Notice2023-09078
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Certain Representations Relating to the Hennessy Stance ESG Large Cap 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
May 1, 2023
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 88 Issue 83 (Monday, May 1, 2023)</title>
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[Federal Register Volume 88, Number 83 (Monday, May 1, 2023)]
[Notices]
[Pages 26636-26639]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-09078]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-97378; File No. SR-NYSEARCA-2023-34]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend Certain
Representations Relating to the Hennessy Stance ESG Large Cap ETF
April 25, 2023.
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 April 21, 2023, NYSE Arca, Inc. (``NYSE Arca'' or the
``Exchange'') 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.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to make changes to certain representations
made in the proposed rule change previously filed with the Securities
and Exchange Commission (the ``Commission'' or ``SEC'') pursuant to
Rule 19b-4 relating to the Hennessy Stance ESG Large Cap ETF, shares of
which are currently listed and traded on the Exchange under NYSE Arca
Rule 8.601-E. The proposed rule change is available on the Exchange's
website at <a href="http://www.nyse.com">www.nyse.com</a>, at the principal office of the Exchange, 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 self-regulatory organization
included statements concerning the purpose of,
[[Page 26637]]
and basis for, the proposed rule change and discussed any comments it
received on the proposed rule change. The text of those 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 parts 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 Commission has approved the listing and trading on the Exchange
of shares (``Shares'') of the Hennessy Stance ESG Large Cap ETF (the
``Fund''),\3\ under NYSE Arca Rule 8.601-E, which governs the listing
and trading of Active Proxy Portfolio Shares, which are securities
issued by an actively managed open-end investment management
company.\4\ Shares of the Fund are currently listed and traded on the
Exchange under NYSE Arca Rule 8.601-E.\5\ The Shares of the Fund are
issued by Hennessy Funds Trust (the ``Issuer''), a statutory trust
organized under the laws of the State of Delaware and registered with
the Commission as an open-end management investment company. The Fund's
investment adviser is Hennessy Advisors, Inc. (the ``Adviser'').
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\3\ See Securities Exchange Act Release No. 96559 (December 21,
2022), 87 FR 79919 (December 28, 2022) (SR-NYSEARCA-2022-84) (Notice
of Filing and Immediate Effectiveness of Proposed Rule Change to
Amend Certain Representations) (Renaming the Fund from Stance Equity
ESG Large Cap Core ETF to Hennessy Stance ESG Large Cap ETF).
\4\ See Securities Exchange Act Release No. 89185 (June 29,
2020), 85 FR 40328 (July 6, 2020) (SR-NYSEArca-2019-95) (Approval of
a Proposed Rule Change To Adopt NYSE Arca Rule 8.601-E To Permit the
Listing and Trading of Active Proxy Portfolio Shares and To List and
Trade Shares of the Natixis U.S. Equity Opportunities ETF Under
Proposed NYSE Arca Rule 8.601-E). Rule 8.601-E(c)(1) provides that
``[t]he term ``Active Proxy Portfolio Share'' means a security that
(a) is issued by a 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; (b) is issued in a specified
minimum number of shares, or multiples thereof, in return for a
deposit by the purchaser of the Proxy Portfolio and/or cash with a
value equal to the next determined net asset value (``NAV''); (c)
when aggregated in the same specified minimum number of Active Proxy
Portfolio Shares, or multiples thereof, may be redeemed at a
holder's request in return for the Proxy Portfolio and/or cash to
the holder by the issuer with a value equal to the next determined
NAV; and (d) the portfolio holdings for which are disclosed within
at least 60 days following the end of every fiscal quarter.'' Rule
8.601-E(c)(2) provides that ``[t]he term ``Actual Portfolio'' means
the identities and quantities of the securities and other assets
held by the Investment Company that shall form the basis for the
Investment Company's calculation of NAV at the end of the business
day.'' Rule 8.601-E(c)(3) provides that ``[t]he term ``Proxy
Portfolio'' means a specified portfolio of securities, other
financial instruments and/or cash designed to track closely the
daily performance of the Actual Portfolio of a series of Active
Proxy Portfolio Shares as provided in the exemptive relief pursuant
to the Investment Company Act of 1940 applicable to such series.''
\5\ The Commission previously approved the listing and trading
of the shares of the Fund. See Securities Exchange Act Nos. 91266
(March 5, 2021) 86 FR 13930 (March 11, 2021) (SR-NYSEArca-2020-104)
(Order Approving a Proposed Rule Change, as Modified by Amendment
No. 2, To List and Trade Shares of the Stance Equity ESG Large Cap
Core ETF Under NYSE Arca Rule 8.601-E) (``Approval Order''); and
90665 (December 15, 2020) 85 FR 83129 (December 21, 2020) (SR-
NYSEArca-2020-104) (Notice of Filing of Proposed Rule Change To List
and Trade Shares of the Stance Equity ESG Large Cap Core ETF Under
NYSE Arca Rule 8.601-E) (``Notice''). (The Approval Order and the
Notice are referred to collectively herein as the ``Releases'').
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The Releases stated that the Fund will invest primarily in
exchange-traded equity securities of U.S. large capitalization issuers
by investing mainly in companies that meet environmental, social and
governance (``ESG'') standards, as determined by the Adviser. The
Exchange proposes to update the investment strategy employed by the
Fund to provide that the Fund may invest in exchange-traded equity
securities of U.S. small- and medium-capitalization issuers that meet
ESG standards, as determined by the Adviser, while continuing to invest
primarily in exchange-traded equity securities of U.S. large-
capitalization issuers that meet ESG standards, as determined by the
Adviser.\6\
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\6\ The Fund filed a registration statement on Form N-1A under
the Securities Act of 1933 (File No. 033-52154) and the Investment
Company Act of 1940 (File No. 811-07168), which became effective on
December 23, 2022 (the ``Registration Statement''). The Fund's
final, definitive prospectus, dated as of December 23, 2022, was
filed pursuant to Rule 497(c) of the Securities Act of 1933 on
December 28, 2022, and contains the current name and investment
strategy of the Fund (the ``Final Prospectus''). A supplement to the
Final Prospectus containing the new name and revised strategy, as
described herein, was filed on February 27, 2023 pursuant to Rule
497(e) of the Securities Act of 1933 (the ``Supplement''). The
description of the Fund and the Shares contained herein are based on
the Registration Statement, the Final Prospectus and the Supplement.
The change to the Fund's investment strategy as described herein
will be implemented effective as of the close of business on April
27, 2023.
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The Adviser believes the change to the Fund's investment strategy
(as described herein) is appropriate and consistent with the best
interest of the Fund and Fund shareholders. In connection with the
change, the Fund's investment objective and principal investment
strategies will remain substantially the same. While the Fund will have
an increased ability to focus on investing in exchange-traded equity
securities of U.S. small- and medium-capitalization issuers that meet
ESG standards, the Fund will continue to invest primarily in exchange-
traded equity securities of U.S. large-capitalization issuers that meet
ESG standards, as determined by the Adviser. The Adviser further
believes that this strategy change is not material because (1) the
investment objective will remain the same and the principal investment
strategies will remain substantially the same; (2) the Fund will
continue to primarily invest in equity securities of large-
capitalization companies; and (3) the principal investment risks are
substantially the same.
As of the close of business on April 27, 2023, the Fund's non-
material strategy change will be effected to allow the Fund an
increased ability to focus on investing in exchange-traded equity
securities of U.S. small- and medium-capitalization issuers that meet
ESG standards, while continuing to invest primarily in exchange-traded
equity securities of U.S. large-capitalization issuers that meet ESG
standards, as determined by the Adviser. Accordingly, as of the close
of business on April 27, 2023, the name of the Fund will change from
Hennessy Stance ESG Large Cap ETF to Hennessy Stance ESG ETF.
The investment objective of the Fund, which is to seek long-term
capital appreciation, will remain unchanged.
Except for the changes noted above, all other representations made
in the Releases remain unchanged.\7\ The Fund will comply with all
continued listing requirements under Rule 8.601-E, including all other
requirements and conditions set forth in the applicable exemptive
order.
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\7\ See supra note 5.
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2. Statutory Basis
The basis under the Act for this proposed rule change is the
requirement under Section 6(b)(5) \8\ that an exchange have rules that
are designed to prevent fraudulent and manipulative acts and practices,
to promote just and equitable principles of trade, to remove
impediments to, and perfect the mechanism of a free and open market
and, in general, to protect investors and the public interest.
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\8\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that the proposed rule change is designed to
prevent fraudulent and manipulative acts and practices, and is designed
to promote just and equitable principles of trade and to protect
investors and the
[[Page 26638]]
public interest. Consistent with the representations in the Releases,
the Fund will continue to seek its investment objective by investing in
exchange-traded securities of issuers that meet ESG standards. As a
result of the change to the Fund's investment strategy, the Exchange is
proposing to amend certain representations in the Releases regarding
the universe of securities in which the Fund may invest and consistent
with that change, to rename the Fund.
The Adviser believes the change to the Fund's investment strategy
is appropriate and consistent with the best interest of the Fund and
Fund shareholders. In connection with the change, the Fund's investment
objective and principal investment strategies will remain substantially
the same. While the Fund will have an increased ability to focus on
investing in exchange-traded equity securities of U.S. small- and
medium-capitalization issuers that meet ESG standards, the Fund will
continue to invest primarily in exchange-traded equity securities of
U.S. large-capitalization issuers that meet ESG standards, as
determined by the Adviser. The Adviser further believes that this
strategy change is not material because (1) the investment objective
will remain the same and the principal investment strategies will
remain the substantially the same; (2) the Fund will continue to
primarily invest in equity securities of large-capitalization
companies; and (3) the principal investment risks are substantially the
same. The proposed changes to the investment strategy will remain
consistent with applicable requirements under the 1940 Act.
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. The Exchange believes the
proposed rule change will not impose a burden on competition and will
benefit investors and the marketplace by permitting continued listing
and trading of Shares of the Fund following implementation of the
changes described above, which changes would not impact the investment
objective of the Fund.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to 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 \9\ and Rule
19b-4(f)(6) thereunder.\10\
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\9\ 15 U.S.C. 78s(b)(3)(A)(iii).
\10\ 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.
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A proposed rule change filed under Rule 19b-4(f)(6) \11\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\12\ 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 proposal
may become operative immediately upon filing. The Commission believes
that waiver of the 30-day operative delay is consistent with the
protection of investors and the public interest because the proposal
does not raise any new or novel issues and doing so will allow the
Shares to continue to be listed and traded on the Exchange without
interruption in a manner that is consistent with the Commission's prior
Approval Order and the applicable requirements under the Investment
Company Act of 1940. Accordingly, the Commission hereby waives the 30-
day operative delay and designates the proposal operative upon
filing.\13\
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\11\ 17 CFR 240.19b-4(f)(6).
\12\ 17 CFR 240.19b-4(f)(6)(iii).
\13\ 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).
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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 under
Section 19(b)(2)(B) \14\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\14\ 15 U.S.C. 78s(b)(2)(B).
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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="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#b1c3c4ddd49cd2dedcdcd4dfc5c2f1c2d4d29fd6dec7"><span class="__cf_email__" data-cfemail="7b090e171e56181416161e150f083b081e18551c140d">[email protected]</span></a>. Please include
File Number SR-NYSEARCA-2023-34 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-NYSEARCA-2023-34. 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="https://www.sec.gov/rules/sro.shtml">https://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.
Do not include personal identifiable information in submissions;
you should submit only information that you wish to make available
publicly. We may redact in part or withhold entirely from publication
submitted material that is obscene or subject to copyright protection.
All submissions should refer to File Number SR-NYSEARCA-2023-
[[Page 26639]]
34 and should be submitted on or before May 22, 2023.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-09078 Filed 4-28-23; 8:45 am]
BILLING CODE 8011-01-P
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