[Federal Register Volume 85, Number 67 (Tuesday, April 7, 2020)]
[Notices]
[Pages 19519-19526]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-07227]



[[Page 19519]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-88534; File No. SR-NYSEArca-2019-96]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
of Amendment No. 2 and Order Instituting Proceedings To Determine 
Whether To Approve or Disapprove a Proposed Rule Change, as Modified by 
Amendment No. 2, To List and Trade Two Series of Active Proxy Portfolio 
Shares Issued by the American Century ETF Trust Under Proposed NYSE 
Arca Rule 8.601-E

April 1, 2020.

I. Introduction

    On December 23, 2019, NYSE Arca, Inc. (``NYSE Arca'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission''), pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a 
proposed rule change to list and trade the following under proposed 
NYSE Arca Rule 8.601-E (Active Proxy Portfolio Shares): American 
Century Mid Cap Growth Impact ETF and American Century Sustainable 
Equity ETF (``Funds'').\3\ The proposed rule change was published for 
comment in the Federal Register on January 3, 2020.\4\ On February 13, 
2020, pursuant to Section 19(b)(2) of the Exchange Act,\5\ the 
Commission designated a longer period within which to approve the 
proposed rule change, disapprove the proposed rule change, or institute 
proceedings to determine whether to disapprove the proposed rule 
change.\6\ On March 31, 2020, the Exchange filed Amendment No. 2 to the 
proposed rule change, which replaced and superseded the proposed rule 
change as originally filed.\7\ The Commission has received no comments 
on the proposed rule change. The Commission is publishing this notice 
and order to solicit comments on the proposed rule change, as modified 
by Amendment No. 2, from interested persons and to institute 
proceedings pursuant to Section 19(b)(2)(B) of the Act \8\ to determine 
whether to approve or disapprove the proposed rule change, as modified 
by Amendment No. 2.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ The Exchange originally proposed to adopt NYSE Arca Rule 
8.602-E to permit the Exchange to list and trade Actively Managed 
Solution Shares, and to list and trade shares of the Funds under 
proposed Exchange Rule 8.602-E. In Amendment No. 2, the Exchange 
removed the proposal to adopt proposed NYSE Arca Rule 8.602-E and 
revised the proposal to seek to list and trade shares of the Funds 
under proposed NYSE Arca Rule 8.601-E (Active Proxy Portfolio 
Shares). See Amendment No. 2, infra note 7. See also Amendment 2 to 
SR-NYSEArca-2019-95 (proposing to adopt NYSE Arca Rule 8.601-E to 
list and trade Active Proxy Portfolio Shares, available on the 
Commission's website at https://www.sec.gov/comments/sr-nysearca-2019-95/srnysearca201995.htm).
    \4\ See Securities Exchange Act Release No. 87867 (Dec. 30, 
2019), 85 FR 394 (``Notice'').
    \5\ 15 U.S.C. 78s(b)(2).
    \6\ See Securities Exchange Act Release No. 88198, 85 FR 9833 
(Feb. 20, 2020). The Commission designated April 2, 2020, as the 
date by which the Commission shall approve or disapprove, or 
institute proceedings to determine whether to disapprove, the 
proposed rule change.
    \7\ Amendment No. 1 to the proposed rule change was filed on 
March 26, 2020 and subsequently withdrawn on March 31, 2020. 
Amendment No. 2 is available on the Commission's website at https://www.sec.gov/.
    \8\ 15 U.S.C. 78s(b)(2)(B).
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II. The Exchange's Description of the Proposed Rule Change, as Modified 
by Amendment No. 2

    The Exchange proposes to list and trade shares of the following 
under proposed NYSE Arca Rule 8.601-E (Active Proxy Portfolio Shares): 
American Century Mid Cap Growth Impact ETF and American Century 
Sustainable Equity ETF. This Amendment No. 2 to SR-NYSEArca-2019-96 
replaces SR-NYSEArca-2019-96 as originally filed and supersedes such 
filing in its entirety. The Exchange has withdrawn Amendment No. 1 to 
SR-NYSEArca-2019-96.
    The proposed 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.

III. 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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange has proposed to add new 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.\9\ Proposed Commentary 02 to Rule 8.601-
E would require the Exchange to file separate proposals under Section 
19(b) of the Act before listing and trading any series of Active Proxy 
Portfolio Shares on the Exchange. Therefore, the Exchange is submitting 
this proposal in order to list and trade shares (``Shares'') of Active 
Proxy Portfolio Shares of the American Century Mid Cap Growth Impact 
ETF and American Century Sustainable Equity ETF (each a ``Fund'' and, 
collectively, the ``Funds'') under proposed Rule 8.601-E.
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    \9\ See Amendment 2 to SR-NYSEArca-2019-95, relating to listing 
and trading on the Exchange of shares of the Natixis ETF Trust, 
filed on March 31, 2020. See also, Securities Exchange Act Release 
No. 87866 (December 30, 2019), 85 FR 357 (January 3, 2020) (SR-
NYSEArca-2019-95). Proposed Rule 8.601-E(c)(1) provides that the 
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 a transfer of 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.
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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 \10\ and for which a ``Disclosed

[[Page 19520]]

Portfolio'' is required to be disseminated at least once daily,\11\ the 
portfolio for an issue of Active Proxy Portfolio Shares will be 
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 1940 Act.\12\ The composition of the portfolio of an issue of 
Active Proxy Portfolio Shares would not be available at commencement of 
Exchange listing and trading. Second, in connection with the creation 
and redemption of Active Proxy Portfolio Shares, such creation or 
redemption may be exchanged for a Proxy Portfolio with a value equal to 
the next-determined NAV.
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    \10\ 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).
    \11\ 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.
    \12\ A mutual fund is required to file with the Commission its 
complete portfolio schedules for the second and fourth fiscal 
quarters on Form N-CSR under the 1940 Act. Information reported on 
Form N-PORT for the third month of a Fund's fiscal quarter will be 
made publicly available 60 days after the end of a Fund's fiscal 
quarter. Form N-PORT requires reporting of a fund's complete 
portfolio holdings on a position-by-position basis on a quarterly 
basis within 60 days after fiscal quarter end. Investors can obtain 
a fund's Statement of Additional Information, its Shareholder 
Reports, its Form N-CSR, filed twice a year, and its Form N-CEN, 
filed annually. A fund's statement of additional information 
(``SAI'') and Shareholder Reports are 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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    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.
    In this regard, with respect to the Funds, the Funds will utilize a 
proxy portfolio methodology--the ``NYSE Proxy Portfolio Methodology''-- 
that would allow market participants to assess the intraday value and 
associated risk of a Fund's Actual Portfolio and thereby facilitate the 
purchase and sale of Shares by investors in the secondary market at 
prices that do not vary materially from their NAV.\13\ The NYSE Proxy 
Portfolio Methodology would utilize creation of a Proxy Portfolio for 
hedging and arbitrage purposes.
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    \13\ The NYSE Proxy Portfolio Methodology is owned by the NYSE 
Group, Inc. and licensed for use by the Funds. NYSE Group, Inc. is 
not affiliated with the Funds, Adviser or Distributor. Not all 
series of Active Proxy Portfolio Shares will utilize the NYSE Proxy 
Portfolio Methodology.
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    The Exchange, after consulting with various Lead Market Makers that 
trade exchange-traded funds (``ETFs'') on the Exchange, believes that 
market makers will be able to make efficient and liquid markets priced 
near the NAV in light of the daily Proxy Portfolio dissemination. 
Market makers employ market making techniques such as ``statistical 
arbitrage,'' including correlation hedging, beta hedging, and 
dispersion trading, which is currently used throughout the financial 
services industry, to make efficient markets in exchange-traded 
products.\14\ These techniques should permit market makers to make 
efficient markets in an issue of Active Proxy Portfolio Shares without 
precise knowledge of a fund's underlying portfolio.
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    \14\ Statistical arbitrage enables a trader to construct an 
accurate proxy for another instrument, allowing it to hedge the 
other instrument or buy or sell the instrument when it is cheap or 
expensive in relation to the proxy. Statistical analysis permits 
traders to discover correlations based purely on trading data 
without regard to other fundamental drivers. These correlations are 
a function of differentials, over time, between one instrument or 
group of instruments and one or more other instruments. Once the 
nature of these price deviations have been quantified, a universe of 
securities is searched in an effort to, in the case of a hedging 
strategy, minimize the differential. Once a suitable hedging proxy 
has been identified, a trader can minimize portfolio risk by 
executing the hedging basket. The trader then can monitor the 
performance of this hedge throughout the trade period making 
correction where warranted. In the case of correlation hedging, the 
analysis seeks to find a proxy that matches the pricing behavior of 
a fund. In the case of beta hedging, the analysis seeks to determine 
the relationship between the price movement over time of a fund and 
that of another stock. Dispersion trading is a hedged strategy 
designed to take advantage of relative value differences in implied 
volatilities between an index and the component stocks of that 
index.
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    The Exchange understands that traders use statistical analysis to 
derive correlations between different sets of instruments to identify 
opportunities to buy or sell one set of instruments when it is 
mispriced relative to the others. For Active Proxy Portfolio Shares, 
market makers may use the knowledge of a fund's means of achieving its 
investment objective, as described in the applicable fund registration 
statement, to manage a market maker's quoting risk in connection with 
trading shares of a fund. Market makers can then conduct statistical 
arbitrage between Proxy Portfolio and shares of a fund, buying and 
selling one against the other over the course of the trading day. They 
will evaluate how the Proxy Portfolio performed in comparison to the 
price of a fund's shares, and use that analysis as well as knowledge of 
risk metrics, such as volatility and turnover, to provide a more 
efficient hedge.
    Market makers have indicated to the Exchange that there will be 
sufficient data to run a statistical analysis which will lead to 
spreads being tightened substantially around NAV of a fund's shares. 
This is similar to certain other existing exchange traded products (for 
example, ETFs that invest in foreign securities that do not trade 
during U.S. trading hours), in which spreads may be generally wider in 
the early days of trading and then narrow as market makers gain more 
confidence in their real-time hedges.
Description of the Funds and the Trust
    The Funds will be series of the American Century ETF Trust 
(``Trust''), which will be registered with the Commission as an open-
end management investment company.\15\
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    \15\ The Trust is registered under the 1940 Act. On January 24, 
2020, the Trust filed a registration statement on Form N-1A under 
the Securities Act of 1933 and the 1940 Act for the Funds (File Nos. 
333-221045 and 811-23305) (``Registration Statement''). The Trust 
also 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 December 11, 2019 
(``American Century Application'' or ``Application''). The Shares 
will not be listed on the Exchange until an order (``American 
Century Exemptive Order'') under the 1940 Act has been issued by the 
Commission with respect to the Application. The American Century 
Application states that the exemptive relief requested by the Trust 
will apply to funds of the Trust that comply with the terms and 
conditions of the American Century Exemptive Order and the order 
issued to Natixis ETF Trust II. With respect to the Natixis ETF 
Trust II, see Seventh Amended and Restated Application for an Order 
under Section 6(c) of the 1940 Act for exemptions from various 
provisions of the 1940 Act and rules thereunder (File No. 812-14870) 
(October 21, 2019 (``Natixis Application''); the Commission notice 
regarding the Natixis Application (Investment Company Release No. 
33684 (File No. 812-14870) November 14, 2019); and the Commission 
order under the 1940 Act granting the exemptions requested in the 
Natixis Application (Investment Company Act Release No. 33711 
(December 10, 2019)) (``Natixis Exemptive Order''). The American 
Century Application incorporates the Natixis Exemptive Order by 
reference. Investments made by the Funds will comply with the 
conditions set forth in the American Century Application, American 
Century Exemptive Order and Natixis Exemptive Order. The description 
of the operation of the Trust and the Funds herein is based, in 
part, on the Registration Statement and the American Century 
Application.

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[[Page 19521]]

    American Century Investment Management, Inc. (``Adviser'') will be 
the investment adviser to the Funds. Foreside Fund Services, LLC will 
act as the distributor and principal underwriter (``Distributor'') for 
the Funds.
    Proposed 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 portfolio 
composition or has access to non-public information regarding the 
Investment Company's Actual Portfolio or changes thereto or the Proxy 
Portfolio must be subject to procedures reasonably designed to prevent 
the use and dissemination of material non-public information regarding 
the Actual Portfolio or changes thereto or the Proxy Portfolio.\16\
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    \16\ The text of proposed Commentary .04 to NYSE Arca Rule 
8.601-E is included in Amendment 2 to SR-NYSEArca-2019-95. See note 
9, supra.
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    Proposed Commentary .04 is similar to Commentary .03(a)(i) and 
(iii) to NYSE Arca Rule 5.2-E(j)(3); however, Commentary .03(a) 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.\17\ Commentary .04 is also similar to 
Commentary .06 to Rule 8.600-E related to Managed Fund Shares, except 
that proposed Commentary .04 relates to establishment and maintenance 
of a ``fire wall'' between the investment adviser and the broker-dealer 
applicable to an Investment Company's Actual Portfolio and/or Proxy 
Portfolio, and not just to the underlying portfolio, as is the case 
with Managed Fund Shares. 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 a Fund's portfolio.
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    \17\ 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.
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    In the event (a) the Adviser or any sub-adviser becomes registered 
as a broker-dealer or becomes newly affiliated with a broker-dealer, or 
(b) any new adviser or sub-adviser is a registered broker-dealer, or 
becomes affiliated with a broker-dealer, it will implement and maintain 
a fire wall with respect to its relevant personnel or its broker-dealer 
affiliate regarding access to information concerning the composition 
and/or changes to the portfolio, and will be subject to procedures 
designed to prevent the use and dissemination of material non-public 
information regarding such portfolio.
The Funds
    According to the Application, the Funds may hold only ``Permissible 
Investments.'' In this regard, the Funds will utilize a proxy portfolio 
methodology--the ``NYSE Proxy Portfolio Methodology''--that would allow 
market participants to assess the intraday value and associated risk of 
a Fund's Actual Portfolio and thereby facilitate the purchase and sale 
of Shares of a Fund by investors in the secondary market at prices that 
do not vary materially from their NAV.\18\ The NYSE Proxy Portfolio 
Methodology would utilize creation of a Proxy Portfolio for hedging and 
arbitrage purposes.
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    \18\ The NYSE Proxy Portfolio Methodology is owned by the NYSE 
Group, Inc. and licensed for use by the Fund. NYSE Group, Inc. is 
not affiliated with the Fund, Adviser or Distributor. Not all series 
of Active Proxy Portfolio Shares will utilize the NYSE Proxy 
Portfolio Methodology.
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American Century Mid Cap Growth Impact ETF
    The Fund will seek long-term capital growth. The Fund's holdings 
will conform to the permissible investments as set forth in the 
American Century Application and the holdings will be consistent with 
all requirements in the American Century Application and American 
Century Exemptive Order.\19\
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    \19\ Pursuant to the American Century Application, the 
permissible investments for a Fund are the ``Permissible 
Investments'' set forth in the Natixis Application and Natixis 
Exemptive Order which are the following: Exchange-traded funds 
(``ETFs''), exchange-traded notes (``ETNs''), exchange-traded common 
stocks, common stocks listed on a foreign exchange (``foreign common 
stocks'') that trade on such exchange contemporaneously with the 
exchange-traded Shares, preferred stocks, exchange-traded American 
Depositary Receipts (``ADRs''), exchange-traded real estate 
investment trusts, exchange-traded commodity pools, exchange-traded 
metals trusts, exchange-traded currency trusts and exchange-traded 
futures that trade contemporaneously with Fund Shares, as well as 
cash and cash equivalents (short-term U.S. Treasury securities, 
government money market funds, and repurchase agreements).
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American Century Sustainable Equity ETF
    The Fund will seek long-term capital growth, with income as a 
secondary objective. The Fund's holdings will conform to the 
permissible investments as set forth in the American Century 
Application and the holdings will be consistent with all requirements 
in the American Century Application and American Century Exemptive 
Order.\20\
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    \20\ See note 19, supra.
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Creations and Redemptions of Shares
    According to the Application, the Creation Basket will be based on 
the Proxy Portfolio, which is designed to approximate the value and 
performance of the Actual Portfolio. All Creation Basket instruments 
will be valued in the same manner as they are valued for purposes of 
calculating a Fund's NAV, and such valuation will be made in the same 
manner regardless of the identity of the purchaser or redeemer. 
Further, the total consideration paid for the purchase or redemption of 
a Creation Unit of Shares will be based on the NAV of such Fund, as 
calculated in accordance with the policies and procedures set forth in 
its Registration Statement.
    As with the Proxy Portfolio, the Creation Basket will mask a Fund's 
Actual Portfolio from full disclosure while at the same time maximizing 
benefits of the ETF structure to shareholders. In particular, the 
Adviser believes that the ability of a Fund to take deposits and make 
redemptions in-kind may aid in achieving a Fund's

[[Page 19522]]

investment objectives by allowing it to be more fully invested, 
minimizing cash drag, and reducing flow-related trading costs. In-kind 
transactions may also increase a Fund's tax efficiency and promote 
efficient secondary market trading in Shares.
    According to the Application, the Trust will offer, issue and sell 
Shares of each Fund to investors only in 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 each 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 each Fund only on a 
Business Day. Creation Units of the Funds may be purchased and/or 
redeemed entirely for cash, as permissible under the procedures 
described below.
    In order to keep costs low and permit each Fund to be as fully 
invested as possible, Shares will be purchased and redeemed in Creation 
Units and generally on an in-kind basis. Accordingly, except where the 
purchase or redemption will include cash under the circumstances 
specified below, purchasers will be required to purchase Creation Units 
by making an in-kind deposit of specified instruments (``Deposit 
Instruments''), and shareholders redeeming their Shares will receive an 
in-kind transfer of specified instruments (``Redemption Instruments''). 
The names and quantities of the instruments that constitute the Deposit 
Instruments and the Redemption Instruments for a Fund (collectively, 
the ``Creation Basket'') 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.
    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 Fund will adopt and implement policies and procedures 
regarding the composition of its Creation Baskets. The policies and 
procedures will set forth detailed parameters for the construction and 
acceptance of baskets in compliance with the terms and conditions of 
the American Century Exemptive Order and that are in the best interests 
of a Fund and its shareholders, including the process for any revisions 
to or deviations from those parameters.
    A Fund that normally issues and redeems Creation Units in kind may 
require purchases and redemptions to be made entirely or in part on a 
cash basis. In such an instance, the Fund will announce, before the 
open of trading in the Core Trading Session (normally, 9:30 a.m. to 
4:00 p.m., E.T.) on a given Business Day, that all purchases, all 
redemptions, or all purchases and redemptions on that day will be made 
wholly or partly in cash. A Fund may also determine, upon receiving a 
purchase or redemption order from an Authorized Participant, to have 
the purchase or redemption, as applicable, be made entirely or in part 
in cash. Each Business Day, before the open of trading on the Exchange, 
a Fund will cause to be published through the National Securities 
Clearing Corporation (``NSCC'') the names and quantities of the 
instruments comprising the Creation Basket, as well as the estimated 
Cash Amount (if any), for that day. The published Creation Basket will 
apply until a new Creation Basket is announced on the following 
Business Day, and there will be no intra-day changes to the Creation 
Basket except to correct errors in the published Creation Basket.
    All orders to purchase Creation Units must be placed with the 
Distributor by or through an Authorized Participant, which is either: 
(1) A ``participating party'' (i.e., a broker or other participant), in 
the Continuous Net Settlement (``CNS'') System of the NSCC, a clearing 
agency registered with the Commission and affiliated with the 
Depository Trust Company (``DTC''), or (2) a DTC Participant, which in 
any case has executed a participant agreement with the Distributor and 
the transfer agent.
Timing and Transmission of Purchase Orders
    All orders to purchase (or redeem) Creation Units, whether using 
the NSCC Process or the DTC Process, must be received by the 
Distributor no later than the NAV calculation time (``NAV Calculation 
Time''), generally 4:00 p.m. E.T. on the date the order is placed 
(``Transmittal Date'') in order for the purchaser (or redeemer) to 
receive the NAV determined on the Transmittal Date. In the case of 
custom orders, the order must be received by the Distributor 
sufficiently in advance of the NAV Calculation Time in order to help 
ensure that the Fund has an opportunity to purchase the missing 
securities with the cash in lieu amounts or to sell securities to 
generate the cash in lieu amounts prior to the NAV Calculation Time. On 
days when the Exchange closes earlier than normal, a Fund may require 
custom orders to be placed earlier in the day.
Availability of Information
    The Funds' website will include on a daily basis, per Share for 
each Fund, the prior Business Day's NAV and the Closing Price or Bid/
Ask Price, and a calculation of the premium/discount of the Closing 
Price or Bid/Ask Price against such NAV.\21\ Each Fund's website also 
will disclose the information required under proposed Rule 8.601-E 
(c)(3).\22\
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    \21\ 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. 
The ``Closing Price'' of Shares is the official closing price of the 
Shares on the Fund's Exchange. 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 such 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.
    \22\ See note 9, supra. Proposed 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 portfolio.
---------------------------------------------------------------------------

    The Proxy Portfolio holdings (including the identity and quantity 
of investments in the Proxy Portfolio) will be publicly available on 
the Funds' 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 Funds' Commission filings will be provided 
on the Funds' website on a current basis. \23\ Thus, each Fund will 
publish the portfolio contents of its Actual Portfolio on a periodic 
basis.
---------------------------------------------------------------------------

    \23\ See note 12, supra.
---------------------------------------------------------------------------

    Investors can obtain a Fund's prospectus, statement of additional 
information (``SAI''), Shareholder Reports, Form N-CSR, N-PORT and Form 
N-CEN filed with the Commission. The prospectus, SAI and Shareholder 
Reports are available free upon request from the Trust, and those 
documents and the Form N-CSR, N-PORT, and Form N-CEN may be viewed on-
screen or downloaded from the Commission's website.
    Updated price information for U.S. exchange-listed equity 
securities is available through major market data

[[Page 19523]]

vendors or securities exchanges trading such securities. Quotation and 
last sale information for the Shares, ETFs, ETNs, U.S. exchange-traded 
common stocks, preferred stocks and ADRs will be available via the 
Consolidated Tape Association (``CTA'') high-speed line. Price 
information for cash equivalents is available through major market data 
vendors
Investment Restrictions
    The Shares of the Funds will conform to the initial and continued 
listing criteria under proposed Rule 8.601-E. The Funds' holdings will 
be limited to and consistent with Permissible Investments as described 
above.
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 a Fund.\24\ Trading in Shares of a 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 proposed NYSE Arca Rule 8.601-E(D), which sets forth 
circumstances under which Shares of a Fund will be halted.
---------------------------------------------------------------------------

    \24\ See NYSE Arca Rule 7.12-E.
---------------------------------------------------------------------------

    Specifically, proposed 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 portfolio; or (b) whether other unusual 
conditions or circumstances detrimental to the maintenance of a fair 
and orderly market are present. In addition, upon notification to the 
Exchange by the issuer of a series of Active Proxy Portfolio Shares, 
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. The 
issuer has represented to the Exchange that it will provide the 
Exchange with prompt notification upon the existence of any such 
condition or set of conditions.
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 deems the Shares to be equity securities, thus 
rendering trading n the Shares subject to the Exchange's existing rules 
governing the trading of equity securities. The Exchange has 
appropriate rules to facilitate trading in the Shares during all 
trading sessions.
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.\25\ 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.
---------------------------------------------------------------------------

    \25\ FINRA conducts cross-market surveillances on behalf of the 
Exchange pursuant to a regulatory services agreement. The Exchange 
is responsible for FINRA's performance under this regulatory 
services agreement.
---------------------------------------------------------------------------

    The surveillances referred to above generally focus on detecting 
securities trading outside their normal patterns, which could be 
indicative of manipulative or other violative activity. When such 
situations are detected, surveillance analysis follows and 
investigations are opened, where appropriate, to review the behavior of 
all relevant parties for all relevant trading violations.
    The Exchange or FINRA, on behalf of the Exchange, or both, will 
communicate as needed regarding trading in the Shares, exchange-traded 
equity securities, and E-mini S&P 500 futures contracts 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 financial 
instruments from such markets and other entities. In addition, the 
Exchange may obtain information regarding trading in such securities 
and financial instruments from markets and other entities that are 
members of ISG or with which the Exchange has in place a comprehensive 
surveillance sharing agreement.\26\
---------------------------------------------------------------------------

    \26\ For a list of the current members of ISG, see 
www.isgportal.org.
---------------------------------------------------------------------------

    In addition, the Exchange also has a general policy prohibiting the 
distribution of material, non-public information by its employees.
    Proposed 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.
    The Exchange will utilize its existing procedures to monitor issuer 
compliance with the requirements of proposed Rule 8.601-E. For example, 
the Exchange will continue to use intraday alerts that will notify 
Exchange personnel of trading activity throughout the day that may 
indicate that unusual conditions or circumstances are present that 
could be detrimental to the maintenance of a fair and orderly market. 
The Exchange will require from the issuer of a series of Active Proxy 
Portfolio Shares, upon initial listing and periodically thereafter, a 
representation that it is in compliance with Rule 8.601-E. The Exchange 
notes that proposed Commentary .01 to Rule 8.601-E would require an 
issuer of Active Proxy Portfolio Shares to notify the Exchange of any 
failure to comply with the continued listing requirements of Rule 
8.601-E. In addition, the Exchange will require issuers to

[[Page 19524]]

represent that they 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.
    With respect to the Funds, 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 issuer has represented to the 
Exchange that it will advise the Exchange of any failure by a 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 a 
Fund is not in compliance with the applicable listing requirements, the 
Exchange will commence delisting procedures under NYSE Arca Rule 5.5-
E(m).
Information Bulletin
    Prior to the commencement of trading, the Exchange will inform its 
Equity Trading Permit (``ETP'') Holders in an Information Bulletin 
(``Bulletin'') of the special characteristics and risks associated with 
trading the Shares. Specifically, the Bulletin will discuss the 
following: (1) The procedures for purchases and redemptions of Shares; 
(2) NYSE Arca Rule 9.2-E(a), which imposes a duty of due diligence on 
its ETP Holders to learn the essential facts relating to every customer 
prior to trading the Shares; (4) how information regarding the Proxy 
Portfolio will be disseminated; (5) the requirement that ETP Holders 
deliver a prospectus to investors purchasing newly issued Shares prior 
to or concurrently with the confirmation of a transaction; and (6) 
trading information.
    In addition, the Bulletin will reference that a Fund is subject to 
various fees and expenses described in the applicable registration 
statement. The Bulletin will discuss any exemptive, no-action, and 
interpretive relief granted by the Commission from any rules under the 
Act. The Bulletin will also disclose that the NAV for the Shares will 
be calculated after 4:00 p.m., E.T. each trading day.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\27\ in general, and furthers the 
objectives of Section 6(b)(5) of the Act,\28\ in particular, in that it 
is designed to prevent fraudulent and manipulative acts and practices, 
to promote just and equitable principles of trade, to remove 
impediments to and perfect the mechanism of a free and open market and 
a national market system, and, in general, to protect investors and the 
public interest.
---------------------------------------------------------------------------

    \27\ 15 U.S.C. 78f(b).
    \28\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    With respect to the proposed listing and trading of Shares of the 
Funds, 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 proposed NYSE Arca Rule 
8.601-E. The Funds' investments will be consistent with its investment 
objective and will not be used to enhance leverage.
    The Exchange or FINRA, on behalf of the Exchange, or both, will 
communicate as needed regarding trading in the Shares, exchange-traded 
equity securities, and E-mini S&P 500 futures contracts 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 financial 
instruments from such markets and other entities. In addition, the 
Exchange may obtain information regarding trading in such securities 
and financial instruments from markets and other entities that are 
members of ISG or with which the Exchange has in place a comprehensive 
surveillance sharing agreement.
    The Exchange, after consulting with various Lead Market Makers that 
trade ETFs on the Exchange, believes that market makers will be able to 
make efficient and liquid markets priced near the NAV, and that market 
makers have knowledge of a fund's means of achieving its investment 
objective even without daily disclosure of a fund's underlying 
portfolio. The Exchange believes that market makers will employ risk-
management techniques to make efficient markets in exchange traded 
products.\29\ This ability should permit market makers to make 
efficient markets in shares without knowledge of a fund's underlying 
portfolio.
---------------------------------------------------------------------------

    \29\ See note 14, supra.
---------------------------------------------------------------------------

    The Exchange understands that traders use statistical analysis to 
derive correlations between different sets of instruments to identify 
opportunities to buy or sell one set of instruments when it is 
mispriced relative to the others. For Active Proxy Portfolio Shares, 
market makers utilizing statistical arbitrage use the knowledge of a 
fund's means of achieving its investment objective, as described in the 
applicable fund registration statement, as well as Proxy Portfolio to 
manage a market maker's quoting risk in connection with trading fund 
shares. Market makers will then conduct statistical arbitrage between 
the Proxy Portfolio and shares of a fund, buying and selling one 
against the other over the course of the trading day. Eventually, at 
the end of each day, they will evaluate how the Proxy Portfolio 
performed in comparison to the price of a fund's shares, and use that 
analysis as well as knowledge of risk metrics, such as volatility and 
turnover, to provide a more efficient hedge.
    The Lead Market Makers also indicated that, as with some other new 
exchange-traded products, spreads would tend to narrow as market makers 
gain more confidence in the accuracy of their hedges and their ability 
to adjust these hedges in real-time and gain an understanding of the 
applicable market risk metrics such as volatility and turnover, and as 
natural buyers and sellers enter the market. Other relevant factors 
cited by Lead Market Makers were that a fund's investment objectives 
are clearly disclosed in the applicable prospectus, the existence of 
quarterly portfolio disclosure and the ability to create shares in 
creation unit size.
    The Funds will utilize the NYSE Proxy Portfolio Methodology that 
would allow market participants to assess the intraday value and 
associated risk of a Fund's Actual Portfolio and thereby facilitate the 
purchase and sale of Shares by investors in the secondary market at 
prices that do not vary materially from their NAV.
    The daily dissemination of the identity and quantity of Proxy 
Portfolio component investments, together with the right of Authorized 
Participants to create and redeem each day at the NAV, will be 
sufficient for market participants to value and trade shares in a 
manner that will not lead to significant deviations between the Shares' 
Bid/Ask Price and NAV.
    The pricing efficiency with respect to trading a series of Active 
Proxy Portfolio Shares will generally rest on the ability of market 
participants to arbitrage between the shares and a fund's portfolio, in 
addition to the ability of market participants to assess a fund's 
underlying value accurately enough throughout the trading day in order 
to hedge positions in shares effectively. Professional traders can buy 
shares that

[[Page 19525]]

they perceive to be trading at a price less than that which will be 
available at a subsequent time and sell shares they perceive to be 
trading at a price higher than that which will be available at a 
subsequent time. It is expected that, as part of their normal day-to-
day trading activity, market makers assigned to shares by the Exchange, 
off-exchange market makers, firms that specialize in electronic 
trading, hedge funds and other professionals specializing in short-
term, non-fundamental trading strategies will assume the risk of being 
``long'' or ``short'' shares through such trading and will hedge such 
risk wholly or partly by simultaneously taking positions in correlated 
assets \30\ or by netting the exposure against other, offsetting 
trading positions--much as such firms do with existing ETFs and other 
equities. Disclosure of a fund's investment objective and principal 
investment strategies in its prospectus and SAI should permit 
professional investors to engage easily in this type of hedging 
activity.
---------------------------------------------------------------------------

    \30\ Price correlation trading is used throughout the financial 
industry. It is used to discover both trading opportunities to be 
exploited, such as currency pairs and statistical arbitrage, as well 
as for risk mitigation such as dispersion trading and beta hedging. 
These correlations are a function of differentials, over time, 
between one or multiple securities pricing. Once the nature of these 
price deviations have been quantified, a universe of securities is 
searched in an effort to, in the case of a hedging strategy, 
minimize the differential. Once a suitable hedging basket has been 
identified, a trader can minimize portfolio risk by executing the 
hedging basket. The trader then can monitor the performance of this 
hedge throughout the trade period, making corrections where 
warranted.
---------------------------------------------------------------------------

    The proposed rule change is designed to promote just and equitable 
principles of trade and to protect investors and the public interest. 
Investors can obtain a fund's SAI, shareholder reports, and its Form N-
CSR, Form N-PORT and Form N-CEN. A fund's SAI and shareholder reports 
will be available free upon request from the applicable 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. In addition, 
with respect to each Fund, a large amount of information will be 
publicly available regarding the Funds and the Shares, thereby 
promoting market transparency. Quotation and last sale information for 
the Shares will be available via the CTA high-speed line. The website 
for the Funds will include a form of the prospectus for each Fund that 
may be downloaded, and additional data relating to NAV and other 
applicable quantitative information, updated on a daily basis. 
Moreover, prior to the commencement of trading, the Exchange will 
inform its ETP Holders in an Information Bulletin of the special 
characteristics and risks associated with trading the Shares. Trading 
in Shares of the Funds 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. In addition, as noted above, 
investors will have ready access to the Proxy Portfolio and quotation 
and last sale information for the Shares. The Shares will conform to 
the initial and continued listing criteria under proposed Rule 8.601-
E.\31\
---------------------------------------------------------------------------

    \31\ See Amendment 2 to SR-NYSEArca-2019-95, referenced in note 
9, supra.
---------------------------------------------------------------------------

    The proposed rule change is designed to perfect the mechanism of a 
free and open market and, in general, to protect investors and the 
public interest in that 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. As noted above, the Exchange has in 
place surveillance procedures relating to trading in the Shares and may 
obtain information via ISG from other exchanges that are members of ISG 
or with which the Exchange has entered into a comprehensive 
surveillance sharing agreement. In addition, as noted above, investors 
will have ready access to information regarding quotation and last sale 
information for the Shares.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. The Exchange believes the 
proposed rule change would permit listing and trading of 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.

IV. Proceedings To Determine Whether To Approve or Disapprove SR-
NYSEArca-2019-96, as Modified by Amendment No. 2, and Grounds for 
Disapproval Under Consideration

    The Commission is instituting proceedings pursuant to Section 
19(b)(2)(B) of the Exchange Act \32\ to determine whether the proposed 
rule change should be approved or disapproved. Institution of such 
proceedings is appropriate at this time in view of the legal and policy 
issues raised by the proposed rule change. Institution of proceedings 
does not indicate that the Commission has reached any conclusions with 
respect to any of the issues involved. Rather, as described below, the 
Commission seeks and encourages interested persons to provide comments 
on the proposed rule change.
---------------------------------------------------------------------------

    \32\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

    Pursuant to Section 19(b)(2)(B) of the Exchange Act,\33\ the 
Commission is providing notice of the grounds for disapproval under 
consideration. The Commission is instituting proceedings to allow for 
additional analysis of the proposed rule change's consistency with 
Section 6(b)(5) of the Exchange Act, which requires, among other 
things, that the rules of a national securities exchange be ``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.'' \34\
---------------------------------------------------------------------------

    \33\ Id.
    \34\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

III. Procedure: Request for Written Comments

    The Commission requests that interested persons provide written 
submissions of their views, data, and arguments with respect to the 
issues identified above, as well as any other concerns they may have 
with the proposal. In particular, the Commission invites the written 
views of interested persons concerning whether the proposed rule 
change, as modified by Amendment No. 2, is consistent with Section 
6(b)(5) or any other provision of the Exchange Act, or the rules and 
regulations thereunder. Although there do not appear to be any issues 
relevant to approval or disapproval that would be facilitated by an 
oral presentation of views, data, and arguments, the Commission will 
consider, pursuant to Rule 19b-4, any request for an

[[Page 19526]]

opportunity to make an oral presentation.\35\
---------------------------------------------------------------------------

    \35\ Section 19(b)(2) of the Exchange Act, as amended by the 
Securities Act Amendments of 1975, Public Law 94-29 (June 4, 1975), 
grants the Commission flexibility to determine what type of 
proceeding--either oral or notice and opportunity for written 
comments--is appropriate for consideration of a particular proposal 
by a self-regulatory organization. See Securities Act Amendments of 
1975, Senate Comm. on Banking, Housing & Urban Affairs, S. Rep. No. 
75, 94th Cong., 1st Sess. 30 (1975).
---------------------------------------------------------------------------

    Interested persons are invited to submit written data, views, and 
arguments regarding whether the proposed rule change, as modified by 
Amendment No. 2, should be approved or disapproved by April 28, 2020. 
Any person who wishes to file a rebuttal to any other person's 
submission must file that rebuttal by May 12, 2020.
    The Commission asks that commenters address the sufficiency of the 
Exchange's statements in support of the proposal, which are set forth 
in Amendment No. 2,\36\ and any other issues raised by the proposed 
rule change, as modified by Amendment No. 2, under the Exchange Act. In 
this regard, the Commission seeks commenters' views regarding whether 
the Exchange's proposed rule to list and trade Active Proxy Portfolio 
Shares, which are actively managed exchange-traded products for which 
the portfolio holdings would be disclosed on a quarterly, rather than 
daily, basis, is adequately designed to prevent fraudulent and 
manipulative acts and practices, to promote just and equitable 
principles of trade, and to protect investors and the public interest, 
and is consistent with the maintenance of a fair and orderly market 
under the Exchange Act. In particular, the Commission seeks commenters' 
views regarding whether the Exchange's proposed listing rule provisions 
as they relate to foreign securities are adequate to prevent fraud and 
manipulation. In addition, the Commission seeks commenters' views 
regarding whether the Exchange's proposed listing rule provisions are 
adequate to prevent the use and dissemination of material non-public 
information relating to the Funds.
---------------------------------------------------------------------------

    \36\ See supra note 7.
---------------------------------------------------------------------------

    Comments may be submitted by any of the following methods:

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-NYSEArca-2019-96 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-2019-96. 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 (http://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-2019-96 and should be submitted 
on or before April 28, 2020. Rebuttal comments should be submitted by 
May 12, 2020.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\37\
---------------------------------------------------------------------------

    \37\ 17 CFR 200.30-3(a)(57).
---------------------------------------------------------------------------

J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-07227 Filed 4-6-20; 8:45 am]
BILLING CODE 8011-01-P