Federal Register / Vol. 83, No. 16 / Wednesday, January 24, 2018 / Notices 3377 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 82167 

(Nov. 29, 2017), 82 FR 57510. 

4Amendment No. 1 replaces and supersedes the 

original proposed rule change in its entirety. In 

Amendment No. 1, the Exchange: (i) Updates the 

proposed rule change to reflect that the Commission 

granted Brandes Investment Trust exemptive relief 

under the Investment Company Act of 1940; (ii) 

provides a representation regarding transaction fees; 

(iii) represents that orders to trade the Shares of the 

Fund are subject to the proxy price protection 

threshold of plus/minus $1.00; and (iv) deletes 

redundant text and makes other technical and 

clarifying changes. Amendment No. 1 is available 

at: https://www.sec.gov/comments/sr-nasdaq-2017- 

124/nasdaq2017124-2833043-161706.pdf. Because 

Amendment No. 1 does not materially alter the 

substance of the proposal or raise unique or novel 

regulatory issues, Amendment No. 1 is not subject 

to notice and comment. 

5Amendment No. 2 partially amends the 

proposed rule change as modified by Amendment 

No. 1 to add back to the filing the following 

representation, which is inadvertently deleted in 

Amendment 1: ‘‘Personnel who make decisions on 

the 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.’’ 

Amendment No. 2 is available at: https://

www.sec.gov/comments/sr-nasdaq-2017-124/ 

nasdaq2017124-2876297-161750.pdf. Because 

Amendment No. 2 does not materially alter the 

substance of the proposal or raise unique or novel 

regulatory issues, Amendment No. 2 is not subject 

to notice and comment. 

6The Commission has issued an order granting 

the Trust and certain of its affiliates exemptive 

relief under the Investment Company Act of 1940. 

See Investment Company Act Release No. 32925 

(November 28, 2017) (File No. 812–14809). 7See Post-Effective Amendment No. 60 to 

Registration Statement on Form N–1A for the Trust 

dated October 13, 2017 (File Nos. 033–81396 and 

811–08614). 8The Commission notes that additional 

information regarding the Trust, the Fund, and the 

Shares, including investment strategies, risks, 

creation and redemption procedures, calculation of 

net asset value (‘‘NAV’’), fees, distributions, and 

taxes, among other things, can be found in 

Amendments No.1 and 2, and the Registration 

Statement, as applicable. See supra notes 4, 5, and 

7, respectively, and accompanying text. 

9According to the Exchange, additional 

information regarding the Fund will be available on 

a free public website for the Fund 

(www.brandesfunds.com, which may contain links 

for certain information to www.nextshares.com) and 

in the Registration Statement for the Fund. 

10The Exchange represents that the free public 

website containing the Composition File will be 

www.nextshares.com. 

11 In determining whether the Fund will issue or 

redeem creation units entirely on a cash basis, the 

key consideration will be the benefit that would 

accrue to the Fund and its investors. 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–82530; File No. SR– 

NASDAQ–2017–124] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Order 

Granting Approval of a Proposed Rule 

Change, as Modified by Amendments 

No. 1 and 2, To List and Trade Shares 

of Brandes Value NextShares Under 

Nasdaq Rule 5745 

January 18, 2018. 

I. Introduction 

On November 24, 2017, The NASDAQ 

Stock Market LLC (‘‘Nasdaq’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’), pursuant to Section 

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

of 1934 (‘‘Act’’) 1 and Rule 19b–4 

thereunder,2 a proposed rule change to 

list and trade common shares (‘‘Shares’’) 

of Brandes Value NextShares (‘‘Fund’’) 

under Nasdaq Rule 5745. The proposed 

rule change was published for comment 

in the Federal Register on December 5, 

2017.3 On December 20, 2017, the 

Exchange filed Amendment No. 1 to the 

proposed rule change.4 On January 5, 

2018, the Exchange filed Amendment 

No. 2 to the proposed rule change.5 The 

Commission received no comment 

letters on the proposed rule change. 

This order approves the proposed rule 

change, as modified by Amendments 

No. 1 and 2. 

II. Exchange’s Description of the 

Proposed Rule Change 

The Exchange proposes to list and 

trade the Shares of the Fund under 

Nasdaq Rule 5745, which governs the 

listing and trading of Exchange-Traded 

Managed Fund Shares, as defined in 

Nasdaq Rule 5745(c)(1). The Fund is a 

series of Brandes Investment Trust 

(‘‘Trust’’).6 The Exchange represents 

that the Trust is registered with the 

Commission as an open-end investment 

company and has filed a registration 

statement on Form N–1A (‘‘Registration 

Statement’’) with the Commission with 

respect to the Fund.7 Brandes 

Investment Partners L.P. will be the 

adviser to the Fund (‘‘Adviser’’). ALPS 

Distributors, Inc. 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, transfer 

agent, and custodian to the Fund. 

The Exchange has made the following 

representations and statements in 

describing the Fund.8 According to the 

Exchange, the Fund will be actively 

managed and will pursue the principal 

investment strategies described below.9

A. Principal Investment Strategies 

The Fund seeks long-term capital 

appreciation by investing primarily in 

equity securities of U.S. companies. 

Equity securities include common and 

preferred stocks, warrants, and rights. 

While the Fund may purchase equity 

securities issued by companies of any 

size, it typically focuses its investments 

on large-capitalization equity securities. 

B. Portfolio Disclosure and Composition 

File 

Consistent with the disclosure 

requirements that apply to traditional 

open-end investment companies, a 

complete list of current Fund portfolio 

positions will be made available at least 

once each calendar quarter, with a 

reporting lag of not more than 60 days. 

The Fund may provide more frequent 

disclosures of portfolio positions at its 

discretion. 

As defined in Nasdaq Rule 5745(c)(3), 

the ‘‘Composition File’’ is the specified 

portfolio of securities and/or cash that 

the Fund will accept as a deposit in 

issuing a creation unit of the Shares, 

and the specified portfolio of securities 

and/or cash that the Fund will deliver 

in a redemption of a creation unit of the 

Shares. The Composition File will be 

disseminated through the National 

Securities Clearing Corporation once 

each business day before the open of 

trading in the Shares on such day and 

also will be made available to the public 

each day on a free public website.10

Because the Fund seeks to preserve the 

confidentiality of its current portfolio 

trading program, the Fund’s 

Composition File generally will not be 

a pro rata reflection of the Fund’s 

investment positions. Each security 

included in the Composition File will 

be a current holding of the Fund, but the 

Composition File generally will not 

include all of the securities in the 

Fund’s portfolio or match the 

weightings of the included securities in 

the portfolio. Securities that the Adviser 

is in the process of acquiring for the 

Fund generally will not be represented 

in the Fund’s Composition File until the 

purchase has been completed. Similarly, 

securities that are held in the Fund’s 

portfolio but are in the process of being 

sold may not be removed from its 

Composition File until the sale is 

substantially completed. To the extent 

that the Fund creates or redeems the 

Shares in-kind, it will use cash amounts 

to supplement the in-kind transactions 

to the extent necessary to ensure that 

creation units are purchased and 

redeemed at NAV. The Composition 

File also may consist entirely of cash, in 

which case it will not include any of the 

securities in the Fund’s portfolio.11

C. Intraday Indicative Value 

An estimated value of an individual 

Share, defined in Nasdaq Rule 

5745(c)(2) as the Intraday Indicative 

Value (‘‘IIV’’) will be calculated and 

disseminated at intervals of not more 

than 15 minutes throughout the Regular 


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3378 Federal Register / Vol. 83, No. 16 / Wednesday, January 24, 2018 / Notices 

12See 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). 

13The IIV disseminated throughout each trading 

day would be based on the same portfolio as used 

to calculate that day’s NAV. The Fund will reflect 

purchases and sales of portfolio positions in its 

NAV the next business day after trades are 

executed. 

14 In NAV-Based Trading (as referenced herein), 

prices of executed trades are not determined until 

the reference NAV is calculated, so buyers and 

sellers of the Shares during the trading day will not 

know the final value of their purchases and sales 

until the end of the trading day. The Exchange 

represents that the Fund’s Registration Statement, 

website and any advertising or marketing materials 

will include prominent disclosure of this fact. The 

Exchange states that although the IIV may provide 

useful estimates of the value of intraday trades, it 

cannot be used to calculate with precision the 

dollar value of the Shares to be bought or sold. 

15According to the Exchange, the premium or 

discount to NAV at which Share prices are quoted 

and transactions are executed will vary depending 

on market factors, including the balance of supply 

and demand for the Shares among investors, 

transaction fees and other costs in connection with 

creating and redeeming creation units of the Shares, 

the cost and availability of borrowing the Shares, 

competition among market makers, the Share 

inventory positions and inventory strategies of 

market makers, the profitability requirements and 

business objectives of market makers, and the 

volume of Share trading. 

16According to the Exchange, all orders to buy or 

sell the Shares that are not executed on the day the 

order is submitted will be automatically cancelled 

as of the close of trading on such day. Prior to the 

commencement of trading in the Fund, the 

Exchange will inform its members in an 

Information Circular of the effect of this 

characteristic on existing order types. 

17 15 U.S.C. 78f. 

18 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). 

19 15 U.S.C. 78f(b)(5). 

20See Nasdaq Rule 5745(g). 

21See Nasdaq Rule 5745(b)(6). 

22The Exchange states that FINRA provides 

surveillance of trading on the Exchange pursuant to 

a regulatory services agreement and that the 

Market Session 12 when the Shares trade 

on the Exchange. The Exchange will 

obtain a representation from the issuer 

of the Shares that the IIV will be 

calculated on an intraday basis and 

provided to Nasdaq for dissemination 

via the Nasdaq Global Index Service. 

The IIV will be based on current 

information regarding the value of the 

securities and other assets held by the 

Fund.13 The purpose of the IIV is to 

enable investors to estimate the nextdetermined NAV so they can determine 

the number of Shares to buy or sell if 

they want to transact in an approximate 

dollar amount.14

D. NAV-Based Trading 

Because the Shares will be listed and 

traded on the Exchange, the Shares will 

be available for purchase and sale on an 

intraday basis. The Shares will be 

purchased and sold in the secondary 

market at prices directly linked to the 

Fund’s next-determined NAV using a 

trading protocol called ‘‘NAV-Based 

Trading.’’ All bids, offers, and execution 

prices of the Shares will be expressed as 

a premium/discount (which may be 

zero) to the Fund’s next-determined 

NAV (e.g., NAV¥$0.01, NAV+$0.01).15

The Fund’s NAV will be determined 

each business day, as of 4:00 p.m. 

Eastern Time. Trade executions will be 

binding at the time orders are matched 

on Nasdaq’s facilities, with the 

transaction prices contingent upon the 

determination of NAV. Nasdaq 

represents that the Shares listed on the 

Exchange will have a unique identifier 

associated with their ticker symbols, 

which will indicate that the Shares are 

traded using NAV-Based Trading. 

According to the Exchange, member 

firms will utilize certain existing order 

types and interfaces to transmit Share 

bids and offers to Nasdaq, which will 

process Share trades like trades in 

shares of other listed securities.16 In the 

systems used to transmit and process 

transactions in the Shares, the Fund’s 

next-determined NAV will be 

represented by a proxy price (e.g., 

100.00) and a premium/discount of a 

stated amount to the next-determined 

NAV to be represented by the same 

increment/decrement from the proxy 

price used to denote NAV (e.g., NAV ¥ 

$0.01 would be represented as 99.99; 

NAV + $0.01 as 100.01). 

To avoid potential investor confusion, 

Nasdaq represents that it will work with 

member firms and providers of market 

data services to seek to ensure that 

representations of intraday bids, offers, 

and execution prices of the Shares that 

are made available to the investing 

public follow the ‘‘NAV ¥ $0.01/NAV 

+ $0.01’’ (or similar) display format. 

Specifically, the Exchange will use the 

NASDAQ Basic and NASDAQ Last Sale 

data feeds to disseminate intraday price 

and quote data for the Shares in real 

time in the ‘‘NAV ¥ $0.01/NAV + 

$0.01’’ (or similar) display format. 

Member firms may use the Nasdaq Basic 

and Nasdaq Last Sale data feeds to 

source intraday Share prices for 

presentation to the investing public in 

the ‘‘NAV ¥ $0.01/NAV + $0.01’’ (or 

similar) display format. 

Alternatively, member firms could 

source intraday Share prices in proxy 

price format from the Consolidated Tape 

and other Nasdaq data feeds (e.g., 

Nasdaq TotalView and Nasdaq Level 2) 

and use a simple algorithm to convert 

prices into the ‘‘NAV ¥ $0.01/NAV + 

$0.01’’ (or similar) display format. Prior 

to the commencement of trading in the 

Fund, the Exchange will inform its 

members in an Information Circular of 

the identities of the specific Nasdaq data 

feeds from which intraday Share prices 

in proxy price format may be obtained. 

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 Act 17 and the rules and regulations 

thereunder applicable to a national 

securities exchange.18 In particular, the 

Commission finds that the proposed 

rule change is consistent with Section 

6(b)(5) of the Act,19 which requires, 

among other things, that the Exchange’s 

rules be designed to prevent fraudulent 

and manipulative acts and practices, to 

promote just and equitable principles of 

trade, to foster cooperation and 

coordination with persons engaged in 

facilitating transactions in securities, to 

remove impediments to and perfect the 

mechanism of a free and open market 

and a national market system, and, in 

general, to protect investors and the 

public interest. 

The Shares will be subject to Nasdaq 

Rule 5745, which sets forth the initial 

and continued listing criteria applicable 

to Exchange-Traded Managed Fund 

Shares. A minimum of 50,000 Shares 

and no less than two creation units of 

the Fund will be outstanding at the 

commencement of trading 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. Every order to trade the 

Shares is subject to the proxy price 

protection threshold of plus/minus 

$1.00, which determines the lower and 

upper thresholds for the life of the order 

and provides that the order will be 

cancelled at any point if it exceeds 

$101.00 or falls below $99.00, the 

established thresholds.20 With certain 

exceptions, each order also must 

contain the applicable order attributes, 

including routing instructions and timein-force information, as described in 

Nasdaq Rule 4703.21

Nasdaq also represents that 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.22 The 


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Federal Register / Vol. 83, No. 16 / Wednesday, January 24, 2018 / Notices 3379 

Exchange is responsible for FINRA’s performance 

under this regulatory services agreement. 

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

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

components of the Fund’s portfolio may trade on 

markets that are members of ISG or with which the 

Exchange has in place a comprehensive 

surveillance sharing agreement. 

24The Exchange further represents that an 

investment adviser to an open-end fund is required 

to be registered under the Investment Advisers Act 

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

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 nonpublic information by an investment adviser must 

be consistent with Rule 204A–1 under the Advisers 

Act. In addition, Rule 206(4)–7 under the Advisers 

Act makes it unlawful for an investment adviser to 

provide investment advice to clients unless such 

investment adviser has (i) adopted and 

implemented written policies and procedures 

reasonably designed to prevent violation, by the 

investment adviser and its supervised persons, of 

the Advisers Act and the Commission rules adopted 

thereunder; (ii) implemented, at a minimum, an 

annual review regarding the adequacy of the 

policies and procedures established pursuant to 

subparagraph (i) above and the effectiveness of their 

implementation; and (iii) designated an individual 

(who is a supervised person) responsible for 

administering the policies and procedures adopted 

under subparagraph (i) above. 

25See Nasdaq Rule 5745(c)(4). 

26 15 U.S.C. 78k–1(a)(1)(C)(iii). 

27 Due to systems limitations, the Consolidated 

Tape will report intraday execution prices and 

quotes for the Shares using a proxy price format. 

Nasdaq has represented that it will separately report 

real-time execution prices and quotes to member 

firms and providers of market data services in the 

‘‘NAV¥$0.01/NAV+$0.01’’ (or similar) display 

format, and otherwise seek to ensure that 

representations of intraday bids, offers and 

execution prices for the Shares that are made 

available to the investing public follow the same 

display format. 

28According to Nasdaq, FTP is a standard 

network protocol used to transfer computer files on 

the internet. Nasdaq will arrange for the daily 

dissemination of an FTP file with executed Share 

trades to member firms and market data services. 

Exchange represents that these 

surveillance procedures are adequate to 

properly monitor trading of the Shares 

on the Exchange and to deter and detect 

violations of Exchange rules and 

applicable federal securities laws. 

FINRA, on behalf of the Exchange, will 

communicate as needed with, and may 

obtain information from, other markets 

and other entities that are members of 

the Intermarket Surveillance Group 

(‘‘ISG’’) 23 regarding trading in the 

Shares and in exchange-traded 

securities held by the Fund (to the 

extent such exchange-traded securities 

are known through the publication of 

the Composition File and periodic 

public disclosures of the Fund’s 

portfolio holdings). In addition, the 

Exchange may obtain information 

regarding trading in the Shares, and in 

exchange-traded securities held by the 

Fund (to the extent such exchangetraded securities are known through the 

publication of the Composition File and 

periodic public disclosures of the 

Fund’s portfolio holdings), from markets 

and other entities that are members of 

ISG or with which the Exchange has in 

place a comprehensive surveillance 

sharing agreement. 

Prior to the commencement of trading 

in the Fund, 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 the Shares in creation 

units (and that the 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 IIV and 

Composition File is disseminated; (d) 

the requirement that members deliver a 

prospectus to investors purchasing the 

Shares prior to or concurrently with the 

confirmation of a transaction; and (e) 

information regarding NAV-Based 

Trading protocols. 

The Information Circular also will 

identify the specific Nasdaq data feeds 

from which intraday Share prices in 

proxy price format may be obtained. As 

noted above, all orders to buy or sell the 

Shares that are not executed on the day 

the order is submitted will be 

automatically cancelled as of the close 

of trading on such day, and the 

Information Circular will discuss the 

effect of this characteristic on existing 

order types. In addition, Nasdaq intends 

to provide its members with a detailed 

explanation of NAV-Based Trading 

through a Trading Alert issued prior to 

the commencement of trading in the 

Shares on the Exchange. 

Nasdaq states that the Adviser is not 

a registered broker-dealer, and is not 

affiliated with a broker-dealer. The 

Exchange represents the Adviser will 

implement and will maintain a fire wall 

with respect to any future affiliated 

broker-dealer regarding access to 

information concerning the composition 

of, and/or changes to, the Fund’s 

portfolio.24 In addition, personnel who 

make decisions on the Fund’s portfolio 

composition must be subject to 

procedures designed to prevent the use 

and dissemination of material, nonpublic information regarding the openend fund’s portfolio. The Exchange 

represents that the Reporting 

Authority 25 that provides the 

Composition File will implement and 

maintain, or be subject to, procedures 

designed to prevent the use and 

dissemination of material non-public 

information regarding the Fund’s 

portfolio positions and changes in the 

positions. In the event that (a) the 

Adviser registers as a broker-dealer or 

becomes newly affiliated with a brokerdealer, or (b) any new adviser or subadviser to the Fund is a registered 

broker-dealer or becomes affiliated with 

a broker-dealer, it will implement and 

will maintain a fire wall with respect to 

its relevant personnel and/or such 

broker-dealer affiliate, if applicable, 

regarding access to information 

concerning the composition and/or 

changes to the Fund’s portfolio and will 

be subject to procedures designed to 

prevent the use and dissemination of 

material non-public information 

regarding such portfolio. 

The Commission finds that the 

proposal to list and trade the Shares on 

the Exchange is consistent with Section 

11A(a)(1)(C)(iii) of the Act,26 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. Information 

regarding NAV-based trading prices, 

best bids and offers for the Shares, and 

volume of the Shares traded will be 

continuously available on a real-time 

basis throughout each trading day on 

brokers’ computer screens and other 

electronic services. All bids and offers 

for the Shares and all Share trade 

executions will be reported intraday in 

real time by the Exchange to the 

Consolidated Tape 27 and separately 

disseminated to member firms and 

market data services through the 

Exchange data feeds. 

The Commission notes that once a 

Fund’s daily NAV is calculated and 

provided to the Exchange, Nasdaq will 

price each Share trade entered into 

during the day at the Fund’s NAV plus/ 

minus the trade’s executed premium/ 

discount. Using the final trade price, 

each executed Share trade will then be 

disseminated to member firms and 

market data services via a File Transfer 

Protocol (‘‘FTP’’) file to be created for 

exchange-traded managed funds and 

confirmed to the member firms 

participating in the trade to supplement 

the previously provided information to 

include final pricing.28

The Exchange will obtain a 

representation from the issuer of the 

Shares that the NAV per Share will be 


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3380 Federal Register / Vol. 83, No. 16 / Wednesday, January 24, 2018 / Notices 

29The Exchange represents that the website 

containing this information will be 

www.brandesfunds.com. 

30The Commission notes that certain other 

proposals for the listing and trading of Managed 

Fund Shares include a representation that the 

exchange will ‘‘surveil’’ for compliance with the 

continued listing requirements. See, e.g., Securities 

Exchange Act Release No. 78005 (Jun. 7, 2016), 81 

FR 38247 (Jun. 13, 2016) (SR–BATS–2015–100). In 

the context of this representation, it is the 

Commission’s view that ‘‘monitor’’ and ‘‘surveil’’ 

both mean ongoing oversight of a fund’s compliance 

with the continued listing requirements. Therefore, 

the Commission does not view ‘‘monitor’’ as a more 

or less stringent obligation than ‘‘surveil’’ with 

respect to the continued listing requirements. 

31 15 U.S.C. 78f(b)(5). 

32 15 U.S.C. 78k–1(a)(1)(C)(iii). 

33 15 U.S.C. 78s(b)(2). 

34 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. 

calculated daily (on each business day 

the New York Stock Exchange is open 

for trading) and provided to Nasdaq via 

the Mutual Fund Quotation Service 

(‘‘MFQS’’) by the fund accounting agent. 

As soon as the NAV is entered into the 

MFQS, Nasdaq will disseminate the 

NAV to market participants and market 

data vendors via the Mutual Fund 

Dissemination Service so all firms will 

receive the NAV per Share at the same 

time. 

The Exchange further represents that 

it may consider all relevant factors in 

exercising its discretion to halt or 

suspend trading in the Shares. The 

Exchange will halt trading in the Shares 

under the conditions specified in 

Nasdaq Rule 4120 and in Nasdaq Rule 

5745(d)(2)(D). Additionally, the 

Exchange may cease trading the Shares 

if other unusual conditions or 

circumstances exist that, in the opinion 

of the Exchange, make further dealings 

on the Exchange detrimental to the 

maintenance of a fair and orderly 

market. To manage the risk of a nonregulatory Share trading halt, Nasdaq 

has in place back-up processes and 

procedures to ensure orderly trading. 

Prior to the commencement of market 

trading in the Shares, the Fund will be 

required to establish and maintain a free 

public website through which its 

current prospectus may be 

downloaded.29 The website will include 

additional information concerning the 

Fund updated on a daily basis, 

including the prior business day’s NAV, 

and the following trading information 

for the business day expressed as 

premiums/discounts to NAV: (a) 

Intraday high, low, average and closing 

prices of the Shares in Exchange 

trading; (b) the midpoint of the highest 

bid and lowest offer prices as of the 

close of Exchange trading, expressed as 

a premium/discount to NAV (‘‘Closing 

Bid/Ask Midpoint’’); and (c) the spread 

between highest bid and lowest offer 

prices as of the close of Exchange 

trading (‘‘Closing Bid/Ask Spread’’). The 

website will also contain charts showing 

the frequency distribution and range of 

values of trading prices, Closing Bid/ 

Ask Midpoints and Closing Bid/Ask 

Spreads over time. 

The Exchange represents that all 

statements and representations made in 

this filing regarding: (a) The description 

of the portfolio or reference assets, (b) 

limitations on portfolio holdings or 

reference assets, (c) dissemination and 

availability of the reference asset or IIV, 

or (d) the applicability of Exchange 

listing rules shall constitute continued 

listing requirements for listing the 

Shares on the Exchange. The issuer has 

represented to the Exchange that it will 

advise the Exchange of any failure by 

the Fund to comply with the continued 

listing requirements, and, pursuant to 

its obligations under Section 19(g)(1) of 

the Act, the Exchange will monitor for 

compliance with the continued listing 

requirements.30 If the Fund is not in 

compliance with the applicable listing 

requirements, the Exchange will 

commence delisting procedures under 

the Nasdaq 5800 Series. 

The approval order is based on all of 

the Exchange’s representations, 

including those set forth above and in 

Amendments No. 1 and 2. In particular, 

the Commission notes that, although the 

Shares will be available for purchase 

and sale on an intraday basis, the Shares 

will be purchased and sold at prices 

directly linked to the Fund’s nextdetermined NAV. Further, the 

Commission notes that the Fund and the 

Shares must comply with the 

requirements of Nasdaq Rule 5745 and 

the conditions set forth in this proposed 

rule change to be listed and traded on 

the Exchange on an initial and 

continuing basis. 

For the foregoing reasons, the 

Commission finds that the proposed 

rule change, as modified by 

Amendments No. 1 and 2, is consistent 

with Section 6(b)(5) 31 and Section 

11A(a)(1)(C)(iii) of the Act,32 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 Act,33 that the 

proposed rule change (SR–NASDAQ– 

2017–124), as modified by Amendments 

No. 1 and 2, be, and hereby is, 

approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.34

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–01207 Filed 1–23–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–82532; File No. SR– 

NYSEArca–2018–02] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing of Proposed 

Rule Change Relating to Listing and 

Trading of the Direxion Daily Bitcoin 

Bear 1X Shares, Direxion Daily Bitcoin 

1.25X Bull Shares, Direxion Daily 

Bitcoin 1.5X Bull Shares, Direxion 

Daily Bitcoin 2X Bull Shares and 

Direxion Daily Bitcoin 2X Bear Shares 

Under NYSE Arca Rule 8.200–E 

January 18, 2018. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that, on January 

4, 2018, NYSE Arca, Inc. (the 

‘‘Exchange’’ or ‘‘NYSE Arca’’) filed with 

the Securities and Exchange 

Commission (the ‘‘Commission’’) the 

proposed rule change as described in 

Items I and II below, which Items have 

been prepared by the self-regulatory 

organization. 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 list and 

trade the shares of the following under 

NYSE Arca Rule 8.200–E, Commentary 

.02 (‘‘Trust Issued Receipts’’): Direxion 

Daily Bitcoin Bear 1X Shares, Direxion 

Daily Bitcoin 1.25X Bull Shares, 

Direxion Daily Bitcoin 1.5X Bull Shares, 

Direxion Daily Bitcoin 2X Bull Shares 

and Direxion Daily Bitcoin 2X Bear 

Shares. The proposed change is 

available on the Exchange’s website at 

www.nyse.com, at the principal office of 

the Exchange, and at the Commission’s 

Public Reference Room. 


daltland on DSKBBV9HB2PROD with NOTICES