[Federal Register Volume 84, Number 131 (Tuesday, July 9, 2019)]
[Notices]
[Pages 32792-32794]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-14489]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-86278; File No. SR-NASDAQ-2019-052]
Self-Regulatory Organizations; The Nasdaq Stock Market LLC;
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change
Regarding the Listing and Trading the Shares of the AlphaMark Actively
Managed Small Cap ETF
July 2, 2019.
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 June 19, 2019, 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 proposes to change the rule for listing and trading
the shares of the AlphaMark Actively Managed Small Cap ETF (the
``Fund'') of ETF Series Solutions (the ``Trust''). Currently, the
shares are listed pursuant to an SEC
[[Page 32793]]
approval order, but will now be listed pursuant to the generic listing
standards under Nasdaq Rule 5735.
The text of the proposed rule change is available on the Exchange's
website at http://nasdaq.cchwallstreet.com, at the principal office of
the Exchange, 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, 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 proposes to change the rule for listing and trading
the shares of the Fund. Currently, the shares are listed pursuant to an
SEC approval order,\3\ but will now be listed pursuant to the generic
listing standards under Nasdaq Rule 5735.
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\3\ See Securities Exchange Act Release No. 74377 (Feb. 25,
2015), 80 FR 11502 (Mar. 3, 2015) (SR-NASDAQ-2015-013) (order
approving the listing and trading on the Exchange of the AlphaMark
Actively Managed Small Cap ETF) (the ``Filing'').
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The Shares began trading on the Exchange on April 21, 2015 after
the Commission issued an order approving the listing and trading of the
Shares on the Exchange.\4\ At that time, the Exchange was required to
file separate proposals under Section 19(b) of the Act before the
listing of any funds listed pursuant to Nasdaq Rule 5735 (``Managed
Fund Shares'') and, as provided in the Filing, the Exchange will
commence delisting procedures under the Nasdaq Rule 5800 series for a
Fund where the Fund is not in compliance with the applicable listing
requirements.\5\ On September 23, 2016, the Commission approved generic
listing standards for Managed Fund Shares that would allow shares of a
series of Managed Fund Shares to list and trade on the Exchange
pursuant to Rule 19b-4(e) so long as the components of that series of
Managed Fund Shares meet the criteria in Nasdaq Rule 5735(b)(1) on an
initial and continual basis.\6\
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\4\ Id.
\5\ As provided in the Filing, all statements and
representations made in the Filing regarding (a) the description of
the portfolio, (b) limitations on portfolio holdings or reference
assets, or (c) the applicability of Exchange rules and surveillance
procedures shall constitute continued listing requirements for
listing the Shares on the Exchange.
\6\ See Securities Exchange Act Release No. 78918 (Sept. 23,
2016), 81 FR 67033 (Sept. 29, 2016) (SR-NASDAQ-2016-104).
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The Exchange now proposes to list and trade the Shares pursuant to
Rule 19b-4(e) of the Act as provided in Nasdaq Rule 5735(b)(1) and, as
such, the components of the Fund will be required to comply with the
requirements of that rule on an initial and continual basis. The
Exchange has confirmed that the Fund's portfolio currently complies
with the requirements of Nasdaq Rule 5735(b)(1).\7\ The Exchange notes
that if the Fund was not already listed, it could be listed pursuant to
Rule 19b-4(e) without the submission of a rule filing.
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\7\ As provided in Nasdaq Rule 5735(b)(1), the Fund must also
comply with such requirements on a continual basis and any failure
to meet such requirements will result in the Exchange initiating
delisting proceedings for the Fund pursuant to the Nasdaq Rule 5800
series.
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2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\8\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\9\ in particular, in that it is designed to prevent
fraudulent and manipulative acts and practices, to promote just and
equitable principles of trade, to remove impediments to, and perfect
the mechanism of a free and open market and, in general, to protect
investors and the public interest.
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\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(5).
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Specifically, the Exchange believes that the proposal is designed
to prevent fraudulent and manipulative acts and practices, to promote
just and equitable principles of trade, to remove impediments to, and
perfect the mechanism of a free and open market and, in general, to
protect investors and the public interest because the sole change in
the proposal is to have the Fund listed and traded on the Exchange
pursuant to the generic listing standards under Nasdaq Rule 5735. As
noted above, if the Fund was not already listed, it would be able to be
listed pursuant to Rule 19b-4(e) without the submission of a rule
filing because the SEC has approved rules on the Exchange related to
generic listing standards for Managed Fund Shares on the basis that the
generic listing criteria is consistent with the Act and, in particular,
``is consistent with Section 6(b)(5) of the Act,\10\ which requires,
among other things, that the Exchange's rules be designed to prevent
fraudulent and manipulative acts and practices, to promote just and
equitable principles of trade, to remove impediments to and perfect the
mechanism of a free and open market and a national market system, and,
in general, to protect investors and the public interest.'' \11\
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\10\ 15 U.S.C. 78f(b)(5).
\11\ See supra note 8[sic].
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Therefore, the Exchange believes that the proposal is designed to
prevent fraudulent and manipulative acts and practices, to promote just
and equitable principles of trade, to remove impediments to and perfect
the mechanism of a free and open market and a national market system,
and, in general, to protect investors and the public interest.
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 not necessary or appropriate in
furtherance of the purposes of the Act. The Exchange believes that the
proposal to allow the Fund to be listed on the Exchange pursuant to the
generic listing standards under Nasdaq Rule 5735(b)(1) will have no
impact on competition.
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 \12\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\13\
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\12\ 15 U.S.C. 78s(b)(3)(A)(iii).
\13\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file 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
[[Page 32794]]
Act \14\ normally does not become operative for 30 days after the date
of its filing. However, Rule 19b-4(f)(6)(iii) \15\ 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 proposed rule change may become effective and operative
immediately upon filing. The Exchange states that waiver of the 30-day
operative delay would streamline and simplify the listing rule
applicable to the Shares and thereby reduce the Fund's compliance
costs. The Exchange further states that, if the Shares were not
currently listed, they would be eligible for immediate listing pursuant
to Nasdaq Rule 5735(b)(1) and the Exchange asserts that there is no
reason the Shares should be treated differently because they are
already listed on the Exchange. For those reasons, the Exchange
believes that waiver of the operative delay would be consistent with
the protection of investors and the public interest. The Commission
believes that waiver of the 30-day operative delay is consistent with
the protection of investors and the public interest. Therefore, the
Commission hereby waives the 30-day operative delay and designates the
proposed rule change operative upon filing.\16\
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\14\ 17 CFR 240.19b-4(f)(6).
\15\ 17 CFR 240.19b-4(f)(6)(iii).
\16\ For purposes only of waiving the 30-day operative delay,
the Commission also has 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 the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-NASDAQ-2019-052 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-2019-052. 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-2019-052 and should be submitted
on or before July 30, 2019.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
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\17\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-14489 Filed 7-8-19; 8:45 am]
BILLING CODE 8011-01-P