22584 Federal Register / Vol. 80, No. 77 / Wednesday, April 22, 2015 / Notices 

22 15 U.S.C. 78s(b)(2)(B). 

23 17 CFR 200.30–3(a)(12). 

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. 74378 

(February 25, 2015), 80 FR 11509 (‘‘Notice’’). 

5 In Amendment No. 1, the Exchange clarified 

that the quotation and last-sale information will be 

available via the Options Price Reporting Authority 

only for U.S. exchange-listed options that the Fund 

holds. Amendment No. 1 is not subject to notice 

and comment because it is a technical amendment 

that does not materially alter the substance of the 

proposed rule change or raise any novel regulatory 

issues. 

6 In Amendment No. 2, the Exchange removed 

exchange-listed options on U.S. Treasury securities 

from the types of derivative instruments in which 

the Fund may invest. Amendment No. 2 is not 

subject to notice and comment because it does not 

materially alter the substance of the proposed rule 

change or raise any novel regulatory issues. 

7The Commission has issued an order, upon 

which the Trust may rely, granting certain 

exemptive relief under the Investment Company 

Act of 1940 (‘‘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 that the 

Fund believes affects its ability to invest in 

derivatives notwithstanding certain representations 

in the application for the Exemptive Relief. See 

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

8See 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). 

9See Notice, supra note 4, 80 FR at 11510. 

10See id. 

under Section 19(b)(2)(B) of the Act 22 to 

determine whether the proposed rule 

change should be approved or 

disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposal 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 No. SR– 

BATS–2015–30 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE., 

Washington, DC 20549–1090. 

All submissions should refer to File No. 

SR–BATS–2015–30. 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 the 

filing will also 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 No. SR–BATS– 

2015–30 and should be submitted on or 

before May 13, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.23

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–09272 Filed 4–21–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74742; File No. SR– 

NASDAQ–2015–011] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Order 

Approving a Proposed Rule Change, 

as Modified by Amendments No. 1 and 

No. 2, To List and Trade the Shares of 

the First Trust Strategic Floating Rate 

ETF of First Trust Exchange-Traded 

Fund IV 

April 16, 2015. 

I. Introduction 

On February 12, 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 shares (‘‘Shares’’) of the 

First Trust Strategic Floating Rate ETF 

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

NASDAQ Rule 5735. The proposed rule 

change was published for comment in 

the Federal Register on March 3, 2015.4

On April 6, 2015, the Exchange filed 

Amendment No. 1 to the proposed rule 

change.5 On April 15, 2015, the 

Exchange filed Amendment No. 2 to the 

proposed rule change.6 The Commission 

received no comments on the proposed 

rule change. This order approves the 

proposed rule change, as modified by 

Amendments No. 1 and No. 2. 

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.7

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.8 The Fund will 

be a series of the Trust. 

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 will act as the 

administrator, accounting agent, 

custodian and transfer agent to the 

Fund. The Exchange states that the 

Adviser is not a broker-dealer, although 

it is affiliated with the Distributor, a 

broker-dealer.9 In addition, the 

Exchange states that the Adviser has 

implemented a fire wall with respect to 

its broker-dealer affiliate regarding 

access to information concerning the 

composition and/or changes to the 

portfolio, and that personnel who make 

decisions on the Fund’s portfolio 

composition will be subject to 

procedures designed to prevent the use 

and dissemination of material nonpublic information regarding the Fund’s 

portfolio.10 In the event (a) the Adviser 

becomes, or becomes newly affiliated 

with, a broker-dealer, or (b) any new 

adviser or sub-adviser is a registered 

broker-dealer or becomes affiliated with 

another broker-dealer, it will implement 

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 


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11See id. 

12Additional information regarding, among other 

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

objectives, the Fund’s strategies, methodology and 

restrictions, risks; fees and expenses associated 

with the Shares, creations and redemptions of 

Shares, availability of price 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 7, respectively. 

13The term ‘‘under normal market conditions’’ 

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. 

14The Adviser expects that, generally, under 

normal market conditions, 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. See Notice, supra note 4, 80 

FR at 11511, n.10. 

15Under normal market conditions, the privatelyissued securities in which the Fund will invest will 

have, at the time of original issuance, $100 million 

or more principal amount outstanding to be 

considered eligible investments. See id. at 11511, 

n.12. 

16The Exchange states that 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. See id. at 11511, n.18. 

17Comparable 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. See id. at 11511, n.19. 

18See id. at 11511. 

19See id. 

20At 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’’) or are parties to a 

comprehensive surveillance sharing agreement with 

the Exchange. See id. at 11512, n.28. 

portfolio.11 The Fund does not currently 

intend to use a sub-adviser. 

The Exchange has made the following 

representations and statements 

regarding the Fund.12

Principal Investments for the Fund 

The investment objective of the Fund 

will be to seek current income. To 

achieve its objective, the Fund will 

invest, under normal market 

conditions,13 at least 80% of its net 

assets in a portfolio of the following 

types of floating-rate debt instruments 

issued by U.S. and non-U.S. public- and 

private-sector entities: Floating-rate 

corporate 14 and government bonds and 

notes; floating-rate agency securities; 

floating-rate instruments of non-U.S. 

issuers; floating-rate privately-issued 

securities; 15 floating-rate asset-backed 

securities; floating-rate mortgage-backed 

securities; floating-rate loans; and 

investment companies that invest 

primarily in the foregoing types of debt 

instruments (collectively, ‘‘Floating Rate 

Debt Instruments’’). 

According to the Exchange, 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 

Exchange represents that 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, and/ 

or Fitch Ratings, or Baa3 or higher by 

Moody’s Investors Service, Inc).16 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 quality 17 by the 

Adviser. The Exchange states that 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.18

The Exchange states that 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.19

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. 

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: Corporate and government 

bonds and notes; agency securities; 

instruments of non-U.S. issuers in 

developed markets; privately-issued 

securities; asset-backed securities; 

mortgage-backed securities; municipal 

bonds; money market securities; and 

investment companies (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 futures contracts and 

exchange-listed U.S. Treasury futures 

contracts.20 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. According to the 

Exchange, 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. 

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, 


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22586 Federal Register / Vol. 80, No. 77 / Wednesday, April 22, 2015 / Notices 

21 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). 

22 15 U.S.C. 78f(b)(5). 

23 15 U.S.C. 78k–1(a)(1)(C)(iii). 

24See Amendment No. 1, supra note 5. 

25See Notice, supra note 4, 80 FR at 11514. 

26See id. 

27Under 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. 

28See id. 

29Currently, 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. 

30See id. 

31See id. at 11516. 

32These 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. See id. at 

11514. 

33See id. at 11515. 

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 Fund will not invest in non-U.S. 

equity securities. 

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.21 In 

particular, the Commission finds that 

the proposed rule change is consistent 

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

Act,22 which requires, among other 

things, that the Exchange’s rules be 

designed 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,23

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, 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 U.S. exchange-listed 

options will be available via the Options 

Price Reporting Authority.24

Intraday executable price quotations 

on Floating Rate Debt Instruments and 

other assets not traded on an exchange 

will be available from major brokerdealer firms or market data vendors, as 

well as from automated quotation 

systems, published or other public 

sources, or online information 

services.25 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.26 For exchangetraded assets, intraday pricing 

information will be available directly 

from the applicable listing exchange. 

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. 

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 (9:30 a.m. to 

4:00 p.m. or 4:15 p.m., Eastern Time) 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’’ 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.27 The Fund’s 

disclosure of derivative positions in the 

Disclosed Portfolio will include 

information that market participants can 

use to value these positions intraday. 

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.28 The Intraday Indicative 

Value, available on the NASDAQ OMX 

Information LLC proprietary index data 

service,29 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.30 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.31

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 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.32 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 

information by its employees.33 The 

Exchange states that the Adviser is not 

a broker-dealer, although it is affiliated 

with the Distributor, a broker-dealer. In 

addition, the Exchange states that the 

Adviser has implemented a fire wall 


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34See id. at 11510. 

35For 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. 36See 17 CFR 240.10A–3. 

37 15 U.S.C. 78f(b)(5). 

38 15 U.S.C. 78s(b)(2). 

39 17 CFR 200.30–3(a)(12). 

with respect to its broker-dealer affiliate 

regarding access to information 

concerning the composition and/or 

changes to the portfolio, and that 

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.34 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. 

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,35

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. 

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 

detect and help deter 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) how 

information regarding the Intraday 

Indicative Value is disseminated; (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; and (f) trading information. 

(5) For initial and/or continued 

listing, the Fund must be in compliance 

with Rule 10A–3 36 under the Act. 

(6) 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. 

(7) Not more than 35% of the Fund’s 

net assets will be invested 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). 

(8) Not more than 20% of the Fund’s 

net assets will be invested in assetbacked securities (excluding agency 

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

the aggregate) to 20% of its net assets. 

(9) Not more than 20% of the Fund’s 

net assets will be invested in in junior 

loans. 

(10) 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. 

(11) 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. 

(12) 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. 

(13) The Fund will not invest in nonU.S. equity securities. 

(14) 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, as modified by Amendment 

No. 1 and No. 2, is consistent with 

Section 6(b)(5) of the Act 37 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,38

that the proposed rule change (SR– 

NASDAQ–2015–011), as modified by 

Amendments No. 1 and No. 2, is hereby 

approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.39

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–09271 Filed 4–21–15; 8:45 am] 

BILLING CODE 8011–01–P 


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