund's and its Subsidiary's investments 
will be consistent with such Fund's investment objective.
    FINRA may obtain information via ISG from other exchanges that are 
members of ISG. In addition, the Exchange may obtain information 
regarding trading in the Shares, Equity Securities, Commodities 
Futures, ETFs, ETNs, and Commodity Pools held by each Fund or its 
Subsidiary, as applicable, 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. In addition, as noted in the Prior Release, the 
Exchange may obtain information from TRACE, which is the FINRA-
developed vehicle that facilitates mandatory reporting of over-the-
counter secondary market transactions in eligible fixed income 
securities. With respect to Commodities Futures held indirectly through 
a Subsidiary, not more than 10% of the weight of such Commodities 
Futures, in the aggregate, shall consist of instruments whose principal 
trading market is not a member of ISG or a market with which the 
Exchange does not have a comprehensive surveillance sharing agreement.
    Options and commodity index futures will be subject to the same 
restrictions as Commodities Futures, and Options and commodity index 
futures will be considered in the aggregate with Commodities Futures. 
Therefore, with respect to Commodities Futures, commodity index futures 
and Options, not more than 10% of the weight \22\ of such Commodities 
Futures, commodity index futures, and Options, in the aggregate, shall 
consist of instruments whose principal trading market is not a member 
of the ISG or a market with which the Exchange does not have a 
comprehensive surveillance sharing agreement. Additionally, not more 
than 10% of each Fund's investments in Equity Securities, closed-end 
funds, ETFs, ETNs, Commodity Pools and non-U.S. investment companies 
(in the aggregate) will be invested in securities that trade in markets 
that are not members of the ISG or that are not parties to a 
comprehensive surveillance sharing agreement with the Exchange.
---------------------------------------------------------------------------

    \22\ To be calculated as the value of the contract divided by 
the total absolute notional value of a Subsidiary's instruments.
---------------------------------------------------------------------------

    The proposed rule change is designed to promote just and equitable 
principles of trade and to protect investors and the public interest in 
that the Exchange will obtain a representation from the issuer of the 
Shares that the NAV per Share will be calculated daily and that the NAV 
and the Disclosed Portfolio will be made available to all market 
participants at the same time. In addition, a large amount of 
information will be publicly available regarding the Funds and the 
Shares, thereby promoting market transparency. Moreover, as noted in 
the Prior Release, the Intraday Indicative Value, available on the 
NASDAQ OMX Information LLC proprietary index data service will be 
widely disseminated by one or more major market data vendors at least 
every 15 seconds during the Regular Market Session. On each business 
day, before commencement of trading in Shares in the Regular Market 
Session on the Exchange, each Fund will disclose on its Web site the 
Disclosed Portfolio of the Fund and the Subsidiary that will form the 
basis for such Fund's calculation of NAV at the end of the business 
day. Information regarding market price and trading volume of the 
Shares will be continually available on a real-time basis throughout 
the day on brokers' computer screens and other electronic services, and 
quotation and last sale information for the Shares will be available 
via Nasdaq proprietary quote and trade services, as well as in 
accordance with the Unlisted Trading Privileges and the Consolidated 
Tape Association plans for the Shares. Intra-day price information on 
the exchange-traded assets held by a Fund and its Subsidiary, including 
the Equity Securities, ETFs, exchange traded investment companies 
(including closed-end funds) and exchange-traded futures contracts on 
commodity indexes will be available via the quote and trade service of 
the respective exchanges on which they primarily trade, as well as in 
accordance with the Unlisted Trading Privileges and the Consolidated 
Tape Association plans. Quotation and last sale information for any 
underlying Commodities will be available via the quote and trade 
service of their respective primary exchanges. Intra-day price 
information on the exchange-traded assets held by the Fund and the 
Subsidiary, including the Equity Securities, ETNs, Options, exchange-
traded investment companies (including closed-end funds) and exchange-
traded futures contracts on commodity indices will be available via the 
quote and trade service of the respective exchanges on which they 
principally trade. Additionally, price information on Swaps, commodity-
linked notes, Forwards and non-exchange traded investment companies 
will be available from major broker-dealer firms or through 
subscription services, such as Bloomberg, Markit and Thomson Reuters, 
which can be accessed by entities that have signed authorized 
participant agreements with a Fund and other investors.
    As noted above and in the Prior Release, the Funds' Web site will 
include a form of the prospectus for each Fund and additional data 
relating to NAV and other applicable

[[Page 29364]]

quantitative information. Moreover, prior to the commencement of 
trading, the Exchange will inform its members in an Information 
Circular of the special characteristics and risks associated with 
trading the Shares. Trading in Shares of a Fund will be halted under 
the conditions specified in Nasdaq Rules 4120 and 4121 or because of 
market conditions or for reasons that, in the view of the Exchange, 
make trading in the Shares inadvisable, and trading in the Shares will 
be subject to Nasdaq Rule 5735(d)(2)(D), which sets forth circumstances 
under which Shares of a Fund may be halted. In addition, as noted 
above, investors will have ready access to information regarding each 
Fund's holdings, the Intraday Indicative Value, the Disclosed 
Portfolio, and quotation and last sale information for the Shares.
    The proposed rule change is designed to perfect the mechanism of a 
free and open market and, in general, to protect investors and the 
public interest in that it will facilitate the continued listing and 
trading of additional types of actively-managed exchange-traded 
products that will enhance competition among market participants, to 
the benefit of investors and the marketplace.
    For the above reasons, Nasdaq believes the proposed rule change is 
consistent with the requirements of Section 6(b)(5) of the Act.

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

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. The instruments and asset 
types proposed to be added by this rule change, in connection with 
those approved in the Prior Order, are consistent with the instruments 
and asset types utilized by other actively managed funds in the 
marketplace. The investment strategies utilized by the Funds, however, 
remain different from other issues of Managed Fund Shares traded on the 
Exchange, and therefore provide investors with another choice of 
Managed Fund Shares. Moreover, the Exchange believes that the proposed 
changes will enhance competition among existing issues of Managed Fund 
Shares and will facilitate the trading of additional types of actively-
managed exchange-traded funds, all to the benefit of investors and the 
marketplace.

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

    Written comments were neither solicited nor received.

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

    Within 45 days of the date of publication of this notice in the 
Federal Register or within such longer period up to 90 days (i) as the 
Commission may designate if it finds such longer period to be 
appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will: 
(a) By order approve or disapprove such proposed rule change; or (b) 
institute proceedings to determine whether the proposed rule change 
should be disapproved.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-NASDAQ-2015-049 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields, 
Secretary, Securities and Exchange Commission, Station Place, 100 F 
Street NE., Washington, DC 20549.

All submissions should refer to File Number SR-NASDAQ-2015-049. This 
file number should be included on the subject line if email is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site 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 Web site viewing and printing in 
the Commission's Public Reference Room, 100 F Street NE., Washington, 
DC 20549, on official business days between the hours of 10:00 a.m. and 
3:00 p.m. Copies of the filing also will be available for inspection 
and copying at the principal office of Nasdaq. All comments received 
will be posted without change; the Commission does not edit personal 
identifying information from submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-NASDAQ-2015-049 and should be submitted 
on or before June 11, 2015.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\23\
---------------------------------------------------------------------------

    \23\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-12284 Filed 5-20-15; 8:45 am]
BILLING CODE 8011-01-P