Federal Register / Vol. 80, No. 41 / Tuesday, March 3, 2015 / Notices 11509 

26 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

exchanges, as well as in accordance 

with the Unlisted Trading Privileges 

and the Consolidated Tape Association 

plans, as applicable. Intra-day, 

executable price quotations on the 

securities and other assets held by the 

Fund, other than investment company 

securities that are not exchange-listed 

will be available from major brokerdealer firms or on the exchange on 

which they are traded, if applicable. 

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. 

The Web site for the Fund will 

include the prospectus for the Fund and 

additional data relating to NAV and 

other applicable quantitative 

information. Trading in Shares of the 

Fund will be halted or paused 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 Shares inadvisable, and 

trading in the Shares will be subject to 

Nasdaq Rule 5735(d)(2)(D), which sets 

forth circumstances under which Shares 

of the Fund may be halted. In addition, 

as noted above, investors will have 

ready access to information regarding 

the Fund’s holdings, the Intraday 

Indicative Value, the Disclosed 

Portfolio, and quotation and last sale 

information for the Shares. 

The proposed rule change is designed 

to perfect the mechanism of a free and 

open market and, in general, to protect 

investors and the public interest in that 

it will facilitate the listing and trading 

of an additional type of activelymanaged exchange-traded product that 

will enhance competition among market 

participants, to the benefit of investors 

and the marketplace. As noted above, 

the Exchange has in place surveillance 

procedures relating to trading in the 

Shares and may obtain information via 

ISG from other exchanges that are 

members of ISG or with which the 

Exchange has entered into a 

comprehensive surveillance sharing 

agreement. In addition, as noted above, 

investors will have ready access to 

information regarding the Fund’s 

holdings, the Intraday Indicative Value, 

the Disclosed Portfolio, and quotation 

and last sale information for the Shares. 

For the above reasons, Nasdaq 

believes the proposed rule change is 

consistent with the requirements of 

Section 6(b)(5) of the Act. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. The 

Exchange believes that the proposed 

rule change will facilitate the listing and 

trading of an additional type of activelymanaged exchange-traded fund that will 

enhance competition among market 

participants, to the benefit of investors 

and the marketplace. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

Written comments were neither 

solicited nor received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period 

up to 90 days (i) as the Commission may 

designate up if it finds such longer 

period to be appropriate and publishes 

its reasons for so finding or (ii) as to 

which the Exchange consents, the 

Commission shall: (a) By order approve 

or disapprove such proposed rule 

change, or (b) institute proceedings to 

determine whether the proposed rule 

change should be disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

NASDAQ–2015–013 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–NASDAQ–2015–013. 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– 

NASDAQ–2015–013, and should be 

submitted on or before March 24, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.26

Jill M. Peterson, 

Assistant Secretary. 

[FR Doc. 2015–04333 Filed 3–2–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74378; File No. SR– 

NASDAQ–2015–011] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing of Proposed Rule Change 

Relating to the Listing and Trading of 

the Shares of the First Trust Strategic 

Floating Rate ETF of First Trust 

Exchange-Traded Fund IV 

February 25, 2015. 

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 February 

12, 2015, The NASDAQ Stock Market 

LLC (‘‘Nasdaq’’ or the ‘‘Exchange’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change as described in 

Items I and II below, which Items have 

been prepared by Nasdaq. The 

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11510 Federal Register / Vol. 80, No. 41 / Tuesday, March 3, 2015 / Notices 

3The Commission approved Nasdaq Rule 5735 in 

Securities Exchange Act Release No. 57962 (June 

13, 2008), 73 FR 35175 (June 20, 2008) (SR– 

NASDAQ–2008–039). There are already multiple 

actively-managed funds listed on the Exchange; see, 

e.g., Securities Exchange Act Release Nos. 69464 

(April 26, 2013), 78 FR 25774 (May 2, 2013) (SR– 

NASDAQ–2013–036) (order approving listing and 

trading of First Trust Senior Loan Fund); 68972 

(February 22, 2013), 78 FR 13721 (February 28, 

2013) (SR–NASDAQ–2012–147) (order approving 

listing and trading of First Trust High Yield Long/ 

Short ETF); 66489 (February 29, 2012), 77 FR 13379 

(March 6, 2012) (SR–NASDAQ–2012–004) (order 

approving listing and trading of WisdomTree 

Emerging Markets Corporate Bond Fund). The 

Exchange believes the proposed rule change raises 

no significant issues not previously addressed in 

those prior Commission orders. 

4A Managed Fund Share is a security that 

represents an interest in an investment company 

registered under the Investment Company Act of 

1940 (15 U.S.C. 80a-1) (the ‘‘1940 Act’’) organized 

as an open-end investment company or similar 

entity that invests in a portfolio of securities 

selected by its investment adviser consistent with 

its investment objectives and policies. In contrast, 

an open-end investment company that issues Index 

Fund Shares, listed and traded on the Exchange 

under Nasdaq Rule 5705, seeks to provide 

investment results that correspond generally to the 

price and yield performance of a specific foreign or 

domestic stock index, fixed income securities index 

or combination thereof. 

5The 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. 30029 (April 

10, 2012) (File No. 812–13795) (the ‘‘Exemptive 

Relief’’). In addition, the Commission has issued 

no-action relief, upon which the Trust may rely, 

pertaining to the Fund’s ability to invest in 

derivatives notwithstanding certain representations 

in the application for the Exemptive Relief. See 

Commission No-Action Letter (December 6, 2012). 

6See Post-Effective Amendment No. 104 to 

Registration Statement on Form N–1A for the Trust, 

dated January 29, 2015 (File Nos. 333–174332 and 

811–22559). The descriptions of the Fund and the 

Shares contained herein are based, in part, on 

information in the Registration Statement. 

7An 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. 

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 

Nasdaq proposes to list and trade the 

shares of the First Trust Strategic 

Floating Rate ETF (the ‘‘Fund’’) of the 

First Trust Strategic Floating Rate ETF 

(the ‘‘Fund’’) of First Trust ExchangeTraded Fund IV (the ‘‘Trust’’) under 

Nasdaq Rule 5735 (‘‘Managed Fund 

Shares’’).3 The shares of the Fund are 

collectively referred to herein as the 

‘‘Shares.’’ 

The text of the proposed rule change 

is available at http://

nasdaq.cchwallstreet.com/, at Nasdaq’s 

principal office, and at the 

Commission’s Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

Nasdaq included statements concerning 

the purpose of, and basis for, the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. 

Nasdaq has prepared summaries, set 

forth in Sections A, B, and C below, of 

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to list and 

trade the Shares of the Fund under 

Nasdaq Rule 5735, which governs the 

listing and trading of Managed Fund 

Shares4 on the Exchange. The Fund will 

be an actively-managed exchange-traded 

fund (‘‘ETF’’). The Shares will be 

offered by the Trust, which was 

established as a Massachusetts business 

trust on September 15, 2010.5 The Trust 

is registered with the Commission as an 

investment company and has filed a 

registration statement on Form N–1A 

(‘‘Registration Statement’’) with the 

Commission.6 The Fund will be a series 

of the Trust. The Fund intends to 

qualify each year as a regulated 

investment company (‘‘RIC’’) under 

Subchapter M of the Internal Revenue 

Code of 1986, as amended. 

First Trust Advisors L.P. will be the 

investment adviser (‘‘Adviser’’) to the 

Fund. First Trust Portfolios L.P. (the 

‘‘Distributor’’) will be the principal 

underwriter and distributor of the 

Fund’s Shares. The Bank of New York 

Mellon Corporation (‘‘BNY’’) will act as 

the administrator, accounting agent, 

custodian and transfer agent to the 

Fund. 

Paragraph (g) of Rule 5735 provides 

that if the investment adviser to the 

investment company issuing Managed 

Fund Shares is affiliated with a brokerdealer, such investment adviser shall 

erect a ‘‘fire wall’’ between the 

investment adviser and the brokerdealer with respect to access to 

information concerning the composition 

and/or changes to such investment 

company portfolio.7 In addition, 

paragraph (g) further requires that 

personnel who make decisions on the 

open-end fund’s portfolio composition 

must be subject to procedures designed 

to prevent the use and dissemination of 

material, non-public information 

regarding the open-end fund’s portfolio. 

Rule 5735(g) is similar to Nasdaq Rule 

5705(b)(5)(A)(i); however, paragraph (g) 

in connection with the establishment of 

a ‘‘fire wall’’ between the investment 

adviser and the broker-dealer reflects 

the applicable open-end fund’s 

portfolio, not an underlying benchmark 

index, as is the case with index-based 

funds. The Adviser is not a brokerdealer, although it is affiliated with the 

Distributor, a broker-dealer. The Adviser 

has implemented a fire wall with 

respect to its broker-dealer affiliate 

regarding access to information 

concerning the composition and/or 

changes to the portfolio. In addition, 

personnel who make decisions on the 

Fund’s portfolio composition will be 

subject to procedures designed to 

prevent the use and dissemination of 

material non-public information 

regarding the Fund’s portfolio. In the 

event (a) the Adviser becomes, or 

becomes newly affiliated with, a brokerdealer, or (b) any new adviser or subadviser is a registered broker-dealer or 

becomes affiliated with another brokerdealer, it will implement 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 portfolio and will 

be subject to procedures designed to 

prevent the use and dissemination of 

material non-public information 

regarding such portfolio. The Fund does 

not currently intend to use a subadviser. 

First Trust Strategic Floating Rate ETF 

The investment objective of the Fund 

will be to seek current income. To 

achieve its objective, the Fund will 

invest, under normal market 

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Federal Register / Vol. 80, No. 41 / Tuesday, March 3, 2015 / Notices 11511 

8The term ‘‘under normal market conditions’’ as 

used herein includes, but is not limited to, the 

absence of adverse market, economic, political or 

other conditions, including extreme volatility or 

trading halts in the fixed income markets or the 

financial markets generally; operational issues 

causing dissemination of inaccurate market 

information; or force majeure type events such as 

systems failure, natural or man-made disaster, act 

of God, armed conflict, act of terrorism, riot or labor 

disruption or any similar intervening circumstance. 

For temporary 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 believes securities in which the Fund 

normally invests have elevated risks due to political 

or economic factors and in other extraordinary 

circumstances. 

9For the avoidance of doubt, the term ‘‘floatingrate’’ shall also include similar terms, such as 

‘‘variable-rate’’ and ‘‘adjustable-rate.’’ 

10The Adviser expects that, under normal market 

conditions, generally, for a corporate bond to be 

considered as an eligible investment, after taking 

into account such an investment, at least 75% of the 

Fund’s net assets that are invested in floating-rate 

corporate bonds and, as described below, fixed-rate 

corporate bonds (in the aggregate), will be 

comprised of corporate bonds that have, at the time 

of original issuance, $100 million or more par 

amount outstanding. 

11 ‘‘Agency securities’’ for these purposes 

generally includes securities issued by the 

following entities: Government National Mortgage 

Association (Ginnie Mae), Federal National 

Mortgage Association (Fannie Mae), Federal Home 

Loan Banks (FHLBanks), Federal Home Loan 

Mortgage Corporation (Freddie Mac), Farm Credit 

System (FCS) Farm Credit Banks (FCBanks), 

Student Loan Marketing Association (Sallie Mae), 

Resolution Funding Corporation (REFCORP), 

Financing Corporation (FICO), and the Farm Credit 

System (FCS) Financial Assistance Corporation 

(FAC). Agency securities can include, but are not 

limited to, mortgage-backed securities. 

12 ‘‘Privately-issued securities’’ for these purposes 

generally includes Rule 144A securities other than 

mortgage-backed Rule 144A securities. Under 

normal market conditions, privately-issued 

securities will have, at the time of original issuance, 

$100 million or more principal amount outstanding 

to be considered eligible investments. 

13Asset-backed securities are securities that are 

backed by a pool of assets. The Fund currently 

intends to invest in asset-backed securities that are 

consumer asset-backed securities. 

14Mortgage-backed securities, which are 

securities that directly or indirectly represent a 

participation in, or are secured by and payable 

from, mortgage loans on real property, will consist 

of: (1) residential mortgage-backed securities 

(‘‘RMBS’’); (2) commercial mortgage-backed 

securities (‘‘CMBS’’); (3) stripped mortgage-backed 

securities (‘‘SMBS’’), which are mortgage-backed 

securities where mortgage payments are divided 

between paying the loan’s principal and paying the 

loan’s interest; (4) collateralized mortgage 

obligations (‘‘CMOs’’) and real estate mortgage 

investment conduits (‘‘REMICs’’), which are 

mortgage-backed securities that are divided into 

multiple classes, with each class being entitled to 

a different share of the principal and interest 

payments received from the pool of underlying 

assets. 

15The floating-rate loans in which the Fund will 

invest will represent amounts borrowed by 

companies or other entities from banks and other 

lenders and a significant portion of such floatingrate loans may be rated below investment grade or 

unrated. Floating-rate loans held by the Fund may 

be senior or subordinate obligations of the borrower 

and may or may not be secured by collateral. First 

lien senior secured floating-rate loans are referred 

to herein as ‘‘senior loans.’’ Floating-rate loans that 

are not senior loans (i.e., unsecured floating-rate 

loans and secured floating-rate loans that are not 

first lien floating-rate loans) are referred to herein 

as ‘‘junior loans.’’ The Fund will generally invest 

in floating-rate loans that the Adviser deems to be 

liquid with readily available prices; 

notwithstanding the foregoing, the Fund may invest 

in floating-rate loans that are deemed illiquid so 

long as the Fund complies with the 15% limitation 

on investments of its net assets in illiquid assets 

described below under ‘‘Investment Restrictions.’’ 

16The Fund currently anticipates investing only 

in registered open-end investment companies that 

are listed and traded in the U.S. on registered 

exchanges (i.e., other ETFs). An ETF is an 

investment company registered under the 1940 Act 

that holds a portfolio of securities. Many ETFs are 

designed to track the performance of a securities 

index, including industry, sector, country and 

region indexes. 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. In addition, the Fund may invest in 

the securities of certain investment companies in 

excess of the limits imposed under the 1940 Act 

pursuant to an exemptive order obtained by the 

Trust and the Adviser from the Commission. See 

Investment Company Act Release No. 30377 

(February 5, 2013) (File No. 812–13895). The ETFs 

in which the Fund may invest include Index Fund 

Shares (as described in Nasdaq Rule 5705), Portfolio 

Depository Receipts (as described in Nasdaq Rule 

5705), and Managed Fund Shares (as described in 

Nasdaq Rule 5735). While the Fund may invest in 

inverse ETFs, the Fund will not invest in leveraged 

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

17The liquidity of a security, especially in the 

case of asset-backed and mortgage-backed 

securities, will be a substantial factor in the Fund’s 

security selection process. Consistent with the 

discussion below under ‘‘Investment Restrictions,’’ 

the Fund will not purchase any Floating Rate Debt 

Instruments (including asset-backed securities and 

mortgage-backed securities) that, in the Adviser’s 

opinion, are illiquid if, as a result, more than 15% 

of the value of the Fund’s net assets will be invested 

in illiquid assets. 

18For the avoidance of doubt, if a security is rated 

by multiple NRSROs and receives different ratings, 

the Fund will treat the security as being rated in 

the highest rating category received from an 

NRSRO. 

19Comparable quality of unrated securities will 

be determined by the Adviser based on 

fundamental credit analysis of the unrated security 

and comparable NRSRO-rated securities. On a best 

efforts basis, the Adviser will attempt to make a 

rating determination based on publicly available 

data. In making a ‘‘comparable quality’’ 

determination, the Adviser may consider, for 

example, whether the issuer of the security has 

issued other rated securities, the nature and 

provisions of the relevant security, whether the 

obligations under the relevant security are 

guaranteed by another entity and the rating of such 

guarantor (if any), relevant cash flows, 

macroeconomic analysis, and/or sector or industry 

analysis. 

20For the avoidance of doubt, there is no 

limitation on the Fund’s investments in agency 

mortgage-backed securities. 

conditions,8 at least 80% of its net assets 

in a portfolio of the following types of 

floating-rate9 debt instruments issued by 

U.S. and non-U.S. public- and privatesector entities: floating-rate corporate10

and government bonds and notes; 

floating-rate agency securities;11

floating-rate instruments of non-U.S. 

issuers; floating-rate privately-issued 

securities;12 floating-rate asset-backed 

securities;13 floating-rate mortgagebacked securities;14 floating-rate 

loans;15 and investment companies16

(including investment companies 

advised by the Adviser) that invest 

primarily in the foregoing types of debt 

instruments17 (collectively, ‘‘Floating 

Rate Debt Instruments’’). 

At least 65% of the Fund’s net assets 

will be invested in Floating Rate Debt 

Instruments that are, at the time of 

purchase, investment grade. To be 

considered ‘‘investment grade,’’ under 

normal market conditions, rated 

Floating Rate Debt Instruments will 

carry, at the time of purchase, a rating 

in the highest four rating categories of 

at least one nationally recognized 

statistical ratings organization 

(‘‘NRSRO’’) (e.g., BBB- or higher by 

Standard & Poor’s Ratings Services 

(‘‘S&P’’), and/or Fitch Ratings (‘‘Fitch’’), 

or Baa3 or higher by Moody’s Investors 

Service, Inc. (‘‘Moody’s’’).18 For unrated 

securities to be considered ‘‘investment 

grade,’’ under normal market 

conditions, such securities will be 

determined, at the time of purchase, to 

be of comparable quality19 by the 

Adviser. The Fund may invest up to 

35% of its net assets in securities that 

are, at the time of investment, rated 

below investment grade by each NRSRO 

rating such securities (or securities that 

are unrated and determined by the 

Adviser to be of comparable quality), 

commonly referred to as ‘‘high yield’’ or 

‘‘junk’’ bonds. If, subsequent to 

purchase by the Fund, a security held 

by the Fund experiences a decline in 

credit quality and falls below 

investment grade, the Fund may 

continue to hold the security, and it will 

not cause the Fund to violate the 35% 

investment limitation; however, the 

security will be taken into account for 

purposes of determining whether 

purchases of additional securities will 

cause the Fund to violate such 

limitation. 

The Fund will limit its investments in 

asset-backed securities (excluding 

agency mortgage-backed securities) and 

non-agency mortgage-backed securities 

(in the aggregate) to 20% of its net 

assets.20 In addition, the Fund will limit 

its investments in junior loans to 20% 

of its net assets. 

The Fund will hold debt securities 

(including, in the aggregate, Floating 

Rate Debt Instruments and the fixed-rate 

debt securities described below) of at 

least 13 non-affiliated issuers. 

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11512 Federal Register / Vol. 80, No. 41 / Tuesday, March 3, 2015 / Notices 

21See footnote 10 above. 

22See footnote 11 above. 

23See footnote 12 above. 

24See footnote 13 above. 

25See footnote 14 above. 

26 ‘‘Money market securities’’ for these purposes 

generally includes: short-term high-quality 

obligations issued or guaranteed by the U.S. 

Treasury or the agencies or instrumentalities of the 

U.S. government; short-term high-quality securities 

issued or guaranteed by non-U.S. governments, 

agencies and instrumentalities; repurchase 

agreements; commercial paper (both asset-backed 

and non-asset-backed); and deposits and other 

obligations of U.S. and non-U.S. banks and 

financial institutions. 

27See footnote 16 above. 

28At least 90% of the Fund’s net assets that are 

invested in exchange-traded derivative instruments 

will be invested in instruments that trade in 

markets that are members of the Intermarket 

Surveillance Group (‘‘ISG’’) (see footnote 40 below) 

or are parties to a comprehensive surveillance 

sharing agreement with the Exchange. 

29See Form N–1A, Item 9. The Commission has 

taken the position that a fund is concentrated if it 

invests more than 25% of the value of its total 

assets in any one industry. See, e.g., Investment 

Company Act Release No. 9011 (October 30, 1975), 

40 FR 54241 (November 21, 1975). 

30 In reaching liquidity decisions, the Adviser 

may consider the following factors: the frequency 

of trades and quotes for the security; the number of 

dealers wishing to purchase or sell the security and 

the number of other potential purchasers; dealer 

undertakings to make a market in the security; and 

the nature of the security and the nature of the 

marketplace in which it trades (e.g., the time 

needed to dispose of the security, the method of 

soliciting offers and the mechanics of transfer). 

31The Commission has stated that long-standing 

Commission guidelines have required open-end 

funds to hold no more than 15% of their net assets 

in illiquid securities and other illiquid assets. See 

Investment Company Act Release No. 28193 (March 

11, 2008), 73 FR 14618 (March 18, 2008), footnote 

34. See also Investment Company Act Release No. 

5847 (October 21, 1969), 35 FR 19989 (December 

31, 1970) (Statement Regarding ‘‘Restricted 

Securities’’); Investment Company Act Release No. 

18612 (March 12, 1992), 57 FR 9828 (March 20, 

1992) (Revisions of Guidelines to Form N–1A). A 

fund’s portfolio security is illiquid if it cannot be 

disposed of in the ordinary course of business 

within seven days at approximately the value 

ascribed to it by the fund. See Investment Company 

Act Release No. 14983 (March 12, 1986), 51 FR 

9773 (March 21, 1986) (adopting amendments to 

Rule 2a-7 under the 1940 Act); Investment 

Company Act Release No. 17452 (April 23, 1990), 

55 FR 17933 (April 30, 1990) (adopting Rule 144A 

under the Securities Act of 1933). 

32The NAV of the Fund’s Shares generally will 

be calculated once daily Monday through Friday as 

of the close of regular trading on the New York 

Stock Exchange, generally 4:00 p.m., Eastern Time 

(the ‘‘NAV Calculation Time’’). NAV per Share will 

be calculated by dividing the Fund’s net assets by 

the number of Fund Shares outstanding. For more 

information regarding the valuation of Fund 

investments in calculating the Fund’s NAV, see the 

Registration Statement. 

Other Investments 

Under normal market conditions, the 

Fund will invest primarily in the 

Floating Rate Debt Instruments 

described above to meet its investment 

objective. In addition, the Fund may 

invest up to 20% of its net assets in the 

following types of fixed-rate debt 

securities: corporate21 and government 

bonds and notes; agency securities;22

instruments of non-U.S. issuers in 

developed markets; privately-issued 

securities;23 asset-backed securities;24

mortgage-backed securities;25 municipal 

bonds; money market securities;26 and 

investment companies27 (including 

investment companies advised by the 

Adviser) that invest primarily in the 

foregoing types of debt securities. 

Further, to pursue its investment 

objective, the Fund may invest up to 

20% of the value of its net assets in 

exchange-listed options on U.S. 

Treasury securities, exchange-listed 

options on U.S. Treasury futures 

contracts and exchange-listed U.S. 

Treasury futures contracts.28 The use of 

these derivative transactions may allow 

the Fund to obtain net long or short 

exposures to selected interest rates. 

These derivatives may also be used to 

hedge risks, including interest rate risks 

and credit risks, associated with the 

Fund’s portfolio investments. The 

Fund’s investments in derivative 

instruments will be consistent with the 

Fund’s investment objective and the 

1940 Act and will not be used to seek 

to achieve a multiple or inverse 

multiple of an index. 

Investment Restrictions 

The Fund will not invest 25% or more 

of the value of its total assets in 

securities of issuers in any one industry. 

This restriction does not apply to (a) 

obligations issued or guaranteed by the 

U.S. government, its agencies or 

instrumentalities or (b) securities of 

other investment companies.29

The Fund may hold up to an aggregate 

amount of 15% of its net assets in 

illiquid assets (calculated at the time of 

investment), including Rule 144A 

securities deemed illiquid by the 

Adviser.30 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 assets. 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.31

The Fund will not invest in non-U.S. 

equity securities. 

Creation and Redemption of Shares 

The Fund will issue and redeem 

Shares on a continuous basis at net asset 

value (‘‘NAV’’) 32 only in large blocks of 

Shares (‘‘Creation Units’’) in 

transactions with authorized 

participants, generally including brokerdealers and large institutional investors 

(‘‘Authorized Participants’’). Creation 

Units generally will consist of 50,000 

Shares, although this may change from 

time to time. Creation Units, however, 

are not expected to consist of less than 

50,000 Shares. As described in the 

Registration Statement and consistent 

with the Exemptive Relief, the Fund 

will issue and redeem Creation Units in 

exchange for an in-kind portfolio of 

instruments and/or cash in lieu of such 

instruments (the ‘‘Creation Basket’’). In 

addition, if there is a difference between 

the NAV attributable to a Creation Unit 

and the market value of the Creation 

Basket exchanged for the Creation Unit, 

the party conveying instruments with 

the lower value will pay to the other an 

amount in cash equal to the difference 

(referred to as the ‘‘Cash Component’’). 

Creations and redemptions must be 

made by or through an Authorized 

Participant that has executed an 

agreement that has been agreed to by the 

Distributor and BNY with respect to 

creations and redemptions of Creation 

Units. All standard orders to create 

Creation Units must be received by the 

transfer agent no later than the closing 

time of the regular trading session on 

the New York Stock Exchange 

(ordinarily 4:00 p.m., Eastern Time) (the 

‘‘Closing Time’’) in each case on the 

date such order is placed in order for 

the creation of Creation Units to be 

effected based on the NAV of Shares as 

next determined on such date after 

receipt of the order in proper form. 

Shares may be redeemed only in 

Creation Units at their NAV next 

determined after receipt not later than 

the Closing Time of a redemption 

request in proper form by the Fund 

through the transfer agent and only on 

a business day. 

The Fund’s custodian, through the 

National Securities Clearing 

Corporation, will make available on 

each business day, prior to the opening 

of business of the Exchange, the list of 

the names and quantities of the 

instruments comprising the Creation 

Basket, as well as the estimated Cash 

Component (if any), for that day. The 

published Creation Basket will apply 

until a new Creation Basket is 

announced on the following business 

day prior to commencement of trading 

in the Shares. 

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33The Bid/Ask Price of the Fund will be 

determined using the mid-point of the highest bid 

and the lowest offer on the Exchange as of the time 

of calculation of the Fund’s NAV. The records 

relating to Bid/Ask Prices will be retained by the 

Fund and its service providers. 

34See Nasdaq Rule 4120(b)(4) (describing the 

three trading sessions on the Exchange: (1) PreMarket Session from 4 a.m. to 9:30 a.m., Eastern 

Time; (2) Regular Market Session from 9:30 a.m. to 

4 p.m. or 4:15 p.m., Eastern Time; and (3) PostContinued 

Net Asset Value 

The Fund’s NAV will be determined 

as of the close of trading (normally 4:00 

p.m., Eastern Time) on each day the 

New York Stock Exchange is open for 

business. NAV will be calculated for the 

Fund by taking the market price of the 

Fund’s total assets, including interest or 

dividends accrued but not yet collected, 

less all liabilities, and dividing such 

amount by the total number of Shares 

outstanding. The result, rounded to the 

nearest cent, will be the NAV per Share. 

All valuations will be subject to review 

by the Board of Trustees of the Trust 

(‘‘Trust Board’’) or its delegate. 

The Fund’s investments will be 

valued daily at market value or, in the 

absence of market value with respect to 

any investment, at fair value, in each 

case in accordance with valuation 

procedures (which may be revised from 

time to time) adopted by the Trust 

Board (the ‘‘Valuation Procedures’’) and 

in accordance with the 1940 Act. A 

market valuation generally means a 

valuation (i) obtained from an exchange, 

an independent pricing service 

(‘‘Pricing Service’’), or a major market 

maker (or dealer) or (ii) based on a price 

quotation or other equivalent indication 

of value supplied by an exchange, a 

Pricing Service, or a major market maker 

(or dealer). The information 

summarized below is based on the 

Valuation Procedures as currently in 

effect; however, as noted above, the 

Valuation Procedures are amended from 

time to time and, therefore, such 

information is subject to change. 

Certain securities, including Floating 

Rate Debt Instruments, in which the 

Fund may invest will not be listed on 

any securities exchange or board of 

trade. Such securities will typically be 

bought and sold by institutional 

investors in individually negotiated 

private transactions that function in 

many respects like an over-the-counter 

secondary market, although typically no 

formal market makers will exist. Certain 

securities, particularly debt securities, 

will have few or no trades, or trade 

infrequently, and information regarding 

a specific security may not be widely 

available or may be incomplete. 

Accordingly, determinations of the fair 

value of debt securities may be based on 

infrequent and dated information. 

Because there is less reliable, objective 

data available, elements of judgment 

may play a greater role in valuation of 

debt securities than for other types of 

securities. Typically, Floating Rate Debt 

Instruments and other debt securities in 

which the Fund may invest (other than 

those described below) will be valued 

using information provided by a Pricing 

Service. Debt securities having a 

remaining maturity of 60 days or less 

when purchased will be valued at cost 

adjusted for amortization of premiums 

and accretion of discounts, provided the 

Adviser’s pricing committee (the 

‘‘Pricing Committee’’) has determined 

that the use of amortized cost is an 

appropriate reflection of fair value given 

market and issuer-specific conditions 

existing at the time of the 

determination. Overnight repurchase 

agreements will be valued at cost and 

term repurchase agreements (i.e., those 

whose maturity exceeds seven days) 

will be valued at the average of the bid 

quotations obtained daily from at least 

two recognized dealers. 

Asset-backed and mortgage-backed 

securities will generally be valued by 

using a Pricing Service. If a Pricing 

Service does not cover a particular 

asset-backed or mortgage-backed 

security, or discontinues covering a 

particular asset-backed or mortgagebacked security, the security will be 

priced using broker quotes generally 

provided by brokers that make or 

participate in markets in the security. 

To derive values, Pricing Services and 

broker-dealers may use matrix pricing 

and valuation models, as well as recent 

market transactions for the same or 

similar assets. As it deems appropriate, 

the Pricing Committee may determine 

that a Pricing Service price does not 

represent an accurate value of an assetbacked or mortgage-backed security, 

based on broker quotes it receives, a 

recent trade in the security by the Fund, 

information from a portfolio manager, or 

other market information. In the event 

that the Pricing Committee determines 

that the Pricing Service price is 

unreliable or inaccurate based on such 

other information, broker quotes may be 

used. Additionally, if the Pricing 

Committee determines that the price of 

an asset-backed or mortgage-backed 

security obtained from a Pricing Service 

and available broker quotes is unreliable 

or inaccurate due to market conditions 

or other reasons, or if a Pricing Service 

price or broker quote is unavailable, the 

security will be valued using fair value 

pricing, as described below. 

Equity securities listed on any 

exchange other than the Exchange will 

be valued at the last sale price on the 

exchange on which they are principally 

traded on the business day as of which 

such value is being determined. Equity 

securities listed on the Exchange will be 

valued at the official closing price on 

the business day as of which such value 

is being determined. If there has been no 

sale on such day, or no official closing 

price in the case of securities traded on 

the Exchange, the securities will be 

valued using fair value pricing, as 

described below. Equity securities 

traded on more than one securities 

exchange will be valued at the last sale 

price or official closing price, as 

applicable, on the business day as of 

which such value is being determined at 

the close of the exchange representing 

the principal market for such securities. 

Exchange-traded options and futures 

contracts will be valued at the closing 

price in the market where such 

contracts are principally traded. 

Certain securities, including Floating 

Rate Debt Instruments, in which the 

Fund will invest will not be able to be 

priced by pre-established pricing 

methods. Such securities may be valued 

by the Trust Board or its delegate at fair 

value. The use of fair value pricing by 

the Fund will be governed by the 

Valuation Procedures and conducted in 

accordance with the provisions of the 

1940 Act. Valuing the Fund’s securities 

using fair value pricing will result in 

using prices for those securities that 

may differ from current market 

valuations or official closing prices on 

the applicable exchange. 

Availability of Information 

The Fund’s Web site 

(www.ftportfolios.com), which will be 

publicly available prior to the public 

offering of Shares, will include a form 

of the prospectus for the Fund that may 

be downloaded. The Web site will 

include the Shares’ ticker, CUSIP and 

exchange information along with 

additional quantitative information 

updated on a daily basis, including, for 

the Fund: (1) Daily trading volume, the 

prior business day’s reported NAV and 

closing price, mid-point of the bid/ask 

spread at the time of calculation of such 

NAV (the ‘‘Bid/Ask Price’’),33 and a 

calculation of the premium and 

discount of the Bid/Ask Price against 

the NAV; and (2) data in chart format 

displaying the frequency distribution of 

discounts and premiums of the daily 

Bid/Ask Price against the NAV, within 

appropriate ranges, for each of the four 

previous calendar quarters. On each 

business day, before commencement of 

trading in Shares in the Regular Market 

Session 34 on the Exchange, the Fund 

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Market Session from 4 p.m. or 4:15 p.m. to 8 p.m., 

Eastern Time). 

35Under accounting procedures to be followed by 

the Fund, trades made on the prior business day 

(‘‘T’’) will be booked and reflected in NAV on the 

current business day (‘‘T+1’’). Accordingly, the 

Fund will be able to disclose at the beginning of the 

business day the portfolio that will form the basis 

for the NAV calculation at the end of the business 

day. 

36Currently, the NASDAQ OMX Global Index 

Data Service (‘‘GIDS’’) is the NASDAQ OMX global 

index data feed service, offering real-time updates, 

daily summary messages, and access to widely 

followed indexes and Intraday Indicative Values for 

ETFs. GIDS provides investment professionals with 

the daily information needed to track or trade 

NASDAQ OMX indexes, listed ETFs, or third-party 

partner indexes and ETFs. 

37Broker-dealers that are FINRA member firms 

have an obligation to report transactions in 

specified debt securities to TRACE to the extent 

required under applicable FINRA rules. Generally, 

such debt securities will have at issuance a maturity 

that exceeds one calendar year. 

38See 17 CFR 240.10A–3. 

will disclose on its Web site the 

identities and quantities of the portfolio 

of securities, and other assets (the 

‘‘Disclosed Portfolio’’ as defined in 

Nasdaq Rule 5735(c)(2)) held by the 

Fund that will form the basis for the 

Fund’s calculation of NAV at the end of 

the business day.35 The Fund’s 

disclosure of derivative positions in the 

Disclosed Portfolio will include 

information that market participants can 

use to value these positions intraday. 

On a daily basis, the Fund will disclose 

on the Fund’s Web site the following 

information regarding each portfolio 

holding, as applicable to the type of 

holding: Ticker symbol, CUSIP number 

or other identifier, if any; a description 

of the holding (including the type of 

holding), the identity of the security or 

other asset or instrument underlying the 

holding, if any; for options, the option 

strike price; quantity held (as measured 

by, for example, par value, notional 

value or number of shares, contracts or 

units); maturity date, if any; coupon 

rate, if any; effective date, if any; market 

value of the holding; and percentage 

weighting of the holding in the Fund’s 

portfolio. The Web site information will 

be publicly available at no charge. 

In addition, for the Fund, an 

estimated value, defined in Rule 

5735(c)(3) as the ‘‘Intraday Indicative 

Value,’’ that reflects an estimated 

intraday value of the Fund’s Disclosed 

Portfolio, will be disseminated. 

Moreover, the Intraday Indicative Value, 

available on the NASDAQ OMX 

Information LLC proprietary index data 

service,36 will be based upon the current 

value for the components of the 

Disclosed Portfolio and will be updated 

and widely disseminated by one or 

more major market data vendors and 

broadly displayed at least every 15 

seconds during the Regular Market 

Session. The Intraday Indicative Value 

will be based on quotes and closing 

prices from the securities’ local market 

and may not reflect events that occur 

subsequent to the local market’s close. 

Premiums and discounts between the 

Intraday Indicative Value and the 

market price may occur. This should not 

be viewed as a ‘‘real time’’ update of the 

NAV per Share of the Fund, which is 

calculated only once a day. 

The dissemination of the Intraday 

Indicative Value, together with the 

Disclosed Portfolio, will allow investors 

to determine the value of the underlying 

portfolio of the Fund on a daily basis 

and will provide a close estimate of that 

value throughout the trading day. 

Investors will also be able to obtain 

the Fund’s Statement of Additional 

Information (‘‘SAI’’), the Fund’s annual 

and semi-annual reports (together, 

‘‘Shareholder Reports’’), and its Form 

N–CSR and Form N–SAR, filed twice a 

year. The Fund’s SAI and Shareholder 

Reports will be available free upon 

request from the Fund, and those 

documents and the Form N–CSR and 

Form N–SAR may be viewed on-screen 

or downloaded from the Commission’s 

Web site at www.sec.gov. 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. 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 (‘‘CTA’’) plans for the 

Shares. Quotation and last sale 

information for the other ETFs in which 

the Fund will invest will be available 

via the quote and trade services of their 

respective primary exchanges, as well as 

in accordance with the Unlisted Trading 

Privileges and the CTA plans, as 

applicable. Quotation and last sale 

information for exchange-traded options 

will be available via the Options Price 

Reporting Authority. Intraday 

executable price quotations on Floating 

Rate Debt Instruments and other assets 

not traded on an exchange will be 

available from major broker-dealer firms 

or market data vendors, as well as from 

automated quotation systems, published 

or other public sources, or online 

information services. Additionally, the 

Trade Reporting and Compliance Engine 

(‘‘TRACE’’) of the Financial Industry 

Regulatory Authority (‘‘FINRA’’) will be 

a source of price information for 

corporate bonds, privately-issued 

securities, mortgage-backed securities 

and asset-backed securities to the extent 

transactions in such securities are 

reported to TRACE.37 For exchangetraded assets, intraday pricing 

information will be available directly 

from the applicable listing exchange. 

Additional information regarding the 

Fund and the Shares, including 

investment strategies, risks, creation and 

redemption procedures, fees, Fund 

holdings disclosure policies, 

distributions and taxes will be included 

in the Registration Statement. 

Initial and Continued Listing 

The Shares will be subject to Rule 

5735, which sets forth the initial and 

continued listing criteria applicable to 

Managed Fund Shares. The Exchange 

represents that, for initial and/or 

continued listing, the Fund must be in 

compliance with Rule 10A–3 38 under 

the Act. A minimum of 100,000 Shares 

will be outstanding at the 

commencement of trading on the 

Exchange. The Exchange will obtain a 

representation from the issuer of the 

Shares that the NAV per Share will be 

calculated daily and that the NAV and 

the Disclosed Portfolio will be made 

available to all market participants at 

the same time. 

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 Shares inadvisable. These may 

include: (1) The extent to which trading 

is not occurring in the securities and/or 

the other assets constituting the 

Disclosed Portfolio of the Fund; or (2) 

whether other unusual conditions or 

circumstances detrimental to the 

maintenance of a fair and orderly 

market are present. Trading in the 

Shares also will be subject to Rule 

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

circumstances under which Shares of 

the Fund 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 

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Federal Register / Vol. 80, No. 41 / Tuesday, March 3, 2015 / Notices 11515 

39FINRA surveils trading on the Exchange 

pursuant to a regulatory services agreement. The 

Exchange is responsible for FINRA’s performance 

under this regulatory services agreement. 40For a list of the current members of ISG, see 

www.isgportal.org. The Exchange notes that not all 

components of the Disclosed Portfolio may trade on 

markets that are members of ISG or with which the 

Exchange has in place a comprehensive 

surveillance sharing agreement. 

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 5735(b)(3), the minimum price 

variation for quoting and entry of orders 

in Managed Fund Shares traded on the 

Exchange is $0.01. 

Surveillance 

The Exchange represents that trading 

in the Shares will be subject to the 

existing trading surveillances, 

administered by both Nasdaq and also 

FINRA on behalf of the Exchange, 

which are designed to detect violations 

of Exchange rules and applicable federal 

securities laws.39 The Exchange 

represents that 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. 

The surveillances referred to above 

generally focus on detecting securities 

trading outside their normal patterns, 

which could be indicative of 

manipulative or other violative activity. 

When such situations are detected, 

surveillance analysis follows and 

investigations are opened, where 

appropriate, to review the behavior of 

all relevant parties for all relevant 

trading violations. 

FINRA, on behalf of the Exchange, 

will communicate as needed regarding 

trading in the Shares and the exchangetraded securities and instruments held 

by the Fund with other markets and 

other entities that are members of ISG,40

and FINRA may obtain trading 

information regarding trading in the 

Shares and the 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 the exchange-traded 

securities and instruments held by the 

Fund from markets and other entities 

that are members of ISG, which includes 

securities and futures exchanges, or 

with which the Exchange has in place 

a comprehensive surveillance sharing 

agreement. Moreover, FINRA, on behalf 

of the Exchange, will be able to access, 

as needed, trade information for certain 

Floating Rate Debt Instruments and 

other debt securities held by the Fund 

reported to FINRA’s TRACE. 

All of the Fund’s net assets that are 

invested in exchange-traded equity 

securities will be invested in securities 

that trade in markets that are members 

of ISG or are parties to a comprehensive 

surveillance sharing agreement with the 

Exchange. At least 90% of the Fund’s 

net assets that are invested in exchangetraded derivative instruments will be 

invested in instruments that trade in 

markets that are members of ISG or are 

parties to a comprehensive surveillance 

sharing agreement with the Exchange. 

In addition, the Exchange also has a 

general policy prohibiting the 

distribution of material, non-public 

information by its employees. 

Information Circular 

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: (1) The 

procedures for purchases and 

redemptions of Shares in Creation Units 

(and that Shares are not individually 

redeemable); (2) Nasdaq Rule 2111A, 

which imposes suitability obligations on 

Nasdaq members with respect to 

recommending transactions in the 

Shares to customers; (3) how 

information regarding the Intraday 

Indicative Value is disseminated; (4) the 

risks involved in trading the Shares 

during the Pre-Market and Post-Market 

Sessions when an updated Intraday 

Indicative Value will not be calculated 

or publicly disseminated; (5) the 

requirement that members deliver a 

prospectus to investors purchasing 

newly issued Shares prior to or 

concurrently with the confirmation of a 

transaction; and (6) trading information. 

The Information Circular will also 

discuss any exemptive, no-action and 

interpretive relief granted by the 

Commission from any rules under the 

Act. 

Additionally, the Information Circular 

will reference that the Fund is subject 

to various fees and expenses described 

in the Registration Statement. The 

Information Circular will also disclose 

the trading hours of the Shares of the 

Fund and the applicable NAV 

Calculation Time for the Shares. The 

Information Circular will disclose that 

information about the Shares of the 

Fund will be publicly available on the 

Fund’s Web site. 

2. Statutory Basis 

Nasdaq believes that the proposal is 

consistent with Section 6(b) of the Act 

in general and Section 6(b)(5) of the Act 

in particular in that it is designed to 

prevent fraudulent and manipulative 

acts and practices, to promote just and 

equitable principles of trade, to foster 

cooperation and coordination with 

persons engaged in facilitating 

transactions in securities, and to remove 

impediments to and perfect the 

mechanism of a free and open market 

and, in general, to protect investors and 

the public interest. 

The Exchange believes that the 

proposed rule change is designed to 

prevent fraudulent and manipulative 

acts and practices in that the Shares will 

be listed and traded on the Exchange 

pursuant to the initial and continued 

listing criteria in Nasdaq Rule 5735. The 

Exchange represents that trading in the 

Shares will be subject to the existing 

trading surveillances, administered by 

both Nasdaq and also FINRA on behalf 

of the Exchange, which are designed to 

detect violations of Exchange rules and 

applicable federal securities laws. 

The Adviser is not a broker-dealer, 

although it is affiliated with the 

Distributor, a broker-dealer, and is 

required to implement a ‘‘fire wall’’ 

with respect to such broker-dealer 

affiliate regarding access to information 

concerning the composition and/or 

changes to the Fund’s portfolio. In 

addition, paragraph (g) of Nasdaq Rule 

5735 further requires that personnel 

who make decisions on the open-end 

fund’s portfolio composition must be 

subject to procedures designed to 

prevent the use and dissemination of 

material non-public information 

regarding the open-end fund’s portfolio. 

FINRA, on behalf of the Exchange, 

will communicate as needed regarding 

trading in the Shares and the exchangetraded securities and instruments held 

by the Fund with other markets and 

other entities that are members of ISG, 

and FINRA may obtain trading 

information regarding trading in the 

Shares and the 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 the exchange-traded 

securities and instruments held by the 

Fund from markets and other entities 

that are members of ISG, which includes 

securities and futures exchanges, or 

with which the Exchange has in place 

a comprehensive surveillance sharing 

agreement. Moreover, FINRA, on behalf 

of the Exchange, will be able to access, 

as needed, trade information for certain 

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11516 Federal Register / Vol. 80, No. 41 / Tuesday, March 3, 2015 / Notices 

Floating Rate Debt Instruments and 

other debt securities held by the Fund 

reported to FINRA’s TRACE. 

All of the Fund’s net assets that are 

invested in exchange-traded equity 

securities will be invested in securities 

that trade in markets that are members 

of ISG or are parties to a comprehensive 

surveillance sharing agreement with the 

Exchange. At least 90% of the Fund’s 

net assets that are invested in exchangetraded derivative instruments will be 

invested in instruments that trade in 

markets that are members of ISG or are 

parties to a comprehensive surveillance 

sharing agreement with the Exchange. 

The investment objective of the Fund 

will be to seek current income. To 

achieve its objective, the Fund will 

invest, under normal market conditions, 

at least 80% of its net assets in a 

portfolio of Floating Rate Debt 

Instruments. In addition, the Fund may 

invest up to 20% of its net assets in 

certain fixed-rate debt securities. The 

Fund may invest up to 20% of the value 

of its net assets in exchange-listed 

options on U.S. Treasury securities, 

exchange-listed options on U.S. 

Treasury futures contracts and 

exchange-listed U.S. Treasury futures 

contracts. The Fund’s investments in 

derivative instruments will be 

consistent with the Fund’s investment 

objective and the 1940 Act and will not 

be used to seek to achieve a multiple or 

inverse multiple of an index. At least 

65% of the Fund’s net assets will be 

invested in Floating Rate Debt 

Instruments that are, at the time of 

purchase, investment grade. The Fund 

will limit its investments in assetbacked securities (excluding agency 

mortgage-backed securities) and nonagency mortgage-backed securities (in 

the aggregate) to 20% of its net assets. 

In addition, the Fund will limit its 

investments in junior loans to 20% of its 

net assets. The Fund may hold up to an 

aggregate amount of 15% of its net 

assets in illiquid assets (calculated at 

the time of investment), including Rule 

144A securities deemed illiquid by the 

Adviser. 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 assets. 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. 

The proposed rule change is designed 

to promote just and equitable principles 

of trade and to protect investors and the 

public interest in that the Exchange will 

obtain a representation from the issuer 

of the Shares that the NAV per Share 

will be calculated daily and that the 

NAV and the Disclosed Portfolio will be 

made available to all market 

participants at the same time. In 

addition, a large amount of information 

will be publicly available regarding the 

Fund and the Shares, thereby promoting 

market transparency. Moreover, the 

Intraday Indicative Value, available on 

the NASDAQ OMX Information LLC 

proprietary index data service, will be 

widely disseminated by one or more 

major market data vendors and broadly 

displayed at least every 15 seconds 

during the Regular Market Session. On 

each business day, before 

commencement of trading in Shares in 

the Regular Market Session on the 

Exchange, the Fund will disclose on its 

Web site the Disclosed Portfolio that 

will form the basis for the Fund’s 

calculation of NAV at the end of the 

business day. Information regarding 

market price and trading volume of the 

Shares will be continually available on 

a real-time basis throughout the day on 

brokers’ computer screens and other 

electronic services, and quotation and 

last sale information for the Shares will 

be available via Nasdaq proprietary 

quote and trade services, as well as in 

accordance with the Unlisted Trading 

Privileges and the CTA plans for the 

Shares. Quotation and last sale 

information for the other ETFs in which 

the Fund will invest will be available 

via the quote and trade services of their 

respective primary exchanges, as well as 

in accordance with the Unlisted Trading 

Privileges and the CTA plans, as 

applicable. Quotation and last sale 

information for exchange-traded options 

will be available via the Options Price 

Reporting Authority. Intraday 

executable price quotations on Floating 

Rate Debt Instruments and other assets 

not traded on an exchange will be 

available from major broker-dealer firms 

or market data vendors, as well as from 

automated quotation systems, published 

or other public sources, or online 

information services. Additionally, 

FINRA’s TRACE will be a source of 

price information for corporate bonds, 

privately-issued securities, mortgagebacked securities and asset-backed 

securities to the extent transactions in 

such securities are reported to TRACE. 

For exchange-traded assets, intraday 

pricing information will be available 

directly from the applicable listing 

exchange. 

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. Trading in Shares of the 

Fund will be halted under the 

conditions specified in Nasdaq Rules 

4120 and 4121 or because of market 

conditions or for reasons that, in the 

view of the Exchange, make trading in 

the Shares inadvisable, and trading in 

the Shares will be subject to Nasdaq 

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

circumstances under which Shares of 

the Fund may be halted. In addition, as 

noted above, investors will have ready 

access to information regarding the 

Fund’s holdings, the Intraday Indicative 

Value, the Disclosed Portfolio, and 

quotation and last sale information for 

the Shares. 

The Fund’s investments will be 

valued daily at market value or, in the 

absence of market value with respect to 

any investment, at fair value, in each 

case in accordance with the Valuation 

Procedures and the 1940 Act. 

The proposed rule change is designed 

to perfect the mechanism of a free and 

open market and, in general, to protect 

investors and the public interest in that 

it will facilitate the listing and trading 

of an additional type of activelymanaged exchange-traded product that 

will enhance competition among market 

participants, to the benefit of investors 

and the marketplace. As noted above, 

FINRA, on behalf of the Exchange, will 

communicate as needed regarding 

trading in the Shares and the exchangetraded securities and instruments held 

by the Fund with other markets and 

other entities that are members of ISG, 

and FINRA may obtain trading 

information regarding trading in the 

Shares and the 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 in the exchange-traded 

securities and instruments held by the 

Fund from markets and other entities 

that are members of ISG, which includes 

securities and futures exchanges, or 

with which the Exchange has in place 

a comprehensive surveillance sharing 

agreement. Furthermore, as noted above, 

investors will have ready access to 

information regarding the Fund’s 

holdings, the Intraday Indicative Value, 

the Disclosed Portfolio, and quotation 

and last sale information for the Shares. 

For the above reasons, Nasdaq 

believes the proposed rule change is 

consistent with the requirements of 

Section 6(b)(5) of the Act. 

mstockstill on DSK4VPTVN1PROD with NOTICES

Federal Register / Vol. 80, No. 41 / Tuesday, March 3, 2015 / Notices 11517 

41 17 CFR 200.30–3(a)(12). 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. The 

Exchange believes that the proposed 

rule change will facilitate the listing and 

trading of an additional type of activelymanaged exchange-traded fund that will 

enhance competition among market 

participants, to the benefit of investors 

and the marketplace. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

Written comments were neither 

solicited nor received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period 

up to 90 days (i) as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding or (ii) as to which 

the Exchange consents, the Commission 

shall: (a) By order approve or 

disapprove such proposed rule change, 

or (b) institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

NASDAQ–2015–011 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–NASDAQ–2015–011. 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– 

NASDAQ–2015–011, and should be 

submitted on or before March 24, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.41

Jill M. Peterson, 

Assistant Secretary. 

[FR Doc. 2015–04334 Filed 3–2–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[File No. 500–1] 

In the Matter of Agent155 Media Corp., 

QSound Labs, Inc., STEN Corp., and 

Wind Energy America, Inc.; Order of 

Suspension of Trading 

February 27, 2015. 

It appears to the Securities and 

Exchange Commission that there is a 

lack of current and accurate information 

concerning the securities of Agent155 

Media Corp. because it has not filed any 

periodic reports since the period ended 

September 30, 2011. 

It appears to the Securities and 

Exchange Commission that there is a 

lack of current and accurate information 

concerning the securities of QSound 

Labs, Inc. because it has not filed any 

periodic reports since the period ended 

December 31, 2007. 

It appears to the Securities and 

Exchange Commission that there is a 

lack of current and accurate information 

concerning the securities of STEN Corp. 

because it has not filed any periodic 

reports since the period ended 

September 28, 2008. 

It appears to the Securities and 

Exchange Commission that there is a 

lack of current and accurate information 

concerning the securities of Wind 

Energy America, Inc. because it has not 

filed any periodic reports since the 

period ended June 30, 2010. 

The Commission is of the opinion that 

the public interest and the protection of 

investors require a suspension of trading 

in the securities of the above-listed 

companies. 

Therefore, it is ordered, pursuant to 

Section 12(k) of the Securities Exchange 

Act of 1934, that trading in the 

securities of the above-listed companies 

is suspended for the period from 9:30 

a.m. EST on February 27, 2015, through 

11:59 p.m. EDT on March 12, 2015. 

By the Commission. 

Jill M. Peterson, 

Assistant Secretary. 

[FR Doc. 2015–04450 Filed 2–27–15; 4:15 pm] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[File No. 500–1] 

Order of Suspension of Trading; In the 

Matter of China Pharmaceuticals, Inc., 

China Printing & Packaging, Inc., 

Silvan Industries, Inc., and Ziyang 

Ceramics Corp. 

February 27, 2015. 

It appears to the Securities and 

Exchange Commission that there is a 

lack of current and accurate information 

concerning the securities of China 

Pharmaceuticals, Inc. because it has not 

filed any periodic reports since the 

period ended June 30, 2012. 

It appears to the Securities and 

Exchange Commission that there is a 

lack of current and accurate information 

concerning the securities of China 

Printing & Packaging, Inc. because it has 

not filed any periodic reports since the 

period ended June 30, 2012. 

It appears to the Securities and 

Exchange Commission that there is a 

lack of current and accurate information 

concerning the securities of Silvan 

Industries, Inc. because it has not filed 

any periodic reports since the period 

ended December 31, 2011. 

It appears to the Securities and 

Exchange Commission that there is a 

lack of current and accurate information 

concerning the securities of Ziyang 

Ceramics Corp. because it has not filed 

mstockstill on DSK4VPTVN1PROD with NOTICES