5300 Federal Register / Vol. 86, No. 11 / Tuesday, January 19, 2021 / Notices 

26 17 CFR 200.30–3(a)(12). 

1See Natixis ETF Trust II, et al., Investment 

Company Act Release No. 33684 (Nov. 14, 2019) 

(notice) and Investment Company Act Release No. 

33711 (Dec. 10, 2019) (order). Except as specifically 

noted in the application, all representations and 

conditions contained in the application previously 

submitted with the Commission (File No. 812– 

14870), as amended and restated, and filed with the 

Commission on October 21, 2019 (the ‘‘Prior 

Application’’) remain applicable to the operation of 

the Funds and will apply to any Funds relying on 

the Amended Order. 

2The relief granted in the Prior Order under 

section 12(d)(1)(J) of the Act for an exemption from 

sections 12(d)(1)(A) and 12(d)(1)(B) of the 1940 Act 

(the ‘‘Section 12(d)(1) Relief’’), and relief under 

sections 6(c) and 17(b) of the Act for an exemption 

from sections 17(a)(1) and 17(a)(2) of the Act 

relating to the Section 12(d)(1) Relief, will expire 

one year from the effective date of rule 12d1–4. See 

Fund of Funds Arrangements, Investment Company 

Act Rel. No. 10871 (Oct. 7, 2020), at III. 

3All capitalized terms not otherwise defined in 

this notice have the meanings ascribed to them in 

the Prior Application. 

4 Deposit Instruments and Redemption 

Instruments may include cash and/or securities. 

5The Funds are not be able to operate in reliance 

on rule 6c–11 because they do not disclose their 

portfolio holdings on a daily basis as required by 

the rule. See rule 6c–11(c)(1)(i) (requiring an ETF 

to disclose prominently on its website, publicly 

available and free of charge, the portfolio holdings 

that will form the basis for each calculation of NAV 

per share). 

All submissions should refer to File 

Number SR–PEARL–2020–38. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

internet website (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–PEARL–2020–38 and 

should be submitted on or before 

February 9, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.26

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–00949 Filed 1–15–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

34171; 812–15157] 

Natixis ETF Trust II, et al. 

January 12, 2021. 

AGENCY: Securities and Exchange 

Commission (‘‘Commission’’). 

ACTION: Notice of an application to 

amend a prior order for exemptive 

relief. 

SUMMARY OF APPLICATION: Applicants 

request an order (‘‘Amended Order’’) 

that would amend a prior order to 

permit the Funds, as defined below, to 

use Creation Baskets (as defined below) 

that include instruments that are not 

included, or are included with different 

weightings, in the Fund’s proxy 

portfolio. 

APPLICANTS: Natixis Advisors, L.P. 

(‘‘Natixis’’), Natixis ETF Trust II (the 

‘‘Trust’’) and NYSE Group, Inc. 

(‘‘NYSE’’). 

FILING DATES: The application was filed 

on August 31, 2020, and amended on 

November 16, 2020 and on December 8, 

2020. 

HEARING OR NOTIFICATION OF HEARING: 

An order granting the requested relief 

will be issued unless the Commission 

orders a hearing. Interested persons may 

request a hearing by emailing the 

Commission’s Secretary at SecretarysOffice@sec.gov and serving Applicants 

with a copy of the request by email. 

Hearing requests should be received by 

the Commission by 5:30 p.m. on 

February 8, 2021 and should be 

accompanied by proof of service on the 

Applicants, in the form of an affidavit, 

or, for lawyers, a certificate of service. 

Pursuant to rule 0–5 under the 

Investment Company Act of 1940 

(‘‘Act’’), hearing requests should state 

the nature of the writer’s interest, any 

facts bearing upon the desirability of a 

hearing on the matter, the reason for the 

request, and the issues contested. 

Persons who wish to be notified of a 

hearing may request notification by 

emailing to the Commission’s Secretary 

at Secretarys-Office@sec.gov. 

ADDRESSES: The Commission: 

Secretarys-Office@sec.gov. Applicants: 

peter.shea@klgates.com. 

FOR FURTHER INFORMATION CONTACT: 

Marc Mehrespand, Senior Counsel; 

Trace Rakestraw, Branch Chief, at (202) 

551–6825 (Division of Investment 

Management, Chief Counsel’s Office). 

SUPPLEMENTARY INFORMATION: The 

following is a summary of the 

application. The complete application 

may be obtained via the Commission’s 

website by searching for the file 

number, or for an applicant using the 

Company name box, at http://

www.sec.gov/search/search.htm or by 

calling (202) 551–8090. 

I. Introduction 

1. On December 10, 2019, the 

Commission issued an order (‘‘Prior 

Order’’) 1 under section 6(c) of the Act 

for an exemption from sections 2(a)(32), 

5(a)(1), 22(d), and 22(e) of the Act and 

rule 22c–1 under the Act, under 

sections 6(c) and 17(b) of the Act for an 

exemption from sections 17(a)(1) and 

17(a)(2) of the Act, and under section 

12(d)(1)(J) of the Act for an exemption 

from sections 12(d)(1)(A) and 

12(d)(1)(B) of the Act.2 The Prior Order 

permitted Applicants to introduce a 

novel type of actively-managed 

exchange-traded fund (‘‘ETF’’) that is 

not required to disclose its portfolio 

holdings on a daily basis (each, a 

‘‘Fund’’). Rather, pursuant to the Prior 

Order, each Business Day 3 a Fund 

publishes a basket of securities and cash 

that, while different from the Fund’s 

portfolio, is designed to closely track its 

daily performance (the ‘‘Proxy 

Portfolio’’). 

2. Pursuant to the Prior Order, a Fund 

sells and redeems its shares (‘‘Shares’’) 

only in Creation Units and generally on 

an in-kind basis. Purchasers are 

required to purchase Creation Units by 

making a deposit of Deposit Instruments 

and shareholders redeeming their 

Shares receive a transfer of Redemption 

Instruments.4 Under the Prior Order, the 

names and quantities of the instruments 

that constitute the Deposit Instruments 

and the Redemption Instruments for a 

Fund (collectively, the ‘‘Creation 

Basket’’) are 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. 

3. Applicants now seek to amend the 

Prior Order to, in effect, give the Funds 

the same flexibility with respect to 

Creation Basket composition as afforded 

to ETFs relying on rule 6c–11.5 More 


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Federal Register / Vol. 86, No. 11 / Tuesday, January 19, 2021 / Notices 5301 

6Pursuant to condition 9, each Fund will also 

maintain and preserve a copy of the Proxy Portfolio 

published on the Fund’s website for each Business 

Day and a copy of each Creation Basket made 

available. 

7See Exchange-Traded Funds, Investment 

Company Act Release No. 33646 (Sept. 25, 2019) 

(‘‘ETF Adopting Release’’), at 80–94 (discussion of 

rule 6c–11 requirement for ETF policies and 

procedures concerning basket construction and 

acceptance and heightened policies and procedures 

for custom baskets). 8See supra note 2. 

specifically, Applicants have requested 

that the Funds be allowed to use 

Creation Baskets that include 

instruments that are not included, or are 

included with different weightings, in 

the Fund’s Proxy Portfolio. 

II. The Application 

A. Applicants’ Proposal 

4. Upon amending the Prior Order, 

the names and quantities of the 

instruments that may constitute a 

Creation Basket will generally be the 

same as the Fund’s Proxy Portfolio, but 

a Fund may accept Creation Baskets that 

differ from the Proxy Portfolio. Each 

Business Day, before the open of trading 

on the Exchange where a Fund is listed, 

the Fund will publish on its website the 

composition of any Creation Basket 

exchanged with an authorized 

participant on the previous Business 

Day that differed from such Business 

Day’s Proxy Portfolio other than with 

respect to cash. 

5. Applicants represent that, for 

portfolio management or other reasons, 

the Funds may determine that it is 

desirable to use Creation Baskets that 

differ from the Proxy Portfolio (beyond 

cash substitutions). For example, a Fund 

may want to use a Creation Basket that 

contains instruments that are not 

included in a Fund’s Proxy Portfolio if 

the Adviser or Sub-Adviser seeks to add 

an instrument to the Fund’s Actual 

Portfolio) without incurring transaction 

costs associated with the purchase of 

the instrument for cash. Similarly, if the 

Adviser or Sub-Adviser decides to sell 

an instrument from a Fund’s Actual 

Portfolio, the instrument may be 

included in a Creation Basket with the 

expectation that the Fund will deliver it 

in-kind during a redemption 

transaction. 

6. The Funds will use the requested 

basket flexibility only in circumstances 

under which Applicants believe there 

will be no harm to the Funds or their 

shareholders, and in order to benefit the 

Funds and their shareholders by 

reducing costs, increasing efficiency and 

improving trading. 

7. Pursuant to condition 10 herein, 

each Fund will adopt and implement 

written policies and procedures 

regarding the construction of its 

Creation Baskets in accordance with 

rule 6c–11 under the Act. For purposes 

of the requirement to comply with the 

policies and procedures provision in 

rule 6c–11, only Creation Baskets that 

differ from a Fund’s Proxy Portfolio will 

be treated as a ‘‘custom basket’’ under 

rule 6c–11(c)(3). 

8. Furthermore, pursuant to condition 

9 herein, each Fund will comply with 

the recordkeeping requirements of rule 

6c–11.6 For purposes of the requirement 

to comply with the recordkeeping 

provision in rule 6c–11, only Creation 

Baskets different from a Fund’s Proxy 

Portfolio will be treated as a ‘‘custom 

basket’’ under rule 6c–11(d)(2)(ii). 

B. Considerations Relating to the 

Requested Relief 

9. Applicants represent that the 

ability to utilize a Creation Basket that 

includes instruments that are not 

included, or are included with different 

weightings, in a Fund’s Proxy Portfolio, 

or are included in different weightings, 

does not raise any new policy concerns 

about reverse engineering of a Fund’s 

portfolio, self-dealing or overreaching, 

or selective disclosure beyond those 

concerns addressed in connection with 

the Prior Order. 

10. Reverse Engineering. Applicants 

acknowledge that, by using a Creation 

Basket that includes instruments that 

are not included in a Fund’s Proxy 

Portfolio, or are included in different 

percentages, and by publishing such 

Creation Basket on its website, the Fund 

would provide market participants with 

additional information about which 

instruments it adds or removes from the 

Fund’s Actual Portfolio. However, 

Applicants represent that they will 

operate the Funds in a manner designed 

to minimize the risk of reverse 

engineering and, for the reasons set 

forth in the application, believe 

successful front-running or free-riding is 

highly unlikely. 

11. Self-Dealing or Overreaching. 

Applicants state that authorized 

participants and other market 

participants will not have the ability to 

disadvantage the Funds by 

manipulating or influencing the 

composition of Creation Baskets, 

including those that differ from the 

Proxy Portfolio. Like the basket and 

custom basket policies and procedures 

required of ETFs by rule 6c–11, the 

Funds will adopt and implement 

written policies and procedures that 

govern the construction of Creation 

Baskets and the process that will be 

used for the acceptance of Creation 

Baskets to safeguard the best interests of 

the Funds and their shareholders.7

12. Selective Disclosure. The Funds 

and each person acting on behalf of the 

Funds will continue to be required to 

comply with Regulation Fair Disclosure 

as if it applied to them (except that the 

exemptions provided in rule 

100(b)(2)(iii) therein shall not apply). 

Applicants believe that the new 

Creation Basket flexibility being sought 

by the Applicants does not raise any 

new concerns about selective disclosure 

of non-public material information. 

First, a Fund’s use of, or conversations 

with authorized participants about, 

Creation Baskets that would result in 

such disclosure would effectively be 

limited by the Funds’ obligation to 

comply with Regulation Fair Disclosure. 

Second, as noted above, each Business 

Day, before the open of trading on the 

Exchange where a Fund is listed, the 

Fund will publish on its website the 

composition of any basket accepted by 

the Fund on the previous Business Day 

that differed from such Business Day’s 

Proxy Portfolio other than with respect 

to cash. 

III. Requested Exemptive Relief 

For the reasons stated above, 

Applicants believe that the Prior Order, 

as amended, continues to meet the 

relevant standards for relief pursuant to 

section 6(c) of the Act for an exemption 

from sections 2(a)(32), 5(a)(1), 22(d), and 

22(e) of the Act and rule 22c–1 under 

the Act, and under sections 6(c) and 

17(b) of the Act for an exemption from 

sections 17(a)(1) and 17(a)(2) of the Act, 

and under section 12(d)(1)(J) of the Act 

for an exemption from sections 

12(d)(1)(A) and 12(d)(1)(B) of the Act.8

IV. Applicants’ Conditions 

Applicants agree that the Amended 

Order granting the requested relief will 

be subject to all of the conditions in the 

Prior Order, except that condition 9 of 

the Prior Order is deleted in its entirety 

and replaced with the conditions 9–10 

as follows: 

9. Each Fund will comply with the 

recordkeeping requirements of rule 6c– 

11 under the Act, as amended, except 

that for purposes of this condition, only 

Creation Baskets different from the 

Fund’s Proxy Portfolio will be treated as 

a ‘‘custom basket’’ under rule 6c– 

11(d)(2)(ii). In addition, each Fund will 

maintain and preserve, for a period of 

not less than five years, in an easily 

accessible place, (i) a copy of the Proxy 

Portfolio published on the Fund’s 

website for each Business Day; and (ii) 

a copy of each Creation Basket made 

available. 


khammond on DSKJM1Z7X2PROD with NOTICES
5302 Federal Register / Vol. 86, No. 11 / Tuesday, January 19, 2021 / Notices 

1See Invesco Capital Management LLC, et al., 

Investment Company Act Release No. 34087 (Nov. 

6, 2020) (notice) and Investment Company Act 

Release No. 34127 (Dec. 2, 2020) (order). Except as 

specifically noted in the application, all 

representations and conditions contained in the 

application previously submitted with the 

Commission (File No. 812–15070), as amended and 

restated, and filed with the Commission on 

November 6, 2020 (the ‘‘Prior Application’’) remain 

applicable to the operation of the Funds and will 

apply to any Funds relying on the Amended Order. 

2All capitalized terms not otherwise defined in 

this notice have the meanings ascribed to them in 

the Prior Application. 

3 Deposit Instruments and Redemption 

Instruments may include cash and/or securities. 

4The Funds are not be able to operate in reliance 

on rule 6c–11 because they do not disclose their 

portfolio holdings on a daily basis as required by 

the rule. See rule 6c–11(c)(1)(i) (requiring an ETF 

to disclose prominently on its website, publicly 

available and free of charge, the portfolio holdings 

that will form the basis for each calculation of NAV 

per share). 

10. Each Fund will adopt and 

implement written policies and 

procedures that govern the construction 

of Creation Baskets, as required under 

rule 6c–11(c)(3) under the Act, as 

amended, except that for purposes of 

this condition, only Creation Baskets 

different from the Fund’s Proxy 

Portfolio will be treated as a ‘‘Custom 

Basket’’. The Fund’s basket policies and 

procedures will be covered by the 

Fund’s compliance program and other 

requirements under rule 38a–1 under 

the Act, as amended. 

For the Commission, by the Division of 

Investment Management, pursuant to 

delegated authority. 

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–00961 Filed 1–15–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

34170; 812–15182] 

Invesco Capital Management LLC, et 

al. 

January 12, 2021. 

AGENCY: Securities and Exchange 

Commission (‘‘Commission’’). 

ACTION: Notice of an application to 

amend a prior order for exemptive 

relief. 

SUMMARY OF APPLICATION: Applicants 

request an order (‘‘Amended Order’’) 

that would amend a prior order to 

permit the Funds, as defined below, to 

use Creation Baskets (as defined below) 

that include instruments that are not 

included, or are included with different 

weightings, in the Fund’s Substitute 

Basket (as defined below). 

APPLICANTS: Invesco Capital 

Management LLC, Invesco Actively 

Managed Exchange-Traded Fund Trust 

and Invesco Distributors, Inc. 

FILING DATES: The application was filed 

on December 1, 2020, and amended on 

December 7, 2020. 

HEARING OR NOTIFICATION OF HEARING: An 

order granting the requested relief will 

be issued unless the Commission orders 

a hearing. Interested persons may 

request a hearing by emailing the 

Commission’s Secretary at SecretarysOffice@sec.gov and serving Applicants 

with a copy of the request by email. 

Hearing requests should be received by 

the Commission by 5:30 p.m. on 

February 8, 2021 and should be 

accompanied by proof of service on the 

Applicants, in the form of an affidavit, 

or, for lawyers, a certificate of service. 

Pursuant to rule 0–5 under the 

Investment Company Act of 1940 

(‘‘Act’’), hearing requests should state 

the nature of the writer’s interest, any 

facts bearing upon the desirability of a 

hearing on the matter, the reason for the 

request, and the issues contested. 

Persons who wish to be notified of a 

hearing may request notification by 

emailing to the Commission’s Secretary 

at Secretarys-Office@sec.gov. 

ADDRESSES: 

The Commission: Secretarys-Office@

sec.gov. 

Applicants: anna.paglia@

invesco.com, paulita.pike@

ropesgray.com and edward.baer@

ropesgray.com. 

FOR FURTHER INFORMATION CONTACT: 

Marc Mehrespand, Senior Counsel; 

Trace Rakestraw, Branch Chief, at (202) 

551–6825 (Division of Investment 

Management, Chief Counsel’s Office). 

SUPPLEMENTARY INFORMATION: The 

following is a summary of the 

application. The complete application 

may be obtained via the Commission’s 

website by searching for the file 

number, or for an applicant using the 

Company name box, at http://

www.sec.gov/search/search.htm or by 

calling (202) 551–8090. 

I. Introduction 

1. On December 2, 2020, the 

Commission issued an order (‘‘Prior 

Order’’) 1 under section 6(c) of the Act 

for an exemption from sections 2(a)(32), 

5(a)(1), 22(d), and 22(e) of the Act and 

rule 22c–1 under the Act, under 

sections 6(c) and 17(b) of the Act for an 

exemption from sections 17(a)(1) and 

17(a)(2) of the Act. The Prior Order 

permitted Applicants to introduce a 

novel type of actively-managed 

exchange-traded fund (‘‘ETF’’) that is 

not required to disclose its portfolio 

holdings on a daily basis (each, a 

‘‘Fund’’). Rather, pursuant to the Prior 

Order, each Business Day 2 a Fund 

publishes a basket of securities and cash 

that, while different from the Fund’s 

portfolio, is designed to closely track its 

daily performance (the ‘‘Substitute 

Basket’’). 

2. Pursuant to the Prior Order, a Fund 

sells and redeems its shares (‘‘Shares’’) 

only in Creation Units and generally on 

an in-kind basis. Purchasers are 

required to purchase Creation Units by 

making a deposit of Deposit Instruments 

and shareholders redeeming their 

Shares receive a transfer of Redemption 

Instruments.3 Under the Prior Order, the 

names and quantities of the instruments 

that constitute the Deposit Instruments 

and the Redemption Instruments for a 

Fund (collectively, the ‘‘Creation 

Basket’’) are the same as the Fund’s 

Substitute Basket, except to the extent 

purchases and redemptions are made 

entirely or in part on a cash basis. 

3. Applicants now seek to amend the 

Prior Order to, in effect, give the Funds 

the same flexibility with respect to 

Creation Basket composition as afforded 

to ETFs relying on rule 6c–11.4 More 

specifically, Applicants have requested 

that the Funds be allowed to use 

Creation Baskets that include 

instruments that are not included, or are 

included with different weightings, in 

the Fund’s Substitute Basket. 

II. The Application 

A. Applicants’ Proposal 

4. Upon amending the Prior Order, 

the names and quantities of the 

instruments that may constitute a 

Creation Basket will generally be the 

same as the Fund’s Substitute Basket, 

but a Fund may accept Creation Baskets 

that differ from the Substitute Basket. 

Each Business Day, before the open of 

trading on the Exchange where a Fund 

is listed, the Fund will publish on its 

website the composition of any Creation 

Basket exchanged with an authorized 

participant on the previous Business 

Day that differed from such Business 

Day’s Substitute Basket other than with 

respect to cash. 

5. Applicants represent that, for 

portfolio management or other reasons, 

the Funds may determine that it is 

desirable to use Creation Baskets that 

differ from the Substitute Basket 

(beyond cash substitutions). For 

example, a Fund may want to use a 

Creation Basket that contains 

instruments that are not included in a 

Fund’s Substitute Basket if the Adviser 


khammond on DSKJM1Z7X2PROD with NOTICES