Notice2023-12216
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To List and Trade Shares of the Natixis Loomis Sayles Focused Growth ETF Under NYSE Arca Rule 8.601-E (Active Proxy Portfolio Shares)
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
June 8, 2023
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 88 Issue 110 (Thursday, June 8, 2023)</title>
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[Federal Register Volume 88, Number 110 (Thursday, June 8, 2023)]
[Notices]
[Pages 37588-37595]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-12216]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-97645; File No. SR-NYSEARCA-2023-38]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To List and Trade
Shares of the Natixis Loomis Sayles Focused Growth ETF Under NYSE Arca
Rule 8.601-E (Active Proxy Portfolio Shares)
June 2, 2023.
Pursuant to section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given
that, on May 24, 2023, NYSE Arca, Inc. (``NYSE Arca'' or ``Exchange'')
filed with the Securities and Exchange Commission (``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\ 15 U.S.C. 78a.
\3\ 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 list and trade shares of the Natixis
Loomis Sayles Focused Growth ETF 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, 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 Exchange has adopted NYSE Arca Rule 8.601-E for the purpose of
permitting the listing and trading, or trading pursuant to unlisted
trading privileges (``UTP''), of Active Proxy Portfolio Shares, which
are securities issued by an actively managed open-end investment
management company.\4\ Commentary .01 to Rule 8.601-E requires the
Exchange to file separate proposals under section 19(b) of the Act
before listing and trading any series of Active Proxy Portfolio Shares
on the Exchange. Therefore, the Exchange is submitting this proposal in
order to list and trade shares (``Shares'') of the Natixis Loomis
Sayles Focused Growth ETF (the ``Fund'') under Rule 8.601-E.
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\4\ See Securities Exchange Act Release No. 89185 (June 29,
2020), 85 FR 40328 (July 6, 2020) (SR-NYSEArca-2019-95). Rule 8.601-
E(c)(1) provides that ``[t]he term ``Active Proxy Portfolio Share''
means a security that (a) is issued by 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; (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 or Custom
Basket, as applicable, 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 or Custom Basket, as applicable, 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.''
Rule 8.601-E(c)(4) provides that the term ``Custom Basket'' means a
portfolio of securities that is different from the Proxy Portfolio
and is otherwise consistent with the exemptive relief issued
pursuant to the Investment Company Act of 1940 applicable to a
series of Active Proxy Portfolio Shares.
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Key Features of Active Proxy Portfolio Shares
While funds issuing Active Proxy Portfolio Shares will be actively-
managed and, to that extent, will be similar to Managed Fund Shares,
Active Proxy Portfolio Shares differ from
[[Page 37589]]
Managed Fund Shares in the following important respects. First, in
contrast to Managed Fund Shares, which are actively-managed funds
listed and traded under NYSE Arca Rule 8.600-E \5\ and for which a
``Disclosed Portfolio'' is required to be disseminated at least once
daily,\6\ the portfolio for an issue of Active Proxy Portfolio Shares
will be publicly disclosed within at least 60 days following the end of
every fiscal quarter in accordance with normal disclosure requirements
otherwise applicable to open-end management investment companies
registered under the Investment Company Act of 1940 (the ``1940
Act'').\7\ The composition of the portfolio of an issue of Active Proxy
Portfolio Shares would not be available at commencement of Exchange
listing and trading. Second, in connection with the creation and
redemption of Active Proxy Portfolio Shares, such creation or
redemption may be exchanged for a Proxy Portfolio or Custom Basket, as
applicable, and/or cash with a value equal to the next-determined NAV.
A series of Active Proxy Portfolio Shares will disclose the Proxy
Portfolio on a daily basis, which, as described above, is designed to
track closely the daily performance of the Actual Portfolio of a series
of Active Proxy Portfolio Shares, instead of the actual holdings of the
Investment Company, as provided by a series of Managed Fund Shares. As
set forth in NYSE Arca Rule 8.601-E(d)(2)(B)(ii), for Active Proxy
Portfolio Shares using a Custom Basket, each Business Day,\8\ before
the opening of trading in the Core Trading Session (as defined in NYSE
Arca Rule 7.34-E (a)), the Investment Company shall make publicly
available on its website the composition of any Custom Basket
transacted on the previous Business Day, except a Custom Basket that
differs from the applicable Proxy Portfolio only with respect to cash.
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\5\ The Commission has previously approved listing and trading
on the Exchange of a number of issues of Managed Fund Shares under
NYSE Arca Rule 8.600-E. See, e.g., Securities Exchange Act Release
Nos. 57801 (May 8, 2008), 73 FR 27878 (May 14, 2008) (SR-NYSEArca-
2008-31) (order approving Exchange listing and trading of twelve
actively-managed funds of the WisdomTree Trust); 60460 (August 7,
2009), 74 FR 41468 (August 17, 2009) (SR-NYSEArca-2009-55) (order
approving listing of Dent Tactical ETF); 63076 (October 12, 2010),
75 FR 63874 (October 18, 2010) (SR-NYSEArca-2010-79) (order
approving Exchange listing and trading of Cambria Global Tactical
ETF); 63802 (January 31, 2011), 76 FR 6503 (February 4, 2011) (SR-
NYSEArca-2010-118) (order approving Exchange listing and trading of
the SiM Dynamic Allocation Diversified Income ETF and SiM Dynamic
Allocation Growth Income ETF). The Commission also has approved a
proposed rule change relating to generic listing standards for
Managed Fund Shares. See Securities Exchange Act Release No. 78397
(July 22, 2016), 81 FR 49320 (July 27, 2016) (SR-NYSEArca-2015-110)
(amending NYSE Arca Equities Rule 8.600 to adopt generic listing
standards for Managed Fund Shares).
\6\ NYSE Arca Rule 8.600-E(c)(2) 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 net asset value at the
end of the business day. NYSE Arca Rule 8.600-E(d)(2)(B)(i) requires
that the Disclosed Portfolio will be disseminated at least once
daily and will be made available to all market participants at the
same time.
\7\ A mutual fund is required to file with the Commission its
complete portfolio schedules for the second and fourth fiscal
quarters on Form N-CSR under the 1940 Act. Information reported on
Form N-PORT for the third month of a fund's fiscal quarter will be
made publicly available 60 days after the end of a fund's fiscal
quarter. Form N-PORT requires reporting of a fund's complete
portfolio holdings on a position-by-position basis on a quarterly
basis within 60 days after fiscal quarter end. Investors can obtain
a series of Active Proxy Portfolio Shares' Statement of Additional
Information (``SAI''), its Shareholder Reports, its Form N-CSR,
filed twice a year, and its Form N-CEN, filed annually. A series of
Active Proxy Portfolio Shares' SAI and Shareholder Reports will be
available free upon request from the Investment Company, and those
documents and the Form N-PORT, Form N-CSR, and Form N-CEN may be
viewed on-screen or downloaded from the Commission's website at
<a href="http://www.sec.gov">www.sec.gov</a>.
\8\ ``Business Day'' is defined to mean any day that the
Exchange is open, including any day when the Fund satisfies
redemption requests as required by section 22(e) of the 1940 Act.
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The Commission has previously approved \9\ and noticed for
immediate effectiveness \10\ the listing and trading on the Exchange of
series of Active Proxy Portfolio Shares under NYSE Arca Rule 8.601-E.
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\9\ See Securities Exchange Act Release Nos. 89185 (June 29,
2020), 85 FR 40328 (July 6, 2020) (SR-NYSEArca-2019-95) (Notice of
Filing of Amendment No. 6 and Order Granting Accelerated Approval of
a Proposed Rule Change, as Modified by Amendment No. 6, 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); 89192 (June 30, 2020), 85 FR 40699 (July 7, 2020) (SR-NYSEArca-
2019-96) (Notice of Filing of Amendment No. 5 and Order Granting
Accelerated Approval of a Proposed Rule Change, as Modified by
Amendment No. 5, to List and Trade Two Series of Active Proxy
Portfolio Shares Issued by the American Century ETF Trust under NYSE
Arca Rule 8.601-E); 89191 (June 30, 2020), 85 FR 40358 (July 6,
2020) (SR-NYSEArca-2019-92) (Notice of Filing of Amendment No. 3 and
Order Granting Accelerated Approval of a Proposed Rule Change, as
Modified by Amendment No. 3, to List and Trade Four Series of Active
Proxy Portfolio Shares Issued by T. Rowe Price Exchange-Traded
Funds, Inc. under NYSE Arca Rule 8.601-E); 89438 (July 31, 2020), 85
FR 47821 (August 6, 2020) (SR-NYSEArca-2020-51) (Order Granting
Approval of a Proposed Rule Change, as Modified by Amendment No. 2,
to List and Trade Shares of Natixis Vaughan Nelson Select ETF and
Natixis Vaughan Nelson MidCap ETF under NYSE Arca Rule 8.601-E);
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).
\10\ See, e.g., Securities Exchange Act Release Nos. 92104 (June
3, 2021), 86 FR 30635 (June 9, 2021) (NYSEArca-2021-46) (Notice of
Filing and Immediate Effectiveness of Proposed Rule Change to List
and Trade Shares of the Nuveen Santa Barbara Dividend Growth ETF,
Nuveen Small Cap Select ETF, and Nuveen Winslow Large-Cap Growth ESG
ETF Under NYSE Arca Rule 8.601-E (Active Proxy Portfolio Shares);
92958 (September 13, 2021), 86 FR 51933 (September 17, 2021)
(NYSEArca-2021-77) (Notice of Filing and Immediate Effectiveness of
Proposed Rule Change To List and Trade Shares of the Nuveen Growth
Opportunities ETF Under NYSE Arca Rule 8.601-E (Active Proxy
Portfolio Shares); 93264 (October 6, 2021), 86 FR 56989 (October 13,
2021) (SR-NYSEArca-2021-84) (Notice of Filing and Immediate
Effectiveness of Proposed Rule Change To List and Trade Shares of
the Schwab Ariel ESG ETF Under NYSE Arca Rule 8.601-E (Active Proxy
Portfolio Shares); 94486 (March 22, 2022), 87 FR 17351 (March 28,
2022) (SR-NYSEArca-2022-14) (Notice of Filing and Immediate
Effectiveness of Proposed Rule Change to List and Trade Shares of
the Columbia Seligman Semiconductor and Technology ETF Under NYSE
Arca Rule 8.601 (Active Proxy Portfolio Shares); 94908 (May 13,
2022), 87 FR 30524 (May 19, 2022) (SR-NYSEArca-2022-28) (Notice of
Filing and Immediate Effectiveness of Proposed Rule Change to List
and Trade Shares of the Principal Real Estate Active Opportunities
ETF Under NYSE Arca Rule 8.601 (Active Proxy Portfolio Shares));
94902 (May 12, 2022), 87 FR 30286 (May 18, 2022) (SR-NYSEArca-2022-
29) (Notice of Filing and Immediate Effectiveness of Proposed Rule
Change to List and Trade Shares of the IQ Winslow Large Cap Growth
ETF and IQ Winslow Focused Large Cap Growth ETF Under NYSE Arca Rule
8.601-E (Active Proxy Portfolio Shares)).
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The Shares of the Fund will be series of Natixis ETF Trust II (the
``Company''), a Massachusetts business trust registered with the
Commission as an open-end management investment company.\11\ Natixis
Advisors, LLC will be the investment adviser to the Fund (the
``Adviser''). Loomis, Sayles & Company, L.P. (``Sub-Adviser'') will be
the Sub-Adviser to the Fund. State Street Bank and Trust Company will
serve as the Fund's custodian. ALPS Distributors, Inc. will act as the
distributor (the ``Distributor'') for the Fund.
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\11\ The Company is registered under the 1940 Act. On March 24,
2023, the Company filed a registration statement on Form N-1A under
the Securities Act of 1933 (15 U.S.C. 77a), and under the 1940 Act
relating to the Fund (File Nos. 333-235466 and 811-23500) (the
``Registration Statement''). The Company filed a seventh 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 on October 21, 2019 (File No. 812-14870). See Investment
Company Act Release No. 33684 (File No. 812-14870) (the
``Application''). On December 10, 2019, the Commission issued an
order under the 1940 Act granting the exemptions requested in the
Application (Investment Company Act Release No. 33711 (December 10,
2019)) (the ``Exemptive Order''). Investments made by the Fund will
comply with the conditions set forth in the Application and the
Exemptive Order. The description of the operation of the Fund herein
is based, in part, on the Registration Statement, Application, and
Exemptive Order. The Exchange will not commence trading in Shares of
the Fund until the Registration Statement is effective.
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Commentary .04 to NYSE Arca Rule 8.601-E provides that, if the
investment
[[Page 37590]]
adviser to the Investment Company issuing Active Proxy Portfolio Shares
is registered as a broker-dealer or is affiliated with a broker-dealer,
such investment adviser will erect and maintain a ``fire wall'' between
the investment adviser and personnel of the broker-dealer or broker-
dealer affiliate, as applicable, with respect to access to information
concerning the composition and/or changes to such Investment Company's
Actual Portfolio, Proxy Portfolio, and/or Custom Basket, as applicable.
Any person related to the investment adviser or Investment Company who
makes decisions pertaining to the Investment Company's Actual
Portfolio, Proxy Portfolio, and/or Custom Basket, as applicable, or has
access to non-public information regarding the Investment Company's
Actual Portfolio, Proxy Portfolio, and/or Custom Basket, as applicable,
or changes thereto must be subject to procedures reasonably designed to
prevent the use and dissemination of material non-public information
regarding the Actual Portfolio, Proxy Portfolio, and/or Custom Basket,
as applicable, or changes thereto. Commentary .04 is similar to
Commentary .03(a)(i) and (iii) to NYSE Arca Rule 5.2-E(j)(3); however,
Commentary .04, in connection with the establishment of a ``fire wall''
between the investment adviser and the broker-dealer, reflects the
applicable open-end fund's portfolio, not an underlying benchmark
index, as is the case with index-based funds.\12\ Commentary .04 is
also similar to Commentary .06 to Rule 8.600-E related to Managed Fund
Shares, except that Commentary .04 relates to establishment and
maintenance of a ``fire wall'' between the investment adviser and
personnel of the broker-dealer or broker-dealer affiliate, as
applicable, applicable to an Investment Company's Actual Portfolio,
Proxy Portfolio, and/or Custom Basket, as applicable, or changes
thereto, and not just to the underlying portfolio, as is the case with
Managed Fund Shares.
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\12\ An investment adviser to an open-end fund is required to be
registered under the Investment Advisers Act of 1940 (the ``Advisers
Act''). As a result, the Adviser, Sub-Adviser and their related
personnel will be 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 violations, 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.
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In addition, Commentary .05 to Rule 8.601-E provides that any
person or entity, including a custodian, Reporting Authority,
distributor, or administrator, who has access to non-public information
regarding the Investment Company's Actual Portfolio, Proxy Portfolio,
or Custom Basket, as applicable, or changes thereto, must be subject to
procedures reasonably designed to prevent the use and dissemination of
material non-public information regarding the applicable Investment
Company Actual Portfolio, Proxy Portfolio, or Custom Basket, as
applicable, or changes thereto. Moreover, if any such person or entity
is registered as a broker-dealer or affiliated with a broker-dealer,
such person or entity will erect and maintain a ``fire wall'' between
the person or entity and the broker-dealer with respect to access to
information concerning the composition and/or changes to such
Investment Company Actual Portfolio, Proxy Portfolio, or Custom Basket,
as applicable.
Neither the Adviser nor the Sub-Adviser is registered as a broker-
dealer but each is affiliated with a broker-dealer. The Adviser and
Sub-Adviser have implemented and will maintain a ``fire wall'' with
respect to such broker-dealer affiliate regarding access to information
concerning the composition of and/or changes to the Fund's Actual
Portfolio, Proxy Portfolio, and/or Custom Basket, as applicable.
In the event (a) the Adviser or Sub-Adviser becomes registered as a
broker-dealer or becomes newly affiliated with a broker-dealer, or (b)
any new adviser or sub-adviser 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 or its broker-
dealer affiliate regarding access to information concerning the
composition and/or changes to the Fund's Actual Portfolio, Proxy
Portfolio, and/or Custom Basket, as applicable, and will be subject to
procedures designed to prevent the use and dissemination of material
non-public information regarding the Fund's Actual Portfolio, Proxy
Portfolio, and/or Custom Basket, as applicable, or changes thereto. Any
person related to the Adviser, Sub-Adviser or the Fund who makes
decisions pertaining to the Fund's Actual Portfolio, Proxy Portfolio,
or Custom Basket, as applicable, or has access to non-public
information regarding the Fund's Actual Portfolio, Proxy Portfolio,
and/or Custom Basket, as applicable, or changes thereto are subject to
procedures reasonably designed to prevent the use and dissemination of
material non-public information regarding the Fund's Actual Portfolio,
Proxy Portfolio, and/or Custom Basket, as applicable or changes
thereto.
In addition, any person or entity, including any service provider
for the Fund, who has access to non-public information regarding the
Fund's Actual Portfolio, Proxy Portfolio, and/or Custom Basket, as
applicable, or changes thereto, will be subject to procedures
reasonably designed to prevent the use and dissemination of material
non-public information regarding the Fund's Actual Portfolio, Proxy
Portfolio, and/or Custom Basket, as applicable, or changes thereto.
Moreover, if any such person or entity is registered as a broker-dealer
or affiliated with a broker-dealer, such person or entity has erected
and will maintain a ``fire wall'' between the person or entity and the
broker-dealer with respect to access to information concerning the
composition and/or changes to the Fund's Actual Portfolio, Proxy
Portfolio, and/or Custom Basket, as applicable.
Description of the Fund
According to the Registration Statement, the Adviser will identify
a Proxy Portfolio for the Fund that is designed to replicates the daily
performance of the Fund's Actual Portfolio and will only include
securities and investments in which the Fund may invest. While the
Fund's Proxy Portfolio and Actual Portfolio will hold some of the same
securities, the Proxy Portfolio and Actual Portfolio may not include
identical securities.
The composition of the Proxy Portfolio will be published on the
Fund's website (<a href="http://im.natixis.com">im.natixis.com</a>) each Business Day before the
commencement of trading of the Fund's Shares. The Fund's website will
include the following information for each portfolio holding in the
Proxy Portfolio: (1) ticker symbol; (2) CUSIP or other identifier; (3)
description of holding; (4) quantity of each security or other asset
held; and (5) percentage weight of the holding in the Proxy Portfolio.
The Proxy Portfolio will be reconstituted daily, and the Adviser or
Sub-Adviser will not make intra-day changes to the Proxy Portfolio
except to correct errors in the published Proxy Portfolio.
[[Page 37591]]
The Fund will, at the end of each trading day, calculate the
percentage weight overlap between the holdings of its Proxy Portfolio
and the Actual Portfolio (the ``Proxy Overlap'') that formed the basis
for the Fund's calculation of NAV at the end of the prior Business Day
by taking the lesser weight of each asset held in common between the
Actual Portfolio and the Proxy Portfolio and adding the totals.
The Fund's holdings will conform to the permissible investments as
set forth in the Application and Exemptive Order, and the holdings will
be consistent with all requirements in the Application and Exemptive
Order.\13\ Any foreign common stocks held by the Fund will be traded on
an exchange that is a member of the Intermarket Surveillance Group
(``ISG'') or with which the Exchange has in place a comprehensive
surveillance sharing agreement.
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\13\ Pursuant to the Application and Exemptive Order, the
permissible investments for the Fund include only the following
instruments: exchange-traded funds, exchange-traded notes, exchange-
traded common stocks, exchange-traded preferred stocks, exchange-
traded American Depositary Receipts, exchange-traded real estate
investment trusts, exchange-traded commodity pools, exchange-traded
metal trusts, exchange-traded currency trusts and exchange-traded
futures that trade contemporaneously with the Fund's shares. In
addition, the Fund may hold cash and cash equivalents (short-term
U.S. Treasury securities, government money market funds, and
repurchase agreements). Pursuant to the Application and Exemptive
Order, the Fund will not hold short positions or invest in
derivatives other than U.S. exchange-traded futures, will not borrow
for investment purposes, and will not purchase any securities that
are illiquid investments at the time of purchase.
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According to the Registration Statement, the Fund's investment
objective is long-term growth of capital. The Fund will, under normal
circumstances, invest primarily in exchange-traded U.S.-listed common
stocks and other exchange-traded equity securities across a wide range
of sectors and industries that the Adviser believes have sustainable
long-term competitive advantages and trade at a significant discount to
estimates of intrinsic value. The Fund focuses on stocks of large
capitalization companies, but the Fund may invest in companies of any
size. The Fund is non-diversified, which means that it may invest a
greater percentage of its assets in a particular issuer and may invest
in fewer issuers than a diversified fund. Typically, the Fund's
portfolio will hold 20 to 30 securities.
Investment Restrictions
The Shares of the Fund will conform to the initial and continued
listing criteria under Rule 8.601-E. The Fund's holdings will be
limited to and consistent with permissible holdings as described in the
Application and Exemptive Order and all requirements in the Application
and Exemptive Order.\14\
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\14\ See id.
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The Fund's investments, including derivatives, will be consistent
with its investment objectives and will not be used to enhance leverage
(although certain derivatives and other investments may result in
leverage). That is, the Fund's investments will not be used to seek
performance that is the multiple or inverse multiple (e.g., 2X or -3X)
of the Fund's primary broad-based securities benchmark index (as
defined in Form N-1A).\15\
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\15\ The Fund's broad-based securities benchmark index will be
identified in a future amendment to its Registration Statement
following the Fund's first full calendar year of performance.
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Purchases and Redemptions
According to the Registration Statement, the Company will issue and
sell Shares of the Fund only in specified minimum size ``Creation
Units'' on a continuous basis through the Distributor at their NAV next
determined after receipt of an order, on any Business Day, in proper
form. The NAV of the Fund's Shares will be calculated each Business Day
as of the close of regular trading on the Exchange, ordinarily 4:00
p.m. Eastern Time (``E.T.''). A Creation Unit will generally consist of
at least 10,000 Shares.
According to the Registration Statement, Shares of the Fund will be
purchased and redeemed in Creation Units. Creation Units will generally
be purchased in-kind through the deposit of a designated portfolio of
securities (the ``Deposit Securities''), which will typically replicate
the Proxy Portfolio, plus the ``Cash Component,'' which is an amount
equal to the difference between the NAV of the Fund's shares (per
Creation Unit) and the market value of the Deposit Securities or ``Cash
Deposit'' (as defined below), as applicable. The Cash Component serves
the function of compensating for any differences between the NAV per
Creation Unit and the market value of the Deposit Securities or Cash
Deposit, as applicable. The Cash Deposit is a ``cash in lieu'' amount
that the Company may permit or require to be added to the Cash
Component to replace any Deposit Security. The names and quantities of
the instruments that constitute the Deposit Securities will be the same
as the Proxy Portfolio, except to the extent that the Fund requires
purchases and redemptions to be made entirely or in part on a cash
basis. Together, the Deposit Securities or Cash Deposit, as applicable,
and the Cash Component constitute the ``Fund Deposit,'' which
represents the minimum initial and subsequent investment amount for a
Creation Unit of the Fund.
Creation Units of the Fund may be purchased and/or redeemed
entirely or partially for cash in the Company's discretion. When full
or partial cash purchases or redemptions of Creation Units are
available or specified for the Fund, they will be effected in
essentially the same manner as in-kind purchases or redemptions
thereof.\16\
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\16\ The Adviser represents that, to the extent the Company
effects the creation or redemption of Shares in cash on any given
day, such transactions will be effected in the same manner for all
Authorized Participants (as defined below) placing trades with the
Fund on that day.
---------------------------------------------------------------------------
The identity and number of shares comprising a Creation Unit may
change from time to time. The Fund, through the National Securities
Clearing Corporation (the ``NSCC''), will make available on each
Business Day, immediately prior to the opening of business on the
Exchange, the list of the names and the required number of shares of
each Deposit Security or the required amount of Cash Deposit, as
applicable, to be included in the Fund Deposit. The published Fund
Deposit will apply until such time as the next-announced composition of
the Deposit Securities is made available, and there will be no intra-
day changes except to correct errors in the published Fund Deposit. The
Fund Deposit will be published each Business Day regardless of whether
the Fund decides to issue or redeem Creation Units entirely or in part
on a cash basis. The identity of the Fund Securities that will be
applicable to redemption requests received in proper form on a Business
Day will also be made available prior to the opening of business on the
Exchange on each Business Day.
All orders to purchase or redeem Creation Units must be placed with
the Distributor by or through an Authorized Participant, who may engage
in creation or redemption transactions directly with the Fund.\17\
Orders to purchase or redeem Creation Units must be submitted at the
close of regular trading on the Exchange, generally 4:00 p.m. E.T., on
each Business Day in order to receive the NAV of Shares of the Fund on
that Business Day. The date on which an order to purchase or redeem
Creation Units is placed is referred to as the ``Transmittal Date.''
When the
[[Page 37592]]
Exchange closes earlier than normal, the Fund may require orders for
Creation Units to be placed earlier in the Business Day.
---------------------------------------------------------------------------
\17\ According to the Registration Statement, an ``Authorized
Participant'' is (i) a broker-dealer or other participant in the
clearing process through the Continuous Net Settlement System of the
NSCC or (ii) a DTC Participant.
---------------------------------------------------------------------------
Availability of Information
The Fund's website (<a href="http://www.im.natixis.com">www.im.natixis.com</a>), which will be publicly
available prior to the public offering of Shares, will include a form
of the prospectus for the Fund that may be downloaded. The Fund's
website will include on a daily basis, per Share for the Fund: (1) the
prior Business Day's NAV; (2) the prior Business Day's ``Closing
Price'' or ``Mid-Point of the Bid/Ask Price at Close''; \18\ and (3) a
calculation of the premium/discount of such Closing Price or Mid-Point
of the Bid/Ask Price at Close against such NAV.\19\ The Adviser has
represented that the Fund's website will also provide: (1) any other
information regarding premiums/discounts as may be required for other
ETFs under Rule 6c-11 under the 1940 Act, as amended, and (2) any
information regarding the bid/ask spread for the Fund as may be
required for other ETFs under Rule 6c-11 under the 1940 Act, as
amended. The Fund's website also will disclose the information required
under Rule 8.601-E(c)(3).\20\ The website and information will be
publicly available at no charge.
---------------------------------------------------------------------------
\18\ The records relating to Bid/Ask Prices will be retained by
the Fund or its service providers. The ``Bid/Ask Price'' is the
midpoint of the highest bid and lowest offer based upon the National
Best Bid and Offer as of the time of calculation of the Fund's NAV.
The ``National Best Bid and Offer'' is the current national best bid
and national best offer as disseminated by the Consolidated
Quotation System or UTP Plan Securities Information Processor. The
``Closing Price'' of Shares is the official closing price of the
Shares on the Exchange.
\19\ The ``premium/discount'' refers to the premium or discount
to the NAV at the end of a trading day and will be calculated based
on the last Bid/Ask Price on a given trading day.
\20\ See note 4, supra. Rule 8.601-E (c)(3) provides that the
website for each series of Active Proxy Portfolio Shares shall
disclose the information regarding the Proxy Portfolio as provided
in the exemptive relief pursuant to the 1940 Act applicable to such
series, including the following, to the extent applicable: (i)
Ticker symbol; (ii) CUSIP or other identifier; (iii) Description of
holding; (iv) Quantity of each security or other asset held; and (v)
Percentage weighting of the holding in the portfolio.
---------------------------------------------------------------------------
The identity and quantity of investments in the Proxy Portfolio for
the Fund will be publicly available on the Fund's website before the
commencement of trading in Shares on each Business Day. The website
will also include information relating to the Proxy Overlap and
Tracking Error, as discussed above. With respect to each Custom Basket
utilized by the Fund, each Business Day, before the opening of trading
in the Core Trading Session (as defined in NYSE Arca Rule 7.34-E (a)),
the Fund's website will also include the composition of any Custom
Basket transacted on the previous Business Day, except a Custom Basket
that differs from the Proxy Portfolio only with respect to cash.
Typical mutual fund-style annual, semi-annual and quarterly
disclosures contained in the Fund's Commission filings will be provided
on the Fund's website on a current basis.\21\ Thus, the Fund will
publish the portfolio contents of its Actual Portfolio on a periodic
basis, and no less than 60 days after the end of every fiscal quarter.
---------------------------------------------------------------------------
\21\ See note 7, supra.
---------------------------------------------------------------------------
Investors can also obtain the Fund's SAI, Shareholder Reports, Form
N-CSR, N-PORT, and Form N-CEN. The prospectus, SAI, and Shareholder
Reports are available free upon request, and those documents and the
Form N-CSR, N-PORT, and Form N-CEN may be viewed on-screen or
downloaded from the Commission's website. The Exchange also notes that
pursuant to the Application, the Fund must comply with Regulation Fair
Disclosure, which prohibits selective disclosure of any material non-
public information.
Information regarding the market price of Shares and trading volume
in Shares, will be continually available on a real-time basis
throughout the day on brokers' computer screens and other electronic
services. The previous day's closing price and trading volume
information for the Shares will be published daily in the financial
section of newspapers.
Quotation and last sale information for the Shares and U.S.
exchange-traded instruments (excluding futures contracts) will be
available via the Consolidated Tape Association (``CTA'') high-speed
line, from the exchanges on which such securities trade, or through
major market data vendors or subscription services. Quotation and last
sale information for futures contracts will be available from the
exchanges on which they trade. Intraday price information for all
exchange-traded instruments, which include all eligible instruments
except cash and cash equivalents, will be available from the exchanges
on which they trade, or through major market data vendors or
subscription services. Intraday price information for cash equivalents
is available through major market data vendors, subscription services
and/or pricing services.
Trading Halts
With respect to trading halts, the Exchange may consider all
relevant factors in exercising its discretion to halt or suspend
trading in the Shares of the Fund.\22\ Trading in Shares of the Fund
will be halted if the circuit breaker parameters in NYSE Arca Rule
7.12-E have been reached. Trading also may be halted because of market
conditions or for reasons that, in the view of the Exchange, make
trading in the Shares inadvisable. Trading in the Shares will be
subject to NYSE Arca Rule 8.601-E(d)(2)(D), which sets forth
circumstances under which Shares of the Fund will be halted.
---------------------------------------------------------------------------
\22\ See NYSE Arca Rule 7.12-E.
---------------------------------------------------------------------------
Specifically, Rule 8.601-E(d)(2)(D) provides that the Exchange may
consider all relevant factors in exercising its discretion to halt
trading in a series of Active Proxy Portfolio Shares. Trading may be
halted because of market conditions or for reasons that, in the view of
the Exchange, make trading in the series of Active Proxy Portfolio
Shares inadvisable. These may include: (a) the extent to which trading
is not occurring in the securities and/or the financial instruments
composing the Proxy Portfolio and/or Actual Portfolio; or (b) whether
other unusual conditions or circumstances detrimental to the
maintenance of a fair and orderly market are present. If the Exchange
becomes aware that the NAV, Proxy Portfolio, or Actual Portfolio with
respect to a series of Active Proxy Portfolio Shares is not
disseminated to all market participants at the same time, the Exchange
shall halt trading in such series until such time as the NAV, Proxy
Portfolio, or Actual Portfolio is available to all market participants
at the same time.
Trading Rules
The Exchange deems the Shares to be equity securities, thus
rendering trading in the Shares subject to the Exchange's existing
rules governing the trading of equity securities. Shares will trade on
the NYSE Arca Marketplace in all trading sessions in accordance with
NYSE Arca Rule 7.34-E(a). As provided in NYSE Arca Rule 7.6-E, the
minimum price variation (``MPV'') for quoting and entry of orders in
equity securities traded on the NYSE Arca Marketplace is $0.01, with
the exception of securities that are priced less than $1.00 for which
the MPV for order entry is $0.0001.
The Shares will conform to the initial and continued listing
criteria under NYSE Arca Rule 8.601-E. The Exchange has appropriate
rules to facilitate trading in the Shares during all trading sessions.
A minimum of 100,000 Shares for the Fund will be outstanding at the
commencement of trading on the
[[Page 37593]]
Exchange. In addition, pursuant to Rule 8.601-E(d)(1)(B), the Exchange,
prior to commencement of trading in the Shares, will obtain a
representation from the Company that (i) the NAV per Share of the Fund
will be calculated daily, (ii) the NAV, Proxy Portfolio, and the Actual
Portfolio for the Fund will be made publicly available to all market
participants at the same time, and (iii) the Company and any person
acting on behalf of the Company will comply with Regulation Fair
Disclosure under the Act, including with respect to any Custom Basket.
With respect to Active Proxy Portfolio Shares, all of the Exchange
member obligations relating to product description and prospectus
delivery requirements will continue to apply in accordance with
Exchange rules and federal securities laws, and the Exchange and the
Financial Industry Regulatory Authority, Inc. (``FINRA'') will continue
to monitor Exchange members for compliance with such requirements.
Surveillance
The Exchange represents that trading in the Shares will be subject
to the existing trading surveillances, administered by the Exchange, as
well as cross-market surveillances administered by FINRA on behalf of
the Exchange, which are designed to detect violations of Exchange rules
and applicable federal securities laws.\23\ The Exchange represents
that these procedures are adequate to properly monitor Exchange trading
of the Shares in all trading sessions and to deter and detect
violations of Exchange rules and federal securities laws applicable to
trading on the Exchange.
---------------------------------------------------------------------------
\23\ FINRA conducts cross-market surveillances on behalf of the
Exchange pursuant to a regulatory services agreement. The Exchange
is responsible for FINRA's performance under this regulatory
services agreement.
---------------------------------------------------------------------------
The surveillances referred to above generally focus on detecting
securities trading outside their normal patterns, which could be
indicative of manipulative or other violative activity. When such
situations are detected, surveillance analysis follows and
investigations are opened, where appropriate, to review the behavior of
all relevant parties for all relevant trading violations.
The Exchange or FINRA, on behalf of the Exchange, or both, will
communicate as needed regarding trading in the Shares and underlying
exchange-traded instruments with other markets and other entities that
are members of the ISG, and the Exchange or FINRA, on behalf of the
Exchange, or both, may obtain trading information regarding trading
such securities and underlying exchange-traded instruments from such
markets and other entities. In addition, the Exchange may obtain
information regarding trading in such securities and underlying
exchange-traded instruments from markets and other entities that are
members of ISG or with which the Exchange has in place a comprehensive
surveillance sharing agreement.\24\
---------------------------------------------------------------------------
\24\ For a list of the current members of ISG, see
<a href="http://www.isgportal.org">www.isgportal.org</a>.
---------------------------------------------------------------------------
The Adviser will make available daily to FINRA and the Exchange the
Actual Portfolio of the Fund, upon request, as necessary to assist with
the performance of the surveillances and investigations referred to
above.
In addition, the Exchange also has a general policy prohibiting the
distribution of material, non-public information by its employees.
Commentary .03 to NYSE Arca Rule 8.601-E provides that the Exchange
will implement and maintain written surveillance procedures applicable
to Active Proxy Portfolio Shares. As part of these surveillance
procedures, the Investment Company's investment adviser will, upon
request by the Exchange or FINRA, on behalf of the Exchange, make
available to the Exchange or FINRA the daily Actual Portfolio holdings
of each series of Active Proxy Portfolio Shares. The Exchange believes
that the ability to access the information on an as needed basis will
provide it with sufficient information to perform the necessary
regulatory functions associated with listing and trading series of
Active Proxy Portfolio Shares on the Exchange, including the ability to
monitor compliance with the initial and continued listing requirements
as well as the ability to surveil for manipulation of Active Proxy
Portfolio Shares.
The Exchange will utilize its existing procedures to monitor issuer
compliance with the requirements of Rule 8.601-E. For example, the
Exchange will continue to use intraday alerts that will notify Exchange
personnel of trading activity throughout the day that may indicate that
unusual conditions or circumstances are present that could be
detrimental to the maintenance of a fair and orderly market. The
Exchange will require from the issuer of a series of Active Proxy
Portfolio Shares, upon initial listing and periodically thereafter, a
representation that it is in compliance with Rule 8.601-E. The Exchange
notes that Commentary .01 to Rule 8.601-E requires an issuer of Active
Proxy Portfolio Shares to notify the Exchange of any failure to comply
with the continued listing requirements of Rule 8.601-E. In addition,
the Exchange will require issuers to represent that they will notify
the Exchange of any failure to comply with the terms of applicable
exemptive and no-action relief. As part of its surveillance procedures,
the Exchange will rely on the foregoing procedures to become aware of
any non-compliance with the requirements of Rule 8.601-E.
With respect to the Fund, all statements and representations made
in this filing regarding (a) the description of the portfolio, (b)
limitations on portfolio holdings, or (c) the applicability of Exchange
listing rules specified in this rule filing shall constitute continued
listing requirements for listing the Shares on the Exchange. The
Exchange will obtain a representation from the Company, prior to
commencement of trading in the Shares of the Fund, 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. If the Fund is not in compliance with
the applicable listing requirements, the Exchange will commence
delisting procedures under NYSE Arca Rule 5.5-E(m).
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with section 6(b) of the Act,\25\ in general, and furthers the
objectives of section 6(b)(5) of the Act,\26\ in particular, in that it
is 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
a national market system, and, in general, to protect investors and the
public interest.\27\
---------------------------------------------------------------------------
\25\ 15 U.S.C. 78f(b).
\26\ 15 U.S.C. 78f(b)(5).
\27\ The Exchange represents that, for initial and continued
listing, the Fund will be in compliance with Rule 10A-3 under the
Act, as provided by NYSE Arca Rule 5.3-E.
---------------------------------------------------------------------------
With respect to the proposed listing and trading of Shares of the
Fund, the Exchange believes that the proposed rule change is designed
to prevent fraudulent and manipulative acts and practices in that the
Shares will be listed and traded on the Exchange pursuant to the
initial and continued listing criteria in NYSE Arca Rule 8.601-E.
[[Page 37594]]
The Fund's holdings will conform to the permissible investments as
set forth in the Application and Exemptive Order, and the holdings will
be consistent with all requirements in the Application and Exemptive
Order.\28\
---------------------------------------------------------------------------
\28\ See note 13, supra.
---------------------------------------------------------------------------
The Exchange or FINRA, on behalf of the Exchange, or both, will
communicate as needed regarding trading in the Shares and underlying
exchange-traded instruments with other markets and other entities that
are members of the ISG, and the Exchange or FINRA, on behalf of the
Exchange, or both, may obtain trading information regarding trading in
the Shares and underlying exchange-traded instruments from such markets
and other entities. In addition, the Exchange may obtain information
regarding trading in the Shares and underlying exchange-traded
instruments from markets and other entities that are members of ISG or
with which the Exchange has in place a comprehensive surveillance
sharing agreement. Any foreign common stocks held by the Fund will be
traded on an exchange that is a member of the ISG or with which the
Exchange has in place a comprehensive surveillance sharing agreement.
The daily dissemination of the identity and quantity of Proxy
Portfolio component investments, together with the right of Authorized
Participants to create and redeem each day at the NAV, will be
sufficient for market participants to value and trade Shares in a
manner that will not lead to significant deviations between the Shares'
Closing Price or Bid/Ask Price and NAV.
The Fund's investments, including derivatives, will be consistent
with its investment objective and will not be used to enhance leverage
(although certain derivatives and other investments may result in
leverage). That is, the Fund's investments will not be used to seek
performance that is the multiple or inverse multiple (e.g., 2X or -3X)
of the Fund's primary broad-based securities benchmark index (as
defined in Form N-1A).
The proposed rule change is designed to promote just and equitable
principles of trade and to protect investors and the public interest in
that the Exchange will obtain a representation from the Company that
the NAV per Share of the Fund will be calculated daily and that the
NAV, Proxy Portfolio, Actual Portfolio and/or Custom Basket, as
applicable, for the Fund will be made available to all market
participants at the same time. Investors can obtain the Fund's SAI,
shareholder reports, and its Form N-CSR, Form N-PORT, and Form N-CEN.
The Fund's SAI and shareholder reports will be available free upon
request from the Fund, and those documents and the Form N-CSR, Form N-
PORT, and Form N-CEN may be viewed on-screen or downloaded from the
Commission's website.
Commentary .03 to NYSE Arca Rule 8.601-E provides that the Exchange
will implement and maintain written surveillance procedures applicable
to Active Proxy Portfolio Shares. As part of these surveillance
procedures, the Investment Company's investment adviser will, upon
request by the Exchange or FINRA, on behalf of the Exchange, make
available to the Exchange or FINRA the daily portfolio holdings of each
series of Active Proxy Portfolio Shares. The Exchange believes that the
ability to access the information on an as needed basis will provide it
with sufficient information to perform the necessary regulatory
functions associated with listing and trading series of Active Proxy
Portfolio Shares on the Exchange, including the ability to monitor
compliance with the initial and continued listing requirements as well
as the ability to surveil for manipulation of Active Proxy Portfolio
Shares. With respect to the Fund, the Adviser will make available daily
to FINRA and the Exchange the portfolio holdings of the Fund upon
request as necessary to facilitate the performance of the surveillances
and investigations referred to above.
The Exchange will utilize its existing procedures to monitor
compliance with the requirements of Rule 8.601-E. For example, the
Exchange will continue to use intraday alerts that will notify Exchange
personnel of trading activity throughout the day that may indicate that
unusual conditions or circumstances are present that could be
detrimental to the maintenance of a fair and orderly market. The
Exchange will require from the Company, upon initial listing and
periodically thereafter, a representation that it is in compliance with
Rule 8.601-E. The Exchange notes that Commentary .01 to Rule 8.601-E
requires the issuer of Shares to notify the Exchange of any failure to
comply with the continued listing requirements of Rule 8.601-E. In
addition, the Exchange will require the issuer to represent that it
will notify the Exchange of any failure to comply with the terms of
applicable exemptive and no-action relief. The Exchange will rely on
the foregoing procedures to become aware of any non-compliance with the
requirements of Rule 8.601-E.
In addition, with respect to the Fund, a large amount of
information will be publicly available regarding the Fund and the
Shares, thereby promoting market transparency. Quotation and last sale
information for the Shares and U.S. exchange-traded instruments
(excluding futures contracts) will be available via the CTA high-speed
line, from the exchanges on which such securities trade, or through
major market data vendors or subscription services. Quotation and last
sale information for futures contracts will be available from the
exchanges on which they trade. Intraday price information for all
exchange-traded instruments, which include all eligible instruments
except cash and cash equivalents, will be available from the exchanges
on which they trade, or through major market data vendors or
subscription services. Intraday price information for cash equivalents
is available through major market data vendors, subscription services
and/or pricing services.
The website for the Fund will include a form of the prospectus that
may be downloaded, and additional data relating to NAV and other
applicable quantitative information, updated on a daily basis. Trading
in Shares of the Fund will be halted if the circuit breaker parameters
in NYSE Arca Rule 7.12-E have been reached or because of market
conditions or for reasons that, in the view of the Exchange, make
trading in the Shares inadvisable. Trading in the Shares will be
subject to NYSE Arca Rule 8.601-E(d)(2)(D), which sets forth
circumstances under which Shares of the Fund will be halted. In
addition, as noted above, investors will have ready access to the Proxy
Portfolio and quotation and last sale information for the Shares. The
identity and quantity of investments in the Proxy Portfolio will be
publicly available on the Fund's website before the commencement of
trading in Shares on each Business Day. The Shares will conform to the
initial and continued listing criteria under Rule 8.601-E.\29\
---------------------------------------------------------------------------
\29\ See note 4, supra.
---------------------------------------------------------------------------
The Fund's holdings will conform to the permissible investments as
set forth in the Application and Exemptive Order, and the holdings will
be consistent with all requirements in the Application and Exemptive
Order.\30\ Any foreign common stocks held by the Fund will be traded on
an exchange that is a member of the ISG or with which the Exchange has
in place a comprehensive surveillance sharing agreement.
---------------------------------------------------------------------------
\30\ See note 13, supra.
---------------------------------------------------------------------------
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 in that
[[Page 37595]]
it will facilitate the listing and trading of an additional type of
actively-managed exchange-traded product that will enhance competition
among market participants, to the benefit of investors and the
marketplace. The Exchange will obtain a representation from the
Adviser, prior to commencement of trading in the Shares of the Fund,
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. If the
Fund is not in compliance with the applicable listing requirements, the
Exchange will commence delisting procedures under NYSE Arca Rule 5.5-
E(m).
As noted above, the Exchange has in place surveillance procedures
relating to trading in the Shares and may obtain information via ISG
from other exchanges that are members of ISG or with which the Exchange
has entered into a comprehensive surveillance sharing agreement. In
addition, as noted above, investors will have ready access to
information regarding quotation and last sale information for the
Shares.
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 purposes of the Act. The Exchange believes the
proposed rule change would permit listing and trading of an additional
actively-managed ETF that has characteristics different from existing
actively-managed and index ETFs and would introduce additional
competition among various ETF products to the benefit of investors.
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) of the Act \31\ and Rule 19b-
4(f)(6) thereunder.\32\
---------------------------------------------------------------------------
\31\ 15 U.S.C. 78s(b)(3)(A).
\32\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires a self-regulatory organization 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.
---------------------------------------------------------------------------
A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the
Act normally does not become operative for 30 days after the date of
its filing. However, Rule 19b-4(f)(6)(iii) \33\ permits the Commission
to designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has
requested that the Commission waive the 30-day operative delay so that
the proposal may become operative immediately upon filing. The Exchange
notes that the Commission has approved and noticed for immediate
effectiveness proposed rule changes to permit listing and trading on
the Exchange of Active Proxy Portfolio Shares similar to the Fund.\34\
The proposed listing rule for the Fund raises no novel legal or
regulatory issues. Thus, 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 hereby waives the 30-
day operative delay and designates the proposed rule change operative
upon filing.\35\
---------------------------------------------------------------------------
\33\ 17 CFR 240.19b-4(f)(6)(iii).
\34\ See supra notes 9 and 10.
\35\ 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 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.
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#b0c2c5dcd59dd3dfddddd5dec4c3f0c3d5d39ed7dfc6"><span class="__cf_email__" data-cfemail="6b191e070e46080406060e051f182b180e08450c041d">[email protected]</span></a>. Please include
File Number SR-NYSEARCA-2023-38 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-2023-38.
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-
2023-38, and should be submitted on or before June 29, 2023.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\36\
---------------------------------------------------------------------------
\36\ 17 CFR 200.30-3(a)(12), (59).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-12216 Filed 6-7-23; 8:45 am]
BILLING CODE 8011-01-P
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</html>Indexed from Federal Register on June 8, 2023.
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.