Document ID: SEC-2019-0970-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: The Nasdaq Stock Market, LLC
Posted Date: 2019-07-09T04:00Z

[Federal Register Volume 84, Number 131 (Tuesday, July 9, 2019)]
[Notices]
[Pages 32792-32794]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-14489]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-86278; File No. SR-NASDAQ-2019-052]

Self-Regulatory Organizations; The Nasdaq Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
Regarding the Listing and Trading the Shares of the AlphaMark Actively 
Managed Small Cap ETF

July 2, 2019.
    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 June 19, 2019, 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 proposes to change the rule for listing and trading 
the shares of the AlphaMark Actively Managed Small Cap ETF (the 
``Fund'') of ETF Series Solutions (the ``Trust''). Currently, the 
shares are listed pursuant to an SEC

[[Page 32793]]

approval order, but will now be listed pursuant to the generic listing 
standards under Nasdaq Rule 5735.
    The text of the proposed rule change is available on the Exchange's 
website at http://nasdaq.cchwallstreet.com, at the principal office of 
the Exchange, 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, 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 proposes to change the rule for listing and trading 
the shares of the Fund. Currently, the shares are listed pursuant to an 
SEC approval order,\3\ but will now be listed pursuant to the generic 
listing standards under Nasdaq Rule 5735.
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    \3\ See Securities Exchange Act Release No. 74377 (Feb. 25, 
2015), 80 FR 11502 (Mar. 3, 2015) (SR-NASDAQ-2015-013) (order 
approving the listing and trading on the Exchange of the AlphaMark 
Actively Managed Small Cap ETF) (the ``Filing'').
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    The Shares began trading on the Exchange on April 21, 2015 after 
the Commission issued an order approving the listing and trading of the 
Shares on the Exchange.\4\ At that time, the Exchange was required to 
file separate proposals under Section 19(b) of the Act before the 
listing of any funds listed pursuant to Nasdaq Rule 5735 (``Managed 
Fund Shares'') and, as provided in the Filing, the Exchange will 
commence delisting procedures under the Nasdaq Rule 5800 series for a 
Fund where the Fund is not in compliance with the applicable listing 
requirements.\5\ On September 23, 2016, the Commission approved generic 
listing standards for Managed Fund Shares that would allow shares of a 
series of Managed Fund Shares to list and trade on the Exchange 
pursuant to Rule 19b-4(e) so long as the components of that series of 
Managed Fund Shares meet the criteria in Nasdaq Rule 5735(b)(1) on an 
initial and continual basis.\6\
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    \4\ Id.
    \5\ As provided in the Filing, all statements and 
representations made in the Filing regarding (a) the description of 
the portfolio, (b) limitations on portfolio holdings or reference 
assets, or (c) the applicability of Exchange rules and surveillance 
procedures shall constitute continued listing requirements for 
listing the Shares on the Exchange.
    \6\ See Securities Exchange Act Release No. 78918 (Sept. 23, 
2016), 81 FR 67033 (Sept. 29, 2016) (SR-NASDAQ-2016-104).
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    The Exchange now proposes to list and trade the Shares pursuant to 
Rule 19b-4(e) of the Act as provided in Nasdaq Rule 5735(b)(1) and, as 
such, the components of the Fund will be required to comply with the 
requirements of that rule on an initial and continual basis. The 
Exchange has confirmed that the Fund's portfolio currently complies 
with the requirements of Nasdaq Rule 5735(b)(1).\7\ The Exchange notes 
that if the Fund was not already listed, it could be listed pursuant to 
Rule 19b-4(e) without the submission of a rule filing.
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    \7\ As provided in Nasdaq Rule 5735(b)(1), the Fund must also 
comply with such requirements on a continual basis and any failure 
to meet such requirements will result in the Exchange initiating 
delisting proceedings for the Fund pursuant to the Nasdaq Rule 5800 
series.
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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 prevent 
fraudulent and manipulative acts and practices, to promote just and 
equitable principles of trade, to remove impediments to, and perfect 
the mechanism of a free and open market and, in general, to protect 
investors and the public interest.
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    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
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    Specifically, the Exchange believes that the proposal is designed 
to prevent fraudulent and manipulative acts and practices, to promote 
just and equitable principles of trade, to remove impediments to, and 
perfect the mechanism of a free and open market and, in general, to 
protect investors and the public interest because the sole change in 
the proposal is to have the Fund listed and traded on the Exchange 
pursuant to the generic listing standards under Nasdaq Rule 5735. As 
noted above, if the Fund was not already listed, it would be able to be 
listed pursuant to Rule 19b-4(e) without the submission of a rule 
filing because the SEC has approved rules on the Exchange related to 
generic listing standards for Managed Fund Shares on the basis that the 
generic listing criteria is consistent with the Act and, in particular, 
``is consistent with Section 6(b)(5) of the Act,\10\ which requires, 
among other things, that the Exchange's rules be designed to prevent 
fraudulent and manipulative acts and practices, to promote just and 
equitable principles of trade, to 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.'' \11\
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    \10\ 15 U.S.C. 78f(b)(5).
    \11\ See supra note 8[sic].
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    Therefore, the Exchange believes that the proposal is designed to 
prevent fraudulent and manipulative acts and practices, 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.

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 believes that the 
proposal to allow the Fund to be listed on the Exchange pursuant to the 
generic listing standards under Nasdaq Rule 5735(b)(1) will have no 
impact on competition.

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 \12\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\13\
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    \12\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \13\ 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.
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    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the

[[Page 32794]]

Act \14\ normally does not become operative for 30 days after the date 
of its filing. However, Rule 19b-4(f)(6)(iii) \15\ 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 proposed rule change may become effective and operative 
immediately upon filing. The Exchange states that waiver of the 30-day 
operative delay would streamline and simplify the listing rule 
applicable to the Shares and thereby reduce the Fund's compliance 
costs. The Exchange further states that, if the Shares were not 
currently listed, they would be eligible for immediate listing pursuant 
to Nasdaq Rule 5735(b)(1) and the Exchange asserts that there is no 
reason the Shares should be treated differently because they are 
already listed on the Exchange. For those reasons, the Exchange 
believes that waiver of the operative delay would be consistent with 
the protection of investors and the public interest. The Commission 
believes that waiver of the 30-day operative delay is consistent with 
the protection of investors and the public interest. Therefore, the 
Commission hereby waives the 30-day operative delay and designates the 
proposed rule change operative upon filing.\16\
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    \14\ 17 CFR 240.19b-4(f)(6).
    \15\ 17 CFR 240.19b-4(f)(6)(iii).
    \16\ For purposes only of waiving the 30-day operative delay, 
the Commission also has 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-2019-052 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-2019-052. 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-2019-052 and should be submitted 
on or before July 30, 2019.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-14489 Filed 7-8-19; 8:45 am]
 BILLING CODE 8011-01-P