11786 Federal Register / Vol. 87, No. 41 / Wednesday, March 2, 2022 / Notices 

85See supra notes 37–39 and accompanying text. 

86Proposed Nasdaq Rule 4120(c)(9)(B)(vii). 

87Amended Notice, supra note 11, 87 FR at 1800– 

01. See proposed Nasdaq Rule 4120(c)(9)(B)(v) 

stating that the Price Volatility Constraint 

‘‘indicates that the security may be ready to trade.’’ 

See also Nasdaq Letter, at 7 (‘‘Then, Nasdaq will 

publicly indicate when the Price Volatility 

Constraint has been met, thus providing investors 

with real time information that the price discovery 

process nears completion and the security is ready 

to trade shortly.’’) 

88The Exchange’s proposal states that investors 

could enter additional orders or cancel existing 

orders throughout the pre-opening process until the 

actual opening auction price is calculated; 

therefore, the Current Reference Price may change 

throughout this time period. See proposed Nasdaq 

Rule 4120(c)(9)(B)(v) and (viii)(b). 

89These conditions also include a determination 

that the issuer’s CDL Order will be executed in full 

in the Nasdaq Halt Cross, a price validation test, 

and satisfaction of the pricing conditions. See 

proposed Nasdaq Rule 4120(c)(9)(B)(vii). 

90Rule 700(b)(3), Commission Rules of Practice, 

17 CFR 201.700(b)(3). 

91 15 U.S.C. 78f(b)(5). 

92 In disapproving the proposed rule change, the 

Commission has considered its impact on 

efficiency, competition, and capital formation. See 

15 U.S.C. 78c(f). According to the Exchange, the 

proposal would give issuers additional flexibility in 

becoming a public company, and in that way 

promote competition among service providers, such 

as underwriters and other advisers, to such 

companies. See Amended Notice, supra note 11, 87 

FR at 1804. One commenter expresses its belief that 

the ability for companies to raise primary capital in 

a direct listing provides companies with additional 

choice and flexibility as they consider alternatives 

to going public and, therefore, helps facilitate 

capital formation. See Letter from Evan Damast, 

Global Head of Equity and Fixed Income Syndicate, 

Morgan Stanley (July 21, 2021); Letter from Evan 

Damast, Global Head of Equity and Fixed Income 

Syndicate, Morgan Stanley (February 1, 2022). 

Another commenter states that adding a primary 

capital raise to a direct listing would advance the 

efficiency and openness of the U.S. capital markets 

and solve a conflict of interest problem. See Letter 

from Bill Gurley, General Partner, Benchmark 

(February 2, 2022). See also Letter from Ran D. BenTzur and Jennifer J. Hitchcock, Fenwick & West LLP 

(February 1, 2022) (stating that the proposal would 

mitigate issuers’ reluctance to use a Direct Listing 

with a Capital Raise because traditional IPOs are 

not subject to similar price range limitations); Letter 

from Barry McCarthy (February 1, 2022) (stating 

that Direct Listings with a Capital Raise are the next 

logical evolution of a direct listing, but will not 

work with the current price range constraints). 

Another commenter states that it believes the 

proposal would stimulate a vibrant ecosystem of 

data and analytics and fintech companies to further 

refine IPO pricing accuracy and broaden investor 

participation, thus improving capital 

intermediation for U.S. markets. See Letter from 

Burke Dempsey, EVP Head of Investment Banking, 

Wedbush Securities Inc. (August 9, 2021). For the 

reasons discussed throughout, however, the 

Commission is disapproving the proposed rule 

change because it does not find that the proposed 

rule change is consistent with the Exchange Act. 

93 15 U.S.C. 78s(b)(2). 

94 17 CFR 200.30–3(a)(12). 

Reference Price not deviate by 10% or 

more from any Current Reference Price 

in the previous 10 minutes, as a 

condition to the opening auction in a 

Direct Listing with a Capital Raise.85

Specifically, the Exchange’s proposal 

provides that ‘‘[t]he Pre-Launch Period 

shall continue until the Price Volatility 

Constraint is satisfied.’’ 86 The Exchange 

also proposes to disseminate 

information about whether the Price 

Volatility Constraint has been satisfied, 

which, according to the Exchange, ‘‘will 

indicate whether the security is ready to 

trade,’’ and ‘‘will provide investors with 

notice that the Cross nears 

execution.’’ 87 Once the Price Volatility 

Constraint is satisfied, however, there 

are additional conditions that must be 

met before the opening cross will occur 

and in the intervening period the 

expected opening auction price may 

change because orders can continue to 

be entered and cancelled.88 Specifically, 

the Exchange, in consultation with the 

financial advisor to the issuer, must 

make the determination that the security 

is ready to trade, and several additional 

conditions specified in proposed 

Nasdaq Rule 4120(c)(9)(B)(vii) and (viii) 

must be met, including the potential 

initiation and conclusion of a PostPricing Period.89 Thus, it would appear 

that there could be a substantial price 

change during the period of time 

between the Exchange’s dissemination 

of the fact that the Price Volatility 

Constraint has been satisfied and the 

actual execution of the opening cross for 

a Direct Listing with a Capital Raise. In 

such event, investors could be misled 

that the opening cross ‘‘nears 

execution’’ and that the disseminated 

Current Reference Price will likely be 

close to the opening auction price when, 

in fact, the auction may not occur for a 

considerable time and the opening 

auction price may differ substantially. 

The Exchange has not addressed this 

potential discrepancy between the 

stated purpose of the proposed 

dissemination of the Price Volatility 

Constraint, and its potential application 

in practice, or explained how this result 

would be consistent with the protection 

of investors, the public interest, or the 

other requirements of Section 6(b)(5) of 

the Exchange Act. 

As stated above, under the 

Commission’s Rules of Practice, the 

‘‘burden to demonstrate that a proposed 

rule change is consistent with the 

Exchange Act and the rules and 

regulations issued thereunder . . . is on 

the self-regulatory organization that 

proposed the rule change.90 For the 

foregoing reasons, the Exchange has not 

met its burden to demonstrate that its 

proposal is consistent with the 

Exchange Act. In particular, the 

Exchange has not adequately 

demonstrated that its proposal to allow 

a Direct Listing with a Capital Raise to 

proceed at an opening auction price that 

falls outside of the disclosed price range 

is consistent with investor protection, 

the public interest, and other relevant 

provisions of Section 6(b)(5) of the 

Exchange Act. 91 Accordingly, for the 

reasons set forth above, the Commission 

must disapprove the proposed rule 

change, as modified by Amendment No. 

2, because the Exchange has not met its 

burden to demonstrate that the proposal 

is consistent with Section 6(b)(5) of the 

Exchange Act.92

III. Conclusion 

The Commission does not find, 

pursuant to Section 19(b)(2) of the 

Exchange Act,93 that the proposed rule 

change is consistent with the Exchange 

Act and the rules and regulations 

thereunder applicable to a national 

securities exchange, and, in particular, 

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

Act. 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Exchange Act, 

that the proposed rule change (SR– 

NASDAQ–2021–045), as modified by 

Amendment No. 2, be, and hereby is, 

Disapproved. 

For the Commission, by the Division 

of Trading and Markets, pursuant to 

delegated authority.94

Eduardo Aleman, 

Assistant Secretary. 

[FR Doc. 2022–04336 Filed 3–1–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

34516; File No. 812–15282] 

Northern Lights Fund Trust IV, et al. 

February 24, 2022. 

AGENCY: Securities and Exchange 

Commission (‘‘Commission’’ or ‘‘SEC’’). 

ACTION: Notice. 

Notice of an application under section 

6(c) of the Investment Company Act of 

1940 (the ‘‘Act’’) for an exemption from 

sections 2(a)(32), 5(a)(1) and 22(d) of the 

Act and rule 22c–1 under the Act and 

under sections 6(c) and 17(b) of the Act 

for an exemption from sections 17(a)(1) 

and 17(a)(2) of the Act. 

SUMMARY OF APPLICATION: Applicants 

request an order (‘‘Order’’) that permits: 

(a) ActiveShares ETFs (as described in 

the Reference Order (as defined below)) 

to issue shares (‘‘Shares’’) redeemable in 

large aggregations only (‘‘creation 

units’’); (b) secondary market 

transactions in Shares to occur at 

negotiated market prices rather than at 

net asset value; and (c) certain affiliated 


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Federal Register / Vol. 87, No. 41 / Wednesday, March 2, 2022 / Notices 11787 

1Precidian ETFs Trust, et al., Investment 

Company Act Rel. Nos. 33440 (April 8, 2019) 

(notice) and 33477 (May 20, 2019) (order). 

1See Letter from Robert Books, Chair, UTP 

Operating Committee, to Vanessa Countryman, 

Secretary, Commission (Nov. 5, 2021) (‘‘Cover 

Letter’’). 

2The Plan governs the collection, processing, and 

dissemination on a consolidated basis of quotation 

information and transaction reports in Eligible 

Securities for its Participants. The Plan serves as the 

required transaction reporting plan for its 

Participants, which is a prerequisite for their 

trading Eligible Securities. See Securities Exchange 

Act Release No. 55647 (Apr. 19, 2007), 72 FR 20891 

(Apr. 26, 2007). 

3 15 U.S.C 78k–1. 

4 17 CFR 242.608. 

5The Proposed Amendment was approved and 

executed by more than the Plan’s required twothirds of the self-regulatory organizations (‘‘SROs’’) 

that are participants of the UTP Plan. The 

participants that approved and executed the 

amendment (the ‘‘Participants’’) are: Cboe BYX 

Exchange, Inc., Cboe BZX Exchange, Inc., Cboe 

EDGA Exchange, Inc., Cboe EDGX Exchange, Inc., 

Cboe Exchange, Inc., Nasdaq ISE, LLC, Nasdaq 

PHLX, Inc., The Nasdaq Stock Market LLC, New 

York Stock Exchange LLC, NYSE American LLC, 

NYSE Arca, Inc., NYSE Chicago, Inc., and NYSE 

National, Inc.. The other SROs that are participants 

in the UTP Plan are: Financial Industry Regulatory 

Authority, Inc., The Investors’ Exchange LLC, LongTerm Stock Exchange, Inc., MEMX LLC, MIAX 

PEARL, LLC, and Nasdaq BX, Inc. 

6See Securities Exchange Act Release No. 93618 

(Nov. 19, 2021), 86 FR 67562 (Nov. 26, 2021) 

(‘‘Notice’’). Comments received in response to the 

Notice are available at https://www.sec.gov/ 

comments/s7-24-89/s72489.shtml. 

7 17 CFR 242.608(b)(2)(i). 

8The full text of the Proposed Amendment 

appears as Attachment A to the Notice. See Notice, 

supra note 6, 86 FR 67566–68. 

9See Securities Exchange Act Release No. 90610, 

86 FR 18596 (April 9, 2021) (File No. S7–03–20) 

(‘‘MDI Rule Release’’). 

10See Securities Exchange Act Release No. 93620 

(Nov. 19, 2021), 86 FR 67541 (Nov. 26, 2021). 

11 17 CFR 242.600(b)(26). 

persons of an ActiveShares ETF to 

deposit securities into, and receive 

securities from, the ActiveShares ETF in 

connection with the purchase and 

redemption of creation units. The relief 

in the Order would incorporate by 

reference terms and conditions of the 

same relief of a previous order granting 

the same relief sought by applicants, as 

that order may be amended from time to 

time (‘‘Reference Order’’).1

APPLICANTS: Northern Lights Fund 

Trust IV, First Manhattan Co. and 

Northern Lights Distributors, LLC. 

FILING DATES: The application was filed 

on November 10, 2021, and amended on 

February 4, 2022. 

HEARING OR NOTIFICATION OF HEARING: 

An order granting the requested relief 

will be issued unless the Commission 

orders a hearing. Interested persons may 

request a hearing on any application by 

emailing the Commission’s Secretary at 

Secretarys-Office@sec.gov and serving 

applicants with a copy of the request by 

email, if an email address is listed for 

the relevant applicant below, or 

personally or by mail, if a physical 

address is listed for the relevant 

applicant below. Hearing requests 

should be received by the Commission 

by 5:30 p.m. on March 21, 2022, and 

should be accompanied by proof of 

service on applicants, in the form of an 

affidavit or, for lawyers, a certificate of 

service. Pursuant to rule 0–5 under the 

Act, hearing requests should state the 

nature of the writer’s interest, any facts 

bearing upon the desirability of a 

hearing on the matter, the reason for the 

request, and the issues contested. 

Persons who wish to be notified of a 

hearing may request notification by 

emailing the Commission’s Secretary. 

ADDRESSES: The Commission: 

Secretarys-Office@sec.gov. Applicants: 

Wendy Wang, Northern Lights Fund 

Trust IV, wwang@

ultimusfundsolutions.com; Benjamin 

Clammer, First Manhattan Co., 

bclammer@firstmanhattan.com; Kevin 

Guerette, Northern Lights Distributors, 

LLC, kguerette@

ultimusfundsolutions.com; JoAnn M. 

Strasser, Esq. and Bibb L. Strench, Esq., 

Thompson Hine LLP, JoAnn.Strasser@

ThompsonHine.com, Bibb.Strench@

ThompsonHine.com. 

FOR FURTHER INFORMATION CONTACT: 

Deepak T. Pai, Senior Counsel, or Trace 

W. Rakestraw, Branch Chief, at (202) 

551–6825 (Division of Investment 

Management, Chief Counsel’s Office). 

SUPPLEMENTARY INFORMATION: For 

applicants’ representations, legal 

analysis, and conditions, please refer to 

applicants’ amended application, dated 

February 4, 2022, which may be 

obtained via the Commission’s website 

by searching for the file number at the 

top of this document, or for an 

Applicant using the Company name 

search field, on the SEC’s EDGAR 

system. The SEC’s EDGAR system may 

be searched at https://www.sec.gov/ 

edgar/searchedgar/legacy/ 

companysearch.html. You may also call 

the SEC’s Public Reference Room at 

(202) 551–8090. 

For the Commission, by the Division of 

Investment Management, under delegated 

authority. 

Jill M. Peterson, 

Assistant Secretary. 

[FR Doc. 2022–04312 Filed 3–1–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94307; File No. S7–24–89] 

Joint Industry Plan; Order Instituting 

Proceedings To Determine Whether To 

Approve or Disapprove the FiftySecond Amendment to the Joint SelfRegulatory Organization Plan 

Governing the Collection, 

Consolidation and Dissemination of 

Quotation and Transaction Information 

for Nasdaq-Listed Securities Traded on 

Exchanges on an Unlisted Trading 

Privileges Basis 

February 24, 2022. 

I. Introduction 

On November 5, 2021,1 certain 

participants in the Joint Self-Regulatory 

Organization Plan Governing the 

Collection, Consolidation and 

Dissemination of Quotation and 

Transaction Information for NasdaqListed Securities Traded on Exchanges 

on an Unlisted Trading Privileges Basis 

(‘‘Nasdaq/UTP Plan’’ or ‘‘Plan’’) 2 filed 

with the Securities and Exchange 

Commission (‘‘SEC’’ or ‘‘Commission’’), 

pursuant to Section 11A of the 

Securities Exchange Act of 1934 

(‘‘Act’’) 3 and Rule 608 of Regulation 

National Market System (‘‘NMS’’) 

thereunder,4 a proposal (the ‘‘Proposed 

Amendment’’) to amend the Nasdaq/ 

UTP Plan.5 The Proposed Amendment 

was published for comment in the 

Federal Register on November 26, 

2021.6

This order institutes proceedings, 

under Rule 608(b)(2)(i) of Regulation 

NMS,7 to determine whether to approve 

or disapprove the Proposed Amendment 

or to approve the Proposed Amendment 

with any changes or subject to any 

conditions the Commission deems 

necessary or appropriate after 

considering public comment. 

II. Summary of the Proposed 

Amendment 8

Under the Proposed Amendment, the 

Participants propose to amend the Plan 

to adopt fees for the receipt of the 

expanded content of consolidated 

market data pursuant to the 

Commission’s Market Data 

Infrastructure Rule (‘‘MDI Rule’’).9 The 

Participants have submitted a separate 

amendment to implement the non-feerelated aspects of the MDI Rule.10

The Participants propose a fee 

structure for the following three 

categories of consolidated equity market 

data, which collectively constitute the 

amended definition of core data, as that 

term is defined in amended Rule 

600(b)(21) of Regulation NMS: 11

(1) Level 1 Service, which would 

include Top of Book Quotations, Last 

Sale Price Information, and odd-lot 


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