43262 Federal Register / Vol. 82, No. 177 / Thursday, September 14, 2017 / Notices 

7 Id. 

8 15 U.S.C. 78f(b). 

9 15 U.S.C. 78f(b)(5). 

10 15 U.S.C. 78s(b)(3)(A)(iii). 

11 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6) requires a self-regulatory organization to give 

the Commission written notice of its intent to file 

the proposed rule change at least five business days 

prior to the date of filing of the proposed rule 

change, or such shorter time as designated by the 

Commission. The Exchange has satisfied this 

requirement. 12 17 CFR 200.30–3(a)(12). 

Laws in the manner set forth in Section 

1. Furthermore, the Exchange has 

always intended to allow amendments 

to the By-Laws by either the Company 

Member or the Board, as evidenced by 

the discussions of this provision in both 

the Governance Approval Order and 

Notice of Filing.7 The existing language 

in Section 1 itself, however, provides 

that the By-Laws may be amended by 

the Company Member and by the 

majority of the Exchange’s Board of 

Directors, so the Exchange is now 

seeking to make the non-substantive 

change from ‘‘and’’ to ‘‘or’’ in Section 1 

to reflect the rule’s original intent. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,8 in general, and furthers the 

objectives of Section 6(b)(5) of the Act,9

in particular, in that it is 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, by 

permitting the Exchange to align the 

implementation date of its Governance 

Proposal with its affiliates Nasdaq 

GEMX, LLC and Nasdaq MRX, LLC, and 

to make non-substantive corrections to 

the proposed By-Laws. The Exchange’s 

proposal does not significantly affect the 

protection of investors or the public 

interest because this proposal does not 

make any substantive changes to the 

Governance Proposal itself; the only 

changes are to extend the 

implementation date and to make nonsubstantive corrections to the proposed 

By-Laws, as discussed above. As noted 

above, the Exchange will provide 

advance notice to members with respect 

to the specific implementation date 

through a Regulatory Alert. In addition, 

the Exchange believes that the nonsubstantive amendments to the By-Laws 

proposed herein will alleviate potential 

confusion as to the applicability of the 

Exchange’s rules, which will protect 

investors and the public interest. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition not 

necessary or appropriate in furtherance 

of the purposes of the Act. The 

Exchange’s proposal does not impose 

any significant burden on competition 

because the Governance Proposal and 

the proposed non-substantive changes 

to the By-Laws will apply to all market 

participants in a uniform manner once 

implemented. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were either 

solicited or received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing proposed rule 

change does not: (i) Significantly affect 

the protection of investors or the public 

interest; (ii) impose any significant 

burden on competition; and (iii) become 

operative for 30 days from the date on 

which it was filed, or such shorter time 

as the Commission may designate, it has 

become effective pursuant to Section 

19(b)(3)(A)(iii) of the Act 10 and 

subparagraph (f)(6) of Rule 19b–4 

thereunder.11

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is: (i) Necessary or appropriate in 

the public interest; (ii) for the protection 

of investors; or (iii) otherwise in 

furtherance of the purposes of the Act. 

If the Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

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 proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

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

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

ISE–2017–80 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Brent J. Fields, Secretary, Securities 

and Exchange Commission, 100 F Street 

NE., Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–ISE–2017–80. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

Internet Web site (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for Web site viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE., 

Washington, DC 20549 on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of such 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change; 

the Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR–ISE– 

2017–80, and should be submitted on or 

before October 5, 2017. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–19477 Filed 9–13–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

32812; 812–14781] 

Innovator ETFs Trust, et al. 

September 11, 2017. 

AGENCY: Securities and Exchange 

Commission (‘‘Commission’’). 

ACTION: Notice. 

Notice of an application for an order 

under section 6(c) of the Investment 

Company Act of 1940 (the ‘‘Act’’) for an 

exemption from sections 2(a)(32), 


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Federal Register / Vol. 82, No. 177 / Thursday, September 14, 2017 / Notices 43263 

1Applicants request that the order apply to the 

initial Fund and any additional series of the Trust, 

and any other open-end management investment 

company or series thereof (each, included in the 

term ‘‘Fund’’), each of which will operate as an 

actively-managed ETF. Any Fund will (a) be 

advised by Innovator or an entity controlling, 

controlled by, or under common control with 

Innovator (each, an ‘‘Advisor’’) and (b) comply with 

the terms and conditions of the application. 

2Prior to May 9, 2017, Innovator Management 

LLC (‘‘Innovator Management’’) served as the 

Trust’s investment adviser. (Innovator and 

Innovator Management are not affiliated persons of 

each other.) Innovator Management entered into an 

agreement with Innovator pursuant to which 

Innovator Management transferred the assets of its 

investment advisory business and related 

intellectual property to Innovator (the 

‘‘Transaction’’). The closing of the Transaction (the 

‘‘Closing’’) occurred on May 9, 2017. The 

Commission previously granted relief to Innovator 

Management and the Trust that, other than the 

identity of the investment adviser, was identical in 

all material respects to that requested in the 

application. Innovator Management LLC, et al., 

Investment Company Act Release Nos. 31209 (Aug. 

13, 2014) (notice) and 31248 (Sep. 9, 2014) (order) 

(‘‘Existing Order’’). On May 5, 2017, the 

Commission staff provided oral no-action relief to 

Innovator, the Trust, and the Distributor to rely on 

the Existing Order until the earlier of the receipt of 

any order granted by the Commission on the 

application or 150 days from the date of the 

Closing. 

5(a)(1), 22(d), and 22(e) of the Act and 

rule 22c–1 under the Act, 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, and under section 

12(d)(1)(J) for an exemption from 

sections 12(d)(1)(A) and 12(d)(1)(B) of 

the Act. The requested order would 

permit (a) actively-managed series of 

certain open-end management 

investment companies (‘‘Funds’’) to 

issue shares redeemable in large 

aggregations only (‘‘Creation Units’’); (b) 

secondary market transactions in Fund 

shares to occur at negotiated market 

prices rather than at net asset value 

(‘‘NAV’’); (c) certain Funds to pay 

redemption proceeds, under certain 

circumstances, more than seven days 

after the tender of shares for 

redemption; (d) certain affiliated 

persons of a Fund to deposit securities 

into, and receive securities from, the 

Fund in connection with the purchase 

and redemption of Creation Units; and 

(e) certain registered management 

investment companies and unit 

investment trusts outside of the same 

group of investment companies as the 

Funds (‘‘Funds of Funds’’) to acquire 

shares of the Funds. 

APPLICANTS: Innovator Capital 

Management, LLC (‘‘Innovator’’), a 

Delaware limited liability company 

registered as an investment adviser 

under the Investment Advisers Act of 

1940, Innovator ETFs Trust (formerly, 

Academy Funds Trust) (the ‘‘Trust’’), a 

Delaware statutory trust registered 

under the Act as an open-end 

management investment company with 

multiple series, and Quasar Distributors, 

LLC (the ‘‘Distributor’’), a Delaware 

limited liability company and brokerdealer registered under the Securities 

Exchange Act of 1934 (‘‘Exchange Act’’). 

FILING DATES: The application was filed 

on June 7, 2017, and amended on 

September 8, 2017. 

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 by writing to the 

Commission’s Secretary and serving 

applicants with a copy of the request, 

personally or by mail. Hearing requests 

should be received by the Commission 

by 5:30 p.m. on October 5, 2017, 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 

writing to the Commission’s Secretary. 

ADDRESSES: Secretary, Securities and 

Exchange Commission, 100 F Street NE., 

Washington, DC 20549–1090; 

Applicants: The Trust and Innovator, 

120 N. Hale Street, Suite 200, Wheaton, 

Illinois 60187; the Distributor, 615 East 

Michigan Street, Milwaukee, Wisconsin 

53202. 

FOR FURTHER INFORMATION CONTACT: HaeSung Lee, Attorney-Adviser, at (202) 

551–7345, or Andrea Ottomanelli 

Magovern, Acting Branch Chief, at (202) 

551–6821 (Division of Investment 

Management, Chief Counsel’s Office). 

SUPPLEMENTARY INFORMATION: The 

following is a summary of the 

application. The complete application 

may be obtained via the Commission’s 

Web site by searching for the file 

number, or for an applicant using the 

Company name box, at http://

www.sec.gov/search/search.htm or by 

calling (202) 551–8090. 

Summary of the Application 

1. Applicants request an order that 

would allow Funds to operate as 

actively-managed exchange traded 

funds (‘‘ETFs’’).1 Fund shares will be 

purchased and redeemed at their NAV 

in Creation Units only. All orders to 

purchase Creation Units and all 

redemption requests will be placed by 

or through an ‘‘Authorized Participant,’’ 

which will have signed a participant 

agreement with the Distributor. Shares 

will be listed and traded individually on 

a national securities exchange, where 

share prices will be based on the current 

bid/offer market. Any order granting the 

requested relief would be subject to the 

terms and conditions stated in the 

application.2

2. Each Fund will consist of a 

portfolio of securities and other assets 

and investment positions (‘‘Portfolio 

Instruments’’). Each Fund will disclose 

on its Web site the identities and 

quantities of the Portfolio Instruments 

that will form the basis for the Fund’s 

calculation of NAV at the end of the 

day. 

3. Shares will be purchased and 

redeemed in Creation Units and 

generally on an in-kind basis. Except 

where the purchase or redemption will 

include cash under the limited 

circumstances specified in the 

application, purchasers will be required 

to purchase Creation Units by 

depositing specified instruments 

(‘‘Deposit Instruments’’), and 

shareholders redeeming their shares 

will receive specified instruments 

(‘‘Redemption Instruments’’). The 

Deposit Instruments and the 

Redemption Instruments will each 

correspond pro rata to the positions in 

the Fund’s portfolio (including cash 

positions) except as specified in the 

application. 

4. Because shares will not be 

individually redeemable, applicants 

request an exemption from section 

5(a)(1) and section 2(a)(32) of the Act 

that would permit the Funds to register 

as open-end management investment 

companies and issue shares that are 

redeemable in Creation Units only. 

5. Applicants also request an 

exemption from section 22(d) of the Act 

and rule 22c–1 under the Act as 

secondary market trading in shares will 

take place at negotiated prices, not at a 

current offering price described in a 

Fund’s prospectus, and not at a price 

based on NAV. Applicants state that (a) 

secondary market trading in shares does 

not involve a Fund as a party and will 

not result in dilution of an investment 

in shares, and (b) to the extent different 

prices exist during a given trading day, 

or from day to day, such variances occur 

as a result of third-party market forces, 

such as supply and demand. Therefore, 

applicants assert that secondary market 

transactions in shares will not lead to 

discrimination or preferential treatment 

among purchasers. Finally, applicants 

represent that share market prices will 

be disciplined by arbitrage 

opportunities, which should prevent 


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43264 Federal Register / Vol. 82, No. 177 / Thursday, September 14, 2017 / Notices 

3The requested relief would apply to direct sales 

of shares in Creation Units by a Fund to a Fund of 

Funds and redemptions of those shares. Applicants, 

moreover, are not seeking relief from section 17(a) 

for, and the requested relief will not apply to, 

transactions where a Fund could be deemed an 

affiliated person, or a second-tier affiliate, of a Fund 

of Funds because an Advisor or an entity 

controlling, controlled by or under common control 

with an Advisor provides investment advisory 

services to that Fund of Funds. 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 81188 

(July 21, 2017), 82 FR 35014 (‘‘Notice’’). 

4 In Amendment No. 1, the Exchange proposes to 

remove a reference to Retail Order from Exchange 

Rule 4702(b)(12)(B) and to remove a reference to 

Retail Orders and RPI Orders from Exchange Rule 

4703(l), as these two order types are no longer 

available on the Exchange. The Exchange also 

provides an example to illustrate its assertion that 

permitting members to submit Limit On Close 

(‘‘LOC’’) Orders until immediately prior to 3:55 

p.m. would facilitate price discovery in the Nasdaq 

Closing Cross. Amendment No. 1 is available at 

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

061/nasdaq2017061.htm. 

5For a more detailed description of the proposal, 

see Notice, supra note 3 and Amendment No. 1, 

supra note 4. 

6See Exchange Rule 4702(b)(12) (defining LOC 

Order). 

7The Exchange proposes a related change to 

Exchange Rule 4702(b)(12)(B) to provide that LOC 

Orders and Closing Cross/Extended Hours Orders 

entered at or after 3:55 p.m. ET would be rejected. 

shares from trading at a material 

discount or premium from NAV. 

6. With respect to Funds that hold 

non-U.S. Portfolio Instruments and that 

effect creations and redemptions of 

Creation Units in kind, applicants 

request relief from the requirement 

imposed by section 22(e) in order to 

allow such Funds to pay redemption 

proceeds within fourteen calendar days 

following the tender of Creation Units 

for redemption. Applicants assert that 

the requested relief would not be 

inconsistent with the spirit and intent of 

section 22(e) to prevent unreasonable, 

undisclosed or unforeseen delays in the 

actual payment of redemption proceeds. 

7. Applicants request an exemption to 

permit Funds of Funds to acquire Fund 

shares beyond the limits of section 

12(d)(1)(A) of the Act; and the Funds, 

and any principal underwriter for the 

Funds, and/or any broker or dealer 

registered under the Exchange Act, to 

sell shares to Funds of Funds beyond 

the limits of section 12(d)(1)(B) of the 

Act. The application’s terms and 

conditions are designed to, among other 

things, help prevent any potential (i) 

undue influence over a Fund through 

control or voting power, or in 

connection with certain services, 

transactions, and underwritings, (ii) 

excessive layering of fees, and (iii) 

overly complex fund structures, which 

are the concerns underlying the limits 

in sections 12(d)(1)(A) and (B) of the 

Act. 

8. Applicants request an exemption 

from sections 17(a)(1) and 17(a)(2) of the 

Act to permit persons that are affiliated 

persons, or second-tier affiliates, of the 

Funds, solely by virtue of certain 

ownership interests, to effectuate 

purchases and redemptions in-kind. The 

deposit procedures for in-kind 

purchases of Creation Units and the 

redemption procedures for in-kind 

redemptions of Creation Units will be 

the same for all purchases and 

redemptions and Deposit Instruments 

and Redemption Instruments will be 

valued in the same manner as those 

Portfolio Instruments currently held by 

the Funds. Applicants also seek relief 

from the prohibitions on affiliated 

transactions in section 17(a) to permit a 

Fund to sell its shares to and redeem its 

shares from a Fund of Funds, and to 

engage in the accompanying in-kind 

transactions with the Fund of Funds.3

The purchase of Creation Units by a 

Fund of Funds directly from a Fund will 

be accomplished in accordance with the 

policies of the Fund of Funds and will 

be based on the NAVs of the Funds. 

9. Section 6(c) of the Act permits the 

Commission to exempt any persons or 

transactions from any provision of the 

Act if such exemption is necessary or 

appropriate in the public interest and 

consistent with the protection of 

investors and the purposes fairly 

intended by the policy and provisions of 

the Act. Section 12(d)(1)(J) of the Act 

provides that the Commission may 

exempt any person, security, or 

transaction, or any class or classes of 

persons, securities, or transactions, from 

any provision of section 12(d)(1) if the 

exemption is consistent with the public 

interest and the protection of investors. 

Section 17(b) of the Act authorizes the 

Commission to grant an order 

permitting a transaction otherwise 

prohibited by section 17(a) if it finds 

that (a) the terms of the proposed 

transaction are fair and reasonable and 

do not involve overreaching on the part 

of any person concerned; (b) the 

proposed transaction is consistent with 

the policies of each registered 

investment company involved; and (c) 

the proposed transaction is consistent 

with the general purposes of the Act. 

For the Commission, by the Division of 

Investment Management, under delegated 

authority. 

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–19537 Filed 9–13–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–81556; File No. SR– 

NASDAQ–2017–061] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing of Amendment No. 1 and Order 

Granting Accelerated Approval of a 

Proposed Rule Change, as Modified by 

Amendment No. 1, To Amend Rules 

4702 and 4754 Relating to the Nasdaq 

Closing Cross and To Make Other 

Related Changes 

September 8, 2017. 

I. Introduction 

On July 13, 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 amend Exchange Rules 4702 

and 4754 relating to the Nasdaq Closing 

Cross and to make other related 

changes. The proposed rule change was 

published for comment in the Federal 

Register on July 27, 2017.3 On August 

22, 2017, the Exchange filed 

Amendment No. 1 to the proposed rule 

change.4 The Commission received no 

comment letters on the proposed rule 

change. The Commission is publishing 

this notice to solicit comments on 

Amendment No. 1 from interested 

persons, and is approving the proposed 

rule change, as modified by Amendment 

No. 1, on an accelerated basis. 

II. Description of the Proposed Rule 

Change, as Modified by Amendment 

No. 1 5

As described in more detail below, 

the Exchange proposes to enhance the 

operation of the Nasdaq Closing Cross 

by extending the time period during 

which members may submit LOC 

Orders,6 and to make other changes 

relating to the Nasdaq Closing Cross and 

the Nasdaq Opening Cross. 

A. Acceptance of LOC Orders and 

Related Changes 

Currently, Exchange Rule 

4702(b)(12)(A) provides that LOC 

Orders may be entered between 4:00 

a.m. ET and immediately prior to 3:50 

p.m. ET. The Exchange proposes to 

amend this rule to permit LOC orders to 

be entered between 3:50 p.m. ET and 

immediately prior to 3:55 p.m. ET, 

provided that there is a First Reference 

Price.7 The Exchange proposes to define 

the First Reference Price to mean the 


asabaliauskas on DSKBBXCHB2PROD with NOTICES