Non-Transparent ETF Sponsors Request Additional Relief

January 8, 2020

Since the SEC issued orders to grant exemptive relief requested in applications filed by Blue Tractor Group, LLC, Fidelity Management & Research Company, Natixis Advisors, L.P., and T. Rowe Price Associates, Inc. to launch a type of non-transparent exchange-traded fund (NT ETF) that follows a proxy portfolio model on December 10, 2019, some of these sponsors have filed applications for exemptive relief that would expand the scope of the relief previously granted. The prior orders granted relief under the 1940 Act, and were limited to exchange-traded securities and other investments that trade on an exchange contemporaneously with the NT ETF’s shares.

The applications most recently filed would expand the scope of these investments to include foreign securities and currencies that trade on non-U.S. exchanges non-contemporaneously with the NT ETF’s shares, fixed income securities and derivatives. NT ETFs require additional relief from the SEC to list their shares on an exchange. This S&K memorandum provides background on NT ETFs and an overview of the significant terms of the applications for exemptive relief that adopt a proxy portfolio model: https://www.sewkis.com/publications/sec-grants-exemptive-applications-of-additional-non-transparent-etf-sponsors/.

The applications for exemptive relief discussed above are available at the links below.

American Century/NYSE: https://www.sec.gov/Archives/edgar/data/52388/000171060719000159/exemptiveorder12919.htm

Blue Tractor: https://www.sec.gov/Archives/edgar/data/1668791/000168035919000611/bluetractor40appa10232019.htm

Fidelity: https://www.sec.gov/Archives/edgar/data/35336/000119312519314931/d842423d40app.htm


Categories

Exchange-Traded Funds (ETFs)