
[Federal Register: June 20, 2008 (Volume 73, Number 120)]
[Notices]               
[Page 35175-35178]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr20jn08-102]                         


[[Page 35175]]

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 SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57962; File No. SR-NASDAQ-2008-039]

 
Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Order 
Granting Approval of Proposed Rule Change, as Modified by Amendment No. 
1 Thereto, Relating to the Listing and Trading of Managed Fund Shares

June 13, 2008.

I. Introduction

    On April 30, 2008, The NASDAQ Stock Market LLC (``Nasdaq'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission''), pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'')\1\ and Rule 19b-4 thereunder,\2\ a 
proposed rule change seeking to adopt new Nasdaq Rule 4420(o) to list 
and trade, or trade pursuant to unlisted trading privileges (``UTP''), 
securities issued by actively managed, open-end investment management 
companies (``Managed Fund Shares'') and to amend certain other Nasdaq 
rules to incorporate references to such Managed Fund Shares. On May 7, 
2008, the Exchange filed Amendment No. 1 to the proposed rule change. 
The proposed rule change, as amended, was published for comment in the 
Federal Register on May 14, 2008.\3\ The Commission received no 
comments regarding the proposal. This order approves the proposed rule 
change, as modified by Amendment No. 1.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 57800 (May 8, 2008), 
73 FR 27874 (``Notice'').
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II. Description of the Proposal

    The Exchange proposes to add new Nasdaq Rule 4420(o) to permit the 
listing and trading, or trading pursuant to UTP, of Managed Fund 
Shares.\4\ The Exchange also proposes to make conforming changes to the 
introductory paragraph of Nasdaq Rule 4420, Nasdaq Rules 4120(a)(9) and 
4120(b)(4)(A), which relate to trading halts, and Nasdaq Rule 4540, 
which relates to entry and annual fees for issuers, to incorporate 
references to Managed Fund Shares.
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    \4\ Proposed Nasdaq Rule 4420(o) is substantively identical to 
NYSE Arca Equities Rule 8.600. See Securities Exchange Act Release 
No. 57619 (April 4, 2008), 73 FR 19544 (April 10, 2008) (SR-
NYSEArca-2008-25) (approving, among other things, listing standards 
for Managed Fund Shares).
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    Proposed Listing Rules for Managed Fund Shares Proposed Nasdaq Rule 
4420(o)(2)(A) provides that Nasdaq will file separate proposals under 
Section 19(b) of the Act before the listing and/or trading of Managed 
Fund Shares. Proposed Nasdaq Rule 4420(o)(2)(B) provides that 
transactions in Managed Fund Shares will occur throughout Nasdaq's 
trading hours.\5\ Proposed Nasdaq Rule 4420(o)(2)(C) provides that the 
minimum price variation for quoting and entry of orders in Managed Fund 
Shares will be $0.01. Proposed Rule Nasdaq 4420(o)(2)(D) provides that 
Nasdaq will implement written surveillance procedures for Managed Fund 
Shares. Proposed Nasdaq Rule 4420(o)(2)(E) provides that, for Managed 
Fund Shares based on an international or global portfolio, the 
statutory prospectus or the application for exemption from provisions 
of the Investment Company Act of 1940 (``1940 Act'') for such series of 
Managed Fund Shares must state that such series must comply with the 
federal securities laws in accepting securities for deposits and 
satisfying redemptions with redemption securities, including that the 
securities accepted for deposits and the securities used to satisfy 
redemption requests are sold in transactions that would be exempt from 
registration under the Securities Act of 1933.
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    \5\ See Nasdaq Rule 4120(b)(4) (describing the three trading 
sessions on the Exchange: (1) Pre-Market Session from 7 a.m. to 9:30 
a.m; (2) Regular Market Session from 9:30 a.m. to 4 p.m. or 4:15 
p.m.; and (3) Post-Market Session from 4 p.m. or 4:15 p.m. to 8 
p.m.).
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    Proposed Definitions. Proposed Nasdaq Rule 4420(o)(3)(A) defines 
the term ``Managed Fund Share'' as a security that: (1) Represents an 
interest in a registered investment company (``Investment Company'') 
organized as an open-end management investment company or similar 
entity, that invests in a portfolio of securities selected by the 
Investment Company's investment adviser consistent with the Investment 
Company's investment objectives and policies; (2) is issued in a 
specified aggregate minimum number in return for a deposit of a 
specified portfolio of securities and/or a cash amount with a value 
equal to the next determined net asset value (``NAV''); and (3) when 
aggregated in the same specified minimum number, may be redeemed at a 
holder's request, which holder will be paid a specified portfolio of 
securities and/or cash with a value equal to the next determined NAV.
    In addition, proposed Nasdaq Rule 4420(o)(3)(B) defines the term 
``Disclosed Portfolio'' as the identities and quantities of the 
securities and other assets held by the Investment Company that will 
form the basis for the Investment Company's calculation of NAV at the 
end of the business day. Proposed Nasdaq Rule 4420(o)(3)(C) defines the 
term ``Intraday Indicative Value'' as the estimated indicative value of 
a Managed Fund Share based on current information regarding the value 
of the securities and other assets in the Disclosed Portfolio. Proposed 
Nasdaq Rule 4420(o)(3)(D) defines the term ``Reporting Authority'' as 
Nasdaq, an institution, or a reporting service designated by Nasdaq or 
by the exchange that lists a particular series of Managed Fund Shares 
(if Nasdaq is trading such series pursuant to UTP) as the official 
source for calculating and reporting information relating to such 
series, including, but not limited to, the Intraday Indicative Value, 
the Disclosed Portfolio, the amount of any cash distribution to holders 
of Managed Fund Shares, NAV, or other information relating to the 
issuance, redemption, or trading of Managed Fund Shares. A series of 
Managed Fund Shares may have more than one Reporting Authority, each 
having different functions.
    Initial and Continued Listing. Proposed Nasdaq Rule 4420(o)(4) sets 
forth the initial and continued listing criteria applicable to Managed 
Fund Shares.\6\ Proposed Nasdaq Rule 4420(o)(4)(A)(i) provides that, 
for each series of Managed Fund Shares, Nasdaq

[[Page 35176]]

will establish a minimum number of Managed Fund Shares required to be 
outstanding at the time of commencement of trading. In addition, under 
proposed Nasdaq Rule 4420(o)(4)(A)(ii), Nasdaq must obtain a 
representation from the issuer of each series of Managed Fund Shares 
that the NAV per share for such series will be calculated daily and 
that the NAV and the Disclosed Portfolio will be made available to all 
market participants at the same time.
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    \6\ The Exchange represented that, for initial and/or continued 
listing, Managed Fund Shares must also be in compliance with Rule 
10A-3 under the Act. See 17 CFR 240.10A-3. In addition, the Exchange 
represented that, with respect to a series of Managed Fund Shares, 
the investment adviser and its related personnel are subject to Rule 
204A-1 under the Investment Advisers Act of 1940 (``Advisers Act''), 
which relates to codes of ethics for investment advisers. See 17 CFR 
275.204A-1. Rule 204A-1 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, the Exchange noted that ``firewall'' procedures, as 
well as procedures designed to prevent the 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 (17 CFR 275.206(4)-7) 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 rules thereunder; (ii) implemented, at a minimum, an 
annual review regarding the adequacy of such policies and procedures 
and the effectiveness of their implementation; and (iii) designated 
an individual (who is a supervised person) responsible for 
administering such policies and procedures. See also Section 204A of 
the Advisers Act (15 U.S.C. 80b-4a) (requiring investment advisers 
to establish, maintain, and enforce written policies and procedures 
reasonably designed to prevent the misuse of material, non-public 
information by such investment adviser or any person associated with 
such investment adviser).
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    Proposed Nasdaq Rule 4420(o)(4)(B) provides that each series of 
Managed Fund Shares will be listed and traded subject to the 
application of the following continued listing criteria: (1) The 
Intraday Indicative Value for Managed Fund Shares must be widely 
disseminated by one or more major market data vendors at least every 15 
seconds during the time when the Managed Fund Shares trade on Nasdaq; 
(2) the Disclosed Portfolio must be disseminated at least once daily 
and made available to all market participants at the same time; and (3) 
the Reporting Authority that provides the Disclosed Portfolio must 
implement and maintain, or be subject to, procedures designed to 
prevent the use and dissemination of material non-public information 
regarding the actual components of the portfolio.
    Proposed Nasdaq Rule 4420(o)(4)(B)(iii) provides that Nasdaq will 
consider the suspension of trading in, or removal from listing of, a 
series of Managed Fund Shares under any of the following circumstances: 
(1) If, following the initial twelve-month period after commencement of 
trading on the Exchange of a series of Managed Fund Shares, there are 
fewer than 50 beneficial holders of the series of Management Fund 
Shares for 30 or more consecutive trading days; (2) if the value of the 
Intraday Indicative Value is no longer calculated or available or the 
Disclosed Portfolio is not made available to all market participants at 
the same time; (3) if the Investment Company issuing the Managed Fund 
Shares has failed to file any filings required by the Commission or if 
Nasdaq is aware that the Investment Company is not in compliance with 
the conditions of any exemptive order or no-action relief granted by 
the Commission to the Investment Company with respect to the series of 
Managed Fund Shares; or (4) if such other event shall occur or 
condition exists which, in the opinion of Nasdaq, makes further 
dealings on Nasdaq inadvisable.
    Proposed Nasdaq Rule 4420(o)(4)(B)(iv) provides that, if the 
Intraday Indicative Value of a series of Managed Fund Shares is not 
being disseminated as required, Nasdaq may halt trading during the day 
in which the interruption to the dissemination of the Intraday 
Indicative Value occurs. If the interruption to the dissemination of 
the Intraday Indicative Value persists past the trading day in which it 
occurred, Nasdaq will halt trading no later than the beginning of the 
trading day following the interruption. If a series of Managed Fund 
Shares is trading on Nasdaq pursuant to UTP, Nasdaq will halt trading 
in that series, as specified in Nasdaq Rules 4120 and 4121. In 
addition, if the Exchange becomes aware that NAV or the Disclosed 
Portfolio with respect to a series of Managed Fund Shares is not 
disseminated to all market participants at the same time, it will halt 
trading in such series until such time as the NAV or the Disclosed 
Portfolio is available to all market participants.
    In addition, proposed Nasdaq Rule 4420(o)(4)(B)(v) provides that, 
upon termination of an Investment Company, the Managed Fund Shares 
issued in connection with such entity must be removed from listing on 
Nasdaq. Proposed Nasdaq Rule 4420(o)(4)(B)(vi) provides that voting 
rights must be as set forth in the applicable Investment Company 
prospectus. Proposed Nasdaq Rule 4420(o)(5) relates to the limitation 
of liability of the Exchange in connection with an issuance of a series 
of Managed Fund Shares.
    Proposed Nasdaq Rule 4420(o)(6) relates to obligations with respect 
to those Managed Fund Shares that receive an exemption from certain 
prospectus delivery requirements under Section 24(d) of the 1940 Act. 
Lastly, proposed Nasdaq Rule 4420(o)(7) provides that, if the 
investment adviser of the Investment Company issuing Managed Fund 
Shares is affiliated with a broker-dealer, such investment adviser must 
erect a ``firewall'' between such investment adviser and broker-dealer 
with respect to access to information regarding the composition and/or 
changes to the Investment Company's portfolio. This proposed rule also 
requires personnel who make decisions on the Investment Company's 
portfolio composition to be subject to procedures designed to prevent 
the use and dissemination of material, non-public information regarding 
the Investment Company's portfolio.

Other Proposed Rule Changes

    The Exchange also proposes to amend: (1) The introductory paragraph 
of Nasdaq Rule 4420 to add a reference to new paragraph (o) thereunder; 
(2) Nasdaq Rule 4120(a)(9) and Nasdaq Rule 4120(b)(4)(A) to add 
references to Managed Fund Shares with respect to trading halts; \7\ 
and (3) Nasdaq Rule 4540(a) and (b) to add references to Managed Fund 
Shares to those securities already covered under the rule relating to 
both entry and annual fees.
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    \7\ Nasdaq also seeks to make an unrelated, minor typographical 
change to Nasdaq Rule 4120(b)(4)(A) with respect to the term ``Trust 
Issued Receipt.''
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Trading Halts

    Nasdaq will halt trading in Managed Fund Shares under the 
conditions specified in Nasdaq Rules 4120 and 4121, as proposed to be 
amended, and in proposed Nasdaq Rule 4420(o)(4)(B)(iv), as discussed 
above. With respect to trading of Managed Fund Shares pursuant to UTP, 
the conditions for a halt include a regulatory halt by the listing 
market, and Nasdaq will stop trading Managed Fund Shares if the listing 
market delists them. Additionally, Nasdaq may cease trading Managed 
Fund Shares if other unusual conditions or circumstances exist which, 
in the opinion of Nasdaq, make further dealings on Nasdaq detrimental 
to the maintenance of a fair and orderly market.

Trading Rules

    Nasdaq deems Managed Fund Shares to be equity securities, thus 
rendering trading in the Managed Fund Shares subject to Nasdaq's 
existing rules governing the trading of equity securities. Nasdaq will 
allow trading in Managed Fund Shares from 7 a.m. until 8 p.m. Eastern 
Time.\8\
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    \8\ See supra note 5.
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Surveillance

    The Exchange intends to utilize its existing surveillance 
procedures applicable to derivative products (including exchange-traded 
funds) to monitor trading in Managed Fund Shares and represents that 
such procedures are adequate to address any concerns regarding the 
trading of Managed Fund Shares on Nasdaq. Trading of Managed Fund 
Shares on Nasdaq will be subject to surveillance procedures of the 
Financial Industry Regulatory Authority (``FINRA'') for equity 
securities, in general, and exchange-traded funds, in particular.\9\ 
The Exchange may also obtain information via the Intermarket 
Surveillance Group (``ISG'') from other

[[Page 35177]]

exchanges who are members or affiliate members of ISG.
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    \9\ The Exchange stated that FINRA surveils trading on Nasdaq 
pursuant to a regulatory services agreement. Nasdaq is responsible 
for FINRA's performance under this regulatory services agreement.
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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 Managed Fund Shares. Specifically, the 
Information Circular will discuss the following: (1) The procedures for 
purchases and redemptions of Managed Fund Shares in Creation Units (and 
that Managed Fund Shares are not individually redeemable); (2) Nasdaq 
Rule 2310, which imposes suitability obligations on Nasdaq members with 
respect to recommending transactions in Managed Fund Shares to 
customers; (3) how information regarding the Intraday Indicative Value 
is disseminated; (4) the requirement that members deliver a prospectus 
to investors purchasing newly issued Managed Fund Shares prior to or 
concurrently with the confirmation of a transaction; \10\ (5) the risks 
involved in trading Managed Fund Shares during the Pre-Market and Post-
Market Sessions when an updated Intraday Indicative Fund value will not 
be calculated or publicly disseminated; (6) any exemptive, no-action, 
or interpretive relief granted by the Commission from any rules under 
the Act; (7) related fees and expenses; (8) trading hours of the 
Managed Fund Shares; (9) NAV calculation and dissemination; and (10) 
trading information.
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    \10\ The Exchange further noted that: (1) Investors purchasing 
Managed Fund Shares directly from a Fund will receive a prospectus; 
and (2) members purchasing Managed Fund Shares from a Fund for 
resale to investors will deliver a prospectus to such investors.
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    Additional discussion regarding the key features of Managed Fund 
Shares, including the registration requirement under the 1940 Act, 
exemptive relief from certain requirements under the 1940 Act, intraday 
trading, creations and redemptions, the Disclosed Portfolio, and the 
Intraday Indicative Value can be found in the Notice.\11\
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    \11\ See Notice, supra note 3.
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III. Discussion

    After careful consideration, the Commission finds that the proposed 
rule change is consistent with the requirements of the Act and the 
rules and regulations thereunder applicable to a national securities 
exchange.\12\ In particular, the Commission believes that the proposal 
is consistent with Section 6(b)(5) of the Act,\13\ which requires, 
among other things, that the rules of a national securities exchange be 
designed to promote just and equitable principles of trade, to remove 
impediments to and perfect the mechanism of a free and open market and 
a national market system, and in general, to protect investors and the 
public interest. The Commission notes that it has previously approved 
substantively identical listing standards for Managed Fund Shares for 
other national securities exchanges.\14\
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    \12\ In approving this proposed rule change, the Commission 
notes that it has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
    \13\ 15 U.S.C. 78f(b)(5).
    \14\ See Securities Exchange Act Release Nos. 57514 (March 17, 
2008), 73 FR 15230 (March 21, 2008) (SR-Amex-2008-02) (approving, 
among other things, listing standards for Managed Fund Shares); and 
57619 (April 4, 2008), 73 FR 19544 (April 10, 2008) (SR-NYSEArca-
2008-25) (approving, among other things, listing standards for 
Managed Fund Shares).
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    The Commission finds that Nasdaq's proposal contains adequate rules 
and procedures to govern the listing and trading of Managed Fund Shares 
on the Exchange.\15\ Prior to listing and/or trading on the Exchange, 
Nasdaq must file a separate proposed rule change pursuant to Section 
19(b) of the Act for each series of Managed Fund Shares. All such 
securities listed and/or traded under proposed Nasdaq Rule 4420(o) will 
be subject to the full panoply of Nasdaq rules and procedures that 
currently govern the trading of equity securities on the Exchange.
    For the initial listing of each series of Managed Fund Shares under 
proposed Nasdaq Rule 4420(o), the Exchange must establish a minimum 
number of Managed Fund Shares required to be outstanding at the 
commencement of trading. In addition, the Exchange must obtain a 
representation from the issuer of Managed Fund 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.
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    \15\ The Commission believes that the proposed rules and 
procedures are adequate with respect to the Managed Fund Shares. 
However, the Commission notes that other proposed series of Managed 
Fund Shares may require additional Exchange rules and procedures to 
govern their listing and trading on the Exchange. For example, in 
the case of a proposed series of Managed Fund Shares that are based 
on a portfolio, at least in part, of non-U.S. securities, rules 
relating to comprehensive surveillance sharing agreements and 
quantitative initial and continued listing standards may be 
required.
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    The Commission believes that the proposed continued listing and 
trading standards under proposed Nasdaq Rule 4420(o)(4)(B) are adequate 
to ensure transparency of key values and information regarding the 
securities. For continued listing of each series of Managed Fund 
Shares, the Intraday Indicative Value must be widely disseminated by 
one or more major market data vendors at least every 15 seconds during 
the time when the Managed Fund Shares trade on the Exchange. Further, 
the Disclosed Portfolio must be disseminated at least once daily and 
made available to all market participants at the same time.
    The Commission finds that the Exchange's rules with respect to 
trading halts under proposed Nasdaq Rule 4120(a)(9), proposed Nasdaq 
Rule 4120(b)(4)(A), and proposed Nasdaq Rule 4420(o)(4)(B)(iv) should 
help ensure the availability of key values and information relating to 
Managed Fund Shares. If the Intraday Indicative Value is not being 
disseminated as required, the Exchange may halt trading during the day 
in which the interruption to the dissemination of the Intraday 
Indicative Value occurs. If the interruption of such value persists 
past the trading day in which it occurred, the Exchange must halt 
trading no later than the beginning of the trading day following the 
interruption.\16\ In addition, if the Exchange becomes aware that the 
NAV or Disclosed Portfolio related to a series of Managed Fund Shares 
is not being disseminated to all market participants at the same time, 
the Exchange will halt trading in such series of Managed Fund 
Shares.\17\ Finally, Nasdaq may cease trading Managed Fund Shares if 
other unusual conditions or circumstances exist which, in the opinion 
of Nasdaq, make further dealings on Nasdaq detrimental to the 
maintenance of a fair and orderly market.
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    \16\ Under proposed Nasdaq Rule 4420(o)(4)(B)(iv), if a series 
of Managed Fund Shares is trading on the Exchange pursuant to 
unlisted trading privileges, the Exchange will halt trading in that 
series, as specified in Nasdaq Rules 4120, as proposed to be 
amended, and 4121. See Nasdaq Rules 4120 and 4121 (setting forth 
rules regarding trading halts for certain derivative securities 
products).
    \17\ The Exchange may resume trading in such series of Managed 
Fund Shares only when the NAV or Disclosed Portfolio is disseminated 
to all market participants. See proposed Nasdaq Rule 
4420(o)(4)(B)(iv).
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    The Exchange may also consider the suspension of trading in, or 
removal from listing of, a series of Managed Fund Shares if: (1) 
Following the initial twelve-month period after commencement of trading 
on the Exchange of a series of Managed Fund Shares, there are fewer 
than 50 beneficial holders of the series of the Managed Fund Shares for 
30 or more consecutive trading days; (2) the value of the Portfolio 
Indicative Value is no longer calculated or available, or the Disclosed 
Portfolio is not made available to all market participants at the same 
time; (3) the Investment

[[Page 35178]]

Company issuing the Managed Fund Shares has failed to file any required 
filings with the Commission, or if the Exchange becomes aware that the 
Investment Company is not in compliance with the conditions of any 
exemptive order or no-action relief granted by the Commission to the 
Investment Company with respect to the series of Managed Fund Shares; 
or (4) such other event shall occur or condition exists which, in the 
opinion of the Exchange, makes further dealings of the Managed Fund 
Shares on the Exchange inadvisable.
    The Commission believes that the requirements of proposed Nasdaq 
Rule 4420(o) should help to prevent trading when a reasonable degree of 
transparency cannot be assured and to maintain a fair and orderly 
market for Managed Fund Shares. The Commission also believes that the 
proposed listing and trading rules for Managed Fund Shares, many of 
which track existing Exchange rules relating to exchange-traded funds, 
are reasonably designed to promote a fair and orderly market for such 
Managed Fund Shares. Specifically, proposed Nasdaq Rule 4420(o)(7) 
requires that: (1) If the investment adviser of the Investment Company 
is affiliated with a broker-dealer, such investment adviser must erect 
a ``firewall'' between such investment adviser and broker-dealer with 
respect to access to information regarding the composition and/or 
changes to the Investment Company's portfolio; and (2) personnel who 
make decisions on the Investment Company's portfolio composition must 
be subject to procedures designed to prevent the use and dissemination 
of material non-public information regarding the Investment Company's 
portfolio.\18\ In addition, proposed Nasdaq Rule 4420(o)(4)(B)(ii)(b) 
requires that the Reporting Authority that provides the Disclosed 
Portfolio implement and maintain, or be subject to, procedures designed 
to prevent the use and dissemination of material, non-public 
information regarding the actual components of the portfolio. The 
proposed rules also require surveillance procedures,\19\ establish 
trading guidelines,\20\ and impose other requirements.\21\
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    \18\ See supra note 6.
    \19\ See proposed Nasdaq Rule 4420(o)(2)(D) (providing that the 
Exchange will implement written surveillance procedures for Managed 
Fund Shares).
    \20\ See proposed Nasdaq Rule 4420(o)(2)(B) and (C) (providing 
that transactions in Managed Fund Shares will occur throughout 
Nasdaq's trading hours and that the minimum price variation for 
quoting and entry of orders in Managed Fund Shares must be $0.01). 
See also supra note 5.
    \21\ See e.g., proposed Nasdaq Rule 4420(o)(2)(E) (requiring 
certain statutory prospectuses for an issue of Managed Fund Shares 
based on an international or global portfolio to make certain 
specific statements regarding creations and redemptions); proposed 
Nasdaq Rule 4420(o)(4)(B)(v) (requiring, upon termination of an 
Investment Company, the Managed Fund Shares issued in connection 
with such Investment Company to be removed from listing on the 
Exchange); proposed Nasdaq Rule 4420(o)(4)(B)(vi) (providing that 
the voting rights will be as set forth in the applicable Investment 
Company prospectus); and proposed Nasdaq Rule 4420(o)(6) (requiring 
certain disclosures to be made in the case of a series of Managed 
Fund Shares that are subject of an order by the Commission exempting 
such securities from certain prospectus delivery requirements under 
Section 24(d) of the 1940 Act and are not otherwise subject to 
prospectus delivery requirements under the Securities Act of 1933).
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Conforming Changes and Listing Fees

    Trading in Managed Fund Shares will be halted as provided in Nasdaq 
Rule 4120(a)(9), as proposed to be amended. In addition, Managed Fund 
Shares will be included under the term ``Derivative Securities 
Product,'' as defined in Nasdaq Rule 4120(b)(4)(A), in connection with 
trading halts for trading pursuant to UTP on the Exchange. The 
Commission also notes that Managed Fund Shares will be included in 
Nasdaq Rules 4540(a) and (b), and, as a result, the Exchange's listing 
fees will be applicable to a series of Managed Fund Shares. The 
Commission finds that the conforming changes made to the Exchange's 
rules, including those governing trading halts and listing fees, are 
reasonable and promote transparency of the rules to be imposed with 
respect to a series of Managed Fund Shares listed and traded on the 
Exchange.

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\22\ that the proposed rule change (SR-NASDAQ-2008-039), as 
modified by Amendment No. 1 thereto, be, and it hereby is, approved.
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    \22\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\23\
Florence E. Harmon,
Acting Secretary.
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    \23\ See 17 CFR 200.30-3(a)(12).
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[FR Doc. E8-13914 Filed 6-19-08; 8:45 am]

BILLING CODE 8010-01-P
