65376 Federal Register / Vol. 83, No. 244 / Thursday, December 20, 2018 / Notices 

12 17 CFR 200.30–3(a)(12). 

1Applicants request that the order apply to the 

Hoya Capital Housing 100 Index ETF and any 

additional series of the Trust and any other openend management investment company or series 

thereof (each, included in the term ‘‘Fund’’), each 

of which will operate as an ETF and will track a 

specified index comprised of domestic and/or 

foreign equity securities and/or domestic and/or 

foreign fixed income securities (each, an 

‘‘Underlying Index’’). Each Fund will (a) be advised 

by the Initial Adviser or an entity controlling, 

controlled by, or under common control with the 

Initial Adviser (each such entity and any successor 

thereto, an ‘‘Adviser’’) and (b) comply with the 

terms and conditions of the application. For 

purposes of the requested order, the term 

‘‘successor’’ is limited to an entity or entities that 

result from a reorganization into another 

jurisdiction or a change in the type of business 

organization. 

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–2018–101. 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–2018–101 and 

should be submitted on or before 

January 10, 2019. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Eduardo A. Aleman, 

Deputy Secretary. 

[FR Doc. 2018–27511 Filed 12–19–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Investment Company Act Release No. 

33325; 812–14969 

Hoya Capital Real Estate, LLC, et al. 

December 17, 2018. 

AGENCY: Securities and Exchange 

Commission (‘‘Commission’’). 

ACTION: Notice. 

Notice of an application for an order 

under section 6(c) of the Investment 

Company Act of 1940 (the ‘‘Act’’) for an 

exemption from sections 2(a)(32), 

5(a)(1), 22(d), and 22(e) of the Act and 

rule 22c–1 under the Act, under 

sections 6(c) and 17(b) of the Act for an 

exemption from sections 17(a)(1) and 

17(a)(2) of the Act, and under section 

12(d)(1)(J) for an exemption from 

sections 12(d)(1)(A) and 12(d)(1)(B) of 

the Act. The requested order would 

permit (a) index-based series of certain 

open-end management investment 

companies (‘‘Funds’’) to issue shares 

redeemable in large aggregations only 

(‘‘Creation Units’’); (b) secondary market 

transactions in Fund shares to occur at 

negotiated market prices rather than at 

net asset value (‘‘NAV’’); (c) certain 

Funds to pay redemption proceeds, 

under certain circumstances, more than 

seven days after the tender of shares for 

redemption; (d) certain affiliated 

persons of a Fund to deposit securities 

into, and receive securities from, the 

Fund in connection with the purchase 

and redemption of Creation Units; and 

(e) certain registered management 

investment companies and unit 

investment trusts outside of the same 

group of investment companies as the 

Funds (‘‘Funds of Funds’’) to acquire 

shares of the Funds. 

APPLICANTS: Hoya Capital Real Estate, 

LLC (the ‘‘Initial Adviser’’), a 

Connecticut limited liability company 

that is registered as an investment 

adviser under the Investment Advisers 

Act of 1940, ETF Series Solutions (the 

‘‘Trust’’), a Delaware statutory trust 

registered under the Act as an open-end 

management investment company with 

multiple series, and Quasar Distributors, 

LLC, (the ‘‘Distributor’’), a Delaware 

limited liability company and brokerdealer registered under the Securities 

Exchange Act of 1934 (‘‘Exchange Act’’). 

FILING DATES: The application was filed 

on October 29, 2018. 

HEARING OR NOTIFICATION OF HEARING: An 

order granting the requested relief will 

be issued unless the Commission orders 

a hearing. Interested persons may 

request a hearing by writing to the 

Commission’s Secretary and serving 

applicants with a copy of the request, 

personally or by mail. Hearing requests 

should be received by the Commission 

by 5:30 p.m. on January 11, 2019, and 

should be accompanied by proof of 

service on applicants, in the form of an 

affidavit, or for lawyers, a certificate of 

service. Pursuant to rule 0–5 under the 

Act, hearing requests should state the 

nature of the writer’s interest, any facts 

bearing upon the desirability of a 

hearing on the matter, the reason for the 

request, and the issues contested. 

Persons who wish to be notified of a 

hearing may request notification by 

writing to the Commission’s Secretary. 

ADDRESSES: Secretary, Securities and 

Exchange Commission, 100 F Street NE, 

Washington, DC 20549–1090; 

Applicants: Hoya Capital Real Estate, 

LLC, 137 Rowayton Avenue, Suite 430, 

Rowayton, Connecticut 06853; ETF 

Series Solutions, 615 East Michigan 

Street, Milwaukee, Wisconsin 53202; 

Quasar Distributors, LLC, 777 East 

Wisconsin Avenue, 6th Floor, 

Milwaukee, Wisconsin 53202. 

FOR FURTHER INFORMATION CONTACT: 

Deepak T. Pai, Senior Counsel, at (202) 

551–6876, or Andrea Ottomanelli 

Magovern, Branch Chief, at (202) 551– 

6821 (Division of Investment 

Management, Chief Counsel’s Office). 

SUPPLEMENTARY INFORMATION: The 

following is a summary of the 

application. The complete application 

may be obtained via the Commission’s 

website by searching for the file 

number, or for an applicant using the 

Company name box, at http://

www.sec.gov/search/search.htm or by 

calling (202) 551–8090. 

Summary of the Application 

1. Applicants request an order that 

would allow Funds to operate as index 

exchange traded funds (‘‘ETFs’’).1 Fund 

shares will be purchased and redeemed 

at their NAV in Creation Units only. All 

orders to purchase Creation Units and 

all redemption requests will be placed 

by or through an ‘‘Authorized 

Participant,’’ which will have signed a 

participant agreement with the 

Distributor. Shares will be listed and 

traded individually on a national 

securities exchange, where share prices 

will be based on the current bid/offer 

market. Any order granting the 

requested relief would be subject to the 


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Federal Register / Vol. 83, No. 244 / Thursday, December 20, 2018 / Notices 65377 

2Each Self-Indexing Fund will post on its website 

the identities and quantities of the investment 

positions that will form the basis for the Fund’s 

calculation of its NAV at the end of the day. 

Applicants believe that requiring Self-Indexing 

Funds to maintain full portfolio transparency will 

help address, together with other protections, 

conflicts of interest with respect to such Funds. 

3The requested relief would apply to direct sales 

of shares in Creation Units by a Fund to a Fund of 

Funds and redemptions of those shares. Applicants 

are not seeking relief from section 17(a) for, and the 

requested relief will not apply to, transactions 

where a Fund could be deemed an Affiliated 

Person, or a Second-Tier Affiliate, of a Fund of 

Funds because an Adviser or an entity controlling, 

controlled by or under common control with an 

Adviser provides investment advisory services to 

that Fund of Funds. 

terms and conditions stated in the 

application. 

2. Each Fund will hold investment 

positions selected to correspond 

generally to the performance of an 

Underlying Index. In the case of SelfIndexing Funds, an affiliated person, as 

defined in section 2(a)(3) of the Act 

(‘‘Affiliated Person’’), or an affiliated 

person of an Affiliated Person (‘‘SecondTier Affiliate’’), of the Trust or a Fund, 

of the Adviser, of any sub-adviser to or 

promoter of a Fund, or of the Distributor 

will compile, create, sponsor or 

maintain the Underlying Index.2

3. Shares will be purchased and 

redeemed in Creation Units and 

generally on an in-kind basis. Except 

where the purchase or redemption will 

include cash under the limited 

circumstances specified in the 

application, purchasers will be required 

to purchase Creation Units by 

depositing specified instruments 

(‘‘Deposit Instruments’’), and 

shareholders redeeming their shares 

will receive specified instruments 

(‘‘Redemption Instruments’’). The 

Deposit Instruments and the 

Redemption Instruments will each 

correspond pro rata to the positions in 

the Fund’s portfolio (including cash 

positions) except as specified in the 

application. 

4. Because shares will not be 

individually redeemable, applicants 

request an exemption from section 

5(a)(1) and section 2(a)(32) of the Act 

that would permit the Funds to register 

as open-end management investment 

companies and issue shares that are 

redeemable in Creation Units only. 

5. Applicants also request an 

exemption from section 22(d) of the Act 

and rule 22c–1 under the Act as 

secondary market trading in shares will 

take place at negotiated prices, not at a 

current offering price described in a 

Fund’s prospectus, and not at a price 

based on NAV. Applicants state that (a) 

secondary market trading in shares does 

not involve a Fund as a party and will 

not result in dilution of an investment 

in shares, and (b) to the extent different 

prices exist during a given trading day, 

or from day to day, such variances occur 

as a result of third-party market forces, 

such as supply and demand. Therefore, 

applicants assert that secondary market 

transactions in shares will not lead to 

discrimination or preferential treatment 

among purchasers. Finally, applicants 

represent that share market prices will 

be disciplined by arbitrage 

opportunities, which should prevent 

shares from trading at a material 

discount or premium from NAV. 

6. With respect to Funds that effect 

creations and redemptions of Creation 

Units in kind and that are based on 

certain Underlying Indexes that include 

foreign securities, applicants request 

relief from the requirement imposed by 

section 22(e) in order to allow such 

Funds to pay redemption proceeds 

within fifteen calendar days following 

the tender of Creation Units for 

redemption. Applicants assert that the 

requested relief would not be 

inconsistent with the spirit and intent of 

section 22(e) to prevent unreasonable, 

undisclosed or unforeseen delays in the 

actual payment of redemption proceeds. 

7. Applicants request an exemption to 

permit Funds of Funds to acquire Fund 

shares beyond the limits of section 

12(d)(1)(A) of the Act; and the Funds, 

and any principal underwriter for the 

Funds, and/or any broker or dealer 

registered under the Exchange Act, to 

sell shares to Funds of Funds beyond 

the limits of section 12(d)(1)(B) of the 

Act. The application’s terms and 

conditions are designed to, among other 

things, help prevent any potential (i) 

undue influence over a Fund through 

control or voting power, or in 

connection with certain services, 

transactions, and underwritings, (ii) 

excessive layering of fees, and (iii) 

overly complex fund structures, which 

are the concerns underlying the limits 

in sections 12(d)(1)(A) and (B) of the 

Act. 

8. Applicants request an exemption 

from sections 17(a)(1) and 17(a)(2) of the 

Act to permit persons that are Affiliated 

Persons, or Second-Tier Affiliates, of the 

Funds, solely by virtue of certain 

ownership interests, to effectuate 

purchases and redemptions in-kind. The 

deposit procedures for in-kind 

purchases of Creation Units and the 

redemption procedures for in-kind 

redemptions of Creation Units will be 

the same for all purchases and 

redemptions, and Deposit Instruments 

and Redemption Instruments will be 

valued in the same manner as those 

investment positions currently held by 

the Funds. Applicants also seek relief 

from the prohibitions on affiliated 

transactions in section 17(a) to permit a 

Fund to sell its shares to and redeem its 

shares from a Fund of Funds, and to 

engage in the accompanying in-kind 

transactions with the Fund of Funds.3

The purchase of Creation Units by a 

Fund of Funds directly from a Fund will 

be accomplished in accordance with the 

policies of the Fund of Funds and will 

be based on the NAVs of the Funds. 

9. Section 6(c) of the Act permits the 

Commission to exempt any persons or 

transactions from any provision of the 

Act if such exemption is necessary or 

appropriate in the public interest and 

consistent with the protection of 

investors and the purposes fairly 

intended by the policy and provisions of 

the Act. Section 12(d)(1)(J) of the Act 

provides that the Commission may 

exempt any person, security, or 

transaction, or any class or classes of 

persons, securities, or transactions, from 

any provision of section 12(d)(1) if the 

exemption is consistent with the public 

interest and the protection of investors. 

Section 17(b) of the Act authorizes the 

Commission to grant an order 

permitting a transaction otherwise 

prohibited by section 17(a) if it finds 

that (a) the terms of the proposed 

transaction are fair and reasonable and 

do not involve overreaching on the part 

of any person concerned; (b) the 

proposed transaction is consistent with 

the policies of each registered 

investment company involved; and (c) 

the proposed transaction is consistent 

with the general purposes of the Act. 

For the Commission, by the Division 

of Investment Management, under 

delegated authority. 

Eduardo A. Aleman, 

Deputy Secretary. 

[FR Doc. 2018–27576 Filed 12–19–18; 8:45 am] 

BILLING CODE 8011–01–P 


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