Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To List and Trade Shares of the American Century Sustainable Growth ETF, 29810-29817 [2021-11610]

Download as PDF 29810 Federal Register / Vol. 86, No. 105 / Thursday, June 3, 2021 / Notices FOR FURTHER INFORMATION CONTACT: SECURITIES AND EXCHANGE COMMISSION Sean Robinson, 202–268–8405. The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on May 26, 2021, it filed with the Postal Regulatory Commission a USPS Request to Add Priority Mail Contract 702 to Competitive Product List. Documents are available at www.prc.gov, Docket Nos. MC2021–94, CP2021–97. SUPPLEMENTARY INFORMATION: Sean Robinson, Attorney, Corporate and Postal Business Law. [FR Doc. 2021–11699 Filed 6–2–21; 8:45 am] BILLING CODE 7710–12–P POSTAL SERVICE Product Change—Priority Mail Negotiated Service Agreement AGENCY: ACTION: Postal ServiceTM. Notice. The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule’s Competitive Products List. SUMMARY: DATES: Date of required notice: June 3, 2021. FOR FURTHER INFORMATION CONTACT: Sean Robinson, 202–268–8405. The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on May 19, 2021, it filed with the Postal Regulatory Commission a USPS Request to Add Priority Mail Contract 701 to Competitive Product List. Documents are available at www.prc.gov, Docket Nos. MC2021–93, CP2021–96. SUPPLEMENTARY INFORMATION: Sean Robinson, Attorney, Corporate and Postal Business Law. [FR Doc. 2021–11698 Filed 6–2–21; 8:45 am] khammond on DSKJM1Z7X2PROD with NOTICES BILLING CODE 7710–12–P [Release No. 34–92052; File No. SR– NYSEArca–2021–44] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To List and Trade Shares of the American Century Sustainable Growth ETF May 27, 2021. 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 21, 2021, NYSE Arca, Inc. (‘‘NYSE Arca’’ or the ‘‘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 Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 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 American Century Sustainable Growth ETF under NYSE Arca Rule 8.601–E. The proposed rule change is available on the Exchange’s website at www.nyse.com, 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 1 15 U.S.C. 78s(b)(1). U.S.C. 78a. 3 17 CFR 240.19b–4. 2 15 VerDate Sep<11>2014 17:23 Jun 02, 2021 Jkt 253001 PO 00000 Frm 00074 Fmt 4703 Sfmt 4703 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’’) as Active Proxy Portfolio Shares of the American Century® Sustainable Growth ETF (the ‘‘Fund’’) under Rule 8.601–E. 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 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 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 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 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 E:\FR\FM\03JNN1.SGM 03JNN1 Federal Register / Vol. 86, No. 105 / Thursday, June 3, 2021 / Notices khammond on DSKJM1Z7X2PROD with NOTICES and for which a ‘‘Disclosed Portfolio’’ is required to be disseminated at least once daily,6 the portfolio for each series 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 each series of Active Proxy Portfolio Shares will 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 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 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 the Fund’s fiscal quarter will be made publicly available 60 days after the end of the Fund’s fiscal quarter. Form N–PORT requires reporting of the 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 the Fund’s Statement of Additional Information (‘‘SAI’’), its Shareholder Reports, its Form N–CSR, filed twice a year, and its Form N–CEN, filed annually. The Fund’s 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 www.sec.gov. VerDate Sep<11>2014 17:23 Jun 02, 2021 Jkt 253001 Investment Company, as provided by a series of Managed Fund Shares. The Commission has previously approved listing and trading on the Exchange of series of Active Proxy Portfolio Shares under NYSE Arca Rule 8.601–E.8 The Fund is a series of the American Century ETF Trust (the ‘‘Trust’’), a Delaware statutory trust.9 The investment adviser for the Fund will be American Century Investment Management, Inc. (‘‘Adviser’’). State Street Bank and Trust Company will serve as the Fund’s transfer agent, custodian, and will conduct certain administrative functions. Foreside Fund 8 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) (‘‘Natixis Order’’); 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) (‘‘American Century Order’’); 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) (‘‘T. Rowe Price Approval Order’’); 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). See also 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). 9 The Trust is registered under the 1940 Act. On April 15, 2021, the Trust 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. 333–221045 and 811–23305 (the ‘‘Registration Statement’’). The Trust filed an application for an order under Section 6(c) of the 1940 Act for exemptions from various provisions of the 1940 Act and rules thereunder (File No. 812–15082), dated April 9, 2020 (‘‘Application’’). On May 12, 2020, the Commission issued an order (‘‘Exemptive Order’’) under the 1940 Act granting the exemptions requested in the Application (Investment Company Act Release No. 33862, May 12, 2020). 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 and the Application. The Exchange will not commence trading in Shares of the Fund until the Registration Statement is effective. PO 00000 Frm 00075 Fmt 4703 Sfmt 4703 29811 Services, LLC, a registered broker dealer, will serve as the distributor (‘‘Distributor’’) of the Shares. Commentary .04 to NYSE Arca Rule 8.601–E provides that, if the investment 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 and/or Proxy Portfolio. Any person related to the investment adviser or Investment Company who makes decisions pertaining to the Investment Company’s Actual Portfolio and/or Proxy Portfolio or has access to non-public information regarding the Investment Company’s Actual Portfolio and/or Proxy Portfolio 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 and/or Proxy Portfolio 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 brokerdealer, reflects the applicable open-end fund’s portfolio, not an underlying benchmark index, as is the case with index-based funds.10 Commentary .04 is also similar to Commentary .06 to Rule 8.600–E related to Managed Fund Shares, except that Commentary .04 10 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 and its 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. E:\FR\FM\03JNN1.SGM 03JNN1 khammond on DSKJM1Z7X2PROD with NOTICES 29812 Federal Register / Vol. 86, No. 105 / Thursday, June 3, 2021 / Notices 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 and/or Proxy Portfolio or changes thereto, and not just to the underlying portfolio, as is the case with Managed Fund Shares. 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 or the Proxy Portfolio 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 or the Proxy Portfolio 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 or Proxy Portfolio. The Adviser is not registered as a broker-dealer but is affiliated with a broker-dealer. The Adviser has 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 and/or Proxy Portfolio. In the event (a) the Adviser becomes registered as a broker-dealer or newly affiliated with a broker-dealer, or (b) any new adviser or sub-adviser is or becomes a registered broker-dealer or affiliated with a brokerdealer, 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 and/or Proxy Portfolio, and will be subject to procedures designed to prevent the use and dissemination of material non-public information regarding the Fund’s Actual Portfolio and/or Proxy Portfolio or changes thereto. Any person related to the Adviser or the Fund who makes decisions pertaining to the Fund’s Actual Portfolio or Proxy Portfolio or has access to non-public information regarding the Fund’s Actual Portfolio and/or the Proxy Portfolio or changes thereto is subject to procedures reasonably designed to prevent the use VerDate Sep<11>2014 17:23 Jun 02, 2021 Jkt 253001 and dissemination of material nonpublic information regarding the Fund’s Actual Portfolio and/or the Proxy Portfolio 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 or the Proxy Portfolio 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 and/or the Proxy Portfolio 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 and/or Proxy Portfolio. Description of the Fund According to the Registration Statement, each ‘‘Business Day’’ 11 before commencement of the trading of Shares, the Fund will publish on its website a Proxy Portfolio designed to closely track the daily performance of the Fund but the Proxy Portfolio will not be the Fund’s Actual Portfolio. The Proxy Portfolio will be designed to closely track the daily performance of the Actual Portfolio and to reflect the economic exposures and risk characteristics of the Fund’s actual holdings on each trading day. According to the Registration Statement, this would be achieved by performing an analysis of the Fund’s Actual Portfolio (‘‘Factor Model’’). The Factor Model is comprised of three sets of factors or analytical metrics: Market-based factors, fundamental factors, and industry/ sector factors. The Fund will have a universe of securities (the ‘‘Model Universe’’) that will be used to generate its Proxy Portfolio. The Model Universe will be comprised solely of securities that the Fund can purchase and will be a financial index or stated portfolio of securities from which Fund investments will be selected. The results of the Factor Model analysis of the Fund’s Actual Portfolio are then applied to the Fund’s Model Universe. The daily rebalanced Proxy Portfolio is then generated as a result of this Model Universe analysis with the Proxy Portfolio being a small sub-set of the 11 ‘‘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. PO 00000 Frm 00076 Fmt 4703 Sfmt 4703 Model Universe. The Factor Model is applied to both the Actual Portfolio and the Model Universe to construct the Fund’s Proxy Portfolio that performs in a manner substantially identical to the performance of its Actual Portfolio. The identity and quantity of Proxy Portfolio component investments and the overlap between the holdings of the prior Business Day’s Proxy Portfolio compared to the Actual Portfolio (‘‘Proxy Overlap’’) will be publicly available on the Fund’s website before the commencement of trading in Shares on each Business Day. The Proxy Portfolio published on the Fund’s website each Business Day 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 Fund’s website will note that the Proxy Overlap is calculated based on the Proxy Portfolio and Actual Portfolio holdings as of the prior Business Day. The Proxy Overlap will be calculated by taking the lesser weight of each asset held in common between the Actual Portfolio and the Proxy Portfolio and adding the totals. The Proxy Portfolio aims to allow market participants to assess the intraday value and associated risk of the Fund’s Actual Portfolio. The Proxy Portfolio will only include securities that are allowed to be held in the Actual Portfolio. 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.12 12 The Application and Exemptive Order incorporates by reference the terms and conditions of a previous order granting the same relief, as that order may be amended from time to time. See Natixis ETF Trust II, et al., Investment Company Act Rel. Nos. 33684 (November 14, 2019) (notice) and 33711 (December 10, 2019) (order) (the ‘‘Reference Order’’). Pursuant to the Reference Order as incorporated by reference into the Application and Exemptive Order, the permissible investments for the Fund include only the following instruments: ETFs; exchange-traded notes (‘‘ETNs’’); exchange-traded common stocks; exchange-traded preferred stocks; exchange-traded American Depositary Receipts (‘‘ADRs’’); exchangetraded real estate investment trusts (‘‘REITs’’); exchange-traded commodity pools; exchange-traded metals trusts; exchange-traded currency trusts; common stocks listed on a foreign exchange that trade on such exchange synchronously with the Shares (‘‘foreign common stocks’’) in the Exchange’s Core Trading Session (normally 9:30 a.m. to 4:00 p.m. Eastern time (‘‘E.T.’’)); exchangetraded futures that trade synchronously with the Fund’s Shares as well as cash and cash equivalents. With the exception of foreign common stocks and cash and cash equivalents, all holdings of the Fund E:\FR\FM\03JNN1.SGM 03JNN1 Federal Register / Vol. 86, No. 105 / Thursday, June 3, 2021 / Notices 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. According to the Registration Statement, the Fund’s investment objective is to seek capital appreciation. The Fund will generally invest in exchange-traded common stocks of large capitalization companies. Under normal circumstances, the Fund will invest at least 80% of the Fund’s net assets in sustainable securities, defined as securities to which the Adviser’s proprietary model assigns an environmental, social, and governance (‘‘ESG’’) score that is in the top three quartiles of the ESG scores the model assigns to all of the securities in the Fund’s benchmark, the Russell 1000 Growth Index. 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.13 The Fund’s investments, including derivatives, will be consistent with their 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). khammond on DSKJM1Z7X2PROD with NOTICES Purchases and Redemptions of Shares According to the Registration Statement, the Trust will offer, issue and sell Shares of the Fund to investors only in specified minimum size ‘‘Creation Units’’ through the Distributor on a continuous basis at the NAV per Share next determined after an order in proper form is received. The NAV of the Fund is expected to be determined as of 4:00 p.m. E.T. on each Business Day. will be listed on a U.S. national securities exchange or a U.S. futures exchange. For purposes of this filing, cash equivalents are short-term U.S. Treasury securities, government money market funds, and repurchase agreements. 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. 13 See notes 9 & 12, supra. VerDate Sep<11>2014 17:23 Jun 02, 2021 Jkt 253001 The Trust will sell and redeem Creation Units of the Fund only on a Business Day. A Creation Unit will generally consist of at least 10,000 Shares. According to the Registration Statement, Shares will be purchased and redeemed in Creation Units and generally on an in-kind basis of a designated portfolio of securities (including any portion of such securities for which cash may be substituted) and the ‘‘Cash Component,’’ which is an amount equal to the difference between the NAV of the Shares (per Creation Unit) and the ‘‘Deposit Amount,’’ which is an amount equal to the market value of the Deposit Securities, and serves to compensate for any differences between the NAV per Creation Unit and the Deposit Amount. Together, the Deposit Securities and the Cash Component constitute the ‘‘Fund Deposit,’’ which will be applicable (subject to possible amendment or correction) to creation requests received in proper form. The Fund Deposit represents the minimum initial and subsequent investment amount for a Creation Unit of the Fund. The names and quantities of the instruments that constitute the Fund Deposit will be the same as the Fund’s Proxy Portfolio, except to the extent purchases and redemptions are made entirely or in part on a cash basis.14 If there is a difference between the NAV attributable to a Creation Unit and the aggregate market value of the Creation Basket exchanged for the Creation Unit, the party conveying instruments with the lower value will also pay to the other an amount in cash equal to that difference (the ‘‘Cash Amount’’). Each Business Day, before the open of trading on the Exchange (9:30 a.m. E.T.), the Fund will cause to be published through the National Securities Clearing Corporation (‘‘NSCC’’) the names and the required number of shares of each Deposit Security and the amount of the Cash Component (if any) to be included in the current Fund Deposit (based on information as of the end of the previous Business Day for the Fund). All orders to purchase and redeem Creation Units must be placed with the Distributor by or through an authorized participant, which has a written agreement with the Distributor that allows the authorized participant to place orders for the purchase and redemption of Creation Units (‘‘Authorized Participant’’). Only an Authorized Participant may create or redeem Creation Units directly with the Fund. Validly submitted orders to purchase or redeem Creation Units on each 14 [sic] PO 00000 Frm 00077 Fmt 4703 Sfmt 4703 29813 Business Day will be accepted until the end of the Core Trading Session (the ‘‘Closing Time’’), generally 4:00 p.m. E.T., on the Business Day that the order is placed (the ‘‘Transmittal Date’’). All Creation Unit orders must be received by the Distributor no later than two hours prior to the Closing Time (normally 2 p.m. E.T.) in order to receive the NAV determined on the Transmittal Date. When the Exchange closes earlier than normal, the Fund may require orders for Creation Units to be placed earlier in the Business Day. Availability of Information The Fund’s website (www.americancenturyetfs.com), 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, the prior Business Day’s NAV and the ‘‘Closing Price’’ or ‘‘Bid/Ask Price,’’ 15 and a calculation of the premium/discount of the Closing Price or Bid/Ask Price against such NAV.16 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 website and information will be publicly available at no charge. The website also will disclose the information required under Rule 8.601– E(c)(3).17 The Proxy Portfolio holdings (including the identity and quantity of investments in the Proxy Portfolio) will 15 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. 16 The ‘‘premium/discount’’ refers to the premium or discount to NAV at the end of a trading day and will be calculated based on the last Bid/ Ask Price or the Closing Price on a given trading day. 17 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 Investment Company Act of 1940 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 Proxy Portfolio. E:\FR\FM\03JNN1.SGM 03JNN1 29814 Federal Register / Vol. 86, No. 105 / Thursday, June 3, 2021 / Notices khammond on DSKJM1Z7X2PROD with NOTICES be publicly available on the Fund’s website before the commencement of trading in Shares on each Business Day. 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.18 Thus, the Fund will publish the portfolio contents of its Actual Portfolio on a periodic basis within at least 60 days following the end of every fiscal quarter. Investors can also obtain the Fund’s prospectus, SAI, shareholder reports, Form N–CSR, Form N–PORT and Form N–CEN. Investors may access complete portfolio schedules for the Fund on Form N–CSR and Form N–PORT. The prospectus, 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 at https://www.sec.gov. 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. Intraday price information for all exchange-traded instruments, which include all eligible instruments and futures contracts but not 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 18 See note 7, supra. VerDate Sep<11>2014 17:23 Jun 02, 2021 the Fund.19 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. 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. In addition, 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 Exchange. In addition, pursuant to Rule 19 See Jkt 253001 PO 00000 NYSE Arca Rule 7.12–E. Frm 00078 Fmt 4703 Sfmt 4703 8.601–E(d)(1)(B), the Exchange, prior to commencement of trading in the Shares, will obtain a representation from the Trust that the NAV per Share will be calculated daily and that the NAV, Proxy Portfolio and the Actual Portfolio for the Fund will be made available to all market participants at the same time. 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.20 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. 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. FINRA, on behalf of the Exchange, or 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 FINRA, on behalf of the Exchange, or the Exchange or both may obtain trading information regarding trading such securities and exchangetraded instruments from such markets and other entities. In addition, the Exchange may obtain information regarding trading in such securities and exchange-traded instruments from 20 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. E:\FR\FM\03JNN1.SGM 03JNN1 khammond on DSKJM1Z7X2PROD with NOTICES Federal Register / Vol. 86, No. 105 / Thursday, June 3, 2021 / Notices markets and other entities that are members of ISG or with which the Exchange has in place a comprehensive surveillance sharing agreement.21 The Advisor will make available daily to FINRA and the Exchange the Actual Portfolio of the Fund, upon request, in order to facilitate the performance of the surveillances 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 for 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 the Fund’s 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 Trust, 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 Trust to represent that it 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 non21 For a list of the current members of ISG, see www.isgportal.org. VerDate Sep<11>2014 17:23 Jun 02, 2021 Jkt 253001 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 or reference asset, (b) limitations on portfolio holdings or reference assets, 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 Trust, 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,22 in general, and furthers the objectives of Section 6(b)(5) of the Act,23 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.24 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. One hundred percent of the value of the Fund’s Actual Portfolio (except for cash and cash equivalents) at the time of purchase will be listed on U.S. or foreign securities exchanges (or, in the limited case of futures contracts, U.S. futures exchanges). The listing and trading of such U.S. securities is subject to rules of the exchanges on which they are listed and traded, as approved by the Commission. 22 15 U.S.C. 78f(b). U.S.C. 78f(b)(5). 24 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. 23 15 PO 00000 Frm 00079 Fmt 4703 Sfmt 4703 29815 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.25 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 exchange-traded instruments from such markets and other entities. In addition, the Exchange may obtain information regarding trading in the Shares and 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 Bid/Ask Price and NAV of the Shares. 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). With respect to the Fund, 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 Trust, prior to commencement of trading in the Shares, that the NAV per Share of the Fund will be calculated daily and that the NAV, Proxy Portfolio and Actual Portfolio for the Fund will be made available to all market participants at the same time. Investors can also obtain the Fund’s SAI, shareholder reports, and 25 See E:\FR\FM\03JNN1.SGM note 9, supra. 03JNN1 khammond on DSKJM1Z7X2PROD with NOTICES 29816 Federal Register / Vol. 86, No. 105 / Thursday, June 3, 2021 / Notices 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 for 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 in order to facilitate the performance of the surveillances 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 Trust, 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 Trust 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 noncompliance 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 VerDate Sep<11>2014 17:23 Jun 02, 2021 Jkt 253001 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. Intraday price information for all exchange-traded instruments, which include all eligible instruments and futures contracts but not 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 may 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 Proxy Portfolio holdings for the Fund (including 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. 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.26 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 components of the Fund’s Actual Portfolio will (a) be listed on an exchange and the primary trading session of such exchange will trade synchronously with the Exchange’s Core Trading Session, as defined in Rule 7.34–E(a); (b) with respect to exchange26 See PO 00000 note 9, supra. Frm 00080 Fmt 4703 Sfmt 4703 traded futures, be listed on a U.S. futures exchange; or (c) consist of cash and cash equivalents. 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 it will facilitate the listing and trading of an additional type of activelymanaged 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 Trust, 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, with respect to the Fund, 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, with respect to the Fund, investors will have ready access to information regarding the Proxy Portfolio and 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 another type of 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. E:\FR\FM\03JNN1.SGM 03JNN1 Federal Register / Vol. 86, No. 105 / Thursday, June 3, 2021 / Notices 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 27 and Rule 19b– 4(f)(6) thereunder.28 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) 29 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 states that the Commission has previously approved proposed rule changes to permit listing and trading on the Exchange of Active Proxy Portfolio Shares similar to the Fund.30 The Exchange also states that the Commission has previously issued a notice of filing and immediate effectiveness for a proposed rule change relating to the proposed listing on a national securities exchange of other issues of Active Proxy Portfolio Shares similar to the Fund.31 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 hereby waives the 30-day operative delay and designates the proposed rule change operative upon filing.32 27 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). In addition, Rule 19b– 4(f)(6) requires a self-regulatory organization to give the Commission written notice of its intent to file 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. 29 17 CFR 240.19b–4(f)(6)(iii). 30 See supra note. 31 See Securities Exchange Act Release No. 90686 (December 16, 2020), 85 FR 83657 (December 22, 2020) (SR–CboeBZX–2020–090) (Notice of Filing and Immediate Effectiveness of a Proposed Rule to List and Trade Shares of the Invesco Real Assets ESG ETF and the Invesco US Large Cap Core ESG ETF, Each a Series of the Invesco Actively Managed Exchange-Traded Fund Trust, under Rule 14.11(m) (Tracking Fund Shares)). 32 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). khammond on DSKJM1Z7X2PROD with NOTICES 28 17 VerDate Sep<11>2014 17:23 Jun 02, 2021 Jkt 253001 29817 At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. submissions should refer to File Number SR–NYSEArca–2021–44 and should be submitted on or before June 24, 2021. 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: [FR Doc. 2021–11610 Filed 6–2–21; 8:45 am] Electronic Comments • Use the Commission’s internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– NYSEArca–2021–44 on the subject line. Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of Designation of a Longer Period for Commission Action on Proceedings To Determine Whether To Approve or Disapprove a Proposed Rule Change, as Modified by Amendment No. 1, To Amend Its Rules Regarding the Minimum Increments for Electronic Bids and Offers and Exercise Prices of Certain FLEX Options and Clarify in the Rules How the System Ranks FLEX Option Bids and Offers for Allocation Purposes Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549–1090. All submissions should refer to File Number SR–NYSEArca–2021–44. 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 (https://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for 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 PO 00000 Frm 00081 Fmt 4703 Sfmt 4703 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.33 J. Matthew DeLesDernier, Assistant Secretary. BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–92040; File No. SR–CBOE– 2020–106] May 27, 2021. On November 16, 2020, Cboe Exchange, Inc. filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Exchange Act’’) 1 and Rule 19b–4 thereunder,2 a proposed rule change to amend its rules regarding the minimum increments for electronic bids and offers and exercise prices of certain FLEX options and clarify how the system ranks FLEX option bids and offers for allocation purposes. On November 30, 2020, the Exchange filed Amendment No. 1 to the proposed rule change, which amended and replaced the proposed rule change in its entirety. The Commission published notice of the proposed rule change, as modified by Amendment No. 1, in the Federal Register on December 4, 2020.3 On January 14, 2021, pursuant to Section 19(b)(2) of the Exchange Act,4 the Commission designated a longer period within which to approve the proposed rule change, disapprove the proposed 33 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 See Securities Exchange Act Release No. 90536 (November 30, 2020), 85 FR 78381 (‘‘Notice’’). Comments received on the proposed rule change are available on the Commission’s website at: https://www.sec.gov/comments/sr-cboe-2020-106/ srcboe2020106.htm. 4 15 U.S.C. 78s(b)(2). 1 15 E:\FR\FM\03JNN1.SGM 03JNN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 86, Number 105 (Thursday, June 3, 2021)]
[Notices]
[Pages 29810-29817]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-11610]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-92052; File No. SR-NYSEArca-2021-44]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To List and Trade 
Shares of the American Century Sustainable Growth ETF

May 27, 2021.
    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 21, 2021, NYSE Arca, Inc. (``NYSE Arca'' or the 
``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 Exchange. 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\ 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 American 
Century Sustainable Growth ETF under NYSE Arca Rule 8.601-E. The 
proposed rule change is available on the Exchange's website at 
www.nyse.com, 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'') as Active Proxy Portfolio 
Shares of the American Century[supreg] Sustainable Growth ETF (the 
``Fund'') under Rule 8.601-E.
---------------------------------------------------------------------------

    \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 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.''
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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 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\

[[Page 29811]]

and for which a ``Disclosed Portfolio'' is required to be disseminated 
at least once daily,\6\ the portfolio for each series 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 each 
series of Active Proxy Portfolio Shares will 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 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.
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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 the Fund's fiscal quarter will be 
made publicly available 60 days after the end of the Fund's fiscal 
quarter. Form N-PORT requires reporting of the 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 
the Fund's Statement of Additional Information (``SAI''), its 
Shareholder Reports, its Form N-CSR, filed twice a year, and its 
Form N-CEN, filed annually. The Fund's 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 
www.sec.gov.
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    The Commission has previously approved listing and trading on the 
Exchange of series of Active Proxy Portfolio Shares under NYSE Arca 
Rule 8.601-E.\8\ The Fund is a series of the American Century ETF Trust 
(the ``Trust''), a Delaware statutory trust.\9\ The investment adviser 
for the Fund will be American Century Investment Management, Inc. 
(``Adviser''). State Street Bank and Trust Company will serve as the 
Fund's transfer agent, custodian, and will conduct certain 
administrative functions. Foreside Fund Services, LLC, a registered 
broker dealer, will serve as the distributor (``Distributor'') of the 
Shares.
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    \8\ 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) 
(``Natixis Order''); 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) (``American Century Order''); 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) (``T. Rowe Price Approval Order''); 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). See also 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).
    \9\ The Trust is registered under the 1940 Act. On April 15, 
2021, the Trust 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. 333-221045 and 811-23305 (the 
``Registration Statement''). The Trust filed an application for an 
order under Section 6(c) of the 1940 Act for exemptions from various 
provisions of the 1940 Act and rules thereunder (File No. 812-
15082), dated April 9, 2020 (``Application''). On May 12, 2020, the 
Commission issued an order (``Exemptive Order'') under the 1940 Act 
granting the exemptions requested in the Application (Investment 
Company Act Release No. 33862, May 12, 2020). 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 and the Application. The Exchange will not commence 
trading in Shares of the Fund until the Registration Statement is 
effective.
---------------------------------------------------------------------------

    Commentary .04 to NYSE Arca Rule 8.601-E provides that, if the 
investment 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 and/or Proxy Portfolio. Any 
person related to the investment adviser or Investment Company who 
makes decisions pertaining to the Investment Company's Actual Portfolio 
and/or Proxy Portfolio or has access to non-public information 
regarding the Investment Company's Actual Portfolio and/or Proxy 
Portfolio 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 and/or Proxy Portfolio 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.\10\ Commentary .04 is also similar to 
Commentary .06 to Rule 8.600-E related to Managed Fund Shares, except 
that Commentary .04

[[Page 29812]]

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 and/or Proxy Portfolio or changes thereto, and not just to 
the underlying portfolio, as is the case with Managed Fund Shares.
---------------------------------------------------------------------------

    \10\ 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 and its 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.
---------------------------------------------------------------------------

    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 or the Proxy 
Portfolio 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 or the Proxy Portfolio 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 or Proxy Portfolio.
    The Adviser is not registered as a broker-dealer but is affiliated 
with a broker-dealer. The Adviser has 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 and/or Proxy Portfolio. In the event (a) 
the Adviser becomes registered as a broker-dealer or newly affiliated 
with a broker-dealer, or (b) any new adviser or sub-adviser is or 
becomes a registered broker-dealer or 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 and/or Proxy Portfolio, and will be subject to 
procedures designed to prevent the use and dissemination of material 
non-public information regarding the Fund's Actual Portfolio and/or 
Proxy Portfolio or changes thereto. Any person related to the Adviser 
or the Fund who makes decisions pertaining to the Fund's Actual 
Portfolio or Proxy Portfolio or has access to non-public information 
regarding the Fund's Actual Portfolio and/or the Proxy Portfolio or 
changes thereto is subject to procedures reasonably designed to prevent 
the use and dissemination of material non-public information regarding 
the Fund's Actual Portfolio and/or the Proxy Portfolio 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 or the Proxy Portfolio 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 and/or the Proxy Portfolio 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 and/or Proxy 
Portfolio.
Description of the Fund
    According to the Registration Statement, each ``Business Day'' \11\ 
before commencement of the trading of Shares, the Fund will publish on 
its website a Proxy Portfolio designed to closely track the daily 
performance of the Fund but the Proxy Portfolio will not be the Fund's 
Actual Portfolio.
---------------------------------------------------------------------------

    \11\ ``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.
---------------------------------------------------------------------------

    The Proxy Portfolio will be designed to closely track the daily 
performance of the Actual Portfolio and to reflect the economic 
exposures and risk characteristics of the Fund's actual holdings on 
each trading day. According to the Registration Statement, this would 
be achieved by performing an analysis of the Fund's Actual Portfolio 
(``Factor Model''). The Factor Model is comprised of three sets of 
factors or analytical metrics: Market-based factors, fundamental 
factors, and industry/sector factors. The Fund will have a universe of 
securities (the ``Model Universe'') that will be used to generate its 
Proxy Portfolio. The Model Universe will be comprised solely of 
securities that the Fund can purchase and will be a financial index or 
stated portfolio of securities from which Fund investments will be 
selected. The results of the Factor Model analysis of the Fund's Actual 
Portfolio are then applied to the Fund's Model Universe. The daily 
rebalanced Proxy Portfolio is then generated as a result of this Model 
Universe analysis with the Proxy Portfolio being a small sub-set of the 
Model Universe. The Factor Model is applied to both the Actual 
Portfolio and the Model Universe to construct the Fund's Proxy 
Portfolio that performs in a manner substantially identical to the 
performance of its Actual Portfolio.
    The identity and quantity of Proxy Portfolio component investments 
and the overlap between the holdings of the prior Business Day's Proxy 
Portfolio compared to the Actual Portfolio (``Proxy Overlap'') will be 
publicly available on the Fund's website before the commencement of 
trading in Shares on each Business Day. The Proxy Portfolio published 
on the Fund's website each Business Day 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 Fund's 
website will note that the Proxy Overlap is calculated based on the 
Proxy Portfolio and Actual Portfolio holdings as of the prior Business 
Day. The Proxy Overlap will be calculated by taking the lesser weight 
of each asset held in common between the Actual Portfolio and the Proxy 
Portfolio and adding the totals.
    The Proxy Portfolio aims to allow market participants to assess the 
intraday value and associated risk of the Fund's Actual Portfolio. The 
Proxy Portfolio will only include securities that are allowed to be 
held in the Actual Portfolio.
    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.\12\

[[Page 29813]]

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.
---------------------------------------------------------------------------

    \12\ The Application and Exemptive Order incorporates by 
reference the terms and conditions of a previous order granting the 
same relief, as that order may be amended from time to time. See 
Natixis ETF Trust II, et al., Investment Company Act Rel. Nos. 33684 
(November 14, 2019) (notice) and 33711 (December 10, 2019) (order) 
(the ``Reference Order''). Pursuant to the Reference Order as 
incorporated by reference into the Application and Exemptive Order, 
the permissible investments for the Fund include only the following 
instruments: ETFs; exchange-traded notes (``ETNs''); exchange-traded 
common stocks; exchange-traded preferred stocks; exchange-traded 
American Depositary Receipts (``ADRs''); exchange-traded real estate 
investment trusts (``REITs''); exchange-traded commodity pools; 
exchange-traded metals trusts; exchange-traded currency trusts; 
common stocks listed on a foreign exchange that trade on such 
exchange synchronously with the Shares (``foreign common stocks'') 
in the Exchange's Core Trading Session (normally 9:30 a.m. to 4:00 
p.m. Eastern time (``E.T.'')); exchange-traded futures that trade 
synchronously with the Fund's Shares as well as cash and cash 
equivalents. With the exception of foreign common stocks and cash 
and cash equivalents, all holdings of the Fund will be listed on a 
U.S. national securities exchange or a U.S. futures exchange. For 
purposes of this filing, cash equivalents are short-term U.S. 
Treasury securities, government money market funds, and repurchase 
agreements. 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.
---------------------------------------------------------------------------

    According to the Registration Statement, the Fund's investment 
objective is to seek capital appreciation. The Fund will generally 
invest in exchange-traded common stocks of large capitalization 
companies. Under normal circumstances, the Fund will invest at least 
80% of the Fund's net assets in sustainable securities, defined as 
securities to which the Adviser's proprietary model assigns an 
environmental, social, and governance (``ESG'') score that is in the 
top three quartiles of the ESG scores the model assigns to all of the 
securities in the Fund's benchmark, the Russell 1000 Growth Index.
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.\13\
---------------------------------------------------------------------------

    \13\ See notes 9 & 12, supra.
---------------------------------------------------------------------------

    The Fund's investments, including derivatives, will be consistent 
with their 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).
Purchases and Redemptions of Shares
    According to the Registration Statement, the Trust will offer, 
issue and sell Shares of the Fund to investors only in specified 
minimum size ``Creation Units'' through the Distributor on a continuous 
basis at the NAV per Share next determined after an order in proper 
form is received. The NAV of the Fund is expected to be determined as 
of 4:00 p.m. E.T. on each Business Day. The Trust will sell and redeem 
Creation Units of the Fund only on a Business Day. A Creation Unit will 
generally consist of at least 10,000 Shares.
    According to the Registration Statement, Shares will be purchased 
and redeemed in Creation Units and generally on an in-kind basis of a 
designated portfolio of securities (including any portion of such 
securities for which cash may be substituted) and the ``Cash 
Component,'' which is an amount equal to the difference between the NAV 
of the Shares (per Creation Unit) and the ``Deposit Amount,'' which is 
an amount equal to the market value of the Deposit Securities, and 
serves to compensate for any differences between the NAV per Creation 
Unit and the Deposit Amount. Together, the Deposit Securities and the 
Cash Component constitute the ``Fund Deposit,'' which will be 
applicable (subject to possible amendment or correction) to creation 
requests received in proper form. The Fund Deposit represents the 
minimum initial and subsequent investment amount for a Creation Unit of 
the Fund. The names and quantities of the instruments that constitute 
the Fund Deposit will be the same as the Fund's Proxy Portfolio, except 
to the extent purchases and redemptions are made entirely or in part on 
a cash basis.\14\ If there is a difference between the NAV attributable 
to a Creation Unit and the aggregate market value of the Creation 
Basket exchanged for the Creation Unit, the party conveying instruments 
with the lower value will also pay to the other an amount in cash equal 
to that difference (the ``Cash Amount'').
---------------------------------------------------------------------------

    \14\ [sic]
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    Each Business Day, before the open of trading on the Exchange (9:30 
a.m. E.T.), the Fund will cause to be published through the National 
Securities Clearing Corporation (``NSCC'') the names and the required 
number of shares of each Deposit Security and the amount of the Cash 
Component (if any) to be included in the current Fund Deposit (based on 
information as of the end of the previous Business Day for the Fund).
    All orders to purchase and redeem Creation Units must be placed 
with the Distributor by or through an authorized participant, which has 
a written agreement with the Distributor that allows the authorized 
participant to place orders for the purchase and redemption of Creation 
Units (``Authorized Participant''). Only an Authorized Participant may 
create or redeem Creation Units directly with the Fund.
    Validly submitted orders to purchase or redeem Creation Units on 
each Business Day will be accepted until the end of the Core Trading 
Session (the ``Closing Time''), generally 4:00 p.m. E.T., on the 
Business Day that the order is placed (the ``Transmittal Date''). All 
Creation Unit orders must be received by the Distributor no later than 
two hours prior to the Closing Time (normally 2 p.m. E.T.) in order to 
receive the NAV determined on the Transmittal Date. When the Exchange 
closes earlier than normal, the Fund may require orders for Creation 
Units to be placed earlier in the Business Day.
Availability of Information
    The Fund's website (www.americancenturyetfs.com), 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, 
the prior Business Day's NAV and the ``Closing Price'' or ``Bid/Ask 
Price,'' \15\ and a calculation of the premium/discount of the Closing 
Price or Bid/Ask Price against such NAV.\16\ 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 website and information will be publicly available at no 
charge. The website also will disclose the information required under 
Rule 8.601-E(c)(3).\17\
---------------------------------------------------------------------------

    \15\ 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.
    \16\ The ``premium/discount'' refers to the premium or discount 
to NAV at the end of a trading day and will be calculated based on 
the last Bid/Ask Price or the Closing Price on a given trading day.
    \17\ 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 Investment Company Act of 
1940 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 Proxy Portfolio.
---------------------------------------------------------------------------

    The Proxy Portfolio holdings (including the identity and quantity 
of investments in the Proxy Portfolio) will

[[Page 29814]]

be publicly available on the Fund's website before the commencement of 
trading in Shares on each Business Day.
    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.\18\ Thus, the Fund will 
publish the portfolio contents of its Actual Portfolio on a periodic 
basis within at least 60 days following the end of every fiscal 
quarter.
---------------------------------------------------------------------------

    \18\ See note 7, supra.
---------------------------------------------------------------------------

    Investors can also obtain the Fund's prospectus, SAI, shareholder 
reports, Form N-CSR, Form N-PORT and Form N-CEN. Investors may access 
complete portfolio schedules for the Fund on Form N-CSR and Form N-
PORT. The prospectus, 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 at https://www.sec.gov. 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. Intraday price 
information for all exchange-traded instruments, which include all 
eligible instruments and futures contracts but not 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.\19\ 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.
---------------------------------------------------------------------------

    \19\ 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.
    In addition, 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 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 Trust that the NAV per 
Share will be calculated daily and that the NAV, Proxy Portfolio and 
the Actual Portfolio for the Fund will be made available to all market 
participants at the same time.
    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.\20\ 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.
---------------------------------------------------------------------------

    \20\ 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.
    FINRA, on behalf of the Exchange, or 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 FINRA, on behalf of the Exchange, or the 
Exchange or both may obtain trading information regarding trading such 
securities and exchange-traded instruments from such markets and other 
entities. In addition, the Exchange may obtain information regarding 
trading in such securities and exchange-traded instruments from

[[Page 29815]]

markets and other entities that are members of ISG or with which the 
Exchange has in place a comprehensive surveillance sharing 
agreement.\21\
---------------------------------------------------------------------------

    \21\ For a list of the current members of ISG, see 
www.isgportal.org.
---------------------------------------------------------------------------

    The Advisor will make available daily to FINRA and the Exchange the 
Actual Portfolio of the Fund, upon request, in order to facilitate the 
performance of the surveillances 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 for 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 the 
Fund's 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 Trust, 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 Trust to represent that it 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 or 
reference asset, (b) limitations on portfolio holdings or reference 
assets, 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 Trust, 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,\22\ in general, and furthers the 
objectives of Section 6(b)(5) of the Act,\23\ 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.\24\
---------------------------------------------------------------------------

    \22\ 15 U.S.C. 78f(b).
    \23\ 15 U.S.C. 78f(b)(5).
    \24\ 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. One 
hundred percent of the value of the Fund's Actual Portfolio (except for 
cash and cash equivalents) at the time of purchase will be listed on 
U.S. or foreign securities exchanges (or, in the limited case of 
futures contracts, U.S. futures exchanges). The listing and trading of 
such U.S. securities is subject to rules of the exchanges on which they 
are listed and traded, as approved by the Commission.
    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.\25\
---------------------------------------------------------------------------

    \25\ See note 9, 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 
such securities and exchange-traded instruments from such markets and 
other entities. In addition, the Exchange may obtain information 
regarding trading in the Shares and 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 Bid/Ask 
Price and NAV of the Shares.
    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).
    With respect to the Fund, 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 Trust, prior to commencement of trading in the 
Shares, that the NAV per Share of the Fund will be calculated daily and 
that the NAV, Proxy Portfolio and Actual Portfolio for the Fund will be 
made available to all market participants at the same time. Investors 
can also obtain the Fund's SAI, shareholder reports, and

[[Page 29816]]

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 for 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 
in order to facilitate the performance of the surveillances 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 Trust, 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 Trust 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. Intraday price information for all exchange-traded 
instruments, which include all eligible instruments and futures 
contracts but not 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 may 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 
Proxy Portfolio holdings for the Fund (including 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.
    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.\26\ 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.
---------------------------------------------------------------------------

    \26\ See note 9, supra.
---------------------------------------------------------------------------

    The components of the Fund's Actual Portfolio will (a) be listed on 
an exchange and the primary trading session of such exchange will trade 
synchronously with the Exchange's Core Trading Session, as defined in 
Rule 7.34-E(a); (b) with respect to exchange-traded futures, be listed 
on a U.S. futures exchange; or (c) consist of cash and cash 
equivalents.
    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 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 Trust, 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, with respect to the Fund, 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, with 
respect to the Fund, investors will have ready access to information 
regarding the Proxy Portfolio and 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 another type 
of 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.

[[Page 29817]]

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 \27\ and Rule 19b-
4(f)(6) thereunder.\28\
---------------------------------------------------------------------------

    \27\ 15 U.S.C. 78s(b)(3)(A).
    \28\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file 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) \29\ 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 
states that the Commission has previously approved proposed rule 
changes to permit listing and trading on the Exchange of Active Proxy 
Portfolio Shares similar to the Fund.\30\ The Exchange also states that 
the Commission has previously issued a notice of filing and immediate 
effectiveness for a proposed rule change relating to the proposed 
listing on a national securities exchange of other issues of Active 
Proxy Portfolio Shares similar to the Fund.\31\ 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 hereby waives the 30-day operative delay 
and designates the proposed rule change operative upon filing.\32\
---------------------------------------------------------------------------

    \29\ 17 CFR 240.19b-4(f)(6)(iii).
    \30\ See supra note.
    \31\ See Securities Exchange Act Release No. 90686 (December 16, 
2020), 85 FR 83657 (December 22, 2020) (SR-CboeBZX-2020-090) (Notice 
of Filing and Immediate Effectiveness of a Proposed Rule to List and 
Trade Shares of the Invesco Real Assets ESG ETF and the Invesco US 
Large Cap Core ESG ETF, Each a Series of the Invesco Actively 
Managed Exchange-Traded Fund Trust, under Rule 14.11(m) (Tracking 
Fund Shares)).
    \32\ For purposes only of waiving the 30-day operative delay, 
the Commission has also considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is 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

     Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-NYSEArca-2021-44 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSEArca-2021-44. 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 (https://www.sec.gov/rules/sro.shtml). 
Copies of the submission, all subsequent amendments, all written 
statements with respect to the proposed rule change that are filed with 
the Commission, and all written communications relating to the proposed 
rule change between the Commission and any person, other than those 
that may be withheld from the public in accordance with the provisions 
of 5 U.S.C. 552, will be available for 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-NYSEArca-2021-44 and should be submitted 
on or before June 24, 2021.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\33\
---------------------------------------------------------------------------

    \33\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-11610 Filed 6-2-21; 8:45 am]
BILLING CODE 8011-01-P

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