8972 Federal Register / Vol. 86, No. 26 / Wednesday, February 10, 2021 / Notices 

17Section 19(b)(2) of the Act, as amended by the 

Securities Acts Amendments of 1975, Public Law 

94–29, 89 Stat. 97 (1975), grants the Commission 

flexibility to determine what type of proceeding— 

either oral or notice and opportunity for written 

comments—is appropriate for consideration of a 

particular proposal by a self-regulatory 

organization. See Securities Acts Amendments of 

1975, Report of the Senate Committee on Banking, 

Housing and Urban Affairs to Accompany S. 249, 

S. Rep. No. 75, 94th Cong., 1st Sess. 30 (1975). 

18 17 CFR 200.30–3(a)(12); 17 CFR 200.30– 

3(a)(57). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3The Commission approved Nasdaq Rule 5750 in 

Securities Exchange Act Release No. 89110 (June 

22, 2020), 85 FR 38461 (June 26, 2020) (SR– 

NASDAQ–2020–032). 

4The Commission has issued an order, upon 

which the Trust may rely, granting certain 

exemptive relief under the 1940 Act. See 

Investment Company Act Release No. 34181 (Jan. 

21, 2021) (‘‘Exemptive Order’’). 

5The Registration Statement is available on the 

Commission’s website at https://www.sec.gov/ 

Archives/edgar/data/1414040/ 

000139834420019856/fp0058104_485apos.htm. 

disapproval that would be facilitated by 

an oral presentation of views, data, and 

arguments, the Commission will 

consider, pursuant to Rule 19b–4, any 

request for an opportunity to make an 

oral presentation.17

Interested persons are invited to 

submit written data, views, and 

arguments regarding whether the 

Amended Proposed Rule Change should 

be approved or disapproved by February 

24, 2021. Any person who wishes to file 

a rebuttal to any other person’s 

submission must file that rebuttal by 

March 8, 2021. 

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 rule-comments@

sec.gov. Please include File No. SR– 

FINRA–2020–038 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to File No. 

SR–FINRA–2020–038. 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 Amended Proposed 

Rule Change that are filed with the 

Commission, and all written 

communications relating to the 

Amended Proposed Rule Change 

between the Commission and any 

person, other than those that may be 

withheld from the public in accordance 

with the provisions of 5 U.S.C. 552, will 

be available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549, on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of such 

filing also will be available for 

inspection and copying at the principal 

office of FINRA. 

All comments received will be posted 

without change. Persons submitting 

comments are cautioned that we do not 

redact or edit personal identifying 

information from comment submissions. 

You should submit only information 

that you wish to make available 

publicly. 

All submissions should refer to File 

No. SR–FINRA–2020–038 and should be 

submitted on or before February 24, 

2021. If comments are received, any 

rebuttal comments should be submitted 

on or before March 8, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.18

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–02715 Filed 2–9–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–91062; File No. SR– 

NASDAQ–2021–005] 

Self-Regulatory Organizations; The 

Nasdaq Stock Market LLC; 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 

February 4, 2021. 

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 January 

25, 2021, 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. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes a rule change 

relating to the ALPS Active REIT ETF 

(the ‘‘Fund’’) of ALPS ETF Trust (the 

‘‘Trust’’), 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.’’ 

(b) Not applicable. [sic] 

The text of the proposed rule change 

is available on the Exchange’s website at 

https://listingcenter.nasdaq.com/ 

rulebook/nasdaq/rules, 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 Commission has approved the 

listing and trading of Proxy Portfolio 

Shares under Nasdaq Rule 5750, which 

governs the listing and trading of Proxy 

Portfolio Shares on the Exchange.3

The Fund is an actively-managed 

exchange-traded fund (‘‘ETF’’). The 

Shares are offered by the Trust, which 

was established as a Delaware statutory 

trust on September 13, 2007.4 The Trust, 

which is registered with the 

Commission as an investment company 

under the Investment Company Act of 

1940 (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 Trust. ALPS 

Advisors, Inc. (‘‘Adviser’’) is the 

investment adviser to the Fund. ALPS 

Portfolio Solutions Distributor, Inc. is 

the principal underwriter and 

distributor of the Fund’s Shares. ALPS 

Fund Services, Inc. acts as the 

administrator and provides fund 

Federal Register / Vol. 86, No. 26 / Wednesday, February 10, 2021 / Notices 8973 

6The 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 

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 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. 

7The 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. 

8The 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. 

9An 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 and its related personnel are 

subject to the provisions of Rule 204A–1 under the 

Advisers Act relating to codes of ethics. This Rule 

requires investment advisers to adopt a code of 

ethics that reflects the fiduciary nature of the 

relationship to clients as well as compliance with 

other applicable securities laws. Accordingly, 

procedures designed to prevent the communication 

and misuse of non-public information by an 

investment adviser must be consistent with Rule 

204A–1 under the Advisers Act. In addition, Rule 

206(4)-7 under the Advisers Act makes it unlawful 

for an investment adviser to provide investment 

advice to clients unless such investment adviser has 

(i) adopted and implemented written policies and 

procedures reasonably designed to prevent 

violation, by the investment adviser and its 

supervised persons, of the Advisers Act and the 

Commission rules adopted thereunder; (ii) 

implemented, at a minimum, an annual review 

regarding the adequacy of the policies and 

procedures established pursuant to subparagraph (i) 

above and the effectiveness of their 

implementation; and (iii) designated an individual 

(who is a supervised person) responsible for 

administering the policies and procedures adopted 

under subparagraph (i) above. 

10The 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; 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. 

11The 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 any subadviser believes securities in which such Fund 

normally invests have elevated risks due to political 

or economic factors and in other extraordinary 

circumstances. 

12See supra note 4. 

accounting services to the Fund. State 

Street Bank and Trust Company acts as 

the custodian and transfer agent to the 

Fund. 

Nasdaq Rule 5750(b)(5) provides that 

if the investment adviser to the 

investment company 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 brokerdealer affiliate, as applicable, with 

respect to access to information 

concerning the composition and/or 

changes to the Fund Portfolio 7 and/or 

the Proxy Basket.8 In addition, Nasdaq 

Rule 5750(b)(5) further requires that any 

person related to the investment adviser 

or Investment Company who makes 

decisions pertaining to the Investment 

Company’s Fund Portfolio and/or the 

Proxy Basket or has access to nonpublic 

information regarding the Fund 

Portfolio and/or Proxy Basket or 

changes thereto must be subject to 

procedures designed to prevent the use 

and dissemination of material nonpublic information regarding the Fund 

Portfolio or the Proxy Basket or changes 

thereto.9

In addition, any person or entity, 

including a custodian, Reporting 

Authority,10 distributor, or 

administrator, who has access to 

nonpublic information regarding the 

Fund Portfolio or the Proxy Basket or 

changes thereto, must be subject to 

procedures designed to prevent the use 

and dissemination of material 

nonpublic information regarding the 

applicable Fund Portfolio or the Proxy 

Basket 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 

and/or changes to such Fund Portfolio 

or Proxy Basket. 

In the event (a) the Adviser or any 

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 another 

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 and/or 

changes to the Fund’s Portfolio and/or 

the Proxy Basket and will be subject to 

procedures designed to prevent the use 

and dissemination of material nonpublic information regarding the Fund’s 

Portfolio and/or the Proxy Basket. 

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 total return through 

dividends and capital appreciation. 

Under normal market conditions,11 the 

Fund will seek to achieve its investment 

objective by investing at least 80% of its 

net assets in exchange-traded equity 

securities of real estate investment 

trusts. 

Under the terms of the Exemptive 

Order,12 the Fund’s investments are 

limited to the following: ETFs, 

exchange-traded notes, exchange listed 

common stocks (excluding ‘‘penny 

stocks’’ as defined in Rule 3a51–1 under 

the Act), exchange-traded preferred 

stocks, exchange-traded American 

Depositary Receipts (ADRs), exchangetraded real estate investment trusts, 

exchange-traded commodity pools, 

exchange-traded metals trusts, and 

exchange-traded currency trusts, in each 

case that are traded on a U.S. securities 

exchange contemporaneously with the 

Fund Shares; exchange-traded futures 

that trade contemporaneously with the 

Fund Shares that are U.S. listed futures 

contracts where the future contract’s 

reference asset is an asset that the Fund 

could invest in directly, or in the case 

of an index future, is based on an index 

of a type of asset that the Fund could 

invest in directly; common stocks listed 

on a foreign exchange that trade on such 

exchange contemporaneously with the 

Fund Shares; and cash and cash 

equivalents (which are short-term U.S. 

Treasury securities, government money 

market funds, and repurchase 

agreements). The Fund’s holdings will 

conform to the permissible investments 

8974 Federal Register / Vol. 86, No. 26 / Wednesday, February 10, 2021 / Notices 

13See Nasdaq Rule 5735. 

as set forth in the Exemptive Order and 

the holdings will be consistent with all 

requirements in the 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. 

Surveillance 

The Exchange believes that its 

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 Exchange 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 Exchange Act, the Exchange will 

surveil for compliance with the 

continued listing requirements. 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 

Financial Industry Regulatory Authority 

(‘‘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 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 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. 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 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. 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. 

Availability of Information 

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 an issuer will comply with 

Regulation Fair Disclosure, which 

prohibits selective disclosure of any 

material non-public information, which 

otherwise does not apply to issuers of 

Proxy Portfolio Shares. 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 for the Proposed Fund 

For the Fund, the Proxy Basket will 

consist of all of the Fund’s portfolio 

holdings but will be weighted 

differently, subject to a minimum 

weightings overlap of 90% with the 

Fund’s 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.13 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 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, as further 

described below. 

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 will be publicly available on the 

Fund website before the commencement 

of trading in Fund Shares on each 

business day. The Proxy Basket will 

contain all of the names of the securities 

in the Fund Portfolio, and only the 

securities that are in the Fund Portfolio 

(and also could contain cash to 

represent the Fund Portfolio’s holdings 

of cash). The Proxy Basket will have a 

minimum overlap of 90% with the Fund 

Portfolio at the beginning of each 

business day, with the precise 

Federal Register / Vol. 86, No. 26 / Wednesday, February 10, 2021 / Notices 8975 

14For 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. 

percentage of aggregate overlap in 

weightings from 90% to 100% to be 

randomly generated each day. 

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 Shares on 

the Exchange. The Guardrail Amount is 

the maximum deviation between the 

weightings of the specific securities and 

cash positions in the Proxy Basket from 

the weightings of those specific 

securities 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%. 

‘‘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 portfolio holdings, 

including the name, identifier, market 

value and weight of each security and 

instrument in the portfolio, at a 

minimum within at least 60 days 

following the end of every fiscal quarter. 

As described above, the Exchange notes 

that the concept of the Proxy Basket 

employed under this structure is 

designed to provide investors with the 

traditional benefits of ETFs while 

protecting the Fund from the potential 

for front running or free riding of 

portfolio transactions, which could 

adversely impact the performance of the 

Fund. 

Additional Information 

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 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 exchangelisted instruments held by the Fund, 

including both U.S. and non-U.S. listed 

equity securities and U.S. exchangelisted 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.14 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, 

underlying U.S. exchange-listed equity 

securities, and U.S. exchange-listed 

futures 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, underlying equity 

securities, and U.S. exchange-listed 

futures from markets and other entities 

that are members of ISG or with which 

the Exchange has in place a 

comprehensive surveillance sharing 

agreement. 

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 Proxy Basket, or 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. The Exchange will obtain a 

representation from the issuer of the 

Shares of the Fund that the NAV per 

share of the Fund will be calculated 

daily and will be made available to all 

market participants at the same time. 

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 Exchange believes that the 

particular instruments that may be 

included in the Fund Portfolio and 

Proxy Basket do not raise any concerns 

related to the Proxy 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 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 will have a 

consistent relationship and that the 

deviation in the returns between the 

Fund and its Proxy Basket will be 

sufficiently small such that the Proxy 

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. Market Makers will be able to 

estimate the value of and hedge 

positions in the Fund’s Shares, which 

8976 Federal Register / Vol. 86, No. 26 / Wednesday, February 10, 2021 / Notices 

15 Id. 

16 15 U.S.C. 78s(b)(3)(A). 

17 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6)(iii) requires a self-regulatory organization 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. 

18 17 CFR 240.19b–4(f)(6). 

19 17 CFR 240.19b–4(f)(6)(iii). 

20See Securities Exchange Act Releases No. 

90684 (Dec. 16, 2020), 85 FR 83637 (Dec. 22, 2020) 

(File No. SR–CboeBZX–2020–091) and 90686 (Dec. 

16, 2020), 85 FR 83657 (Dec. 22, 2020) (File No. SR– 

CboeBZX–2020–090). 

21For 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). 

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. Each series will 

disclose the Proxy Basket, which is 

designed to closely track the daily 

performance of the Fund Portfolio, on a 

daily basis. 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 for that day. 

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, 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 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

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), or 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 the NAV per 

share of the Fund will be calculated 

daily and will be made available to all 

market participants at the same time. 

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 exchangetraded 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) of the Act 16 and Rule 19b– 

4(f)(6) thereunder.17

A proposed rule change filed 

pursuant to Rule 19b–4(f)(6) under the 

Act 18 normally does not become 

operative for 30 days after the date of its 

filing. However, Rule 19b–4(f)(6)(iii) 19

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 asked 

the Commission to waive the 30-day 

operative delay. The proposed rule 

change is substantially similar to 

previous proposals on which the 

Commission has granted waiver of the 

operative delay,20 does not raise any 

novel regulatory issues, and 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 

operative delay and designates the 

proposal as operative upon filing.21

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

Federal Register / Vol. 86, No. 26 / Wednesday, February 10, 2021 / Notices 8977 

22 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78m(n)(1); 17 CFR 240.13n–1. A copy 

of DDR’s application on Form SDR and nonconfidential exhibits thereto are available for public 

viewing on the Commission’s website. In 2016, DDR 

submitted a prior application for registration as an 

SDR. See Release No. 34–78216 (June 30, 2016), 81 

FR 44379 (July 7, 2016); Release No. 34–81302 

(Aug. 3, 2017), 82 FR 37276 (Aug. 9, 2017). DDR 

withdrew this prior application in 2018. See Letter 

from Chris Childs, Managing Director, DDR, Mar. 

27, 2018, https://www.sec.gov/divisions/marketreg/ 

sdr/dtcc-sdr-application-withdrawal-letter032718.pdf. 

2 15 U.S.C. 78k–1(b). 

3 DDR has included the interest rate asset class in 

its application based on feedback from potential 

users of its SDR services. The potential users have 

identified certain types of transactions that will be 

reported through DDR’s infrastructure for interest 

rate derivatives as falling within the Exchange Act 

definition of an SBS transaction. 

4The descriptions set forth in this notice 

regarding the structure and operations of DDR have 

been derived, excerpted, or summarized from DDR’s 

application on Form SDR. 

5 15 U.S.C. 78m(n). 

6 Id. 

7See Release No. 34–74246 (Feb. 11, 2015), 80 FR 

14438, 14438 (Mar. 19, 2015) (‘‘SDR Adopting 

Release’’). In 2016, the Commission subsequently 

amended 17 CFR 240. 13n–4 to address third-party 

regulatory access to SBS data obtained by an SDR. 

See Release No. 34–78716 (Aug. 29, 2016), 81 FR 

60585 (Sep. 2, 2016). 

8See Release No. 34–80359 (Mar. 31, 2017), 82 FR 

16867 (Apr. 6, 2017). 

9Release No. 34–74244 (Feb. 11, 2015), 80 FR 

14563 (Mar. 19, 2015); Release No. 34–78321 (July 

14, 2016), 81 FR 53546 (Aug. 12, 2016). Regulation 

SBSR and the SDR Rules are referred to collectively 

as the ‘‘SBS Reporting Rules.’’ 

10See 17 CFR 242.909. 

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 

change 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 rule-comments@

sec.gov. Please include File Number SR– 

NASDAQ–2021–005 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–2021–005. 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–2021–005, and 

should be submitted on or before March 

3, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.22

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–02711 Filed 2–9–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–91071; File No. SBSDR– 

2020–01] 

Security-Based Swap Data 

Repositories; DTCC Data Repository 

(U.S.), LLC; Notice of Filing of 

Application for Registration as a 

Security-Based Swap Data Repository 

February 5, 2021. 

I. Introduction 

On December 22, 2020, DTCC Data 

Repository (U.S.), LLC (‘‘DDR’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’) an 

application on Form SDR to register as 

a security-based swap data repository 

(‘‘SDR’’) pursuant to Section 13(n)(1) of 

the Securities Exchange Act of 1934 

(‘‘Exchange Act’’) and 17 CFR 240.13n– 

1 (‘‘Rule 13n–1’’) thereunder,1 and as a 

securities information processor (‘‘SIP’’) 

under Section 11A(b) of the Exchange 

Act.2 DDR intends to operate as a 

registered SDR for security-based swap 

(‘‘SBS’’) transactions in the equity, 

credit, and interest rate derivatives asset 

classes.3 The Commission is publishing 

this notice to solicit comments from 

interested persons regarding DDR’s 

application,4 and the Commission will 

consider any comments it receives in 

making its determination whether to 

approve DDR’s application for 

registration as an SDR and as a SIP. 

II. Background 

A. SDR Registration, Duties, and Core 

Principles 

Section 13(n) of the Exchange Act 

makes it unlawful for any person, unless 

registered with the Commission, 

directly or indirectly, to make use of the 

mails or any means or instrumentality of 

interstate commerce to perform the 

functions of an SDR.5 To be registered 

and maintain registration, an SDR must 

comply with certain requirements and 

core principles described in Section 

13(n), as well as any requirements that 

the Commission may impose by rule or 

regulation.6 In 2015, the Commission 

adopted 17 CFR 240.13n–1 to 13n–12 

under the Exchange Act to establish 

Form SDR, the procedures for 

registration as an SDR, and the duties 

and core principles applicable to an 

SDR (‘‘SDR Rules’’).7 The Commission 

provided a temporary exemption from 

compliance with the SDR Rules and also 

extended exemptions from the 

provisions of the Dodd-Frank Act set 

forth in a Commission order providing 

temporary exemptions and other 

temporary relief from compliance with 

certain provisions of the Exchange Act 

concerning security-based swaps, and 

these temporary exemptions expired in 

2017.8

The Commission also has adopted 17 

CFR 242.900 to 909 under the Exchange 

Act (collectively, ‘‘Regulation SBSR’’), 

which governs regulatory reporting and 

public dissemination of security-based 

swap transactions.9 Among other things, 

Regulation SBSR requires each 

registered SDR to register with the 

Commission as a SIP,10 and the Form 

SDR constitutes an application for