Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”), and Rule 19b-4 thereunder, notice is hereby given that on July 27, 2016 The Nasdaq Stock Market LLC (“Nasdaq” or “Exchange”) filed with the Securities and Exchange Commission (“SEC” or “Commission”) the proposed rule change as described in in Items I and II below, which Items have been prepared by Nasdaq. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons.
17 CFR 240.19b-4.
I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change
Nasdaq proposes a proposed rule change with respect to the Eaton Vance Floating-Rate & High Income NextShares (the “Fund”), a series of Eaton Vance NextShares Trust II (the “Trust”).
The proposed rule change is being filed to reflect a proposed revision to the Fund's name and modify its proposed investments (which are set forth in an order previously granted by the Commission). All capitalized terms referenced but not defined herein have the same meaning as in the Prior Release.
See Securities Exchange Act Release No. 74797 (April 23, 2015), 80 FR 23831 (April 29, 2015) (SR-NASDAQ-2015-036) (the “Prior Notice”); see also Securities Exchange Act Release No. 75499 (July 21, 2015), 80 FR 44406 (July 27, 2015) (SR-NASDAQ-2015-036) (the “Prior Order,” and, together with the Prior Notice, the “Prior Release”). Except for the changes discussed herein, all other facts presented and representations made in the Prior Release with respect to the Fund remain unchanged and in full effect.
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, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change
1. Purpose
The shares of the Fund will be offered by the Trust. The Trust is registered with the Commission as an open-end investment company and has filed a registration statement on Form N-1A (“Registration Statement”) with the Commission. The Fund is a series of the Trust.
See Registration Statement on Form N-1A for the Eaton Vance NextShares Trust II dated December 10, 2015 (File Nos. 333-197734 and 811-22983).
The Commission previously approved the listing and trading on the Exchange of the shares of the Fund under Nasdaq Rule 5745, which governs the listing and trading of NextSharesTM on the Exchange. The shares of the Fund have not commenced trading on the Exchange.
The Commission approved Nasdaq Rule 5745 in Securities Exchange Act Release No. 73562 (November 7, 2014), 79 FR 68309 (November 14, 2014) (SR-NASDAQ-2014-020).
In this proposed rule change, the Exchange proposes to change the Fund's name and modify its proposed investments. As stated in the Prior Release, the Fund is named Eaton Vance Floating-Rate & High Income NextShares and it normally will invest primarily in a combination of income-producing floating rate loans and other floating rate debt securities and high-yield corporate bonds. As proposed, the Fund will be renamed Eaton Vance Floating-Rate NextShares and it normally will invest primarily in income-producing floating rate loans and other floating rate debt securities.
The changes described herein will be reflected in a revised prospectus and statement of additional information for the Fund to be filed with the Commission. The changes described herein will not be implemented until such proposed rule change is declared operative.
Beyond the changes described above, there are no changes to any other information included in the Prior Release, except as made in the Amended Release; and all other facts presented and representations made in the Prior Release remain true and in effect. The Trust confirms that the Fund will continue to comply with all initial listing requirements under Nasdaq Rule 5745.
2. Statutory Basis
The Exchange believes that the proposal is consistent with section 6(b) of the Act, 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 Fund will continue to comply with all the initial and continued listing requirements under Nasdaq Rule 5735.
The Exchange believes that the proposed rule change to change the Fund's name and to modify its proposed investments does not alter any of the arguments contained in the Prior Release in support of the original approval order that permitted the listing and trading of shares of the Fund and all other representations made in the Prior Release remain unchanged. The Exchange believes this proposed rule change is consistent with the Exchange's efforts to protect investors and the public interest through the disclosure of updated and correct information regarding the Fund.
For the above reasons, Nasdaq believes the proposed rule change is consistent with the requirements of section 6(b)(5) of the Act.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. In fact, the Exchange believes that the introduction of the Fund will promote competition by making available to investors an actively managed investment strategy in a structure that offers the cost and tax efficiencies and shareholder protections of ETFs, while removing the requirement for daily portfolio holdings disclosure to ensure a tight relationship between market trading prices and NAV.
Moreover, the Exchange believes that the proposed method of trading in NextShares will provide investors with transparency of trading costs, and the ability to control trading costs using limit orders, that is not available for conventionally traded ETFs.
These developments could significantly enhance competition to the benefit of the markets and investors.
C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others
Written comments were neither solicited nor received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action
Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, the proposed rule change has become effective pursuant to section 19(b)(3)(A) of the Act and Rule 19b-4(f)(6) thereunder. The Exchange believes that this proposed rule change is properly designated as non-controversial because it enhances clarity and operational transparency without modifying members' rights or obligations.
17 CFR 240.19b-4(f)(6).
The Exchange has asked the Commission to waive the 30-day operative delay so that the proposal may become operative immediately upon filing. The Exchange argues that waiver of the 30-day operative delay is consistent with the protection of investors and the public interest because the proposed changes to the Fund are consistent with the Exchange arguments and Commission findings made in the Prior Release for the listing and trading of NextShares on the Exchange. In the context of the unique pricing and trading mechanisms of NextShares, the Commission believes that waiver of the 30-day operative delay with respect to these proposed changes to the Fund is consistent with the protection of investors and the public interest and hereby waives the 30-day operative delay and designates the proposed rule change to be operative upon filing.
For purposes only of waiving the 30-day operative delay, the Commission has also considered the proposed rule's impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f).
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is: (i) Necessary or appropriate in the public interest; (ii) for the protection of investors; or (iii) otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
Electronic Comments
- Use the Commission's Internet comment form ( http://www.sec.gov/rules/sro.shtml ); or
- Send an email to rule-comments@sec.gov. Please include File Number SR-NASDAQ-2016-105 on the subject line.
Paper Comments
- Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-NASDAQ-2016-105. 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 such filing will also be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-NASDAQ-2016-105 and should be submitted on or before August 26, 2016.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-18569 Filed 8-4-16; 8:45 am]
BILLING CODE 8011-01-P