Document ID: SEC-2016-0530-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: The NASDAQ Stock Market, LLC
Posted Date: 2016-03-28T04:00Z

[Federal Register Volume 81, Number 59 (Monday, March 28, 2016)]
[Notices]
[Pages 17211-17213]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-06866]

[[Page 17211]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77419; File No. SR-NASDAQ-2016-041]

Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Relating to the Listing and Trading of the Shares of the Eaton Vance 
Global Income Builder NextShares of the Eaton Vance ETMF Trust

March 22, 2016.
    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 18, 2016, The Nasdaq Stock Market LLC (``Nasdaq'' or the 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in in Items I 
and II below, which Items have been prepared by Nasdaq. 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

    Nasdaq proposes a proposed rule change with respect to the Eaton 
Vance Global Dividend Income NextShares (the ``Fund''), a series of 
Eaton Vance ETMF Trust (the ``Trust'').
    The proposed rule change is being filed to reflect a proposed 
revision to the Fund's name and to modify its investment objective and 
proposed investments (which are set forth in an order previously 
granted by the Commission).\3\
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    \3\ See Securities Exchange Act Release No. 74797 (Apr. 23, 
2015), 80 FR 23831 (Apr. 29, 2015) (SR-NASDAQ-2015-036) (the ``Prior 
Notice''); see also Securities Exchange Act Release No. 75499 (Jul. 
21, 2015), 80 FR 44406 (Jul. 27, 2015) (SR-NASDAQ-2015-036) (the 
``Prior Order,'' and, together with the Prior Notice, the ``Prior 
Release'').
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    Except for the changes discussed below, all other facts presented 
and representations made in the Prior Release remain unchanged and in 
full effect. All capitalized terms referenced but not defined herein 
have the same meaning as in the Prior Release.
    The text of the proposed rule change is available at http://nasdaq.cchwallstreet.com/, at Nasdaq's principal office, and at the 
Commission's Public Reference Room.

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

    In its filing with the Commission, Nasdaq included statements 
concerning the purpose of, and basis for, the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. Nasdaq 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The shares of the Fund will be offered by the Trust. 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.\4\ The Fund is a series of the Trust.
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    \4\ See Registration Statement on Form N-1A for the Eaton Vance 
NextShares Trust dated Dec. 10, 2015 (File Nos. 333-197733 and 811-
22982).
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    The Commission previously approved the listing and trading on the 
Exchange of the shares of the Fund under Nasdaq Rule 5745, which 
governs the listing and trading of NextShares on the Exchange.\5\ The 
shares of the Fund have not commenced trading on the Exchange.
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    \5\ The Commission approved Nasdaq Rule 5745 in Securities 
Exchange Act Release No. 73562 (Nov. 7, 2014), 79 FR 68309 (Nov. 14, 
2014) (SR-NASDAQ-2014-020).
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    In this proposed rule change, the Exchange proposes to change its 
name and modify its investment objective and proposed investments.\6\ 
As stated in the Prior Release, the Fund is named the Eaton Vance 
Global Dividend Income NextShares and its investment objective of the 
Fund is to provide current income and long-term growth of capital. As 
stated in the Prior Release, the Fund normally will invest primarily in 
common stocks and, in Eaton Vance Management's (the ``Adviser'') 
discretion, preferred stocks of U.S. and foreign companies that pay 
dividends.
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    \6\ The changes described herein will be effective contingent 
upon effectiveness of a post-effective amendment to the Registration 
Statement of the Trust, on behalf of the Fund. The changes described 
herein will not be implemented until such proposed rule change is 
declared operative.
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    As proposed, the Fund will be renamed the Eaton Vance Global Income 
Builder NextShares and the investment objective will be total return. 
Under normal market conditions, the Fund will invest primarily in 
common stocks, preferred stocks and other hybrid securities, and in 
income instruments including cash or cash equivalents.\7\
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    \7\ Hybrid securities generally possess characteristics common 
to both equity and debt securities. Preferred stocks, convertible 
securities, and certain debt obligations are types of hybrid 
securities. Income instruments include all types of fixed and 
floating-rate bonds and notes; corporate commercial paper; mortgage-
backed and other asset-backed securities; inflation-indexed bonds 
issued by both governments and corporations; structured notes; 
loans; loan participations and assignments; delayed funding loans 
and revolving credit facilities; and bank certificates of deposit, 
fixed time deposits, and bank deposits.
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    Beyond the changes described above, there are no changes to any 
other information included in the Prior Release; and all other facts 
presented and representations made in the Prior Release remain true and 
in effect. The Trust confirms that the Fund will continue to comply 
with all initial listing requirements under Nasdaq Rule 5745.
2. Statutory Basis
    The Exchange believes that the proposal is consistent with Section 
6(b) of the Act \8\ in general, and Section 6(b)(5) of the Act \9\ 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 a national market system. The Exchange believes that the 
proposed rule change to change the Fund's name and modify the Fund's 
investment objective and proposed investments does not alter any of the 
arguments contained in the Prior Release in support of the original 
approval order that permitted the listing and trading of shares of the 
Fund. The Exchange believes that the mechanisms supporting efficient 
trading of NextShares are equally applicable across different asset 
classes and investment strategies.
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    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
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    As described in the Prior Release, the Exchange believes that the 
proposed rule change is designed to prevent fraudulent and manipulative 
acts and practices in that the NextShares will be listed and traded on 
the Exchange pursuant to the initial and continued listing criteria in 
Nasdaq Rule 5745. The Exchange believes that its surveillance 
procedures are adequate to properly monitor the trading of NextShares 
on Nasdaq and to deter and detect

[[Page 17212]]

violations of Exchange rules and the applicable federal securities 
laws. The Adviser is affiliated with a broker-dealer and has 
implemented a ``fire wall'' between the investment adviser and the 
broker-dealer affiliate with respect to access to information 
concerning the composition and/or changes to the Fund's portfolio 
holdings. The Exchange may obtain information via ISG from other 
exchanges that are members of ISG or with which the Exchange has 
entered into a comprehensive surveillance sharing agreement, to the 
extent necessary.
    The proposed rule change is designed to promote just and equitable 
principles of trade and to protect investors and the public interest. 
The Exchange will obtain a representation from the Trust that the NAV 
per Share will be calculated on each business day that the New York 
Stock Exchange is open for trading and that the NAV will be made 
available to all market participants at the same time. In addition, a 
large amount of information will be publicly available regarding the 
Fund and the NextShares, thereby promoting market transparency.
    Prior to the commencement of market trading in NextShares, the Fund 
will be required to establish and maintain a public Web site through 
which its current prospectus may be downloaded. The Web site will 
display additional Fund information updated on a daily basis, including 
the prior business day's NAV, and the following trading information for 
such business day expressed as premiums/discounts to NAV: (a) Intraday 
high, low, average and closing prices of NextShares in Exchange 
trading; (b) the Closing Bid/Ask Midpoint; and (c) the Closing Bid/Ask 
Spread. The Web site 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 Composition File 
will be disseminated through the NSCC before the open of trading in 
NextShares on each business day and also will be made available to the 
public each day on a free Web site. The Exchange will obtain a 
representation from the Trust that the IIV will be calculated and 
disseminated on an intraday basis at intervals of not more than 15 
minutes during trading on the Exchange and provided to Nasdaq for 
dissemination. A complete list of current portfolio positions for the 
Fund 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 their discretion.
    Transactions in NextShares will be reported to the Consolidated 
Tape at the time of execution in proxy price format and will be 
disseminated to member firms and market data services through Nasdaq's 
trading service and market data interfaces, as described in the Prior 
Release. Once the Fund's daily NAV has been calculated and the final 
price of its intraday NextShares trades has been determined, Nasdaq 
will deliver a confirmation with final pricing to the transacting 
parties. At the end of the day, Nasdaq will also post a newly created 
FTP file with the final transaction data for the trading and market 
data services.
    The Exchange expects that information regarding NAV-based trading 
prices and volumes of NextShares traded will be continuously available 
on a real-time basis throughout each trading day on brokers' computer 
screens and other electronic services. Because NextShares will trade at 
prices based on the next-determined NAV, investors will be able to buy 
and sell individual NextShares at a known premium or discount to NAV 
that they can limit by transacting using limit orders at the time of 
order entry.
    Trading in NextShares will be subject to Nasdaq Rules 5745(d)(2)(B) 
and (C), which provide for the suspension of trading or trading halts 
under certain circumstances, including if, in the view of the Exchange, 
trading in NextShares becomes inadvisable.
    The proposed rule change is designed to perfect the mechanism of a 
free and open market and, in general, to protect investors and the 
public interest in that it will facilitate the listing and trading of 
the Fund, which seeks to provide investors with access to an actively 
managed investment strategy in a structure that offers the cost and tax 
efficiencies and shareholder protections of ETFs, while removing the 
requirement for daily portfolio holdings disclosure to ensure a tight 
relationship between market trading prices and NAV.
    For the above reasons, Nasdaq believes 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 
result in any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act. In fact, the 
Exchange believes that the introduction of the Fund will promote 
competition by making available to investors an actively managed 
investment strategy in a structure that offers the cost and tax 
efficiencies and shareholder protections of ETFs, while removing the 
requirement for daily portfolio holdings disclosure to ensure a tight 
relationship between market trading prices and NAV.
    Moreover, the Exchange believes that the proposed method of trading 
in NextShares will provide investors with transparency of trading 
costs, and the ability to control trading costs using limit orders, 
that is not available for conventionally traded ETFs.
    These developments could significantly enhance competition to the 
benefit of the markets and investors.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    Written comments were neither solicited nor received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the proposed rule change does not (i) significantly affect 
the protection of investors or the public interest; (ii) impose any 
significant burden on competition; or (iii) become operative for 30 
days from the date on which it was filed, or such shorter time as the 
Commission may designate if consistent with the protection of investors 
and the public interest, the proposed rule change has become effective 
pursuant to Section 19(b)(3)(A) of the Act \10\ and Rule 19b-4(f)(6) 
thereunder.\11\
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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(6). As required under Rule 19b-
4(f)(6)(iii), the Exchange provided the Commission with written 
notice of its intent to file the proposed rule change, along with a 
brief description and the 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.
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    The Exchange has asked the Commission to waive the 30-day operative 
delay so that the proposal may become operative immediately upon 
filing. The Exchange argues that waiver of this requirement is 
consistent with the protection of investors and the public interest 
because the proposed changes to the Fund are consistent with the 
Exchange arguments and Commission findings made in the Prior Release 
for the listing and trading of NextShares on the Exchange. In the 
context of the unique pricing and trading mechanisms of NextShares, the 
Commission believes that waiver of the 30-day operative delay with 
respect to these proposed changes to the Fund is

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consistent with the protection of investors and the public interest and 
hereby waives the 30-day operative delay and designates the proposed 
rule change to be operative upon filing.\12\
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    \12\ 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 the 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. 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-NASDAQ-2016-041 on the subject line.

Paper comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-NASDAQ-2016-041. 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 this filing will also be available 
for inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-NASDAQ-2016-041 and should 
be submitted on or before April 18, 2016.
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    \13\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
Brent J. Fields,
Secretary.
[FR Doc. 2016-06866 Filed 3-25-16; 8:45 am]
 BILLING CODE 8011-01-P