Federal Register / Vol. 80, No. 37 / Wednesday, February 25, 2015 / Notices 10189 

13 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 73960 

(Dec. 30, 2014), 80 FR 540 (‘‘Notice’’). 4According to the Exchange, the Trust has filed 

a registration statement on Form N–1A 

(‘‘Registration Statement’’) with the Commission. 

See Registration Statement on Form N–1A for the 

Trust filed on July 24, 2014 (File Nos. 333–187668 

and 811–22819). In addition, the Exchange states 

that the Trust has obtained certain exemptive relief 

under the 1940 Act. See Investment Company Act 

Release No. 30607 (July 23, 2013) (‘‘Exemptive 

Order’’). 

5See Nasdaq Rule 5735(g). The Exchange states 

that, in the event (a) the Adviser or the Sub-Adviser 

becomes newly affiliated with a broker-dealer or 

registers as a broker-dealer, or (b) any new adviser 

or sub-adviser is a registered broker-dealer or 

becomes affiliated with a broker-dealer, the 

Adviser, the Sub-Adviser, or any new adviser or 

sub-adviser, as the case may be, will implement a 

fire wall with respect to its relevant personnel and 

its broker-dealer affiliate, as applicable, regarding 

access to information concerning the composition 

of or changes to the portfolio, and will be subject 

to procedures designed to prevent the use and 

dissemination of material, non-public information 

regarding the portfolio. 

6See 17 CFR 240.10A–3. 

• Send an email to rulecomments@sec.gov. Please include File 

Number SR–NYSEArca–2015–07 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Brent J. Fields, Secretary, Securities 

and Exchange Commission, 100 F Street 

NE., Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–NYSEArca–2015–07. 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 such 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. 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– 

NYSEArca–2015–07, and should be 

submitted on or before March 18, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–03816 Filed 2–24–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74303; File No. SR– 

NASDAQ–2014–127] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Order 

Granting Approval of Proposed Rule 

Change Relating to the Listing and 

Trading of the Shares of the Tuttle 

Tactical Management U.S. Core ETF of 

ETFis Series Trust I 

February 19, 2015. 

I. Introduction 

On December 19, 2014, The NASDAQ 

Stock Market LLC (‘‘Nasdaq’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’), pursuant to Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Act’’) 1 and Rule 19b–4 

thereunder,2 a proposed rule change to 

list and trade the shares (‘‘Shares’’) of 

the Tuttle Tactical Management U.S. 

Core ETF (‘‘Fund’’) under Nasdaq Rule 

5735. The proposed rule change was 

published for comment in the Federal 

Register on January 6, 2015.3 The 

Commission received no comments on 

the proposal. This order grants approval 

of the proposed rule change. 

II. Description of the Proposed Rule 

Change 

The Exchange proposes to list and 

trade Shares of the Fund under Nasdaq 

Rule 5735, which governs the listing 

and trading of Managed Fund Shares on 

the Exchange. The Shares will be 

offered by ETFis Series Trust I 

(‘‘Trust’’), which is registered with the 

Commission as an investment 

company.4 The Fund is a series of the 

Trust. 

Etfis Capital LLC will be the 

investment adviser (‘‘Adviser’’), and 

Tuttle Tactical Management, LLC will 

be the investment sub-adviser (‘‘SubAdviser’’), to the Fund. ETF Distributors 

LLC will be the principal underwriter 

and distributor of the Fund’s Shares, 

and Bank of New York Mellon will act 

as the administrator, accounting agent, 

custodian, and transfer agent to the 

Fund. 

The Exchange represents that the 

Adviser and Sub-Adviser are not 

registered as broker-dealers, and the 

Sub-Adviser it not affiliated with a 

broker-dealer; however, the Exchange 

represents that the Adviser is affiliated 

with a broker-dealer. The Exchange 

states that the Adviser has implemented 

a fire wall with respect to its broker 

dealer affiliate regarding access to 

information concerning the composition 

of or changes to the portfolio.5 The 

Exchange also represents that the Shares 

will be subject to Nasdaq Rule 5735, 

which sets forth the initial and 

continued listing criteria applicable to 

Managed Fund Shares, and that for 

initial and continued listing, the Fund 

must be in compliance with Rule 10A– 

3 under the Act.6

The Exchange has made the following 

representations and statements in 

describing the Fund and its investment 

strategy, including, among other things, 

portfolio holdings and investment 

restrictions. 

A. Principal Investments of the Fund 

According to the Exchange, the 

Fund’s investment objective will be to 

provide long-term capital appreciation, 

while maintaining a secondary 

emphasis on capital preservation, 

primarily through investments in the 

U.S. equity market. The Sub-Adviser 

will employ four tactical models in 

seeking to achieve the Fund’s 

investment objective: ‘‘S&P 500 

Absolute Momentum,’’ ‘‘Relative 

Strength Equity,’’ ‘‘Beta Opportunities,’’ 

and ‘‘Short-Term S&P 500 Counter 

Trend.’’ While the Sub-Adviser will 

generally seek to maintain an equal 

weighting among these four tactical 

models, market movements may result 

in the Fund being overweight or 

underweight one or more of the tactical 

models. The Fund will be an actively 

managed exchange-traded fund (‘‘ETF’’) 

that seeks to achieve its investment 

objective by utilizing a long-only, multistrategy, tactically-managed exposure to 

the U.S. equity market. To obtain such 

exposure, the Sub-Adviser will invest, 

under normal circumstances, not less 


asabaliauskas on DSK5VPTVN1PROD with NOTICES
10190 Federal Register / Vol. 80, No. 37 / Wednesday, February 25, 2015 / Notices 

7The Exchange states that ETFs included in the 

Fund will be listed and traded in the U.S. on 

registered exchanges. The Fund may invest in the 

securities of ETFs in excess of the limits imposed 

under the 1940 Act pursuant to exemptive orders 

obtained by other ETFs and their sponsors from the 

Commission. The ETFs in which the Fund may 

invest include Index Fund Shares (as described in 

Nasdaq Rule 5705), Portfolio Depositary Receipts 

(as described in Nasdaq Rule 5705), and Managed 

Fund Shares (as described in Nasdaq Rule 5735). 

While the Fund may invest in leveraged ETFs (e.g., 

2X or 3X), the Fund will not invest in inverse or 

inverse leveraged ETFs. The shares of ETFs in 

which a Fund may invest will be limited to 

securities that trade in markets that are members of 

the Intermarket Surveillance Group (‘‘ISG’’), which 

includes all U.S. national securities exchanges, or 

are parties to a comprehensive surveillance sharing 

agreement with the Exchange. 

8The Exchange represents that ETNs will be 

limited to those described in Nasdaq Rule 5710. 

9According to the Exchange, money market 

instruments will include securities that are issued 

or guaranteed by the U.S. Treasury, by various 

agencies of the U.S. government, or by various 

instrumentalities that have been established or 

sponsored by the U.S. government. U.S. Treasury 

obligations are backed by the ‘‘full faith and credit’’ 

of the U.S. government. Securities issued or 

guaranteed by federal agencies and U.S. 

government-sponsored instrumentalities may or 

may not be backed by the full faith and credit of 

the U.S. government. 

10See Notice, supra note 3; see also Registration 

Statement and Exemptive Order, supra note 4. 

11 15 U.S.C. 78(f). 

12 In approving this proposed rule change, the 

Commission notes that it has considered the 

proposed rule’s impact on efficiency, competition, 

and capital formation. See 15 U.S.C. 78c(f). 

13 15 U.S.C. 78f(b)(5). 

14 15 U.S.C. 78k–1(a)(1)(C)(iii). 

15See Notice, supra note 3, 80 FR at 544. 

16According to the Exchange, the NASDAQ OMX 

Global Index Data Service offers real-time updates, 

daily summary messages, and access to widely 

followed indexes and Intraday Indicative Values for 

ETFs. See id., 80 FR at 543. 

17See id. 

than 80% of the Fund’s assets in: (1) 

Other ETFs; 7 (2) exchange-traded notes 

(‘‘ETNs’’); 8 (3) exchange-traded trusts 

that hold commodities (‘‘ETTs,’’ and 

together with ETFs and ETNs, 

collectively, ‘‘ETPs’’); (4) individually 

selected U.S. exchange-traded common 

stocks (when the Sub-Adviser 

determines that it is more efficient or 

otherwise advantageous to do so); (5) 

money market funds; (6) U.S. treasuries; 

or (7) money market instruments.9 To 

the extent that the Fund invests in ETFs 

or money market funds to gain domestic 

exposure, the Fund is considered, in 

part, a ‘‘fund of funds.’’ 

B. Other Investments of the Fund 

In order to seek its investment 

objective, the Fund will not employ 

other strategies outside of the abovedescribed ‘‘Principal Investments.’’ 

However, the Fund may, from time to 

time, take temporary defensive positions 

that are inconsistent with the Fund’s 

principal investment strategies in an 

attempt to respond to adverse market, 

economic, political, or other conditions. 

In such circumstances, the Fund may 

also hold up to 100% of its portfolio in 

cash or other short-term, highly liquid 

investments, such as money market 

instruments, U.S. government 

obligations, commercial paper, 

repurchase agreements, or other cash 

equivalents. When the Fund takes a 

temporary defensive position, the Fund 

may not be able to achieve its 

investment objective. 

C. Investment Restrictions of the Fund 

As stated above, the Fund will invest 

not less than 80% of its total assets in 

shares of ETPs, individually selected 

U.S. exchange-traded common stocks 

(when the Sub-Adviser determines that 

it is more efficient or otherwise 

advantageous to do so), money market 

funds, U.S. treasuries, or money market 

instruments. The Fund will not 

purchase securities of open-end or 

closed-end investment companies 

except in compliance with the 1940 Act. 

In addition, the Fund will not use 

derivative instruments, including 

options, swaps, forwards, and futures 

contracts, either listed or over-thecounter. Under normal circumstances, 

the Fund will not invest more than 25% 

of its total assets in leveraged ETPs. The 

Fund does not presently intend to 

engage in any form of borrowing for 

investment purposes, and will not be 

operated as a ‘‘leveraged ETF,’’ i.e., it 

will not be operated in a manner 

designed to seek a multiple of the 

performance of an underlying reference 

index. 

The Fund may hold up to an aggregate 

amount of 15% of its net assets in 

illiquid securities and other illiquid 

assets (calculated at the time of 

investment). The Fund will monitor its 

portfolio liquidity on an ongoing basis 

to determine whether, in light of current 

circumstances, an adequate level of 

liquidity is being maintained, and will 

consider taking appropriate steps in 

order to maintain adequate liquidity if, 

through a change in values, net assets, 

or other circumstances, more than 15% 

of the Fund’s net assets are held in 

illiquid securities or other illiquid 

assets. Illiquid securities and other 

illiquid assets include securities subject 

to contractual or other restrictions on 

resale and other instruments that lack 

readily available markets, as determined 

in accordance with Commission staff 

guidance. 

Additional information regarding the 

Trust, Fund, and Shares, including 

investment strategies and restrictions, 

risks, creation and redemption 

procedures, fees, portfolio holdings 

disclosure policies, distributions and 

taxes, calculation of net asset value per 

share (‘‘NAV’’), availability of 

information, trading rules and halts, and 

surveillance procedures, among other 

things, can be found in the Notice, 

Registration Statement, and Exemptive 

Order, as applicable.10

III. Discussion and Commission 

Findings 

After careful review, the Commission 

finds that the proposed rule change is 

consistent with the requirements of 

Section 6 of the Act 11 and the rules and 

regulations thereunder applicable to a 

national securities exchange.12 In 

particular, the Commission finds that 

the proposed rule change is consistent 

with the requirements of Section 6(b)(5) 

of the Act,13 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 foster cooperation and 

coordination with persons engaged in 

facilitating transactions in securities, 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. 

The Commission finds that the 

proposal to list and trade the Shares on 

the Exchange is consistent with Section 

11A(a)(1)(C)(iii) of the Act,14 which sets 

forth the finding of Congress that it is in 

the public interest and appropriate for 

the protection of investors and the 

maintenance of fair and orderly markets 

to assure the availability to brokers, 

dealers, and investors of information 

with respect to quotations for, and 

transactions in, securities. 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 and 

any underlying ETPs.15 In addition, the 

Intraday Indicative Value (as defined in 

Nasdaq Rule 5735(c)(3)), which will be 

based upon the current value of the 

components of the Disclosed Portfolio 

(as defined in Nasdaq Rule 5735(c)(2)), 

will be available on the NASDAQ OMX 

Information LLC proprietary index data 

service 16 and will be updated and 

widely disseminated and broadly 

displayed at least every 15 seconds 

during the Regular Market Session.17 On 

each business day, before 


asabaliauskas on DSK5VPTVN1PROD with NOTICES
Federal Register / Vol. 80, No. 37 / Wednesday, February 25, 2015 / Notices 10191 

18On a daily basis, the Disclosed Portfolio will 

include each portfolio security and other financial 

instruments of the Fund with the following 

information on the Fund’s Web site: (1) ticker 

symbol (if applicable); (2) name of security and 

financial instrument; (3) number of shares (if 

applicable); (4) dollar value of securities and 

financial instruments held in the Fund; and (5) 

percentage weighting of the security and financial 

instrument in the Fund. The Web site information 

will be publicly available at no charge. See id. 

19See id., 80 FR at 542. The Exchange notes that, 

for purposes of calculating NAV, the Fund’s 

investments will be valued at market value (i.e., the 

price at which a security is trading and could 

presumably be purchased or sold) or, in the absence 

of market value with respect to any investment, at 

fair value in accordance with valuation procedures 

adopted by the Board and in accordance with the 

1940 Act. Common stocks and equity securities 

(including shares of ETPs) will be valued at the last 

sales price on that exchange. Portfolio securities 

traded on more than one securities exchange will 

be valued at the last sale price or, if so disseminated 

by an exchange, the official closing price, as 

applicable, at the close of the exchange representing 

the principal exchange or market for such securities 

on the business day as of which such value is being 

determined. U.S. Treasuries are valued using 

quoted market prices, and money market funds are 

valued at the net asset value reported by the funds. 

For all security types in which the Fund may 

invest, the Fund’s primary pricing source is IDC; its 

secondary source is Reuters; and its tertiary source 

is Bloomberg. 

20See id., 80 FR at 544. 

21See id. 

22See id., 80 FR at 543. 

23See id. 

24See id., 80 FR at 542. 

25See id., 80 FR at 543. 

26See id. at 544. 

27See id. 

28See id. See also Nasdaq Rule 5735(d)(2)(C) 

(providing additional considerations for the 

suspension of trading in or removal from listing of 

Managed Fund Shares on the Exchange). 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 or pause 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 also 

may be halted because of market conditions or for 

reasons that, in the view of the Exchange, make 

trading in the Shares inadvisable. See Notice, supra 

note 3, 80 FR at 544. 

29See Nasdaq Rule 5735(d)(2)(B)(ii). 

30See Notice, supra note 3, 80 FR at 544. 

31See supra note 5 and accompanying text. The 

Exchange further represents that an investment 

adviser to an open-end fund is required to be 

registered under the Investment Advisers Act of 

1940 (‘‘Advisers Act’’). As a result, the Adviser, the 

Sub-Adviser, and their related personnel are subject 

to the provisions of Rule 204A–1 under the 

Advisers Act relating to codes of ethics. This Rule 

requires investment advisers to adopt a code of 

ethics that reflects the fiduciary nature of the 

relationship to clients as well as compliance with 

applicable federal securities laws as defined in Rule 

204A–1(e)(4). Accordingly, procedures designed to 

prevent the communication and misuse of 

nonpublic 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. 

32For a list of the current members of ISG, see 

www.isgportal.org. 

commencement of trading in Shares in 

the Regular Market Session on the 

Exchange, the Fund will disclose on its 

Web site the Disclosed Portfolio, which 

will form the basis for the Fund’s 

calculation of NAV at the end of the 

business day.18 The NAV of the Fund 

will be determined once each business 

day, normally as of the close of trading 

on the New York Stock Exchange 

(normally 4:00 p.m. Eastern time or 

‘‘E.T.’’).19 Information regarding market 

price and volume of the Shares will be 

continually available on a real-time 

basis throughout the day on brokers’ 

computer screens and other electronic 

services.20 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.21 Price 

information regarding the ETPs, equity 

securities, U.S. treasuries, money 

market instruments, and money market 

funds held by the Fund will be available 

through the U.S. exchanges trading such 

assets, in the case of exchange-traded 

securities, as well as automated 

quotation systems, published or other 

public sources, or on-line information 

services such as Bloomberg or Reuters.22

Intra-day price information will also be 

available through subscription services, 

such as Bloomberg, Markit, and 

Thomson Reuters, which can be 

accessed by authorized participants and 

other investors.23 In addition, BNY 

Mellon, through the National Securities 

Clearing Corporation, will also make 

available on each business day, prior to 

the opening of business of the Exchange 

(currently 9:30 a.m., E.T.), the list of the 

names and the quantity of each security 

to be included (based on information at 

the end of the previous business day), 

subject to any adjustments as described 

below, in order to effect redemptions of 

Creation Unit aggregations of the Fund 

until such time as the next-announced 

composition of the Fund Securities is 

made available.24 The Fund’s Web site 

will include a form of the prospectus for 

the Fund and additional data relating to 

NAV and other applicable quantitative 

information.25

The Commission further believes that 

the proposal to list and trade the Shares 

is reasonably designed to promote fair 

disclosure of information that may be 

necessary to price the Shares 

appropriately and to prevent trading 

when a reasonable degree of 

transparency cannot be assured. The 

Commission notes that the Exchange 

will obtain a representation from the 

issuer of the Shares that the NAV will 

be calculated daily and that the NAV 

and the Disclosed Portfolio will be made 

available to all market participants at 

the same time.26 Further, trading in the 

Shares will be subject to Nasdaq 

5735(d)(2)(D), which sets forth 

circumstances under which trading in 

the Shares may be halted.27 The 

Exchange also may halt trading in the 

Shares if trading is not occurring in the 

securities or the financial instruments 

constituting the Disclosed Portfolio or if 

other unusual conditions or 

circumstances detrimental to the 

maintenance of a fair and orderly 

market are present.28 Further, the 

Commission notes that the Reporting 

Authority that provides the Disclosed 

Portfolio must implement and maintain, 

or be subject to, procedures designed to 

prevent the use and dissemination of 

material, non-public information 

regarding the actual components of the 

portfolio.29 The Exchange states that it 

has a general policy prohibiting the 

distribution of material, non-public 

information by its employees.30 The 

Exchange also states that the Adviser is 

affiliated with a broker-dealer, and that 

the Adviser has implemented a fire wall 

with respect to its broker-dealer affiliate 

regarding access to information 

concerning the composition of or 

changes to the portfolio.31 The Financial 

Industry Regulatory Authority 

(‘‘FINRA’’), on behalf of the Exchange, 

will communicate as needed regarding 

trading in the Shares and other 

exchange-traded securities and 

instruments held by the Fund with 

other markets and other entities that are 

ISG members, and FINRA, on behalf of 

the Exchange, may obtain trading 

information regarding trading in the 

Shares and other exchange-traded 

securities and instruments held by the 

Fund from such markets and other 

entities. In addition, the Exchange may 

obtain information regarding trading in 

the Shares and other exchange-traded 

securities and instruments held by the 

Fund from markets and other entities 

that are members of ISG or with which 

the Exchange has in place a 

comprehensive surveillance sharing 

agreement.32

The Exchange represents that it deems 

the Shares to be equity securities, thus 

rendering trading in the Shares subject 


asabaliauskas on DSK5VPTVN1PROD with NOTICES
10192 Federal Register / Vol. 80, No. 37 / Wednesday, February 25, 2015 / Notices 

33According to the Exchange, 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. See Notice, supra note 3, 80 FR at 544. 

34 17 CFR 240.10A–3. 

35 15 U.S.C. 78s(b)(2). 

36 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

to the Exchange’s existing rules 

governing the trading of equity 

securities. In support of this proposal, 

the Exchange has also made the 

following representations: 

(1) The Shares will be subject to Rule 

5735, which sets forth the initial and 

continued listing criteria applicable to 

Managed Fund Shares. 

(2) The Exchange has appropriate 

rules to facilitate transactions in the 

Shares during all trading sessions. 

(3) 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. 

Specifically, the Information Circular 

will discuss the following: (a) The 

procedures for purchases and 

redemptions of Shares in Creation Units 

(and that Shares are not individually 

redeemable); (b) Nasdaq Rule 2111A, 

which imposes suitability obligations on 

Nasdaq members with respect to 

recommending transactions in the 

Shares to customers; (c) how 

information regarding the Intraday 

Indicative Value and Disclosed Portfolio 

is disseminated; (d) the risks involved 

in trading the Shares during the PreMarket and Post-Market Sessions when 

an updated Intraday Indicative Value 

will not be calculated or publicly 

disseminated; (e) the requirement that 

members deliver a prospectus to 

investors purchasing newly issued 

Shares prior to or concurrently with the 

confirmation of a transaction; and (f) 

trading information. 

(4) Trading in the Shares will be 

subject to the existing trading 

surveillances, administered by both 

Nasdaq and FINRA,33 on behalf of the 

Exchange. The trading surveillance 

procedures are designed to detect 

violations of Exchange rules and 

applicable federal securities laws. These 

procedures are adequate to properly 

monitor Exchange trading of the Shares 

in all trading sessions and to deter and 

detect violations of Exchange rules and 

applicable federal securities laws. 

(5) For initial and continued listing, 

the Fund must be in compliance with 

Rule 10A–3 under the Act.34

(6) A minimum of 100,000 Shares will 

be outstanding at the commencement of 

trading on the Exchange. 

(7) The Fund will invest at least 80% 

of its assets under normal market 

conditions in shares of ETPs, 

individually selected U.S. exchangetraded common stocks (when the SubAdviser determines that it is more 

efficient or otherwise advantageous to 

do so), money market funds, U.S. 

treasuries, or money market 

instruments. In order to seek its 

investment objective, the Fund will not 

employ other strategies outside of the 

above-described ‘‘Principal 

Investments.’’ 

(8) The Fund may hold up to an 

aggregate amount of 15% of its net 

assets in illiquid assets (calculated at 

the time of investment) and will 

monitor its portfolio liquidity on an 

ongoing basis to determine whether, in 

light of current circumstances, an 

adequate level of liquidity is being 

maintained. The Fund will consider 

taking appropriate steps in order to 

maintain adequate liquidity if, through 

a change in values, net assets, or other 

circumstances, more than 15% of the 

Fund’s net assets are held in illiquid 

assets. 

(9) While the Fund may invest in 

leveraged ETFs (e.g., 2X or 3X), the 

Fund will not invest in inverse or 

inverse leveraged ETFs. Under normal 

circumstances, the Fund will not invest 

more than 25% of its total assets in 

leveraged ETPs. The Fund will not be 

operated in a manner designed to seek 

a multiple of the performance of an 

underlying reference index. 

(10) The Fund will not use derivative 

instruments, including options, swaps, 

forwards, and futures contracts. 

(11) The Fund’s investments will be 

consistent with the Fund’s investment 

objective. 

The Commission notes that the Fund 

and the Shares must comply with the 

requirements of Nasdaq Rule 5735 to be 

initially and continuously listed and 

traded on the Exchange. This approval 

order is based on all of the Exchange’s 

representations and description of the 

Fund, including those set forth above 

and in the Notice. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,35 that the 

proposed rule change (SR–NASDAQ– 

2014–127), be, and it hereby is, 

approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.36

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–03812 Filed 2–24–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74312; File No. SR–CBOE– 

2015–18] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change Relating to Exchange 

Rule 6.25 

February 19, 2015. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that, on February 

19, 2015, Chicago Board Options 

Exchange, Incorporated (the ‘‘Exchange’’ 

or ‘‘CBOE’’) filed with the Securities 

and Exchange Commission (the 

‘‘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 the Substance 

of the Proposed Rule Change 

The Exchange proposes to extend a 

pilot program related to Rule 6.25 

(Nullification and Adjustment of 

Options Transactions). The text of the 

proposed rule change is available on the 

Exchange’s Web site (http://

www.cboe.com/AboutCBOE/

CBOELegalRegulatoryHome.aspx), at 

the Exchange’s Office of the Secretary, 

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. 


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