Federal Register / Vol. 80, No. 76 / Tuesday, April 21, 2015 / Notices 22249 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4See Securities Exchange Act Release No. 74377 

(February 25, 2015), 80 FR 11502 (‘‘Notice’’). 

5The Trust has obtained an order from the 

Commission granting certain exemptive relief to the 

Trust under the 1940 Act. See Investment Company 

Act Release No. 31469 (February 24, 2015) (File No. 

812–14402). 

6See Post- Effective Amendment No. 43 to the 

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

dated February 4, 2015 (File Nos. 333–179562 and 

811–22668). 

7See Notice, supra note 4, 80 FR at 11503. In 

addition, the Exchange states that, in the event (a) 

the Adviser becomes 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, 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 

nonpublic information regarding such portfolio. 

According to the Exchange, the Adviser has no 

present intent or arrangement to become affiliated 

with any broker-dealer, and the Fund does not 

currently intend to use a sub-adviser. Id. 

8Additional information regarding, among other 

things, the Fund, the Shares, the Fund’s investment 

objectives, the Fund’s strategies, the Fund’s 

holdings, risks, fees and expenses associated with 

the Shares, creations and redemptions of Shares, 

availability of information, trading rules and halts, 

and surveillance procedures can be found in the 

Notice and the Registration Statement. See Notice, 

supra note 4, and Registration Statement, supra 

note 6, respectively. 

9The 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 securities 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. 

prospectus, the Company will not 

exercise any right it may have under the 

Contract to impose restrictions on 

transfers between the subaccounts 

under the Contracts, including 

limitations on the future number of 

transfers, for a period beginning at least 

30 days before the Effective Date 

through at least 30 days following the 

Effective Date. 

7. All Affected Contract Owners will 

be notified, at least 30 days before the 

Effective Date about: (a) The intended 

substitution of Existing Funds with the 

Replacement Funds; (b) the intended 

Effective Date; and (c) information with 

respect to transfers as set forth in 

Condition 6 above. In addition, the 

Companies will also deliver, at least 30 

days before the Effective Date a 

prospectus for each applicable 

Replacement Fund. 

8. Companies will deliver to each 

Affected Contract Owner within five (5) 

business days of the Effective Date a 

written confirmation which will 

include: (a) A confirmation that the 

Substitutions were carried out as 

previously notified; (b) a restatement of 

the information set forth in the PreSubstitution Notice; and (c) before and 

after account values. 

9. After the Effective Date Applicants 

agree not to change a Replacement 

Fund’s sub-adviser without first (a) 

obtaining shareholder approval of the 

sub-adviser change or (b) Voya Variable 

Portfolios Inc. determining that it can 

continue to rely on its manager-ofmanagers exemptive order. 

10. For two years following the 

Effective Date the net annual expenses 

of each Replacement Fund will not 

exceed the net annual expenses of the 

corresponding Existing Fund as of the 

Fund’s most recent fiscal year. To 

achieve this limitation, the Replacement 

Fund’s investment adviser will waive 

fees or reimburse the Replacement Fund 

in certain amounts to maintain expenses 

at or below the limit. Any adjustments 

will be made at least on a quarterly 

basis. In addition, the Companies will 

not increase the Contract fees and 

charges including asset based charges 

such as mortality expense risk charges 

deducted from the subaccounts that 

would otherwise be assessed under the 

terms of the Contracts for a period of at 

least two years following the Effective 

Date. 

For the Commission, by the Division of 

Investment Management, under delegated 

authority. 

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–09067 Filed 4–20–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74728; File No. SR– 

NASDAQ–2015–013] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Order 

Approving a Proposed Rule Change To 

List and Trade Shares of the 

AlphaMark Actively Managed Small 

Cap ETF of ETF Series Solutions 

April 15, 2015. 

I. Introduction 

On February 17, 2015, The NASDAQ 

Stock Market LLC (the ‘‘Exchange’’ or 

‘‘Nasdaq’’) filed with the Securities and 

Exchange Commission (‘‘Commission’’), 

pursuant to section 19(b)(1) 1 of the 

Securities Exchange Act of 1934 (‘‘Act’’ 

or ‘‘Exchange Act’’) 2 and Rule 19b–4 

thereunder,3 a proposed rule change to 

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

the AlphaMark Actively Managed Small 

Cap ETF (the ‘‘Fund’’) of ETF Series 

Solutions (the ‘‘Trust’’) under Nasdaq 

Rule 5735. The proposed rule change 

was published for comment in the 

Federal Register on March 3, 2015.4 The 

Commission received no comments on 

the proposed rule change. This order 

approves the proposed rule change. 

II. Description of the Proposal 

The Exchange proposes to list and 

trade the Shares under Nasdaq Rule 

5735, which governs the listing and 

trading of Managed Fund Shares on the 

Exchange. The Fund will be an activelymanaged exchange-traded fund (‘‘ETF’’). 

The Shares will be offered by the Trust.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 is a 

series of the Trust. 

AlphaMark Advisors, LLC will be the 

investment adviser (‘‘Adviser’’) to the 

Fund. Quasar Distributors, LLC (the 

‘‘Distributor’’) will be the principal 

underwriter and distributor of the 

Fund’s Shares. U.S. Bancorp Fund 

Services, LLC will act as the 

administrator, accounting agent, and 

transfer agent to the Fund. U.S. Bank 

National Association will act as the 

custodian to the Fund. The Exchange 

states that the Adviser is not a brokerdealer, and is not affiliated with any 

broker-dealer.7 The Exchange has made 

the following representations and 

statements regarding the Fund.8

Principal Investments 

The Fund’s primary investment 

objective is to seek long-term growth of 

capital. The Fund will pursue its 

objectives by investing primarily—i.e., 

at least 80% of its assets under normal 

market conditions 9—in a portfolio of 

equity securities of small cap companies 

listed on a U.S. exchange. 

The Fund defines ‘‘equity securities’’ 

to include common and preferred stock, 

American Depositary Receipts 

(‘‘ADRs’’), real estate investment trusts, 

and ETFs that under normal 

circumstances invest at least 80% of 

their net assets in equity securities of 

small cap companies (‘‘Small Cap 

ETFs’’). The Fund may invest up to 30% 

of its net assets in foreign equity 

securities of small cap companies traded 

on a U.S. exchange as ADRs, which may 

include companies in emerging markets. 

The Adviser expects that there will 

generally be between 25 and 40 stocks 

in the Fund’s portfolio. 

The Fund is non-diversified, and 

therefore may invest a larger percentage 

of its assets in the securities of a single 


tkelley on DSK3SPTVN1PROD with NOTICES
22250 Federal Register / Vol. 80, No. 76 / Tuesday, April 21, 2015 / Notices 

10See Notice, supra note 4, 80 FR at 11504. 

11The Exchange states that not more than 10% of 

the net assets of the Fund, in the aggregate, will be 

invested in unlisted equity securities or equity 

securities not listed on an exchange that is a 

member of the ISG or a party to a comprehensive 

surveillance sharing agreement with the Exchange. 

See id. at 11504, n.12. 

12 In approving this proposed rule change, the 

Commission 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 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) PostMarket Session from 4 p.m. or 4:15 p.m. to 8 p.m. 

Eastern time). 

16See Notice, supra note 4, 80 FR at 11507. 

17Currently, the NASDAQ OMX Global Index 

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

index data feed service. The Exchange represents 

that GIDS offers real-time updates, daily summary 

messages, and access to widely followed indexes 

and Intraday Indicative Values for ETFs, and that 

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. 

18See id. at 11506. 

19See id. at 11509. 

20These may include: (1) The extent to which 

trading is not occurring in the securities and/or the 

financial instruments 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. See id. at 11507. 

company than diversified funds. The 

Fund’s investment in various sectors 

may change significantly over time. The 

Fund’s investment in foreign equity 

securities will be in the form of ADRs 

and may include ADRs representing 

companies in emerging markets. With 

respect to its investments as part of its 

principal investment strategies in 

exchange-listed securities, the Fund will 

invest in such securities that trade in 

markets that are members of the 

Intermarket Surveillance Group 

(‘‘ISG’’).10

Other Investments 

Although the Fund under normal 

circumstances will invest at least 80% 

of its assets in U.S. exchange-listed 

equity securities, the Fund may invest 

the remaining assets in: Equity 

securities traded over-the-counter; 11

money market instruments; securities of 

open-end mutual funds, money market 

mutual funds, and ETFs other than 

Small Cap ETFs; and non-exchangelisted ADRs. 

III. Discussion and Commission 

Findings 

After careful review, the Commission 

finds that the Exchange’s proposal to list 

and trade the Shares is consistent with 

the Exchange Act 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 section 6(b)(5) of the Exchange 

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 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 Exchange Act,14

which sets forth Congress’ finding 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 and via the 

Consolidated Tape Association (‘‘CTA’’) 

plans for the Shares. 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. 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 

any underlying exchange-traded 

products will also 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. 

Intraday, 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 broker-dealer firms and through 

subscription or free services that can be 

accessed by authorized participants and 

other investors. Intraday price 

information for exchange-traded 

securities will be publicly available 

from the Web sites of the exchanges on 

which they trade, on public financial 

Web sites, and through subscription 

services. Intraday price information 

regarding over-the-counter equities 

(including certain investment company 

securities) and money market 

instruments, will be available through 

subscription services. 

The Commission also 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. On 

each business day, before 

commencement of trading in Shares in 

the Regular Market Session 15 on the 

Exchange, the Fund will disclose on its 

Web site the identities and quantities of 

the portfolio of securities and other 

assets (the ‘‘Disclosed Portfolio’’) held 

by the Fund that will form the basis for 

the Fund’s calculation of NAV at the 

end of the business day. The Web site 

information will be publicly available at 

no charge. The 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 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.16 The intraday indicative 

value, available on the NASDAQ OMX 

Information LLC proprietary index data 

service,17 will be based upon the current 

value for the components of the 

Disclosed Portfolio and will be updated 

and widely disseminated and broadly 

displayed at least every 15 seconds 

during the Regular Market Session.18

The Web site for the Fund will include 

the prospectus for the Fund and 

additional data relating to NAV and 

other applicable quantitative 

information.19

The Exchange represents that it 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.20

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. 

The Exchange states that it has a 

general policy prohibiting the 

distribution of material, non-public 


tkelley on DSK3SPTVN1PROD with NOTICES
Federal Register / Vol. 80, No. 76 / Tuesday, April 21, 2015 / Notices 22251 

21See id. at 11508. 

22See supra note 7. 

23For a list of the current members of ISG, see 

www.isgportal.org. 24See 17 CFR 240.10A–3. 

25 15 U.S.C. 78f(b)(5). 

26 15 U.S.C. 78s(b)(2). 

27 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

information by its employees.21 The 

Exchange states that the Adviser is not 

a broker-dealer, and is not affiliated 

with any broker-dealer. In addition, the 

Exchange states that in the event (a) the 

Adviser becomes affiliated with a 

broker-dealer or registers as a brokerdealer, or (b) any new adviser or subadviser is a registered broker-dealer or 

becomes affiliated with a broker-dealer, 

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 nonpublic information 

regarding such portfolio.22

FINRA, on behalf of the Exchange, 

will communicate as needed regarding 

trading in the Shares and other 

exchange-traded securities 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 from such markets and other 

entities. In addition, the Exchange may 

obtain information regarding trading in 

the Shares and other exchange-traded 

securities from markets and other 

entities that are members of ISG or with 

which the Exchange has in place a 

comprehensive surveillance sharing 

agreement.23

The Commission notes that the Fund 

and the Shares must comply with the 

requirements of Nasdaq Rule 5735 to be 

listed and traded on the Exchange. 

Nasdaq deems the Shares to be equity 

securities, thus rendering trading in the 

Shares subject to Nasdaq’s existing rules 

governing the trading of equity 

securities. In support of this proposal, 

the Exchange represented that: 

(1) The Shares will be subject to 

Nasdaq Rule 5735, which sets forth the 

initial and continued listing criteria 

applicable to Managed Fund Shares. 

(2) Trading in the Shares will be 

subject to the existing trading 

surveillances administered by both 

Nasdaq and FINRA on behalf of the 

Exchange, which are designed to detect 

violations of Exchange rules and 

applicable federal securities laws, and 

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. 

(3) The Exchange has appropriate 

rules to facilitate transactions in the 

Shares during all trading sessions. 

(4) 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) the 

dissemination of information regarding 

the Intraday Indicative Value through 

major index service providers such as 

NASDAQ OMX proprietary index data 

services or other major market 

proprietary index services; (d) 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; (e) the 

requirement that members deliver a 

prospectus to investors purchasing 

newly issued Shares prior to or 

concurrently with the confirmation of a 

transaction; (f) trading information; and 

(g) the dissemination of the Disclosed 

Portfolio through the Fund’s Web site. 

(5) For initial and/or continued 

listing, the Fund must be in compliance 

with Rule 10A–3 24 under the Act. 

(6) The Fund may invest up to 30% 

of its net assets in foreign equity 

securities of small cap companies traded 

on a U.S. exchange as ADRs, which may 

include companies in emerging markets. 

(7) The Fund may hold up to an 

aggregate amount of 15% of its net 

assets in illiquid securities or other 

illiquid assets (calculated at the time of 

investment). 

(8) The Fund may not invest more 

than 25% of the value of its total assets 

in securities of issuers in any one 

industry or group of industries. This 

restriction does not apply to obligations 

issued or guaranteed by the U.S. 

government, its agencies or 

instrumentalities, or securities of other 

registered investment companies. 

(9) Not more than 10% of the net 

assets of the Fund, in the aggregate, will 

be invested in unlisted equity securities 

or equity securities not listed on an 

exchange that is a member of the ISG or 

a party to a comprehensive surveillance 

sharing agreement with the Exchange. 

(10) A minimum of 100,000 Shares 

will be outstanding at the 

commencement of trading on the 

Exchange. 

This approval order is based on all of 

the Exchange’s representations, 

including those set forth above and in 

the Notice. For the foregoing reasons, 

the Commission finds that the proposed 

rule change is consistent with section 

6(b)(5) of the Act 25 and the rules and 

regulations thereunder applicable to a 

national securities exchange. 

IV. Conclusion 

It is therefore ordered, pursuant to 

section 19(b)(2) of the Exchange Act,26

that the proposed rule change (SR– 

NASDAQ–2015–013) be, and it hereby 

is, approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.27

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–09064 Filed 4–20–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74733; File No. SR–C2– 

2015–007] 

Self-Regulatory Organizations; C2 

Options Exchange, Incorporated; 

Notice of Filing and Immediate 

Effectiveness of a Proposed Rule 

Change To Amend the Fees Schedule 

April 15, 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 April 10, 

2015, C2 Options Exchange, 

Incorporated (the ‘‘Exchange’’ or ‘‘C2’’) 

filed with the Securities and Exchange 

Commission (the ‘‘Commission’’) the 

proposed rule change as described in 

Items I, II, and III below, which Items 

have been prepared by the Exchange. 

The Commission is publishing this 

notice to solicit comments on the 

proposed rule change from interested 

persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend its 

Fees Schedule. The text of the proposed 

rule change is available on the 


tkelley on DSK3SPTVN1PROD with NOTICES