Document ID: SEC-2023-0369-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: The Nasdaq Stock Market, LLC
Posted Date: 2023-04-03T04:00Z

[Federal Register Volume 88, Number 63 (Monday, April 3, 2023)]
[Notices]
[Pages 19687-19693]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-06782]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-97211; File No. SR-NASDAQ-2023-006]

Self-Regulatory Organizations; The Nasdaq Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
To List and Trade Shares of the SGI Dynamic Tactical ETF Under Nasdaq 
Rule 5750 (``Proxy Portfolio Shares'')

March 28, 2023.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on March 17, 2023, The Nasdaq Stock Market LLC (``Nasdaq'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``SEC'' or ``Commission'') the proposed rule change as described in 
Items I and II below, which Items have been prepared by the Exchange. 
The Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposed a rule change relating to the SGI Dynamic 
Tactical ETF (the ``Fund'') of The RBB Fund, Inc. (the ``Company''), to 
list and trade shares of the Fund under Nasdaq Rule 5750 (``Proxy 
Portfolio Shares''). The shares of the Fund are collectively referred 
to herein as the ``Shares.''

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
sections A, B, and C below, of the most significant aspects of such 
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange has adopted Nasdaq Rule 5750, which governs the 
listing and trading of Proxy Portfolio Shares on the Exchange.\3\
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    \3\ The Exchange adopted Nasdaq Rule 5750 in Securities Exchange 
Act Release No. 89110 (June 22, 2020), 85 FR 38461 (June 26, 2020) 
(SR-NASDAQ-2020-032).
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    The Fund is an actively-managed exchange-traded fund (``ETF''). The 
Shares will be offered by the Company, which was established as a 
Maryland corporation on February 29, 1988.\4\ The Company, which is 
registered with the Commission as an investment company under the 1940 
Act, has filed a registration statement on Form N-1A (``Registration 
Statement'') relating to the Fund with the Commission.\5\ The Fund is a 
series of the Company. Summit Global Investments, LLC (``Adviser'') is 
the investment adviser to the Fund. SG Trading Solutions, LLC, is the 
sub-adviser (``Sub-Adviser'') to the Fund. Quasar Distributors, LLC is 
the principal underwriter and distributor of the Fund's Shares. U.S. 
Bank Global Fund Services acts as the administrator, transfer agent and 
provides fund accounting services to the Fund. U.S. Bank, N.A. acts as 
the custodian to the Fund.
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    \4\ The Commission has issued an order, upon which the Company 
may rely, granting certain exemptive relief under the Investment 
Company Act of 1940 (the ``1940 Act''). See Investment Company Act 
Release No. 34857 (March 15, 2023) (``Exemptive Order''). 
Investments made by the Fund will comply with the conditions set 
forth in the Application and the Exemptive Order. The description of 
the operation of the Fund herein is based, in part, on the 
Registration Statement and Exemptive Order. The Exchange will not 
commence trading in the Fund's Proxy Portfolio Shares until the 
Registration Statement is effective.
    \5\ The Registration Statement (File No. 811-05518) is available 
on the Commission's website at https://www.sec.gov/Archives/edgar/data/0000831114/000139834422007151/fp0074774_485apos.htm.
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    Nasdaq Rule 5750(b)(5) provides that if the investment adviser to 
the Investment Company (as defined herein) issuing Proxy Portfolio 
Shares \6\ is registered as a broker-dealer or is affiliated with a 
broker-dealer, such investment adviser will erect and maintain a ``fire 
wall'' between the investment adviser and personnel of the broker-
dealer or broker-dealer affiliate, as applicable, with respect to 
access to information concerning the composition of and/or changes to 
the Fund Portfolio,\7\ the Proxy Basket and/or Custom Basket, as 
applicable.\8\ In addition, Nasdaq Rule 5750(b)(5) further requires 
that changes to the Fund Portfolio, the Proxy Basket and/or Custom 
Basket must be subject to procedures designed to prevent the use and 
dissemination of material nonpublic information regarding the Fund 
Portfolio, and/or the Proxy Basket, and/or Custom Basket, as 
applicable, or changes thereto.\9\
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    \6\ The term ``Proxy Portfolio Share'' means a security that: 
(A) represents an interest in an investment company registered under 
the Investment Company Act of 1940 (``Investment Company'') 
organized as an open-end management investment company, that invests 
in a portfolio of securities selected by the Investment Company's 
investment adviser consistent with the Investment Company's 
investment objectives and policies; (B) is issued in a specified 
aggregate minimum number in return for a deposit of a specified 
Proxy Basket or Custom Basket, as applicable, and/or a cash amount 
with a value equal to the next determined net asset value; (C) when 
aggregated in the same specified minimum number, may be redeemed at 
a holder's request, which holder will be paid specified Proxy Basket 
or Custom Basket, as applicable, and/or a cash amount with a value 
equal to the next determined net asset value; and (D) the portfolio 
holdings for which are disclosed within at least 60 days following 
the end of every fiscal quarter.
    \7\ The term ``Fund Portfolio'' means the identities and 
quantities of the securities and other assets held by the Investment 
Company that will form the basis for the Investment Company's 
calculation of net asset value at the end of the business day.
    \8\ The term ``Proxy Basket'' means the identities and 
quantities of the securities and other assets included in a basket 
that is designed to closely track the daily performance of the Fund 
Portfolio, as provided in the exemptive relief under the 1940 Act 
applicable to a series of Proxy Portfolio Shares. The website for 
each series of Proxy Portfolio Shares shall disclose the following 
information regarding the Proxy Basket as required under Rule 5750, 
to the extent applicable: (A) Ticker symbol; (B) CUSIP or other 
identifier; (C) Description of holding; (D) Quantity of each 
security or other asset held; and (E) Percentage weight of the 
holding in the portfolio. For purposes of this proposed rule change, 
the term Custom Basket means a portfolio of securities that is 
different from the Proxy Basket and is otherwise consistent with the 
exemptive relief issued pursuant to the 1940 Act applicable to a 
series of Proxy Portfolio Shares.
    \9\ An investment adviser to an open-end fund is required to be 
registered under the Investment Advisers Act of 1940 (the ``Advisers 
Act''). As a result, the Adviser, Sub-Adviser, and their 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 non-
public information by an investment adviser must be consistent with 
Rule 204A-1 under the Advisers Act. The Adviser and Sub-Adviser are 
each not registered as a broker-dealer and are not affiliated with 
broker-dealers. The Adviser and Sub-Adviser will each implement and 
maintain a ``fire wall'' with respect to any future broker-dealer 
affiliates regarding access to information concerning the 
composition of and/or changes to the Fund Portfolio, Proxy 
Portfolio, and/or Custom Basket, as applicable. 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.

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[[Page 19688]]

    In addition, in accordance with Nasdaq Rule 5750(b)(6), any person 
or entity, including a custodian, Reporting Authority,\10\ distributor, 
or administrator, who has access to nonpublic information regarding the 
Fund Portfolio, the Proxy Basket or Custom Basket, as applicable, or 
changes thereto, must be subject to procedures designed to prevent the 
use and dissemination of material nonpublic information regarding the 
applicable Fund Portfolio, the Proxy Basket or Custom Basket, as 
applicable, or changes thereto. Moreover, if any such person or entity 
is registered as a broker-dealer or affiliated with a broker-dealer, 
such person or entity will erect and maintain a ``fire wall'' between 
the person or entity and the broker-dealer with respect to access to 
information concerning the composition of and/or changes to such Fund 
Portfolio, Proxy Basket or Custom Basket, as applicable, or changes 
thereto.
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    \10\ The term ``Reporting Authority'' in respect of a particular 
series of Proxy Portfolio Shares means the Exchange, an institution, 
or a reporting service designated by the Exchange or by the exchange 
that lists a particular series of Proxy Portfolio Shares (if the 
Exchange is trading such series pursuant to unlisted trading 
privileges) as the official source for calculating and reporting 
information relating to such series, including, but not limited to, 
the Proxy Basket; the Fund Portfolio; Custom Basket; the amount of 
any cash distribution to holders of Proxy Portfolio Shares, net 
asset value, or other information relating to the issuance, 
redemption or trading of Proxy Portfolio Shares. A series of Proxy 
Portfolio Shares may have more than one Reporting Authority, each 
having different functions.
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    The issuer represents that with respect to each Proxy Basket and 
Custom Basket: (i) the Proxy Basket will be publicly disseminated at 
least once daily and will be made available to all market participants 
at the same time, and (ii) with respect to each Custom Basket utilized 
by a series of Proxy Portfolio Shares, each business day, before the 
opening of trading in the regular market session, the investment 
company shall make publicly available on its website the composition of 
any Custom Basket transacted on the previous business day, except a 
Custom Basket that differs from the applicable Proxy Basket only with 
respect to cash.
    In the event (a) the Adviser or Sub-Adviser registers as a broker-
dealer, 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 a broker-dealer, it will implement and will maintain a 
fire wall with respect to its relevant personnel and/or such broker-
dealer affiliate, as applicable, regarding access to information 
concerning the composition of and/or changes to the Fund Portfolio, the 
Proxy Basket and/or Custom Basket, as applicable and will be subject to 
procedures designed to prevent the use and dissemination of material 
non-public information regarding the Fund Portfolio, the Proxy Basket, 
and/or Custom Basket, as applicable, or changes thereto.
    The Fund intends to qualify each year as a regulated investment 
company under Subchapter M of the Internal Revenue Code of 1986, as 
amended.
The Fund's Principal Investment Strategies
    The investment objective of the Fund will be to seek to provide 
long-term capital appreciation. Under normal market conditions,\11\ the 
Fund will seek to achieve its investment objective by utilizing both 
fundamental analysis and proprietary quantitative frameworks that help 
inform the investment decision-making process regarding strategic 
investment opportunities.
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    \11\ The term ``normal market conditions'' as used herein, is 
defined in Nasdaq Rule 5750(c)(4). On a temporary basis, including 
for defensive purposes, during the initial invest-up period and 
during periods of high cash inflows or outflows, the Fund may depart 
from its principal investment strategies; for example, it may hold a 
higher than normal proportion of its assets in cash. During such 
periods, the Fund may not be able to achieve its investment 
objective. The Fund may adopt a defensive strategy when the Adviser 
or Sub-Adviser believes securities in which the Fund normally 
invests have elevated risks due to political or economic factors and 
in other extraordinary circumstances.
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    Under the terms of the Exemptive Order,\12\ the Fund's investments 
are limited to the following: ETFs traded on a U.S. exchange, exchange-
traded notes traded on a U.S. exchange, U.S. exchange-traded common 
stocks, U.S. exchange-traded preferred stocks, U.S. exchange-traded 
American Depositary Receipts, U.S. exchange-traded real estate 
investment trusts, U.S. exchange-traded commodity pools, U.S. exchange-
traded metals trusts, U.S. exchange-traded currency trusts, and common 
stocks listed on a foreign exchange that trade on such exchange 
contemporaneously with the Fund's Shares, exchange-traded futures that 
are traded on a U.S. futures exchange contemporaneously with the Fund's 
Shares; and cash and cash equivalents (which are short-term U.S. 
Treasury securities, government money market funds, and repurchase 
agreements). The Fund will not borrow for investment purposes, hold 
short positions, or purchase any securities that are illiquid 
investments at the time of purchase.
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    \12\ See supra note 4.
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    The Fund's holdings will conform to the permissible investments as 
set forth in the Registration Statement and Exemptive Order and the 
holdings will be consistent with all requirements in the Registration 
Statement and Exemptive Order. Any foreign common stocks held by the 
Fund will be traded on an exchange that is a member of the Intermarket 
Surveillance Group (``ISG'') or with which the Exchange has in place a 
comprehensive surveillance sharing agreement. The Fund's investments, 
including derivatives, will be consistent with its investment objective 
and will not be used to enhance leverage (although certain derivatives 
and other investments may result in leverage). That is, the Fund's 
investments will not be used to seek performance that is the multiple 
or inverse multiple (e.g., 2X or -3X) of the Fund's primary broad-based 
securities benchmark index (as defined in Form N-1A).
Surveillance
    The Exchange represents that trading in the Proxy Portfolio Shares 
will be subject to the existing trading surveillances, administered by 
the Exchange, as well as cross-market surveillances administered by 
Financial Industry Regulatory Authority (``FINRA''), on behalf of the 
Exchange, which are designed to detect violations of Exchange rules and 
applicable federal securities laws. The Exchange represents that these 
surveillance procedures are adequate to properly monitor the trading of 
Proxy Portfolio Shares on the Exchange during all trading sessions and 
to deter and detect violations of Exchange rules and the applicable 
federal securities laws. Trading of Proxy Portfolio Shares on the 
Exchange will be subject to the Exchange's surveillance procedures for 
derivative products. The Fund's investments, including derivatives, 
will be consistent with its investment objective and will not be used 
to enhance leverage (although certain derivatives and other investments 
may result in leverage).
    The Exchange prior to the commencement of trading will require the 
issuer of each series of Proxy Portfolio Shares listed on the Exchange 
to represent to the Exchange that it will advise the Exchange of any 
failure by

[[Page 19689]]

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 surveil for compliance with the continued listing 
requirements. In addition, the Exchange will require the issuer to 
represent that it will notify the Exchange of any failure to comply 
with the terms of applicable exemptive and no-action relief. If the 
Fund is not in compliance with the applicable listing requirements, the 
Exchange will commence delisting procedures under the Nasdaq 5800 
Series. In addition, the Exchange also has a general policy prohibiting 
the distribution of material, non-public information by its employees.
    The Adviser will upon request make available to the Exchange and/or 
FINRA, on behalf of the Exchange, the daily Fund Portfolio of each 
series of Proxy Portfolio Shares. The Exchange believes that this is 
appropriate because it will provide the Exchange and/or FINRA, on 
behalf of the Exchange, with access to the daily Fund Portfolio of any 
series of Proxy Portfolio Shares upon request on an as needed basis. 
The Exchange believes that the ability to access the information on an 
as needed basis will provide it and/or FINRA with sufficient 
information to perform the necessary regulatory functions associated 
with listing and trading series of Proxy Portfolio Shares on the 
Exchange, including the ability to monitor compliance with the initial 
and continued listing requirements as well as the ability to surveil 
for manipulation of the Shares.
Trading Halts
    With respect to trading halts, the Exchange may consider all 
relevant factors in exercising its discretion to halt or suspend 
trading in the Shares of the Fund.\13\ 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 in Shares of the Fund will be halted if the circuit breaker 
parameters in Equity 4, Rule 4121 have been reached.
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    \13\ See Nasdaq Rules 4120 and 4121.
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    Trading may be halted because of market conditions or for reasons 
that, in the view of the Exchange, make trading in the Proxy Portfolio 
Shares inadvisable. These may include: (1) the extent to which trading 
is not occurring in the securities and/or the financial instruments 
composing the Proxy Basket or Fund Portfolio; or (2) whether other 
unusual conditions or circumstances detrimental to the maintenance of a 
fair and orderly market are present. Trading in the Proxy Portfolio 
Shares also will be subject to Rule 5750(d)(2)(D), which sets forth 
circumstances under which a series of Proxy Portfolio Shares may be 
halted.
Trading Rules
    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. Nasdaq will allow trading in the Shares 
from 4:00 a.m. until 8:00 p.m., Eastern Time in accordance with Equity 
2, Section 8. The Exchange has appropriate rules to facilitate 
transactions in the Shares during all trading sessions. As provided in 
Nasdaq Rule 5750(b)(3), the minimum price variation for quoting and 
entry of orders in Proxy Portfolio Shares traded on the Exchange is 
$0.01. A ``Creation Unit'' will consist of at least 5,000 Shares.
    With respect to Proxy Portfolio Shares, all of the Exchange member 
obligations relating to product description and prospectus delivery 
requirements will continue to apply in accordance with Exchange rules 
and federal securities laws, and the Exchange and FINRA will continue 
to monitor Exchange members for compliance with such requirements.
Availability of Information
    The Fund's website (www.sgiam.com) will include a form of the 
prospectus for the Fund that may be downloaded. The Exchange notes that 
a significant amount of information about the Fund and its Fund 
Portfolio is publicly available at all times and the website and 
information will be publicly available at no charge. The Fund will 
disclose the Proxy Basket, which is designed to closely track the daily 
performance of the Fund Portfolio, on a daily basis on the Fund's 
website (www.sgiam.com). With respect to each Custom Basket, each 
business day, before the opening of trading in the regular market 
session, the Investment Company shall make publicly available on its 
website the composition of any Custom Basket transacted on the previous 
business day, except a Custom Basket that differs from the applicable 
Proxy Basket only with respect to cash. Intraday pricing information 
for all constituents of the Proxy Basket that are exchange-traded, 
which includes all eligible instruments except cash and cash 
equivalents, will be available on the exchanges on which they are 
traded and through subscription services. Intraday pricing information 
for cash equivalents will be available through subscription services 
and/or pricing services. Each series of Proxy Portfolio Shares will at 
a minimum publicly disclose the entirety of its portfolio holdings, 
including the name, identifier, market value and weight of each 
security and instrument in the portfolio within at least 60 days 
following the end of every fiscal quarter in a manner consistent with 
normal disclosure requirements otherwise applicable to open-end 
investment companies registered under the 1940 Act.
    The website will include additional quantitative information 
updated on a daily basis, including, on a per Share basis for the Fund, 
the prior business day's NAV and the closing price or bid/ask price at 
the time of calculation of such NAV, and a calculation of the premium 
or discount of the closing price or bid/ask price against such NAV. The 
website will also disclose any other information regarding premiums and 
discounts and the bid/ask spread for the Fund as may be required for 
other ETFs under Rule 6c-11 under the 1940 Act, as amended. On each 
business day, before the commencement of trading of Shares, the Fund 
will publish on its website the Proxy Basket and the ``Guardrail 
Amount'' (see description below) for that day.
    Form N-PORT requires reporting of a fund's complete portfolio 
holdings on a position-by-position basis on a quarterly basis within 60 
days after fiscal quarter end. Investors can obtain a fund's Statement 
of Additional Information, its Shareholder Reports, its Form N-CSR, 
filed twice a year, and its Form N-CEN, filed annually. A fund's SAI 
and Shareholder Reports are available for free upon request from the 
Investment Company, and those documents and the Form N-PORT, Form N-
CSR, and Form N-CEN may be viewed on-screen or downloaded from the 
Commission's website at www.sec.gov. The Exchange also notes that the 
Exemptive Order provides that the issuer of the Fund will comply with 
Regulation Fair Disclosure. 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.
Proxy Basket and Custom Baskets
    Pursuant to the Exemptive Order, the Fund is permitted to use 
Custom Baskets. For the Fund, the Proxy Basket will consist of all of 
the Fund portfolio holdings but will be weighted differently, subject 
to a minimum

[[Page 19690]]

weightings overlap of 90% with the Fund Portfolio at the beginning of 
each business day. Intraday pricing information for all constituents of 
the Proxy Basket that are exchange-traded, which includes all eligible 
instruments except cash and cash equivalents, will be available on the 
exchanges on which they are traded and through subscription services. 
Intraday pricing information for cash equivalents will be available 
through subscription services and/or pricing services. The Exchange 
notes that the Fund's net asset value (``NAV'') will form the basis for 
creations and redemptions for the Fund and creations and redemptions 
will work in a manner substantively identical to that of series of 
Managed Fund Shares.\14\ The Adviser expects that the Shares of the 
Fund will generally be created and redeemed in-kind, with limited 
exceptions. The names and quantities of the instruments that constitute 
the basket of securities for creations and redemptions will be the same 
as the Fund's Proxy Basket, except to the extent purchases and 
redemptions are made entirely or in part on a cash basis. In addition, 
in accordance with the Exemptive Order, the Fund may determine to use 
Custom Baskets that differ from the Proxy Portfolio in that they 
include instruments that are not in the Proxy Portfolio, or are 
included in the Proxy Portfolio but in different weightings. In the 
event that the value of the Proxy Basket is not the same as the Fund's 
NAV, the creation and redemption baskets will consist of the securities 
included in the Proxy Basket plus or minus an amount of cash equal to 
the difference between the NAV and the value of the Proxy Basket.
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    \14\ See Nasdaq Rule 5735.
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    Nasdaq Rule 5750(c)(6) defines ``Custom Basket'' for the purposes 
of Nasdaq Rule 5750 as a portfolio of securities that is different from 
the Proxy Basket and is otherwise consistent with the exemptive relief 
issued pursuant to the 1940 Act applicable to a series of Proxy 
Portfolio Shares.
    The Proxy Basket will be constructed utilizing a proprietary 
algorithmic process that will be applied to the Fund Portfolio on a 
daily basis. The Proxy Basket holdings (including the identity and 
quantity of investments in the Proxy Basket) will be publicly available 
on the Fund's website before the commencement of trading in Fund Shares 
on each business day, although the weightings of such holdings in the 
Proxy Basket will differ from the Fund Portfolio. The Proxy Basket will 
have a minimum overlap of 90% with the Fund Portfolio at the beginning 
of each business day, with the precise percentage of aggregate overlap 
in weightings from 90% to 100% to be randomly generated each day (the 
overlap and tracking error will be available on the Fund's website 
before the commencement of trading in Proxy Portfolio Shares on each 
business day and discussed further below).
    In addition to the disclosure of the Proxy Basket, the Fund will 
also publish the Guardrail Amount on its website on each business day 
before the commencement of trading in the Proxy Portfolio Shares on the 
Exchange. The Guardrail Amount is the maximum deviation between the 
weightings of the specific instruments and cash positions in the Proxy 
Basket from the weightings of those specific instruments and cash 
positions in the Fund Portfolio. The Guardrail Amount is intended to 
ensure that no individual security in the Proxy Basket will be 
overweighted or underweighted by more than the publicly disclosed 
percentage when compared to the actual weighting of each security 
within the Fund Portfolio as of the beginning of each business day. The 
Adviser expects the performance of the Proxy Basket and the Fund 
Portfolio to be closely aligned in light of the construction of the 
Proxy Basket, and does not expect the ``Tracking Error'' to exceed 1% 
(available on the Fund's website before the commencement of trading in 
Proxy Portfolio Shares on each business day). ``Tracking Error'' is 
defined to mean the standard deviation over the past three months of 
the daily difference, in percentage terms, between the Proxy Basket per 
Share NAV and that of the Fund at the end of the business day.
    The Fund will also disclose the entirety of its Fund Portfolio, 
including the name, identifier, market value and weight of each 
security and instrument in the portfolio, no less than 60 days 
following the end of every fiscal quarter.
Additional Information
    The Exchange represents that the Shares will conform to the initial 
and continued listing criteria under Nasdaq Rule 5750, including the 
dissemination of key information such as the Proxy Basket, the Custom 
Basket, the Fund Portfolio, and NAV, suspension of trading or removal, 
trading halts, surveillance, minimum price variation for quoting and 
order entry, an information circular informing members of the special 
characteristics and risks associated with trading in the series of 
Proxy Portfolio Shares, and firewalls as set forth in the proposed 
Exchange rules applicable to Proxy Portfolio Shares.
    Price information for the exchange-listed instruments held by the 
Fund, including both U.S. and non-U.S. listed equity securities and 
U.S. exchange-listed futures will be available through major market 
data vendors or securities exchanges listing and trading such 
securities. Moreover, U.S.-listed equity securities held by the Fund 
will trade on markets that are a member of ISG or with which the 
Exchange has in place a comprehensive surveillance sharing 
agreement.\15\ Any foreign common stocks held by the Fund will be 
traded on an exchange that is a member of ISG or with which the 
Exchange has in place a comprehensive surveillance sharing agreement. 
All futures contracts that the Fund may invest in will be traded on a 
U.S. futures exchange. The Exchange or FINRA, on behalf of the 
Exchange, or both, will communicate as needed regarding trading in the 
Shares and underlying exchange-traded instruments with other markets 
and other entities that are members of ISG, and the Exchange or FINRA, 
on behalf of the Exchange, or both, may obtain trading information 
regarding trading such instruments from such markets and other 
entities. In addition, the Exchange may obtain information regarding 
trading in the Shares and underlying exchange-traded instruments from 
markets and other entities that are members of ISG or with which the 
Exchange has in place a comprehensive surveillance sharing agreement.
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    \15\ For a list of the current members of ISG, see 
www.isgportal.com. The Exchange notes that not all components of the 
Fund may trade on markets that are members of ISG or with which the 
Exchange has in place a comprehensive surveillance sharing 
agreement.
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    All statements and representations made in this filing regarding 
the description of the portfolio or reference assets, limitations on 
portfolio holdings or reference assets, dissemination and availability 
of reference assets (as applicable) such as the Fund Portfolio and the 
Proxy Basket, the Custom Basket, and the applicability of Exchange 
listing rules specified in this filing shall constitute continued 
listing requirements for the Shares. A minimum of 100,000 Shares of the 
Fund will be outstanding at the commencement of trading on the 
Exchange. In addition, pursuant to Nasdaq Rule 5750(d)(1)(B), the 
Exchange prior to the commencement of trading in the Proxy Portfolio 
Shares, will obtain a representation from the issuer of the Shares of 
the Fund that (i) the NAV per share for the Fund will be calculated 
daily, (ii) each of the following will be made available to all market 
participants at the same time

[[Page 19691]]

when disclosed: the NAV, the Proxy Basket, and the Fund Portfolio, and 
(iii) the issuer and any person acting on behalf of the series of Proxy 
Portfolio Shares will comply with Regulation Fair Disclosure under the 
Act,\16\ including with respect to any Custom Basket.
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    \16\ 17 CFR 243.100-243.103. Regulation Fair Disclosure provides 
that whenever an issuer, or any person acting on its behalf, 
discloses material nonpublic information regarding that issuer or 
its securities to certain individuals or entities--generally, 
securities market professionals, such as stock analysts, or holders 
of the issuer's securities who may well trade on the basis of the 
information--the issuer must make public disclosure of that 
information.
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    The issuer has represented to the Exchange that it will advise the 
Exchange of any failure by the Fund or Shares to comply with the 
continued listing requirements, and, pursuant to its obligations under 
Section 19(g)(1) of the Act, the Exchange will surveil for compliance 
with the continued listing requirements. FINRA conducts certain cross-
market surveillances on behalf of the Exchange pursuant to a regulatory 
services agreement. The Exchange is responsible for FINRA's performance 
under this regulatory services agreement. If a Fund is not in 
compliance with the applicable listing requirements, the Exchange will 
commence delisting procedures under the Nasdaq 5800 Series.
2. Statutory Basis
    Nasdaq believes that the proposal is consistent with Section 6(b) 
of the Act in general and Section 6(b)(5) of the Act, in particular, in 
that it is 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, and to remove impediments to and perfect 
the mechanism of a free and open market and, in general, to protect 
investors and the public interest.
    The Fund's holdings will conform to the permissible investments as 
set forth in the Registration Statement and Exemptive Order and the 
holdings will be consistent with all requirements in the Registration 
Statement and Exemptive Order. The Fund's investments, including 
derivatives, will be consistent with its investment objective and will 
not be used to enhance leverage (although certain derivatives and other 
investments may result in leverage). That is, the Fund's investments 
will not be used to seek performance that is the multiple or inverse 
multiple (e.g., 2X or -3X) of the Fund's primary broad-based securities 
benchmark index (as defined in Form N-1A).
    The Exchange believes that the particular instruments that may be 
included in the Fund Portfolio and the Proxy Basket or Custom Basket do 
not raise any concerns related to the Proxy Basket or Custom Basket 
being able to closely track the NAV of the Fund because such 
instruments include only instruments that trade on an exchange 
contemporaneously with the Shares. In addition, the Fund's Proxy Basket 
or Custom Basket is designed to reliably and consistently correlate to 
the performance of the Fund.
    The Adviser anticipates that the returns between the Fund and its 
respective Proxy Basket or Custom Basket will have a consistent 
relationship and that the deviation in the returns between the Fund and 
its Proxy Basket or Custom Basket will be sufficiently small such that 
the Proxy Basket or Custom Basket will provide authorized participants, 
arbitrageurs and other market participants (collectively, ``Market 
Makers'') with a reliable hedging vehicle that they can use to 
effectuate low-risk arbitrage trades in Fund Shares. The Exchange 
believes that the disclosures provided by the Fund will allow Market 
Makers to understand the relationship between the performance of the 
Fund and its Proxy Basket or Custom Basket. Market Makers will be able 
to estimate the value of and hedge positions in the Fund's Shares, 
which the Exchange believes will facilitate the arbitrage process and 
help ensure that the Fund's Shares normally will trade at market prices 
close to their NAV. The Exchange also believes that competitive market 
making, where traders are looking to take advantage of differences in 
bid-ask spread, will aid in keeping spreads tight.
    The Exchange notes that a significant amount of information about 
the Fund and its Fund Portfolio is publicly available at all times. The 
Fund will disclose the Proxy Basket, which is designed to closely track 
the daily performance of the Fund Portfolio, on a daily basis and will 
be available on the Fund's website before the commencement of trading 
in Proxy Portfolio Shares on each business day. With respect to each 
Custom Basket, each business day, before the opening of trading in the 
regular market session, the Investment Company shall make publicly 
available on its website the composition of any Custom Basket 
transacted on the previous business day, except a Custom Basket that 
differs from the applicable Proxy Basket only with respect to cash. 
Intraday pricing information for all constituents of the Proxy Basket 
that are exchange-traded, which includes all eligible instruments 
except cash and cash equivalents, will be available on the exchanges on 
which they are traded and through subscription services. Intraday 
pricing information for cash equivalents will be available through 
subscription services and/or pricing services. The issuer of the Proxy 
Portfolio Shares will at a minimum publicly disclose the entirety of 
its portfolio holdings,\17\ including the name, identifier, market 
value and weight of each security and instrument in the portfolio 
within at least 60 days following the end of every fiscal quarter in a 
manner consistent with normal disclosure requirements otherwise 
applicable to open-end investment companies registered under the 1940 
Act.
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    \17\ This information will be made available on the Fund's 
website at www.sgiam.com.
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    The Fund's website will include additional quantitative information 
updated on a daily basis,\18\ including, on a per Share basis for the 
Fund, the prior business day's NAV and the closing price or bid/ask 
price at the time of calculation of such NAV, and a calculation of the 
premium or discount of the closing price or bid/ask price against such 
NAV. The website will also disclose any other information regarding 
premiums and discounts and the bid/ask spread for the Fund as may be 
required for other ETFs under Rule 6c-11 under the 1940 Act, as 
amended. On each business day, before the commencement of trading of 
Shares, the Fund will publish on its website the Proxy Basket and the 
Guardrail Amount for that day.
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    \18\ Id.
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    The Exchange represents that the Shares of the Fund will continue 
to comply with all other proposed requirements applicable to Proxy 
Portfolio Shares, including the dissemination of key information such 
as the Proxy Basket, the Custom Basket, disclosure of the Fund 
Portfolio quarterly, and NAV, suspension of trading or removal, trading 
halts, surveillance, minimum price variation for quoting and order 
entry, an information circular informing members of the special 
characteristics and risks associated with trading in the series of 
Proxy Portfolio Shares, and firewalls as set forth in the proposed 
Exchange rules applicable to Proxy Portfolio Shares and the orders 
approving such rules. Moreover, U.S.-listed equity securities, 
exchange-traded futures that are traded on a U.S. futures exchange, and 
non-U.S. listed equity securities held by the

[[Page 19692]]

Fund will trade on markets that are a member of ISG or with which the 
Exchange has in place a comprehensive surveillance sharing 
agreement.\19\
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    \19\ Supra note 15.
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    The daily dissemination of the identity and quantity of Proxy 
Portfolio component investments, together with the right of Authorized 
Participants to create and redeem each day at the NAV, will be 
sufficient for market participants to value and trade Shares in a 
manner that will not lead to significant deviations between the Shares' 
Closing Price or Bid/Ask Price and NAV.
    All statements and representations made in this filing regarding 
the description of the portfolio or reference assets, limitations on 
portfolio holdings or reference assets, dissemination and availability 
of reference asset (as applicable), and the applicability of Exchange 
listing rules specified in this filing shall constitute continued 
listing requirements for the Shares. The issuer has represented to the 
Exchange that it will advise the Exchange of any failure by the Fund or 
Shares to comply with the continued listing requirements, and, pursuant 
to its obligations under Section 19(g)(1) of the Act, the Exchange will 
surveil for compliance with the continued listing requirements. A 
minimum of 100,000 Shares of the Fund will be outstanding at the 
commencement of trading on the Exchange. The Exchange will obtain a 
representation from the issuer of the Shares of the Fund that (i) the 
NAV per share for the Fund will be calculated daily, (ii) each of the 
following will be made available to all market participants at the same 
time when disclosed: the NAV, the Proxy Basket, and the Fund Portfolio, 
and (iii) the issuer and any person acting on behalf of the series of 
Proxy Portfolio Shares will comply with Regulation Fair Disclosure 
under the Act,\20\ including with respect to any Custom Basket.
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    \20\ See supra note 16.
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    FINRA conducts certain cross-market surveillances on behalf of the 
Exchange pursuant to a regulatory services agreement. The Exchange is 
responsible for FINRA's performance under this regulatory services 
agreement. If a Fund is not in compliance with the applicable listing 
requirements, the Exchange will commence delisting procedures under the 
Nasdaq 5800 Series.
    For the above reasons, the Exchange believes that the proposed rule 
change is consistent with the requirements of Section 6(b)(5) of the 
Act.

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 that is not necessary or appropriate 
in furtherance of the purposes of the Act. Rather, the Exchange notes 
that the proposed rule change will facilitate the listing of a new type 
of actively-managed exchange-traded product, thus enhancing competition 
among both market participants and listing venues, to the benefit of 
investors and the marketplace.

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 \21\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\22\
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    \21\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \22\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires the Exchange to give the Commission written notice of its 
intent to file the proposed rule change, along with a brief 
description and text of 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.
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    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act normally does not become operative for 30 days after the date of 
its filing. However, Rule 19b-4(f)(6)(iii) \23\ permits the Commission 
to designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has 
requested that the Commission waive the 30-day operative delay so that 
the proposal may become operative immediately upon filing. The 
Commission has noticed for immediate effectiveness proposed rule 
changes to permit listing and trading of Proxy Portfolio Shares on the 
Exchange and Active Proxy Portfolio Shares (which securities are 
substantively similar to Proxy Portfolio Shares but listed on another 
exchange) of numerous funds.\24\ The proposed listing rule for the Fund 
raises no novel legal or regulatory issues. Thus, the Commission 
believes that waiver of the 30-day operative delay is consistent with 
the protection of investors and the public interest. Accordingly, the 
Commission hereby waives the 30-day operative delay and designates the 
proposed rule change operative upon filing.\25\
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    \23\ 17 CFR 240.19b-4(f)(6)(iii).
    \24\ See e.g., Securities Exchange Act Release No. 95082 (Feb 4, 
2021), 88 FR 8972 (Feb. 10, 2021) (SR-NASDAQ-2021-005) (Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change Relating 
to the ALPS Active REIT ETF of ALPS ETF Trust To List and Trade 
Shares of the Fund Under Nasdaq Rule 5750) (Proxy Portfolio Shares); 
Securities Exchange Act Release Nos. 92104 (June 3, 2021), 86 FR 
30635 (June 9, 2021) (SR-NYSEArca-2021-46) (Notice of Filing and 
Immediate Effectiveness of Proposed Rule Change to List and Trade 
Shares of the Nuveen Santa Barbara Dividend Growth ETF, Nuveen Small 
Cap Select ETF, and Nuveen Winslow Large-Cap Growth ESG ETF Under 
NYSE Arca Rule 8.601-E (Active Proxy Portfolio Shares)); 92958 
(September 13, 2021), 86 FR 51933 (September 17, 2021) (SR-NYSEArca-
2021-77) (Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change To List and Trade Shares of the Nuveen Growth 
Opportunities ETF Under NYSE Arca Rule 8.601-E (Active Proxy 
Portfolio Shares)); and 93264 (October 6, 2021), 86 FR 56989 
(October 13, 2021) (SR-NYSEArca-2021-84) (Notice of Filing and 
Immediate Effectiveness of Proposed Rule Change To List and Trade 
Shares of the Schwab Ariel ESG ETF Under NYSE Arca Rule 8.601-E 
(Active Proxy Portfolio Shares)).
    \25\ For purposes only of waiving the 30-day operative delay, 
the Commission has also considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of such proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act.

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 [email protected]. Please include 
File Number SR-NASDAQ-2023-006 on the subject line.

Paper Comments

     Send paper comments in triplicate to: Secretary, 
Securities and Exchange

[[Page 19693]]

Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to File Number SR-NASDAQ-2023-006. 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 website (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 website 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 also will be available for inspection 
and copying at the principal office of the Exchange. All comments 
received will be posted without change. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-NASDAQ-2023-006 and should be submitted 
on or before April 24, 2023.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\26\
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    \26\ 17 CFR 200.30-3(a)(12), (59).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-06782 Filed 3-31-23; 8:45 am]
BILLING CODE 8011-01-P