[Federal Register Volume 82, Number 213 (Monday, November 6, 2017)]
[Notices]
[Pages 51457-51461]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-24047]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81987; File No. SR-NASDAQ-2017-091]


Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Order 
Granting Approval of Proposed Rule Change, as Modified by Amendments 
No. 1 and 2, To List and Trade Shares of the Calvert Ultra-Short 
Duration Income NextSharesTM Under Nasdaq Rule 5745

October 31, 2017.

I. Introduction

    On August 30, 2017, 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 to list and trade common shares (``Shares'') of 
the Calvert Ultra-Short Duration Income NextSharesTM 
(``Fund'') under Nasdaq Rule 5745. The proposed rule change was 
published for comment in the Federal Register on September 18, 2017.\3\ 
On September 15, 2017, the Exchange filed Amendment No. 1 to the 
proposed rule change.\4\ On October 27, 2017, the Exchange filed 
Amendment No. 2 to the proposed rule change.\5\ The Commission received 
no comments on the proposed rule change. This order grants approval of 
the proposed rule change, as modified by Amendments No. 1 and 2.
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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. 81591 (September 13, 
2017), 82 FR 43611 (``Notice'').
    \4\ Amendment No. 1 to the proposed rule change is a partial 
amendment in which the Exchange clarifies that: (i) In the event 
that (a) the Adviser registers as a broker-dealer or becomes newly 
affiliated with a broker-dealer, or (b) any new adviser or a sub-
adviser to the Fund is a registered broker-dealer or becomes 
affiliated with a broker-dealer, it will not just implement but also 
maintain a fire wall with respect to its relevant personnel and/or 
such broker-dealer affiliate, if applicable; and (ii) the Financial 
Industry Regulatory Authority, Inc. (``FINRA''), on behalf of the 
Exchange, will communicate as needed with, and may obtain 
information from, other markets and entities that are members of the 
Intermarket Surveillance Group (``ISG'') regarding trading in the 
Shares, and in exchange-traded securities and instruments held by 
the Fund (to the extent those exchange-traded securities and 
instruments are known through the publication of the Composition 
File and periodic public disclosures of the Fund's portfolio 
holdings), and the Exchange may obtain such trading information from 
markets and other entities that are members of ISG or with which the 
Exchange has in place a comprehensive surveillance sharing 
agreement. Amendment No. 1 is available at: https://www.sec.gov/comments/sr-nasdaq-2017-091/nasdaq2017091-2447435-161078.pdf. 
Because Amendment No. 1 to the proposed rule change does not 
materially alter the substance of the proposed rule change or raise 
unique or novel regulatory issues, Amendment No. 1 is not subject to 
notice and comment.
    \5\ Amendment No. 2 to the proposed rule change is a partial 
amendment in which the Exchange clarifies that the name of the Fund 
will be Calvert Ultra-Short Duration Income NextShares. Amendment 
No. 2 is available at: https://www.sec.gov/comments/sr-nasdaq-2017-091/nasdaq2017091-2656932-161387.pdf. Because Amendment No. 2 to the 
proposed rule change does not materially alter the substance of the 
proposed rule change or raise unique or novel regulatory issues, 
Amendment No. 2 is not subject to notice and comment.
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II. Exchange's Description of the Proposed Rule Change

    The Exchange proposes to list and trade the Shares of the Fund 
under Nasdaq Rule 5745, which governs the listing and trading of 
Exchange-Traded Managed Fund Shares, as defined in Nasdaq Rule 
5745(c)(1). The Fund is a series of the Calvert Management Series 
(``Trust''). The Exchange represents that the Trust is registered with 
the Commission as an open-end investment company and that it has filed 
a registration statement on Form N-1A

[[Page 51458]]

(``Registration Statement'') with the Commission with respect to the 
Fund.\6\ Calvert Research and Management (``Adviser''), a wholly owned 
subsidiary of Eaton Vance Management, will be the Adviser to the 
Fund.\7\
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    \6\ See Post-Effective Amendment No. 86 to the Registration 
Statement on Form N-1A for CMS Trust dated July 20, 2017 (File Nos. 
002-69565 and 811-03101).
    \7\ According to the Exchange, the Commission has issued an 
order granting Eaton Vance Management, Eaton Vance ETMF Trust, Eaton 
Vance ETMF Trust II and certain affiliates exemptive relief under 
the Investment Company Act of 1940 (``1940 Act''). See Investment 
Company Act Release No. 31361 (December 2, 2014) (File No. 812-
14139) (``Order''). The Exchange states that the Adviser is a 
wholly-owned subsidiary of Eaton Vance Management and may rely on 
this exemptive order with respect to the Fund. In compliance with 
Nasdaq Rule 5745(b)(5), which applies to Shares based on an 
international or global portfolio, the application for the Order 
states that the Fund will comply with the federal securities laws in 
accepting securities for deposits and satisfying redemptions with 
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, as amended.
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    Foreside Fund Services, LLC will be the principal underwriter and 
distributor of the Fund's Shares. State Street Bank and Trust Company 
will act as the accounting agent, custodian, and transfer agent to the 
Fund. ICE Data Services will be the intraday indicative value (``IIV'') 
calculator to the Fund.
    The Exchange has made the following representations and statements 
in describing the Fund.\8\ According to the Exchange, the Fund will be 
actively managed and will pursue the principal investment strategies 
described below.\9\
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    \8\ The Commission notes that additional information regarding 
the Trust, the Fund, and the Shares, including investment 
strategies, risks, creation and redemption procedures, calculation 
of net asset value (``NAV''), fees, distributions, and taxes, among 
other things, can be found in the Notice, Amendments No. 1 and 2, 
and the Registration Statement, as applicable. See supra notes 3-6, 
respectively, and accompanying text.
    \9\ According to the Exchange, additional information regarding 
the Fund will be available on a free public Web site for the Fund 
(www.calvert.com and/or www.nextshares.com) and in the Registration 
Statement for the Fund.
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A. Principal Investment Strategies

    The investment objective of the Fund is to seek to maximize income, 
to the extent consistent with preservation of capital, through 
investment in bonds and income-producing securities. The Fund will seek 
to achieve its investment objective by investing, under normal 
circumstances, at least 80% of its net assets (including borrowings for 
investment purposes) in a portfolio of floating-rate debt securities 
(e.g., corporate floating-rate securities) and debt securities with 
durations of less than or equal to one year. The Fund will typically 
invest at least 65% of its net assets in investment grade, U.S. dollar-
denominated debt securities, as assessed at the time of purchase. The 
Fund will invest principally in bonds issued by U.S. corporations, the 
U.S. Government or its agencies, and U.S. Government-sponsored 
enterprises such as the Federal National Mortgage Association and the 
Federal Home Loan Mortgage Corporation. The Fund may also invest up to 
25% of its net assets in foreign debt securities.

B. Portfolio Disclosure and Composition File

    Consistent with the disclosure requirements that apply to 
traditional open-end investment companies, a complete list of the 
Fund's current portfolio positions will be made available at least once 
each calendar quarter, with a reporting lag of not more than 60 days. 
The Fund may provide more frequent disclosures of portfolio positions 
at its discretion.
    As defined in Nasdaq Rule 5745(c)(3), the ``Composition File'' is 
the specified portfolio of securities and/or cash that the Fund will 
accept as a deposit in issuing a creation unit of Shares, and the 
specified portfolio of securities and/or cash that the Fund will 
deliver in a redemption of a creation unit of Shares. The Composition 
File will be disseminated through the National Securities Clearing 
Corporation once each business day before the open of trading in Shares 
on that day and also will be made available to the public each day on a 
free Web site.\10\ Because the Fund seeks to preserve the 
confidentiality of its current portfolio trading program, the Fund's 
Composition File generally will not be a pro rata reflection of the 
Fund's investment positions. Each security included in the Composition 
File will be a current holding of the Fund, but the Composition File 
generally will not include all of the securities in the Fund's 
portfolio or match the weightings of the included securities in the 
portfolio. Securities that the Adviser is in the process of acquiring 
for the Fund generally will not be represented in the Fund's 
Composition File until the purchase has been completed. Similarly, 
securities that are held in the Fund's portfolio but are in the process 
of being sold may not be removed from its Composition File until the 
sale is substantially completed. When creating and redeeming Shares in-
kind, the Fund will use cash amounts to supplement the in-kind 
transactions to the extent necessary to ensure that creation units are 
purchased and redeemed at NAV. The Composition File also may consist 
entirely of cash, in which case it will not include any of the 
securities in the Fund's portfolio.\11\
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    \10\ The Exchange represents that the free public Web site 
containing the Composition File will be at www.calvert.com and/or 
www.nextshares.com.
    \11\ In determining whether the Fund will issue or redeem 
creation units entirely on a cash basis, the key consideration will 
be the benefit that would accrue to the Fund and its investors.
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C. Intraday Indicative Value

    An estimated value of an individual Share, defined in Nasdaq Rule 
5745(c)(2) as the IIV, will be calculated and disseminated at intervals 
of not more than 15 minutes throughout the Regular Market Session \12\ 
when Shares trade on the Exchange. The Exchange will obtain a 
representation from the issuer of the Shares that the IIV will be 
calculated on an intraday basis and provided to Nasdaq for 
dissemination via the Nasdaq Global Index Service. The IIV will be 
based on current information regarding the value of the securities and 
other assets held by the Fund.\13\ The purpose of the IIV is to enable 
investors to estimate the next-determined NAV so they can determine the 
number of Shares to buy or sell if they want to transact in an 
approximate dollar amount.\14\
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    \12\ See Nasdaq Rule 4120(b)(4) (describing the three trading 
sessions on the Exchange: (1) Pre-Market Session from 4:00 a.m. to 
9:30 a.m. Eastern Time (``E.T.''); (2) Regular Market Session from 
9:30 a.m. to 4:00 p.m. or 4:15 p.m. E.T.; and (3) Post-Market 
Session from 4:00 p.m. or 4:15 p.m. to 8:00 p.m. E.T.
    \13\ The IIV disseminated throughout each trading day would be 
based on the same portfolio as used to calculate that day's NAV. The 
Fund will reflect purchases and sales of portfolio positions in its 
NAV the next business day after trades are executed.
    \14\ In NAV-Based Trading (as referenced herein), prices of 
executed trades are not determined until the reference NAV is 
calculated, so buyers and sellers of Shares during the trading day 
will not know the final value of their purchases and sales until the 
end of the trading day. The Exchange represents that the 
Registration Statement, Web site, and any advertising or marketing 
materials will include prominent disclosure of this fact. The 
Exchange states that although the IIV may provide useful estimates 
of the value of intraday trades, they cannot be used to calculate 
with precision the dollar value of the Shares to be bought or sold.
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D. NAV-Based Trading

    Because Shares will be listed and traded on the Exchange, Shares 
will be available for purchase and sale on an intraday basis. Shares 
will be purchased and sold in the secondary market at prices directly 
linked to the Fund's next-determined NAV using a trading protocol 
called ``NAV-Based Trading.'' All bids, offers, and execution prices of 
Shares will be expressed as a premium/discount (which may be zero) to 
the

[[Page 51459]]

Fund's next-determined NAV (e.g., NAV-$0.01, NAV + $0.01).\15\ The 
Fund's NAV will be determined each business day, normally as of 4:00 
p.m. E.T. Trade executions will be binding at the time orders are 
matched on Nasdaq's facilities, with the transaction prices contingent 
upon the determination of NAV. Nasdaq represents that all Shares listed 
on the Exchange will have a unique identifier associated with their 
ticker symbol, which will indicate that the Shares are traded using 
NAV-Based Trading.
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    \15\ According to the Exchange, the premium or discount to NAV 
at which Share prices are quoted and transactions are executed will 
vary depending on market factors, including the balance of supply 
and demand for Shares among investors, transaction fees, and other 
costs in connection with creating and redeeming creation units of 
Shares, the cost and availability of borrowing Shares, competition 
among market makers, the Share inventory positions and inventory 
strategies of market makers, the profitability requirements and 
business objectives of market makers, and the volume of Share 
trading.
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    According to the Exchange, member firms will utilize certain 
existing order types and interfaces to transmit Share bids and offers 
to Nasdaq, which will process Share trades like trades in shares of 
other listed securities.\16\ In the systems used to transmit and 
process transactions in Shares, the Fund's next-determined NAV will be 
represented by a proxy price (e.g., 100.00) and a premium/discount of a 
stated amount to the next-determined NAV to be represented by the same 
increment/decrement from the proxy price used to denote NAV (e.g., NAV-
$0.01 would be represented as 99.99; NAV + $0.01 as 100.01).
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    \16\ According to the Exchange, all orders to buy or sell Shares 
that are not executed on the day the order is submitted will be 
automatically cancelled as of the close of trading on that day. 
Prior to the commencement of trading in the Fund, the Exchange will 
inform its members in an Information Circular of the effect of this 
characteristic on existing order types.
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    To avoid potential investor confusion, Nasdaq represents that it 
will work with member firms and providers of market data services to 
seek to ensure that representations of intraday bids, offers, and 
execution prices of Shares that are made available to the investing 
public follow the ``NAV-$0.01/NAV + $0.01'' (or similar) display 
format. Specifically, the Exchange will use the NASDAQ Basic and NASDAQ 
Last Sale data feeds to disseminate intraday price and quote data for 
Shares in real time in the ``NAV-$0.01/NAV + $0.01'' (or similar) 
display format. Member firms may use the NASDAQ Basic and NASDAQ Last 
Sale data feeds to source intraday Share prices for presentation to the 
investing public in the ``NAV-$0.01/NAV + $0.01'' (or similar) display 
format.
    Alternatively, member firms may source intraday Share prices in 
proxy price format from the Consolidated Tape and other Nasdaq data 
feeds (e.g., Nasdaq TotalView and Nasdaq Level 2) and use a simple 
algorithm to convert prices into the ``NAV-$0.01/NAV + $0.01'' (or 
similar) display format. Prior to the commencement of trading in the 
Fund, the Exchange will inform its members in an Information Circular 
of the identities of the specific Nasdaq data feeds from which intraday 
Share prices in proxy price format may be obtained.

III. Discussion and Commission Findings

    After careful review, the Commission finds that the Exchange's 
proposal to list and trade the Shares is consistent with the Act and 
the rules and regulations thereunder applicable to a national 
securities exchange.\17\ In particular, the Commission finds that the 
proposed rule change is consistent with Section 6(b)(5) of the Act,\18\ 
which requires, among other things, that the Exchange's rules be 
designed to prevent fraudulent and manipulative acts and practices, to 
promote just and equitable principles of trade, to foster cooperation 
and coordination with persons engaged in facilitating transactions in 
securities, 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.
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    \17\ In approving this proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. See 15 U.S.C. 78c(f).
    \18\ 15 U.S.C. 78f(b)(5).
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    The Shares will be subject to Nasdaq Rule 5745, which sets forth 
the initial and continued listing criteria applicable to Exchange-
Traded Managed Fund Shares. A minimum of 50,000 Shares and no less than 
two creation units of the Fund will be outstanding at the commencement 
of trading on the Exchange.
    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. Every order to trade Shares of the Fund 
is subject to the proxy price protection threshold of plus/minus $1.00, 
which determines the lower and upper thresholds for the life of the 
order and provides that the order will be cancelled at any point if it 
exceeds $101.00 or falls below $99.00.\19\ With certain exceptions, 
each order also must contain the applicable order attributes, including 
routing instructions and time-in-force information, as described in 
Nasdaq Rule 4703.\20\
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    \19\ See Nasdaq Rule 5745(h).
    \20\ See Nasdaq Rule 5745(b)(6).
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    Nasdaq also represents that trading in the Shares will be subject 
to the existing trading surveillances, administered by both Nasdaq and 
FINRA on behalf of the Exchange, which are designed to detect 
violations of Exchange rules and applicable federal securities 
laws.\21\ The Exchange represents that these surveillance procedures 
are adequate to properly monitor trading of Shares on the Exchange and 
to deter and detect violations of Exchange rules and applicable federal 
securities laws. FINRA, on behalf of the Exchange, will communicate as 
needed with, and may obtain information from, other markets and 
entities that are members of the ISG regarding trading in the Shares 
and in exchange-traded securities and instruments held by the Fund (to 
the extent those exchange-traded securities and instruments are known 
through the publication of the Composition File and periodic public 
disclosures of the Fund's portfolio holdings). In addition, the 
Exchange may obtain information regarding trading in the Shares, and in 
exchange-traded securities and instruments held by the Fund (to the 
extent those exchange-traded securities and instruments are known 
through the publication of the Composition File and periodic public 
disclosures of the Fund's portfolio holdings), from markets and other 
entities that are members of ISG 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 Trade Reporting and Compliance Engine.
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    \21\ The Exchange states that FINRA provides surveillance of 
trading on the Exchange pursuant to a regulatory services agreement 
and that the Exchange is responsible for FINRA's performance under 
this regulatory services agreement.
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    Prior to the commencement of trading in the Fund, 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: (a) 
The procedures for purchases and redemptions of Shares in creation 
units (and that Shares are not individually redeemable); (b) Nasdaq 
Rule 2111A, which imposes suitability obligations on Nasdaq members 
with respect to recommending transactions in the Shares to customers; 
(c) how information regarding the IIV and Composition File is 
disseminated; (d) the requirement that members deliver a

[[Page 51460]]

prospectus to investors purchasing Shares prior to or concurrently with 
the confirmation of a transaction; and (e) information regarding NAV-
Based Trading protocols.
    The Information Circular also will identify the specific Nasdaq 
data feeds from which intraday Share prices in proxy price format may 
be obtained. As noted above, all orders to buy or sell Shares that are 
not executed on the day the order is submitted will be automatically 
cancelled as of the close of trading on that day, and the Information 
Circular will discuss the effect of this characteristic on existing 
order types. In addition, Nasdaq intends to provide its members with a 
detailed explanation of NAV-Based Trading through a Trading Alert 
issued prior to the commencement of trading in Shares on the Exchange.
    Nasdaq states that the Adviser is not a registered broker-dealer; 
however, it is affiliated with a broker-dealer and has implemented and 
will maintain a fire wall with respect to its affiliated broker-dealer 
regarding access to information concerning the composition of, and/or 
changes to, the Fund's portfolio.\22\ In addition, personnel who make 
decisions on the 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. The 
Reporting Authority \23\ will implement and maintain, or ensure that 
the Composition File will be subject to, procedures designed to prevent 
the use and dissemination of material non-public information regarding 
the Fund's portfolio positions and changes in the positions. In the 
event that (a) the Adviser registers as a broker-dealer or becomes 
newly affiliated with a broker-dealer, or (b) any new adviser or sub-
adviser to the Fund is a registered broker-dealer or becomes affiliated 
with a broker-dealer, it will implement and maintain a fire wall with 
respect to its relevant personnel and/or such broker-dealer affiliate, 
as the case may be, regarding access to information concerning the 
composition of, and/or changes to, the Fund's portfolio, and will be 
subject to procedures designed to prevent the use and dissemination of 
material non-public information regarding the portfolio.
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    \22\ See Amendment No. 1, supra note 4. The Exchange further 
represents that an investment adviser to an open-end fund is 
required to be registered under the Investment Advisers Act of 1940 
(``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.
    \23\ See Nasdaq Rule 5745(c)(4).
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    The Commission finds that the proposal to list and trade the Shares 
on the Exchange is consistent with Section 11A(a)(1)(C)(iii) of the 
Act,\24\ which sets forth Congress' finding that it is in the public 
interest and appropriate for the protection of investors and the 
maintenance of fair and orderly markets to assure the availability to 
brokers, dealers, and investors of information with respect to 
quotations for, and transactions in, securities. Information regarding 
NAV-based trading prices, best bids and offers for Shares, and volume 
of Shares traded will be continuously available on a real-time basis 
throughout each trading day on brokers' computer screens and other 
electronic services. All bids and offers for Shares and all Share trade 
executions will be reported intraday in real time by the Exchange to 
the Consolidated Tape \25\ and separately disseminated to member firms 
and market data services through the Exchange data feeds.
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    \24\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
    \25\ Due to systems limitations, the Consolidated Tape will 
report intraday execution prices and quotes for Shares using a proxy 
price format. Nasdaq has represented that it will separately report 
real-time execution prices and quotes to member firms and providers 
of market data services in the ``NAV-$0.01/NAV + $0.01'' (or 
similar) display format, and will otherwise seek to ensure that 
representations of intraday bids, offers and execution prices for 
Shares that are made available to the investing public follow the 
same display format.
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    The Commission notes that once a Fund's daily NAV has been 
calculated and disseminated, Nasdaq will price each Share trade entered 
into during the day at the Fund's NAV plus/minus the trade's executed 
premium/discount. Using the final trade price, each executed Share 
trade will then be disseminated to member firms and market data 
services via a File Transfer Protocol (``FTP'') file \26\ that will be 
created for exchange-traded managed funds and will be confirmed to the 
member firms participating in the trade to supplement the previously 
provided information with final pricing.
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    \26\ According to Nasdaq, FTP is a standard network protocol 
used to transfer computer files on the Internet. Nasdaq will arrange 
for the daily dissemination of an FTP file with executed Share 
trades to member firms and market data services.
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    The Exchange will obtain a representation from the issuer of the 
Shares that the NAV per Share will be calculated daily (on each 
business day that the New York Stock Exchange is open for trading) and 
provided to Nasdaq via the Mutual Fund Quotation Service (``MFQS'') by 
the fund accounting agent. As soon as the NAV is entered into the MFQS, 
Nasdaq will disseminate the NAV to market participants and market data 
vendors via the Mutual Fund Dissemination Service so that all firms 
will receive the NAV per share at the same time.
    The Exchange further represents that it may consider all relevant 
factors in exercising its discretion to halt or suspend trading in the 
Shares. The Exchange will halt trading in the Shares under the 
conditions specified in Nasdaq Rule 4120 and in Nasdaq Rule 
5745(d)(2)(C). Additionally, the Exchange may cease trading the Shares 
if other unusual conditions or circumstances exist that, in the opinion 
of the Exchange, make further dealings on the Exchange detrimental to 
the maintenance of a fair and orderly market. To manage the risk of a 
non-regulatory Share trading halt, Nasdaq has in place back-up 
processes and procedures to ensure orderly trading. Prior to the 
commencement of market trading in the Shares, the Fund will be required 
to establish and maintain a public Web site through which its current 
prospectus may be downloaded.\27\ The Web site will include additional 
information concerning the Fund updated on a daily basis, including the 
prior business day's NAV, and the following trading information for 
that business day expressed as premiums/discounts to NAV: (a) Intraday 
high, low, average, and closing prices of Shares in Exchange trading; 
(b) the midpoint of the highest bid and lowest offer prices as of the 
close of Exchange trading, expressed as a premium/discount to NAV 
(``Closing Bid/Ask Midpoint''); and (c) the spread between highest bid 
and lowest offer prices as of the close of Exchange trading (``Closing 
Bid/Ask Spread.''). The Web site will also contain charts showing the 
frequency distribution and range of values of

[[Page 51461]]

trading prices, Closing Bid/Ask Midpoints, and Closing Bid/Ask Spreads 
over time.
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    \27\ The Exchange represents that the Web site containing this 
information will be www.calvert.com.
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    The Exchange represents that all statements and representations 
made in the filing regarding: (a) The description of the portfolio or 
reference assets, (b) limitations on portfolio holdings or reference 
assets, (c) dissemination and availability of the reference asset or 
IIV, or (d) the applicability of Exchange listing rules shall 
constitute continued listing requirements for listing the Shares on the 
Exchange. The issuer has represented to the Exchange that it will 
advise the Exchange of any failure by the Fund to comply with the 
continued listing requirements, and, pursuant to its obligations under 
Section 19(g)(1) of the Act, the Exchange will monitor for compliance 
with the continued listing requirements.\28\ If the Fund is not in 
compliance with the applicable listing requirements, the Exchange will 
commence delisting procedures for the Fund under the Nasdaq 5800 
Series.
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    \28\ The Commission notes that certain other proposals for the 
listing and trading of Managed Fund Shares include a representation 
that the exchange will ``surveil'' for compliance with the continued 
listing requirements. See, e.g., Securities Exchange Act Release No. 
78005 (Jun. 7, 2016), 81 FR 38247 (Jun. 13, 2016) (SR-BATS-2015-
100). In the context of this representation, it is the Commission's 
view that ``monitor'' and ``surveil'' both mean ongoing oversight of 
a fund's compliance with the continued listing requirements. 
Therefore, the Commission does not view ``monitor'' as a more or 
less stringent obligation than ``surveil'' with respect to the 
continued listing requirements.
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    This approval order is based on all of the Exchange's 
representations, including those set forth above, in the Notice, and 
Amendments No. 1 and 2,\29\ and the Exchange's description of the Fund. 
In particular, the Commission notes that, although the Shares will be 
available for purchase and sale on an intraday basis, the Shares will 
be purchased and sold at prices directly linked to the Fund's next-
determined NAV. Further, the Commission notes that the Fund and the 
Shares must comply with the requirements of Nasdaq Rule 5745 and the 
conditions set forth in this proposed rule change to be listed and 
traded on the Exchange on an initial and continuing basis.
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    \29\ See supra notes 4 and 5.
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    For the foregoing reasons, the Commission finds that the proposed 
rule change, as modified by Amendments No. 1 and 2, is consistent with 
Section 6(b)(5) \30\ and Section 11A(a)(1)(C)(iii)of the Act,\31\ and 
the rules and regulations thereunder applicable to a national 
securities exchange.
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    \30\ 15 U.S.C. 78f(b)(5).
    \31\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
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IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\32\ that the proposed rule change (SR-NASDAQ-2017-091), as 
modified by Amendments No. 1 and 2, be, and it hereby is, approved.
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    \32\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\33\
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    \33\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-24047 Filed 11-3-17; 8:45 am]
 BILLING CODE 8011-01-P


