Notice2021-24896
Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Reflect a Modification to the Permitted Components of the Tracking Baskets of the Invesco Real Assets ESG ETF and Invesco US Large Cap Core ETF
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
November 16, 2021
Issuing agencies
Securities and Exchange Commission
Full Text
<html>
<head>
<title>Federal Register, Volume 86 Issue 218 (Tuesday, November 16, 2021)</title>
</head>
<body><pre>
[Federal Register Volume 86, Number 218 (Tuesday, November 16, 2021)]
[Notices]
[Pages 63429-63431]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-24896]
=======================================================================
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-93546; File No. SR-CboeBZX-2021-075]
Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Reflect
a Modification to the Permitted Components of the Tracking Baskets of
the Invesco Real Assets ESG ETF and Invesco US Large Cap Core ETF
November 9, 2021.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on November 2, 2021, Cboe BZX Exchange, Inc. (the ``Exchange'' or
``BZX'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I and II
below, which Items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Cboe BZX Exchange, Inc. (the ``Exchange'' or ``BZX'') proposes to
reflect an amendment to the Reference Order relied upon by the Invesco
Real Assets ESG ETF and Invesco US Large Cap Core ESG ETF, shares of
which are listed and traded on the Exchange under BZX Rule 14.11(m).
The text of the proposed rule change is also available on the
Exchange's website (<a href="http://markets.cboe.com/us/equities/regulation/rule_filings/bzx/">http://markets.cboe.com/us/equities/regulation/rule_filings/bzx/</a>), at the Exchange's Office of the Secretary, and at
the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange adopted BZX Rule 14.11(m) for the purpose of
permitting the listing and trading, or pursuant to unlisted trading
privileges (``UTP''), of Tracking Fund Shares, which are securities
issued by an actively managed open-end management investment
company.\3\ Exchange Rule 14.11(m)(2)(A) requires the Exchange to file
separate proposals under Section 19(b) of the Act before listing and
trading any series of Tracking Fund Shares on the Exchange. Pursuant to
this provision, the Exchange submitted proposals to list and trade
shares (``Shares'') of Tracking Fund Shares of the following funds
under BZX Rule 14.11(m): Invesco Real Assets ESG ETF and Invesco US
Large Cap Core ESG
[[Page 63430]]
ETF (each, a ``Fund'' and, together the ``Funds'').\4\
---------------------------------------------------------------------------
\3\ See Securities Exchange Act Release No. 88887 (May 15,
2020), 85 FR 30990 (May 21, 2020) (SR-CboeBZX-2019-107) (Notice of
Filing of Amendment No. 5 and Order Granting Accelerated Approval of
a Proposed Rule Change, as Modified by Amendment No. 5, to Adopt
Rule 14.11(m), Tracking Fund Shares, and to List and Trade Shares of
the Fidelity Blue Chip Value ETF, Fidelity Blue Chip Growth ETF, and
Fidelity New Millennium ETF (``Approval Order'')). Rule
14.11(m)(3)(A) provides that ``[t]he term ``Tracking Fund Share''
means a security that (i) represents an interest in an investment
company registered under the Investment Company Act of 1940
(``Investment Company'') organized as an open-end management
investment company, 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;
(ii) is issued in a specified aggregate minimum number in return for
a deposit of a specified Tracking Basket and/or a cash amount with a
value equal to the next determined net asset value; (iii) when
aggregated in the same specified minimum number, may be redeemed at
a holder's request, which holder will be paid a specified Tracking
Basket and/or a cash amount with a value equal to the next
determined net asset value; and (iv) the portfolio holdings for
which are disclosed within at least 60 days following the end of
every fiscal quarter. Rule 14.11(m)(3)(E) provides that ``[t]he term
``Tracking Basket'' means the identities and quantities of the
securities and other assets included in a basket that is designed to
closely track the daily performance of the Fund Portfolio, as
provided in the exemptive relief under the Investment Company Act of
1940 applicable to a series of Tracking Fund Shares.''
\4\ See Securities Exchange Act Release No. 90686 (December 16,
2020) 85 FR 83657 (December 22, 2020) (SR-CboeBZX-2020-090).
---------------------------------------------------------------------------
Among others, Invesco Actively Managed Exchange-Traded Fund Trust
(the ``Issuer''), issued a second amended and restated application for
an order under Section 6(c) of the 1940 Act for exemptions from various
provisions of the 1940 Act and rules thereunder (the
``Application'').\5\ On October 27, 2020, the Commission issued an
order (the ``Prior Exemptive Order'') under the 1940 Act granting the
exemptions requested in the Application.\6\ The relief in the Prior
Exemptive Order incorporates by reference terms and conditions of the
same relief of a previous order granting the same relief sought by
applicants, as that order may be amended from time to time (the
``Reference Order'').\7\
---------------------------------------------------------------------------
\5\ See File No. 812-15141, dated September 30, 2020.
\6\ See Investment Company Act Release No. 34076, October 27,
2020.
\7\ The Reference Order refers to the Fidelity Beach Street
Trust, et al., Investment Company Act Rel. Nos. 33683 (Nov. 14,
2019) (notice) and 33712 (Dec. 10, 2019) (order).
---------------------------------------------------------------------------
Under the Prior Exemptive Order, the Funds are required to publish
a basket of securities and cash that, while different from the Fund's
portfolio, is designed to closely track its daily performance (i.e.,
the Tracking Basket). The Prior Exemptive Order provided that the
Tracking Basket will solely consist of a combination of (i) select
recently disclosed portfolio holdings (``Strategy Components''); (ii)
liquid U.S. exchange-traded funds (``ETFs'') that convey information
about the types of instruments (that are not otherwise fully
represented by the Strategy Components) in which a Fund invests
(``Representative ETFs''); and (iii) cash and cash equivalents.
Exchange Rule 14.11(m)(4)(B)(iii)(c) provides that the Exchange will
consider the suspension of trading in and will commence delisting
proceedings for a series of Tracking Fund Shares pursuant to Rule 14.12
if, among other things, the Exchange 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 or the Commission staff
under the 1940 Act to the Investment Company with respect to the series
of Tracking Funds Shares. On August 5, 2021, the Commission issued an
amended order to the Reference Order that, among other things, permits
the Issuer to include select securities from which a Fund's investment
are selected such as a broad-based market index (``Investment
Universe'') in the Fund's Tracking Basket (the ``Amended Reference
Order'').\8\ The Funds will comply with this condition of the Amended
Reference Order and the Exchange is updating the listing rule for the
Shares accordingly. Except for the change noted above, all other
representations made in the rule filing remain unchanged and will
continue to constitute continuing listing requirements for the Funds.
The Funds will also continue to comply with the requirements of Rule
14.11(m).
---------------------------------------------------------------------------
\8\ See Investment Company Act Release No. 34350, August 5,
2021.
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the Securities Exchange Act of 1934 (the ``Act'') and the rules and
regulations thereunder applicable to the Exchange and, in particular,
the requirements of Section 6(b) of the Act.\9\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \10\ requirements that the rules of an exchange 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 regulating, clearing,
settling, processing information with respect to, and 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.
---------------------------------------------------------------------------
\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
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. The proposed revision is intended to reflect the
change in the Amended Reference Order that permits the Issuer to
include select securities from the Fund's Investment Universe in the
Fund's Tracking Basket. The proposed rule change would permit the Funds
to operate consistent with the Prior Exemptive Order, which
incorporates the Reference Order that may be amended from time to time.
Furthermore, Exchange Rule 14.11(m)(4)(B)(iii)(c) provides that the
Exchange will consider the suspension of trading in and will commence
delisting proceedings for a series of Tracking Fund Shares pursuant to
Rule 14.12 if, among other things, the Exchange 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 of the
Commission Staff under the 1940 Act to the Investment Company with
respect to the series of Tracking Funds Shares. By clearly identifying
the change in the committed components of each Funds' Tracking Basket,
the proposed Rule change will assist the Exchange in complying this
aspect of the listing rule, as modified, consistent with section
6(b)(1) of the Act.\11\ Except for the changes noted above, all other
representations made in the respective rule filings remain unchanged
and, as noted, will continue to constitute continuing listing
requirements for the Funds.
---------------------------------------------------------------------------
\11\ 15 U.S.C. 78f(b)(1).
---------------------------------------------------------------------------
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 purpose of the Act. As noted, the purpose of the
filing is to reflect an amendment to the Reference Order governing the
listing and trading of these Funds. As noted, the effect of this filing
is to allow an adjustment to the components of the Tracking Baskets for
each of the Funds. The Exchange believes this will not impose any
burden on competition.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
The Exchange neither solicited nor received comments on the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A)(iii) of the Act \12\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\13\
---------------------------------------------------------------------------
\12\ 15 U.S.C. 78s(b)(3)(A)(iii).
\13\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires the Exchange to give the Commission written notice of its
intent to file the proposed rule change, along with a brief
description and text of the proposed rule change, at least five
business days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the Commission. The
Exchange has satisfied this requirement.
---------------------------------------------------------------------------
[[Page 63431]]
A proposed rule change filed under Rule 19b-4(f)(6) \14\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\15\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposed
rule change may take effect upon filing. The Exchange states that the
proposed rule change raises no novel regulatory issues because the
Funds will continue to comply with the requirements of BZX Rule
14.11(m). The Exchange also notes that a similar proposal to amend the
listing rules of other shares that BZX also lists and trades pursuant
to Rule 14.11(m) is currently in effect.\16\ For these reasons, the
Commission believes that waiver of the 30-day operative delay is
consistent with the protection of investors and the public interest.
Accordingly, the Commission waives the 30-day operative delay and
designates the proposal operative upon filing.\17\
---------------------------------------------------------------------------
\14\ 17 CFR 240.19b-4(f)(6).
\15\ 17 CFR 240.19b-4(f)(6)(iii).
\16\ See Securities and Exchange Act No. 92946 (September 13,
2021) 86 FR 51941 (September 17, 2021) (SR-CboeBZX-2021-060).
\17\ For purposes only of waiving the 30-day operative delay,
the Commission has 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 such proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
<bullet> Use the Commission's internet comment form (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#2b595e474e06484446464e455f586b584e48054c445d"><span class="__cf_email__" data-cfemail="e391968f86ce808c8e8e868d9790a3908680cd848c95">[email protected]</span></a>. Please include
File Number SR-CboeBZX-2021-075 on the subject line.
Paper Comments
<bullet> 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-CboeBZX-2021-075. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549 on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange.
All comments received will be posted without change. Persons
submitting comments are cautioned that we do not redact or edit
personal identifying information from comment submissions. You should
submit only information that you wish to make available publicly.
All submissions should refer to File Number SR-CboeBZX-2021-075 and
should be submitted on or before December 7, 2021.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\18\
---------------------------------------------------------------------------
\18\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-24896 Filed 11-15-21; 8:45 am]
BILLING CODE 8011-01-P
</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body>
</html>Indexed from Federal Register on November 16, 2021.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.