Document ID: SEC-2014-0333-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ Stock Market LLC
Posted Date: 2014-02-25T05:00Z

[Federal Register Volume 79, Number 37 (Tuesday, February 25, 2014)]
[Notices]
[Pages 10584-10591]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-03972]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-71572; File No. SR-NASDAQ-2014-019]

Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing of Proposed Rule Change Relating to the Listing and 
Trading of Shares of the First Trust Managed Municipal Fund of First 
Trust Exchange-Traded Fund III

February 19, 2014.
    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 February 7, 2014, 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, 
II, and III 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 to list and trade the shares of the First Trust 
Managed Municipal ETF (the ``Fund'') of First Trust Exchange-Traded 
Fund III (the ``Trust'') under Nasdaq Rule 5735 (``Managed Fund 
Shares'').\3\ The shares of the Fund are collectively referred to 
herein as the ``Shares.''
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    \3\ The Commission approved Nasdaq Rule 5735 in Securities 
Exchange Act Release No. 57962 (June 13, 2008), 73 FR 35175 (June 
20, 2008) (SR-NASDAQ-2008-039). There are already multiple actively-
managed funds listed on the Exchange; see, e.g., Securities Exchange 
Act Release Nos. 69464 (April 26, 2013), 78 FR 25774 (May 2, 2013) 
(SR-NASDAQ-2013-036) (order approving listing and trading of First 
Trust Senior Loan Fund); 68972 (February 22, 2013), 78 FR 13721 
(February 28, 2013) (SR-NASDAQ-2012-147) (order approving listing 
and trading of First Trust High Yield Long/Short ETF); 66489 
(February 29, 2012), 77 FR 13379 (March 6, 2012) (SR-NASDAQ-2012-
004) (order approving listing and trading of WisdomTree Emerging 
Markets Corporate Bond Fund). Additionally, the Commission has 
previously approved the listing and trading of a number of actively-
managed funds on NYSE Arca, Inc. pursuant to Rule 8.600 of that 
exchange. See, e.g., Securities Exchange Act Release Nos. 68870 
(February 8, 2013), 78 FR 11245 (February 15, 2013) (SR-NYSEArca-
2012-139) (order approving listing and trading of First Trust 
Preferred Securities and Income ETF); 64643 (June 10, 2011), 76 FR 
35062 (June 15, 2011) (SR-NYSEArca-2011-21) (order approving listing 
and trading of WisdomTree Global Real Return Fund). The Exchange 
believes the proposed rule change raises no significant issues not 
previously addressed in those prior Commission orders.
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    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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to list and trade the Shares of the Fund 
under Nasdaq Rule 5735, which governs the listing and trading of 
Managed Fund Shares \4\ on the Exchange. The Fund will be an actively-
managed exchange-traded fund (``ETF''). The Shares will be offered by 
the Trust, which was established as a Massachusetts business trust on 
January 9, 2008.\5\ The Trust is registered with the Commission as an 
investment company and has filed a registration statement on Form N-1A 
(``Registration Statement'') with the Commission.\6\ The Fund will be a 
series of the Trust.
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    \4\ A Managed Fund Share is a security that represents an 
interest in an investment company registered under the Investment 
Company Act of 1940 (15 U.S.C. 80a-1) (the ``1940 Act'') organized 
as an open-end investment company or similar entity that invests in 
a portfolio of securities selected by its investment adviser 
consistent with its investment objectives and policies. In contrast, 
an open-end investment company that issues Index Fund Shares, listed 
and traded on the Exchange under Nasdaq Rule 5705, seeks to provide 
investment results that correspond generally to the price and yield 
performance of a specific foreign or domestic stock index, fixed 
income securities index or combination thereof.
    \5\ The Commission has issued an order, upon which the Trust may 
rely, granting certain exemptive relief under the 1940 Act. See 
Investment Company Act Release No. 30029 (April 10, 2012) (File No. 
812-13795) (the ``Exemptive Relief''). In addition, on December 6, 
2012, the staff of the Commission's Division of Investment 
Management (``Division'') issued a no-action letter (``No-Action 
Letter'') relating to the use of derivatives by actively-managed 
ETFs. See No-Action Letter dated December 6, 2012 from Elizabeth G. 
Osterman, Associate Director, Office of Exemptive Applications, 
Division of Investment Management. The No-Action Letter stated that 
the Division would not recommend enforcement action to the 
Commission under applicable provisions of and rules under the 1940 
Act if actively-managed ETFs operating in reliance on specified 
orders (which include the Exemptive Relief) invest in options 
contracts, futures contracts or swap agreements provided that they 
comply with certain representations stated in the No-Action Letter.
    \6\ See Post-Effective Amendment No. 2 to Registration Statement 
on Form N-1A for the Trust, dated December 20, 2013 (File Nos. 333-
176976 and 811-22245). The descriptions of the Fund and the Shares 
contained herein are based, in part, on information in the 
Registration Statement.
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    First Trust Advisors L.P. will be the investment adviser 
(``Adviser'') to the Fund. First Trust Portfolios L.P. (the 
``Distributor'') will be the principal underwriter and distributor of 
the Fund's Shares. Brown Brothers Harriman & Co. (``BBH'') will act as 
the administrator, accounting agent, custodian and transfer agent to 
the Fund.
    Paragraph (g) of Rule 5735 provides that if the investment adviser 
to the investment company issuing Managed Fund Shares is affiliated 
with a broker-dealer, such investment adviser shall erect a ``fire 
wall'' between the investment adviser and the broker-dealer with 
respect to access to information concerning the composition and/or 
changes to such investment company portfolio.\7\ In addition,

[[Page 10585]]

paragraph (g) further requires that personnel who make decisions on the 
open-end fund's portfolio composition must be subject to procedures 
designed to prevent the use and dissemination of material, non-public 
information regarding the open-end fund's portfolio. Rule 5735(g) is 
similar to Nasdaq Rule 5705(b)(5)(A)(i); however, paragraph (g) in 
connection with the establishment of a ``fire wall'' between the 
investment adviser and the broker-dealer reflects the applicable open-
end fund's portfolio, not an underlying benchmark index, as is the case 
with index-based funds. The Adviser is not a broker-dealer, but it is 
affiliated with the Distributor, a broker-dealer, and has implemented a 
fire wall with respect to its broker-dealer affiliate regarding access 
to information concerning the composition and/or changes to the 
portfolio. In addition, personnel who make decisions on the Fund's 
portfolio composition will be subject to procedures designed to prevent 
the use and dissemination of material non-public information regarding 
the Fund's portfolio. In the event (a) the Adviser or any 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 a 
fire wall with respect to its relevant personnel and/or such broker-
dealer affiliate, as applicable, regarding access to information 
concerning the composition and/or changes to the portfolio and will be 
subject to procedures designed to prevent the use and dissemination of 
material non-public information regarding such portfolio. The Fund 
currently does not intend to use a sub-adviser.
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    \7\ 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 and its related personnel are 
subject to the provisions of Rule 204A-1 under the Advisers Act 
relating to codes of ethics. This Rule requires investment advisers 
to adopt a code of ethics that reflects the fiduciary nature of the 
relationship to clients as well as compliance with other applicable 
securities laws. Accordingly, procedures designed to prevent the 
communication and misuse of non-public information by an investment 
adviser must be consistent with Rule 204A-1 under the Advisers Act. 
In addition, Rule 206(4)-7 under the Advisers Act makes it unlawful 
for an investment adviser to provide investment advice to clients 
unless such investment adviser has (i) adopted and implemented 
written policies and procedures reasonably designed to prevent 
violation, by the investment adviser and its supervised persons, of 
the Advisers Act and the Commission rules adopted thereunder; (ii) 
implemented, at a minimum, an annual review regarding the adequacy 
of the policies and procedures established pursuant to subparagraph 
(i) above and the effectiveness of their implementation; and (iii) 
designated an individual (who is a supervised person) responsible 
for administering the policies and procedures adopted under 
subparagraph (i) above.
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First Trust Managed Municipal ETF
Principal Investments
    The primary investment objective of the Fund will be to generate 
current income that is exempt from regular federal income taxes and its 
secondary objective will be long-term capital appreciation. Under 
normal market conditions,\8\ the Fund will seek to achieve its 
investment objectives by investing at least 80% of its net assets 
(including investment borrowings) in municipal debt securities that pay 
interest that is exempt from regular federal income taxes 
(collectively, ``Municipal Securities'').\9\ Municipal Securities are 
generally issued by or on behalf of states, territories or possessions 
of the U.S. and the District of Columbia and their political 
subdivisions, agencies, authorities and other instrumentalities. The 
types of Municipal Securities in which the Fund may invest include 
municipal lease obligations (and certificates of participation in such 
obligations), municipal general obligation bonds, municipal revenue 
bonds, municipal notes, municipal cash equivalents, private activity 
bonds (including without limitation industrial development bonds), and 
pre-refunded \10\ and escrowed to maturity bonds. In addition, 
Municipal Securities include securities issued by entities whose 
underlying assets are municipal bonds (for example, tender option bond 
(TOB) trusts and custodial receipts trusts). The Fund may invest in 
Municipal Securities of any maturity.
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    \8\ The term ``under normal market conditions'' as used herein 
includes, but is not limited to, the absence of adverse market, 
economic, political or other conditions, including extreme 
volatility or trading halts in the fixed income markets or the 
financial markets generally; operational issues causing 
dissemination of inaccurate market information; or force majeure 
type events such as systems failure, natural or man-made disaster, 
act of God, armed conflict, act of terrorism, riot or labor 
disruption or any similar intervening circumstance. For temporary 
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 and invest part or all of its 
assets in short-term debt securities, money market funds and other 
cash equivalents, or it may hold cash. (See ``Other Investments'' 
below.) During such periods, the Fund may not be able to achieve its 
investment objectives. The Fund may adopt a defensive strategy when 
the Adviser believes securities in which the Fund normally invests 
have elevated risks due to political or economic factors and in 
other extraordinary circumstances.
    \9\ Assuming compliance with the investment requirements and 
limitations described herein (including the 10% limitation on 
distressed Municipal Securities described below), the Fund may 
invest up to 100% of its net assets in Municipal Securities that pay 
interest that generates income subject to the federal alternative 
minimum tax.
    \10\ A pre-refunded municipal bond is a municipal bond that has 
been refunded to a call date on or before the final maturity of 
principal and remains outstanding in the municipal market. The 
payment of principal and interest of the pre-refunded municipal 
bonds held by the Fund will be funded from securities in a 
designated escrow account that holds U.S. Treasury securities or 
other obligations of the U.S. government (including its agencies and 
instrumentalities). As the payment of principal and interest is 
generated from securities held in a designated escrow account, the 
pledge of the municipality has been fulfilled and the original 
pledge of revenue by the municipality is no longer in place. The 
escrow account securities pledged to pay the principal and interest 
of the pre-refunded municipal bond do not guarantee the price 
movement of the bond before maturity. Investment in pre-refunded 
municipal bonds held by the Fund may subject the Fund to interest 
rate risk, market risk and credit risk. In addition, while a 
secondary market exists for pre-refunded municipal bonds, if the 
Fund sells pre-refunded municipal bonds prior to maturity, the price 
received may be more or less than the original cost, depending on 
market conditions at the time of sale.
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    The Fund will invest at least 65% of its net assets in investment 
grade securities, which are securities that are rated at the time of 
investment in one of the four highest credit quality categories by at 
least one nationally recognized statistical rating organization rating 
that security or, if unrated, determined by the Adviser to be of 
comparable quality.\11\ The Fund will consider pre-refunded or escrowed 
to maturity bonds, regardless of rating, to be investment grade 
securities. The Fund may invest up to 35% of its net assets in 
securities that are, at the time of investment, rated below investment 
grade (or securities that are unrated and determined by the Adviser to 
be of comparable quality), commonly referred to as ``high yield'' or 
``junk'' bonds. If, subsequent to purchase by the Fund, a security held 
by the Fund experiences a decline in credit quality and falls below 
investment grade, the Fund may continue to hold the security and it 
will not count toward the 35% investment limitation.
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    \11\ Comparable quality of unrated securities will be determined 
by the Adviser based on fundamental credit analysis of the unrated 
security and comparable rated securities. On a best efforts basis, 
the Adviser will attempt to make a rating determination based on 
publicly available data. In making a ``comparable quality'' 
determination, the Adviser may consider, for example, whether the 
issuer of the security has issued other rated securities, the nature 
and provisions of the relevant security, whether the obligations 
under the relevant security are guaranteed by another entity and the 
rating of such guarantor (if any), relevant cash flows, 
macroeconomic analysis, and/or sector or industry analysis.
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Investments in Derivatives
    To pursue its investment objectives, the Fund may invest in 
interest rate swaps,\12\ options, exchange-listed options on futures 
contracts, futures contracts and forward contracts. The use of these 
derivative transactions may allow the Fund to obtain net long or short 
exposures to selected interest rates or durations and/or to gain 
exposure to Municipal Securities. These derivatives may also be used to 
hedge risks, including interest rate risks and credit risks, associated 
with the Fund's other portfolio investments.
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    \12\ To the extent practicable, the Fund will invest in swaps 
cleared through the facilities of a centralized clearing house.
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    The Fund generally expects that no more than 20% of the value of 
the Fund's net assets will be invested in

[[Page 10586]]

derivative instruments; however, there will be no limitation on the 
Fund's investments in derivative instruments to be used by the Fund 
solely for hedging purposes.\13\ The Fund will only enter into 
transactions in derivative instruments with counterparties that the 
Adviser reasonably believes are capable of performing under the 
applicable contract.\14\ The Fund's investments in derivative 
instruments will be consistent with the Fund's investment objectives 
and the 1940 Act and will not be used to seek to achieve a multiple or 
inverse multiple of an index.
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    \13\ The Fund will limit its direct investments in futures, 
options on futures and swaps to the extent necessary for the Adviser 
to claim the exclusion from regulation as a ``commodity pool 
operator'' with respect to the Fund under Rule 4.5 promulgated by 
the Commodity Futures Trading Commission (``CFTC''), as such rule 
may be amended from time to time. Under Rule 4.5 as currently in 
effect, the Fund will limit its trading activity in futures, options 
on futures and swaps (excluding activity for ``bona fide hedging 
purposes,'' as defined by the CFTC) such that it will meet one of 
the following tests: (i) Aggregate initial margin and premiums 
required to establish its futures, options on futures and swap 
positions will not exceed 5% of the liquidation value of the Fund's 
portfolio, after taking into account unrealized profits and losses 
on such positions; or (ii) aggregate net notional value of its 
futures, options on futures and swap positions will not exceed 100% 
of the liquidation value of the Fund's portfolio, after taking into 
account unrealized profits and losses on such positions.
    \14\ The Fund will seek, where possible, to use counterparties, 
as applicable, whose financial status is such that the risk of 
default is reduced; however, the risk of losses resulting from 
default is still possible. The Adviser will evaluate the 
creditworthiness of counterparties on an ongoing basis. In addition 
to information provided by credit agencies, the Adviser's analysis 
will evaluate each approved counterparty using various methods of 
analysis and may consider the Adviser's past experience with the 
counterparty, its known disciplinary history and its share of market 
participation.
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Other Investments
    Under normal market conditions, the Fund will invest substantially 
all of its assets to meet its investment objectives as described above. 
In addition, the Fund may invest its assets as generally described 
below.
    The Fund may invest up to 10% of its net assets in taxable 
municipal securities. In addition, the Fund may invest up to 10% of its 
net assets in distressed Municipal Securities.\15\ The Fund may also 
invest up to 10% of its net assets in short-term debt securities, money 
market funds and other cash equivalents, or it may hold cash. The 
percentage of the Fund invested in such holdings will vary and will 
depend on several factors, including market conditions.
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    \15\ Distressed Municipal Securities are Municipal Securities 
that are currently in default and not expected to pay the current 
coupon. If, subsequent to purchase by the Fund, a Municipal Security 
held by the Fund becomes distressed, the Fund may continue to hold 
the Municipal Security and it will not count toward the 10% limit.
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    Short-term debt securities, which do not include Municipal 
Securities, are securities from issuers having a long-term debt rating 
of at least A by Standard & Poor's Ratings Services, a Division of The 
McGraw-Hill Companies, Inc. (``S&P Ratings''), Moody's Investors 
Service, Inc. (``Moody's'') or Fitch Ratings (``Fitch'') and having a 
maturity of one year or less. The use of temporary investments will not 
be a part of a principal investment strategy of the Fund.
    Short-term debt securities are defined to include, without 
limitation, the following: (1) Fixed rate and floating rate U.S. 
government securities, including bills, notes and bonds differing as to 
maturity and rates of interest, which are either issued or guaranteed 
by the U.S. Treasury or by U.S. government agencies or 
instrumentalities; (2) certificates of deposit issued against funds 
deposited in a bank or savings and loan association; (3) bankers' 
acceptances, which are short-term credit instruments used to finance 
commercial transactions; (4) repurchase agreements,\16\ which involve 
purchases of debt securities; (5) bank time deposits, which are monies 
kept on deposit with banks or savings and loan associations for a 
stated period of time at a fixed rate of interest; and (6) commercial 
paper, which is short-term unsecured promissory notes. The Fund may 
only invest in commercial paper rated A-1 or higher by S&P Ratings, 
Prime-1 or higher by Moody's or F1 or higher by Fitch.
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    \16\ The Fund intends to enter into repurchase agreements only 
with financial institutions and dealers believed by the Adviser to 
present minimal credit risks in accordance with criteria approved by 
the Board of Trustees of the Trust (``Trust Board''). The Adviser 
will review and monitor the creditworthiness of such institutions. 
The Adviser will monitor the value of the collateral at the time the 
transaction is entered into and at all times during the term of the 
repurchase agreement.
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    The Fund may invest up to 20% of its net assets in the securities 
of other investment companies, including money market funds, closed-end 
funds, open-end funds and other ETFs.\17\
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    \17\ An ETF is an investment company registered under the 1940 
Act that holds a portfolio of securities. Many ETFs are designed to 
track the performance of a securities index, including industry, 
sector, country and region indexes. ETFs included in the Fund will 
be listed and traded in the U.S. on registered exchanges. The Fund 
may invest in the securities of ETFs in excess of the limits imposed 
under the 1940 Act pursuant to exemptive orders obtained by other 
ETFs and their sponsors from the Commission. In addition, the Fund 
may invest in the securities of certain other investment companies 
in excess of the limits imposed under the 1940 Act pursuant to an 
exemptive order that the Trust has obtained from the Commission. See 
Investment Company Act Release No. 30377 (February 5, 2013) (File 
No. 812-13895). The ETFs in which the Fund may invest include Index 
Fund Shares (as described in Nasdaq Rule 5705), Portfolio Depository 
Receipts (as described in Nasdaq Rule 5705), and Managed Fund Shares 
(as described in Nasdaq Rule 5735). While the Fund may invest in 
inverse ETFs, the Fund will not invest in leveraged or inverse 
leveraged (e.g., 2X or -3X) ETFs.
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    The Fund may hold up to an aggregate amount of 15% of its net 
assets in illiquid assets (calculated at the time of investment), 
including Rule 144A securities deemed illiquid by the Adviser, in 
accordance with Commission guidance.\18\ The Fund will monitor its 
portfolio liquidity on an ongoing basis to determine whether, in light 
of current circumstances, an adequate level of liquidity is being 
maintained, and will consider taking appropriate steps in order to 
maintain adequate liquidity if, through a change in values, net assets, 
or other circumstances, more than 15% of the Fund's net assets are held 
in illiquid assets. Illiquid assets include securities subject to 
contractual or other restrictions on resale and other instruments that 
lack readily available markets as determined in accordance with 
Commission staff guidance.
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    \18\ In reaching liquidity decisions, the Adviser may consider 
the following factors: The frequency of trades and quotes for the 
security; the number of dealers wishing to purchase or sell the 
security and the number of other potential purchasers; dealer 
undertakings to make a market in the security; and the nature of the 
security and the nature of the marketplace in which it trades (e.g., 
the time needed to dispose of the security, the method of soliciting 
offers and the mechanics of transfer).
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    The Fund may not invest 25% or more of the value of its total 
assets in securities of issuers in any one industry or group of 
industries. This restriction does not apply to (a) Municipal Securities 
issued by governments or political subdivisions of governments, (b) 
obligations issued or guaranteed by the U.S. government, its agencies 
or instrumentalities, or (c) securities of other investment 
companies.\19\
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    \19\ See Form N-1A, Item 9. The Commission has taken the 
position that a fund is concentrated if it invests more than 25% of 
the value of its total assets in any one industry. See, e.g., 
Investment Company Act Release No. 9011 (October 30, 1975), 40 FR 
54241 (November 21, 1975).
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    The Fund intends to qualify each year as a regulated investment 
company (``RIC'') under Subchapter M of the Internal Revenue Code of 
1986, as amended.
Creation and Redemption of Shares
    The Fund will issue and redeem Shares on a continuous basis at net 
asset value (``NAV'') \20\ only in large blocks of

[[Page 10587]]

Shares (``Creation Units'') in transactions with authorized 
participants, generally including broker-dealers and large 
institutional investors (``Authorized Participants''). Creation Units 
will consist of 50,000 Shares. As described in the Registration 
Statement and consistent with the Exemptive Relief, the Fund will issue 
and redeem Creation Units in exchange for an in-kind portfolio of 
instruments or, under certain circumstances, cash in lieu of such 
instruments or a combination of instruments and cash (the ``Creation 
Basket''). In addition, if there is a difference between the NAV 
attributable to a Creation Unit and the market value of the Creation 
Basket exchanged for the Creation Unit, the party conveying instruments 
with the lower value will pay to the other an amount in cash equal to 
the difference (referred to as the ``Cash Component'').
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    \20\ The NAV of the Fund's Shares generally will be calculated 
once daily Monday through Friday as of the close of regular trading 
on the New York Stock Exchange, generally 4:00 p.m., Eastern time 
(the ``NAV Calculation Time''). NAV per Share will be calculated by 
dividing the Fund's net assets by the number of Fund Shares 
outstanding. For more information regarding the valuation of Fund 
investments in calculating the Fund's NAV, see the Registration 
Statement.
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    Creations and redemptions must be made by an Authorized Participant 
or through a firm that is either a member of the National Securities 
Clearing Corporation (``NSCC'') or a Depository Trust Company 
participant, that, in each case, must have executed an agreement that 
has been agreed to by the Distributor and BBH with respect to creations 
and redemptions of Creation Units. All standard orders to create 
Creation Units must be received by the transfer agent no later than the 
closing time of the regular trading session on the New York Stock 
Exchange (ordinarily 4:00 p.m., Eastern time) (the ``Closing Time''), 
in each case on the date such order is placed in order for the creation 
of Creation Units to be effected based on the NAV of Shares as next 
determined on such date after receipt of the order in proper form. 
Shares may be redeemed only in Creation Units at their NAV next 
determined after receipt, not later than the Closing Time, of a 
redemption request in proper form by the Fund through the transfer 
agent and only on a business day.
    The Fund's custodian, through the NSCC, will make available on each 
business day, prior to the opening of business of the Exchange, the 
list of the names and quantities of the instruments comprising the 
Creation Basket, as well as the estimated Cash Component (if any), for 
that day. The published Creation Basket will apply until a new Creation 
Basket is announced on the following business day.
Net Asset Value
    The Fund's NAV will be determined as of the close of trading 
(normally 4:00 p.m., Eastern time) on each day the New York Stock 
Exchange is open for business. NAV will be calculated for the Fund by 
taking the market price of the Fund's total assets, including interest 
or dividends accrued but not yet collected, less all liabilities, and 
dividing such amount by the total number of Shares outstanding. The 
result, rounded to the nearest cent, will be the NAV per Share. All 
valuations will be subject to review by the Trust Board or its 
delegate.
    The Fund's investments will be valued daily at market value or, in 
the absence of market value with respect to any investment, at fair 
value, in each case in accordance with valuation procedures (which may 
be revised from time to time) adopted by the Trust Board (``Valuation 
Procedures'') and in accordance with the 1940 Act. A market valuation 
generally means a valuation (i) obtained from an exchange, an 
independent pricing service (``Pricing Service''), or a major market 
maker (or dealer) or (ii) based on a price quotation or other 
equivalent indication of value supplied by an exchange, a Pricing 
Service, or a major market maker (or dealer). The information 
summarized below is based on the Valuation Procedures as currently in 
effect; however, as noted above, the Valuation Procedures are amended 
from time to time and, therefore, such information is subject to 
change.
    Certain securities in which the Fund may invest will not be listed 
on any securities exchange or board of trade. Such securities will 
typically be bought and sold by institutional investors in individually 
negotiated private transactions that function in many respects like an 
over-the-counter secondary market, although typically no formal market 
makers will exist. Certain securities, particularly debt securities, 
will have few or no trades, or trade infrequently, and information 
regarding a specific security may not be widely available or may be 
incomplete. Accordingly, determinations of the fair value of debt 
securities may be based on infrequent and dated information. Because 
there is less reliable, objective data available, elements of judgment 
may play a greater role in valuation of debt securities than for other 
types of securities. Typically, debt securities (other than those 
described in the next sentence) will be valued using information 
provided by a Pricing Service. Debt securities having a remaining 
maturity of 60 days or less when purchased will be valued at cost 
adjusted for amortization of premiums and accretion of discounts.
    Equity securities (including ETFs and closed-end funds) listed on 
any exchange other than the Exchange will be valued at the last sale 
price on the business day as of which such value is being determined. 
Equity securities (including ETFs and closed-end funds) listed on the 
Exchange will be valued at the official closing price on the business 
day as of which such value is being determined. If there has been no 
sale on such day, or no official closing price in the case of 
securities traded on the Exchange, the securities will be valued using 
fair value pricing, as described below. Equity securities traded on 
more than one securities exchange will be valued at the last sale price 
or official closing price, as applicable, on the business day as of 
which such value is being determined at the close of the exchange 
representing the principal market for such securities. Non-fixed income 
securities traded in the over-the-counter market will be valued at the 
midpoint between the bid and the asked price, if available, and 
otherwise at the closing bid prices. Registered open-end management 
investment companies (other than ETFs, which will be valued as 
described above) will be valued at their net asset values as reported 
by such registered open-end management investment companies to Pricing 
Services.
    Exchange-traded options and futures contracts will be valued at the 
closing price in the market where such contracts are principally 
traded. Over-the-counter futures contracts and options will be valued 
at the midpoint between the bid and the asked price, if available, and 
otherwise at the closing bid prices.
    Interest rate swaps will be valued using a Pricing Service or, if 
the Pricing Service does not provide a value, the Adviser's pricing 
committee will then attempt to obtain one or more quotes provided by 
the selling dealer or financial institution and will value the swaps 
accordingly.
    Certain securities may not be able to be priced by pre-established 
pricing methods. Such securities may be valued by the Trust Board or 
its delegate at fair value. The use of fair value pricing by the Fund 
will be governed by the Valuation Procedures and conducted in 
accordance with the provisions of the 1940 Act. Valuing the Fund's 
securities using fair value pricing will result in using prices for 
those securities that may differ from current market

[[Page 10588]]

valuations or official closing prices on the applicable exchange.
Availability of Information
    The Fund's Web site (www.ftportfolios.com), which will be publicly 
available prior to the public offering of Shares, will include a form 
of the prospectus for the Fund that may be downloaded. The Web site 
will include the Shares' ticker, Cusip and exchange information along 
with additional quantitative information updated on a daily basis, 
including, for the Fund: (1) Daily trading volume, the prior business 
day's reported NAV and closing price, mid-point of the bid/ask spread 
at the time of calculation of such NAV (the ``Bid/Ask Price''),\21\ and 
a calculation of the premium and discount of the Bid/Ask Price against 
the NAV; and (2) data in chart format displaying the frequency 
distribution of discounts and premiums of the daily Bid/Ask Price 
against the NAV, within appropriate ranges, for each of the four 
previous calendar quarters. On each business day, before commencement 
of trading in Shares in the Regular Market Session \22\ on the 
Exchange, the Fund will disclose on its Web site the identities and 
quantities of the portfolio of securities and other assets (the 
``Disclosed Portfolio'' as defined in Nasdaq Rule 5735(c)(2)) held by 
the Fund that will form the basis for the Fund's calculation of NAV at 
the end of the business day.\23\ The Disclosed Portfolio will include, 
as applicable, the names, quantities, percentage weightings and market 
values of the portfolio securities and other assets held by the Fund. 
The Web site information will be publicly available at no charge.
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    \21\ The Bid/Ask Price of the Fund will be determined using the 
midpoint of the highest bid and the lowest offer on the Exchange as 
of the time of calculation of the Fund's NAV. The records relating 
to Bid/Ask Prices will be retained by the Fund and its service 
providers.
    \22\ See Nasdaq Rule 4120(b)(4) (describing the three trading 
sessions on the Exchange: (1) Pre-Market Session from 4 a.m. to 9:30 
a.m., Eastern time; (2) Regular Market Session from 9:30 a.m. to 4 
p.m. or 4:15 p.m., Eastern time; and (3) Post-Market Session from 4 
p.m. or 4:15 p.m. to 8 p.m., Eastern time).
    \23\ Under accounting procedures to be followed by the Fund, 
trades made on the prior business day (``T'') will be booked and 
reflected in NAV on the current business day (``T+1''). Accordingly, 
the Fund will be able to disclose at the beginning of the business 
day the portfolio that will form the basis for the NAV calculation 
at the end of the business day.
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    In addition, for the Fund, an estimated value, defined in Rule 
5735(c)(3) as the ``Intraday Indicative Value,'' that reflects an 
estimated intraday value of the Fund's Disclosed Portfolio, will be 
disseminated. Moreover, the Intraday Indicative Value, available on the 
NASDAQ OMX Information LLC proprietary index data service,\24\ will be 
based upon the current value for the components of the Disclosed 
Portfolio and will be updated and widely disseminated by one or more 
major market data vendors and broadly displayed at least every 15 
seconds during the Regular Market Session. The Intraday Indicative 
Value will be based on quotes and closing prices from the securities' 
local market and may not reflect events that occur subsequent to the 
local market's close. Premiums and discounts between the Intraday 
Indicative Value and the market price may occur. This should not be 
viewed as a ``real time'' update of the NAV per Share of the Fund, 
which is calculated only once a day.
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    \24\ Currently, the NASDAQ OMX Global Index Data Service 
(``GIDS'') is the NASDAQ OMX global index data feed service, 
offering real-time updates, daily summary messages, and access to 
widely followed indexes and Intraday Indicative Values for ETFs. 
GIDS provides investment professionals with the daily information 
needed to track or trade NASDAQ OMX indexes, listed ETFs, or third-
party partner indexes and ETFs.
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    The dissemination of the Intraday Indicative Value, together with 
the Disclosed Portfolio, will allow investors to determine the value of 
the underlying portfolio of the Fund on a daily basis and will provide 
a close estimate of that value throughout the trading day.
    Investors will also be able to obtain the Fund's Statement of 
Additional Information (``SAI''), the Fund's annual and semi-annual 
reports (together, ``Shareholder Reports''), and its Form N-CSR and 
Form N-SAR, filed twice a year. The Fund's SAI and Shareholder Reports 
will be available free upon request from the Fund, and those documents 
and the Form N-CSR and Form N-SAR may be viewed on-screen or downloaded 
from the Commission's Web site at www.sec.gov. 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. 
Quotation and last sale information for the Shares will be available 
via Nasdaq proprietary quote and trade services, as well as in 
accordance with the Unlisted Trading Privileges and the Consolidated 
Tape Association plans for the Shares. One source of price information 
for Municipal Securities is the Electronic Municipal Market Access 
(``EMMA'') of the Municipal Securities Rulemaking Board (``MSRB'').\25\ 
Additionally, the MSRB offers trade data subscription services that 
permit subscribers to obtain information about municipal securities 
transactions. Quotation information from brokers and dealers or Pricing 
Services will also be available for fixed income securities generally. 
Intraday executable price information for fixed income securities, 
equity securities and derivatives will be available from major broker-
dealer firms and major market data vendors. For exchange-traded assets, 
intraday price information will also be available directly from the 
applicable listing exchanges. Intraday price information will also 
generally be available through subscription services, such as 
Bloomberg, Markit, and Thomson Reuters, which can be accessed by 
Authorized Participants and other investors.
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    \25\ A source of price information for other types of fixed 
income securities is the Trade Reporting and Compliance Engine 
(``TRACE'') of the Financial Industry Regulatory Authority 
(``FINRA'').
---------------------------------------------------------------------------

    Additional information regarding the Fund and the Shares, including 
investment strategies, risks, creation and redemption procedures, fees, 
Fund holdings disclosure policies, distributions and taxes will be 
included in the Registration Statement. All terms relating to the Fund 
that are referred to, but not defined in, this proposed rule change 
will be defined in the Registration Statement.
Initial and Continued Listing
    The Shares will be subject to Rule 5735, which sets forth the 
initial and continued listing criteria applicable to Managed Fund 
Shares. The Exchange represents that, for initial and/or continued 
listing, the Fund must be in compliance with Rule 10A-3 \26\ under the 
Act. A minimum of 100,000 Shares will be outstanding at the 
commencement of trading on the Exchange. The Exchange will obtain a 
representation from the issuer of the Shares that the NAV per Share 
will be calculated daily and that the NAV and the Disclosed Portfolio 
will be made available to all market participants at the same time.
---------------------------------------------------------------------------

    \26\ See 17 CFR 240.10A-3.
---------------------------------------------------------------------------

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. 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

[[Page 10589]]

(12). Trading may be halted because of market conditions or for reasons 
that, in the view of the Exchange, make trading in the Shares 
inadvisable. These may include: (1) The extent to which trading is not 
occurring in the securities and/or the other assets constituting the 
Disclosed Portfolio of the Fund; or (2) whether other unusual 
conditions or circumstances detrimental to the maintenance of a fair 
and orderly market are present. Trading in the Shares also will be 
subject to Rule 5735(d)(2)(D), which sets forth circumstances under 
which Shares of the Fund 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. The Exchange has 
appropriate rules to facilitate transactions in the Shares during all 
trading sessions. As provided in Nasdaq Rule 5735(b)(3), the minimum 
price variation for quoting and entry of orders in Managed Fund Shares 
traded on the Exchange is $0.01.
Surveillance
    The Exchange represents that trading in the Shares will be subject 
to the existing trading surveillances, administered by both Nasdaq and 
also FINRA on behalf of the Exchange, which are designed to detect 
violations of Exchange rules and applicable federal securities 
laws.\27\ The Exchange represents that these procedures are adequate to 
properly monitor Exchange trading of the Shares in all trading sessions 
and to deter and detect violations of Exchange rules and applicable 
federal securities laws.
---------------------------------------------------------------------------

    \27\ FINRA surveils trading on the Exchange pursuant to a 
regulatory services agreement. The Exchange is responsible for 
FINRA's performance under this regulatory services agreement.
---------------------------------------------------------------------------

    The surveillances referred to above generally focus on detecting 
securities trading outside their normal patterns, which could be 
indicative of manipulative or other violative activity. When such 
situations are detected, surveillance analysis follows and 
investigations are opened, where appropriate, to review the behavior of 
all relevant parties for all relevant trading violations.
    FINRA, on behalf of the Exchange, will communicate as needed 
regarding trading in the Shares with other markets and other entities 
that are members of the Intermarket Surveillance Group (``ISG''),\28\ 
and FINRA may obtain trading information regarding trading in the 
Shares from such markets and other entities. In addition, the Exchange 
may obtain information regarding trading in the Shares from markets and 
other entities that are members of ISG, which includes securities and 
futures exchanges, or with which the Exchange has in place a 
comprehensive surveillance sharing agreement. Moreover, FINRA, on 
behalf of the Exchange, will be able to access, as needed, trade 
information for certain fixed income securities held by the Fund 
reported to FINRA's TRACE.
---------------------------------------------------------------------------

    \28\ For a list of the current members of ISG, see 
www.isgportal.org. The Exchange notes that not all components of the 
Disclosed Portfolio may trade on markets that are members of ISG or 
with which the Exchange has in place a comprehensive surveillance 
sharing agreement.
---------------------------------------------------------------------------

    At least 90% of the Fund's net assets that are invested in 
exchange-traded futures and exchange-traded options (in the aggregate) 
will be invested in instruments that trade in markets that are members 
of ISG or are parties to a comprehensive surveillance sharing agreement 
with the Exchange.
    In addition, the Exchange also has a general policy prohibiting the 
distribution of material, non-public information by its employees.
Information Circular
    Prior to the commencement of trading, the Exchange will inform its 
members in an Information Circular of the special characteristics and 
risks associated with trading the Shares. Specifically, the Information 
Circular will discuss the following: (1) The procedures for purchases 
and redemptions of Shares in Creation Units (and that Shares are not 
individually redeemable); (2) Nasdaq Rule 2111A, which imposes 
suitability obligations on Nasdaq members with respect to recommending 
transactions in the Shares to customers; (3) how information regarding 
the Intraday Indicative Value is disseminated; (4) the risks involved 
in trading the Shares during the Pre-Market and Post-Market Sessions 
when an updated Intraday Indicative Value will not be calculated or 
publicly disseminated; (5) the requirement that members deliver a 
prospectus to investors purchasing newly issued Shares prior to or 
concurrently with the confirmation of a transaction; and (6) trading 
information.
    In addition, the Information Circular will advise members, prior to 
the commencement of trading, of the prospectus delivery requirements 
applicable to the Fund. Members purchasing Shares from the Fund for 
resale to investors will deliver a prospectus to such investors. The 
Information Circular will also discuss any exemptive, no-action and 
interpretive relief granted by the Commission from any rules under the 
Act.
    Additionally, the Information Circular will reference that the Fund 
is subject to various fees and expenses described in the Registration 
Statement. The Information Circular will also disclose the trading 
hours of the Shares of the Fund and the applicable NAV Calculation Time 
for the Shares. The Information Circular will disclose that information 
about the Shares of the Fund will be publicly available on the Fund's 
Web site.
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 Exchange believes that the proposed rule change is designed to 
prevent fraudulent and manipulative acts and practices in that the 
Shares will be listed and traded on the Exchange pursuant to the 
initial and continued listing criteria in Nasdaq Rule 5735. The 
Exchange represents that trading in the Shares will be subject to the 
existing trading surveillances, administered by both Nasdaq and also 
FINRA on behalf of the Exchange, which are designed to detect 
violations of Exchange rules and applicable federal securities laws.
    The Adviser is not a broker-dealer, but it is affiliated with a 
broker-dealer and is required to implement a ``fire wall'' with respect 
to such broker-dealer affiliate regarding access to information 
concerning the composition and/or changes to the Fund's portfolio. In 
addition, paragraph (g) of Nasdaq Rule 5735 further requires that 
personnel who make decisions on the open-end fund's portfolio 
composition must be subject to procedures designed to prevent the use 
and dissemination of material non-public information regarding the 
open-end fund's portfolio.
    FINRA, on behalf of the Exchange, will communicate as needed 
regarding trading in the Shares with other markets and other entities 
that are members of ISG, and FINRA may obtain trading

[[Page 10590]]

information regarding trading in the Shares from such markets and other 
entities. In addition, the Exchange may obtain information regarding 
trading in the Shares from markets and other entities that are members 
of ISG, which includes securities and futures exchanges, or with which 
the Exchange has in place a comprehensive surveillance sharing 
agreement. Moreover, FINRA, on behalf of the Exchange, will be able to 
access, as needed, trade information for certain fixed income 
securities held by the Fund reported to FINRA's TRACE. At least 90% of 
the Fund's net assets that are invested in exchange-traded futures and 
exchange-traded options (in the aggregate) will be invested in 
instruments that trade in markets that are members of ISG or are 
parties to a comprehensive surveillance sharing agreement with the 
Exchange.
    The primary investment objective of the Fund will be to generate 
current income that is exempt from regular federal income taxes and its 
secondary objective will be long-term capital appreciation. Under 
normal market conditions, the Fund will seek to achieve its investment 
objectives by investing at least 80% of its net assets (including 
investment borrowings) in Municipal Securities. The Fund will invest at 
least 65% of its net assets in investment grade securities. The Fund 
may invest up to 10% of its net assets in taxable municipal securities 
and up to 10% of its net assets in distressed Municipal Securities. The 
Fund generally expects that no more than 20% of the value of the Fund's 
net assets will be invested in derivative instruments; however, there 
will be no limitation on the Fund's investments in derivative 
instruments to be used by the Fund solely for hedging purposes. The 
Fund's investments in derivatives will be consistent with the Fund's 
investment objectives and the 1940 Act and will not be used to seek to 
achieve a multiple or inverse multiple of an index. Also, the Fund may 
hold up to an aggregate amount of 15% of its net assets in illiquid 
assets (calculated at the time of investment), including Rule 144A 
securities deemed illiquid by the Adviser, in accordance with 
Commission guidance. The Fund will monitor its portfolio liquidity on 
an ongoing basis to determine whether, in light of current 
circumstances, an adequate level of liquidity is being maintained, and 
will consider taking appropriate steps in order to maintain adequate 
liquidity if, through a change in values, net assets, or other 
circumstances, more than 15% of the Fund's net assets are held in 
illiquid assets. Illiquid assets include securities subject to 
contractual or other restrictions on resale and other instruments that 
lack readily available markets as determined in accordance with 
Commission staff guidance.
    The Fund's investments will be valued daily at market value or, in 
the absence of market value with respect to any investment, at fair 
value, in each case in accordance with the Valuation Procedures and in 
accordance with the 1940 Act.
    The proposed rule change is designed to promote just and equitable 
principles of trade and to protect investors and the public interest in 
that the Exchange will obtain a representation from the issuer of the 
Shares that the NAV per Share will be calculated daily and that the NAV 
and the Disclosed Portfolio 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 
Shares, thereby promoting market transparency. Moreover, the Intraday 
Indicative Value, available on the NASDAQ OMX Information LLC 
proprietary index data service, will be widely disseminated by one or 
more major market data vendors and broadly displayed at least every 15 
seconds during the Regular Market Session. On each business day, before 
commencement of trading in Shares in the Regular Market Session on the 
Exchange, the Fund will disclose on its Web site the Disclosed 
Portfolio that will form the basis for the Fund's calculation of NAV at 
the end of the business day. 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, and quotation and last sale information for the 
Shares will be available via Nasdaq proprietary quote and trade 
services, as well as in accordance with the Unlisted Trading Privileges 
and the Consolidated Tape Association plans for the Shares. One source 
of price information for Municipal Securities is the MSRB's EMMA. 
Additionally, the MSRB offers trade data subscription services that 
permit subscribers to obtain information about municipal securities 
transactions. Quotation information from brokers and dealers or Pricing 
Services will also be available for fixed income securities generally. 
Intraday executable price information for fixed income securities, 
equity securities and derivatives will be available from major broker-
dealer firms and major market data vendors. For exchange-traded assets, 
intraday price information will also be available directly from the 
applicable listing exchanges. Intraday price information will also 
generally be available through subscription services, such as 
Bloomberg, Markit, and Thomson Reuters, which can be accessed by 
Authorized Participants and other investors.
    The Fund's Web site will include a form of the prospectus for the 
Fund and additional data relating to NAV and other applicable 
quantitative information. Trading in Shares of the Fund will be halted 
under the conditions specified in Nasdaq Rules 4120 and 4121 or because 
of market conditions or for reasons that, in the view of the Exchange, 
make trading in the Shares inadvisable, and trading in the Shares will 
be subject to Nasdaq Rule 5735(d)(2)(D), which sets forth circumstances 
under which Shares of the Fund may be halted. In addition, as noted 
above, investors will have ready access to information regarding the 
Fund's holdings, the Intraday Indicative Value, the Disclosed 
Portfolio, and quotation and last sale information for the Shares.
    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 
an additional type of actively-managed exchange-traded product that 
will enhance competition among market participants, to the benefit of 
investors and the marketplace. As noted above, FINRA, on behalf of the 
Exchange, will communicate as needed regarding trading in the Shares 
with other markets and other entities that are members of ISG and FINRA 
may obtain trading information regarding trading in the Shares from 
such markets and other entities. In addition, the Exchange may obtain 
information regarding trading in the Shares from markets and other 
entities that are members of ISG, which includes securities and futures 
exchanges, or with which the Exchange has in place a comprehensive 
surveillance sharing agreement. Furthermore, as noted above, investors 
will have ready access to information regarding the Fund's holdings, 
the Intraday Indicative Value, the Disclosed Portfolio, and quotation 
and last sale information for the Shares.
    For the above reasons, Nasdaq believes the proposed rule change is 
consistent with the requirements of Section 6(b)(5) of the Act.

[[Page 10591]]

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. The Exchange believes that 
the proposed rule change will facilitate the listing and trading of an 
additional type of actively-managed exchange-traded fund that will 
enhance competition among market participants, 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

    Written comments were neither solicited nor received.

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

    Within 45 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the Exchange consents, the Commission shall: (a) By order approve 
or disapprove such proposed rule change, or (b) institute proceedings 
to determine whether the proposed rule change should be 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-2014-019 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NASDAQ-2014-019. 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 the filing also will be available for inspection 
and copying at the principal office of Nasdaq. 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-2014-019 and 
should be submitted on or before March 18, 2014.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\29\
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    \29\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-03972 Filed 2-24-14; 8:45 am]
BILLING CODE 8011-01-P