68684 Federal Register / Vol. 88, No. 191 / Wednesday, October 4, 2023 / Notices 

57 15 U.S.C. 78s(b)(3)(C). 

58 17 CFR 200.30–3(a)(57). 

1 15 U.S.C. 78s(b)(1). 

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4See Securities Exchange Act Release No. 89185 

(June 29, 2020), 85 FR 40328 (July 6, 2020) (SR– 

NYSEArca–2019–95). Rule 8.601–E(c)(1) provides 

that ‘‘[t]he term ‘‘Active Proxy Portfolio Share’’ 

means a security that (a) is issued by an investment 

company registered under the Investment Company 

Act of 1940 (‘‘Investment Company’’) organized as 

an open-end management investment company that 

invests in a portfolio of securities selected by the 

Investment Company’s investment adviser 

consistent with the Investment Company’s 

investment objectives and policies; (b) is issued in 

a specified minimum number of shares, or 

multiples thereof, in return for a deposit by the 

purchaser of the Proxy Portfolio or Custom Basket, 

as applicable, and/or cash with a value equal to the 

next determined net asset value (‘‘NAV’’); (c) when 

aggregated in the same specified minimum number 

of Active Proxy Portfolio Shares, or multiples 

thereof, may be redeemed at a holder’s request in 

return for the Proxy Portfolio or Custom Basket, as 

applicable, and/or cash to the holder by the issuer 

with a value equal to the next determined NAV; and 

(d) the portfolio holdings for which are disclosed 

within at least 60 days following the end of every 

fiscal quarter.’’ Rule 8.601–E(c)(2) provides that 

‘‘[t]he term ‘‘Actual Portfolio’’ means the identities 

and quantities of the securities and other assets 

held by the Investment Company that shall form the 

basis for the Investment Company’s calculation of 

NAV at the end of the business day.’’ Rule 8.601– 

E(c)(3) provides that ‘‘[t]he term ‘‘Proxy Portfolio’’ 

means a specified portfolio of securities, other 

financial instruments and/or cash designed to track 

closely the daily performance of the Actual 

Portfolio of a series of Active Proxy Portfolio Shares 

as provided in the exemptive relief pursuant to the 

Investment Company Act of 1940 applicable to such 

series.’’ Rule 8.601–E(c)(4) provides that the term 

‘‘Custom Basket’’ means a portfolio of securities 

that is different from the Proxy Portfolio and is 

otherwise consistent with the exemptive relief 

issued pursuant to the Investment Company Act of 

1940 applicable to a series of Active Proxy Portfolio 

Shares. 

5Pursuant to Commission approval, the Funds 

are currently listed on Cboe BZX Exchange, Inc. 

(‘‘BZX’’) and utilize the Precidian ActiveShares 

methodology (the ‘‘Precidian Model’’). See 

Securities Exchange Act Release No. 88175 

(February 12, 2020), 85 FR 9494 (February 19, 2020) 

(SR–CboeBZX–2019–057) (Notice of Filing of 

Amendment No. 2 and Order Granting Accelerated 

Approval of a Proposed Rule Change, as Modified 

by Amendment No. 2 thereto, To List and Trade 

Shares of the American Century Focused Dynamic 

Growth ETF and American Century Focused Large 

Cap Value ETF Under BZX Rule 14.11(k)). 

6The 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). 

7NYSE Arca Rule 8.600–E(c)(2) defines the term 

‘‘Disclosed Portfolio’’ as the identities and 

submissions should refer to file number 

SR–EMERALD–2023–19 and should be 

submitted on or before October 25, 

2023. Rebuttal comments should be 

submitted by November 8, 2023. 

VI. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(3)(C) of the Act,57 that File 

No. SR–EMERALD–2023–19, be and 

hereby is, temporarily suspended. In 

addition, the Commission is instituting 

proceedings to determine whether the 

proposed rule change should be 

approved or disapproved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.58

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–22032 Filed 10–3–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 3498663; File No. SR– 

NYSEARCA–2023–67] 

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 Focused 

Dynamic Growth ETF and the 

American Century Focused Large Cap 

Value ETF Under NYSE Arca Rule 

8.601–E (Active Proxy Portfolio 

Shares) 

September 29, 2023. 

Pursuant to Section 19(b)(1) 1 of the 

Securities Exchange Act of 1934 

(‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that, on 

September 28, 2023, NYSE Arca, Inc. 

(‘‘NYSE Arca’’ or ‘‘Exchange’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change as described in 

Items I and II below, which Items have 

been prepared by the self-regulatory 

organization. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

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 

Focused Dynamic Growth ETF and the 

American Century Focused Large Cap 

Value ETF. 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’’) of the 

American Century Focused Dynamic 

Growth ETF and the American Century 

Focused Large Cap Value ETF (each a 

‘‘Fund’’ and, collectively, the ‘‘Funds’’) 

under Rule 8.601–E.5

Key Features of Active Proxy Portfolio 

Shares 

While funds issuing Active Proxy 

Portfolio Shares will be activelymanaged 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 6

and for which a ‘‘Disclosed Portfolio’’ is 

required to be disseminated at least 

once daily,7 the portfolio for an issue of 


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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. 

8A mutual fund is required to file with the 

Commission its complete portfolio schedules for the 

second and fourth fiscal quarters on Form N–CSR 

under the 1940 Act. Information reported on Form 

N–PORT for the third month of a fund’s fiscal 

quarter will be made publicly available 60 days 

after the end of a fund’s fiscal quarter. Form N– 

PORT requires reporting of a fund’s complete 

portfolio holdings on a position-by-position basis 

on a quarterly basis within 60 days after fiscal 

quarter end. Investors can obtain a series of Active 

Proxy Portfolio Shares’ Statement of Additional 

Information (‘‘SAI’’), its Shareholder Reports, its 

Form N–CSR, filed twice a year, and its Form N– 

CEN, filed annually. A series of Active Proxy 

Portfolio Shares’ SAI and Shareholder Reports will 

be available free upon request from the Investment 

Company, and those documents and the Form N– 

PORT, Form N–CSR, and Form N–CEN may be 

viewed on-screen or downloaded from the 

Commission’s website at www.sec.gov. 

9 ‘‘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. 

10See Securities Exchange Act Release Nos. 

89185 (June 29, 2020), 85 FR 40328 (July 6, 2020) 

(SR–NYSEArca–2019–95) (Notice of Filing of 

Amendment No. 6 and Order Granting Accelerated 

Approval of a Proposed Rule Change, as Modified 

by Amendment No. 6, to Adopt NYSE Arca Rule 

8.601–E to Permit the Listing and Trading of Active 

Proxy Portfolio Shares and To List and Trade 

Shares of the Natixis U.S. Equity Opportunities ETF 

Under Proposed NYSE Arca Rule 8.601–E); 89192 

(June 30, 2020), 85 FR 40699 (July 7, 2020) (SR– 

NYSEArca–2019–96) (Notice of Filing of 

Amendment No. 5 and Order Granting Accelerated 

Approval of a Proposed Rule Change, as Modified 

by Amendment No. 5, to List and Trade Two Series 

of Active Proxy Portfolio Shares Issued by the 

American Century ETF Trust under NYSE Arca 

Rule 8.601–E); 89191 (June 30, 2020), 85 FR 40358 

(July 6, 2020) (SR–NYSEArca–2019–92) (Notice of 

Filing of Amendment No. 3 and Order Granting 

Accelerated Approval of a Proposed Rule Change, 

as Modified by Amendment No. 3, to List and Trade 

Four Series of Active Proxy Portfolio Shares Issued 

by T. Rowe Price Exchange-Traded Funds, Inc. 

under NYSE Arca Rule 8.601–E); 89438 (July 31, 

2020), 85 FR 47821 (August 6, 2020) (SR– 

NYSEArca–2020–51) (Order Granting Approval of a 

Proposed Rule Change, as Modified by Amendment 

No. 2, to List and Trade Shares of Natixis Vaughan 

Nelson Select ETF and Natixis Vaughan Nelson 

MidCap ETF under NYSE Arca Rule 8.601–E); 

91266 (March 5, 2021), 86 FR 13930 (March 11, 

2021) (SR–NYSEArca–2020–104) (Order Approving 

a Proposed Rule Change, as Modified by 

Amendment No. 2, To List and Trade Shares of the 

Stance Equity ESG Large Cap Core ETF Under 

NYSE Arca Rule 8.601–E). 

11See, e.g., Securities Exchange Act Release Nos. 

92104 (June 3, 2021), 86 FR 30635 (June 9, 2021) 

(NYSEArca–2021–46) (Notice of Filing and 

Immediate Effectiveness of Proposed Rule Change 

to List and Trade Shares of the Nuveen Santa 

Barbara Dividend Growth ETF, Nuveen Small Cap 

Select ETF, and Nuveen Winslow Large-Cap 

Growth ESG ETF Under NYSE Arca Rule 8.601–E 

(Active Proxy Portfolio Shares); 92958 (September 

13, 2021), 86 FR 51933 (September 17, 2021) 

(NYSEArca–2021–77) (Notice of Filing and 

Immediate Effectiveness of Proposed Rule Change 

To List and Trade Shares of the Nuveen Growth 

Opportunities ETF Under NYSE Arca Rule 8.601– 

E (Active Proxy Portfolio Shares); 93264 (October 6, 

2021), 86 FR 56989 (October 13, 2021) (SR– 

NYSEArca–2021–84) (Notice of Filing and 

Immediate Effectiveness of Proposed Rule Change 

To List and Trade Shares of the Schwab Ariel ESG 

ETF Under NYSE Arca Rule 8.601–E (Active Proxy 

Portfolio Shares); 94486 (March 22, 2022), 87 FR 

17351 (March 28, 2022) (SR–NYSEArca–2022–14) 

(Notice of Filing and Immediate Effectiveness of 

Proposed Rule Change to List and Trade Shares of 

the Columbia Seligman Semiconductor and 

Technology ETF Under NYSE Arca Rule 8.601 

(Active Proxy Portfolio Shares); 94908 (May 13, 

2022), 87 FR 30524 (May 19, 2022) (SR–NYSEArca– 

2022–28) (Notice of Filing and Immediate 

Effectiveness of Proposed Rule Change to List and 

Trade Shares of the Principal Real Estate Active 

Opportunities ETF Under NYSE Arca Rule 8.601 

(Active Proxy Portfolio Shares)); 94902 (May 12, 

2022), 87 FR 30286 (May 18, 2022) (SR–NYSEArca– 

2022–29) (Notice of Filing and Immediate 

Effectiveness of Proposed Rule Change to List and 

Trade Shares of the IQ Winslow Large Cap Growth 

ETF and IQ Winslow Focused Large Cap Growth 

ETF Under NYSE Arca Rule 8.601–E (Active Proxy 

Portfolio Shares)); and 97645 (June 2, 2023), 88 FR 

37588 (SR–NYSEArca–2023–38) (Notice of Filing 

and Immediate Effectiveness of Proposed Rule 

Change To List and Trade Shares of the Natixis 

Loomis Sayles Focused Growth ETF Under NYSE 

Arca Rule 8.601–E (Active Proxy Portfolio Shares)). 

12The Trust is registered under the 1940 Act. On 

June 18, 2018, the Trust filed a registration 

statement on Form N–1A relating to the Funds (File 

No. 811–23305) (the ‘‘Registration Statement’’). The 

Commission issued an order granting exemptive 

relief to the Trust (‘‘Exemptive Order’’) under the 

1940 Act on May 12, 2020 (Investment Company 

Act Release No. 33862). The Exemptive Order was 

granted with respect to the Trust’s application for 

exemptive relief (the ‘‘Application’’) (Investment 

Company Act Release No. 33841) (File No. 812– 

15082). Each Fund’s final, definitive prospectus, 

dated as of January 1, 2023, was filed pursuant to 

Rule 485B of the Securities Act of 1933, and 

contains the current methodology of each Fund (the 

‘‘Final Prospectus’’). A supplement to the Final 

Prospectus containing the change to the 

methodology used by each Fund from the Precidian 

Model to the NYSE AMS proxy portfolio 

methodology, as described herein, was filed on 

August 22, 2023, pursuant to Rule 497(e) of the 

Securities Act of 1933 (the ‘‘Supplement’’). 

Pursuant to the Supplement, the change to the 

methodology will be implemented effective October 

23, 2023. As part of the transition, effective October 

23, 2023, the listing exchange for the Funds will 

change from BZX to the Exchange. Investments 

made by the Funds will comply with the conditions 

set forth in the Application and the Exemptive 

Order. The description of each Fund and the Shares 

contained herein are based on the Registration 

Statement, the Final Prospectus and the 

Supplement. The Exchange will not commence 

trading in the Shares of each Fund until the 

Supplement is effective. 

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’’).8 The composition of 

the portfolio of an issue of Active Proxy 

Portfolio Shares would not be available 

at commencement of Exchange listing 

and trading. Second, in connection with 

the creation and redemption of Active 

Proxy Portfolio Shares, such creation or 

redemption may be exchanged for a 

Proxy Portfolio or Custom Basket, as 

applicable, and/or cash with a value 

equal to the next-determined NAV. A 

series of Active Proxy Portfolio Shares 

will disclose the Proxy Portfolio on a 

daily basis, which, as described above, 

is designed to track closely the daily 

performance of the Actual Portfolio of a 

series of Active Proxy Portfolio Shares, 

instead of the actual holdings of the 

Investment Company, as provided by a 

series of Managed Fund Shares. As set 

forth in NYSE Arca Rule 8.601– 

E(d)(2)(B)(ii), for Active Proxy Portfolio 

Shares using a Custom Basket, each 

Business Day,9 before the opening of 

trading in the Core Trading Session (as 

defined in NYSE Arca Rule 7.34–E(a)), 

the Investment Company shall make 

publicly available on its website the 

composition of any Custom Basket 

transacted on the previous Business 

Day, except a Custom Basket that differs 

from the applicable Proxy Portfolio only 

with respect to cash. 

The Commission has previously 

approved 10 and noticed for immediate 

effectiveness 11 the listing and trading 

on the Exchange of series of Active 

Proxy Portfolio Shares under NYSE 

Arca Rule 8.601–E. 

The Shares of each Fund will be 

issued by American Century ETF Trust 

(the ‘‘Trust’’), a statutory trust organized 

under the laws of the State of Delaware 

and registered with the Commission as 

an open-end management investment 

company.12 American Century 

Investment Management, Inc. will be 

the investment adviser to each Fund 

(the ‘‘Adviser’’). Foreside Fund 

Services, LLC will serve as the 

distributor (the ‘‘Distributor’’) of each of 

the Fund’s 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, Proxy 

Portfolio, and/or Custom Basket, as 

applicable. Any person related to the 

investment adviser or Investment 

Company who makes decisions 

pertaining to the Investment Company’s 

Actual Portfolio, Proxy Portfolio, and/or 


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68686 Federal Register / Vol. 88, No. 191 / Wednesday, October 4, 2023 / Notices 

13An 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. 

Custom Basket, as applicable, or has 

access to non-public information 

regarding the Investment Company’s 

Actual Portfolio, Proxy Portfolio, and/or 

Custom Basket, as applicable, or 

changes thereto must be subject to 

procedures reasonably designed to 

prevent the use and dissemination of 

material non-public information 

regarding the Actual Portfolio, Proxy 

Portfolio, and/or Custom Basket, as 

applicable, or changes thereto. 

Commentary .04 is similar to 

Commentary .03(a)(i) and (iii) to NYSE 

Arca Rule 5.2–E(j)(3); however, 

Commentary .04, in connection with the 

establishment of a ‘‘fire wall’’ between 

the investment adviser and the brokerdealer, reflects the applicable open-end 

fund’s portfolio, not an underlying 

benchmark index, as is the case with 

index-based funds.13 Commentary .04 is 

also similar to Commentary .06 to Rule 

8.600–E related to Managed Fund 

Shares, except that Commentary .04 

relates to establishment and 

maintenance of a ‘‘fire wall’’ between 

the investment adviser and personnel of 

the broker-dealer or broker-dealer 

affiliate, as applicable, applicable to an 

Investment Company’s Actual Portfolio, 

Proxy Portfolio, and/or Custom Basket, 

as applicable, or changes thereto, and 

not just to the underlying portfolio, as 

is the case with Managed Fund Shares. 

In addition, Commentary .05 to Rule 

8.601–E provides that any person or 

entity, including a custodian, Reporting 

Authority, distributor, or administrator, 

who has access to non-public 

information regarding the Investment 

Company’s Actual Portfolio, Proxy 

Portfolio, or Custom Basket, as 

applicable, or changes thereto, must be 

subject to procedures reasonably 

designed to prevent the use and 

dissemination of material non-public 

information regarding the applicable 

Investment Company Actual Portfolio, 

Proxy Portfolio, or Custom Basket, as 

applicable, or changes thereto. 

Moreover, if any such person or entity 

is registered as a broker-dealer or 

affiliated with a broker-dealer, such 

person or entity will erect and maintain 

a ‘‘fire wall’’ between the person or 

entity and the broker-dealer with 

respect to access to information 

concerning the composition and/or 

changes to such Investment Company 

Actual Portfolio, Proxy Portfolio, or 

Custom Basket, as applicable. 

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 each Fund’s Actual Portfolio, 

Proxy Portfolio, and/or Custom Basket, 

as applicable. 

In the event (a) the 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 each 

Fund’s Actual Portfolio, Proxy Portfolio, 

and/or Custom Basket, as applicable, 

and will be subject to procedures 

designed to prevent the use and 

dissemination of material non-public 

information regarding each Fund’s 

Actual Portfolio, Proxy Portfolio, and/or 

Custom Basket, as applicable, or 

changes thereto. Any person related to 

the Adviser or each Fund who makes 

decisions pertaining to each Fund’s 

Actual Portfolio, Proxy Portfolio, or 

Custom Basket, as applicable, or has 

access to non-public information 

regarding each Fund’s Actual Portfolio, 

Proxy Portfolio, and/or Custom Basket, 

as applicable, or changes thereto are 

subject to procedures reasonably 

designed to prevent the use and 

dissemination of material non-public 

information regarding each Fund’s 

Actual Portfolio, Proxy Portfolio, and/or 

Custom Basket, as applicable or changes 

thereto. 

In addition, any person or entity, 

including any service provider for each 

Fund, who has access to non-public 

information regarding each Fund’s 

Actual Portfolio, Proxy Portfolio, and/or 

Custom Basket, as applicable, or 

changes thereto, will be subject to 

procedures reasonably designed to 

prevent the use and dissemination of 

material non-public information 

regarding each Fund’s Actual Portfolio, 

Proxy Portfolio, and/or Custom Basket, 

as applicable, or changes thereto. 

Moreover, if any such person or entity 

is registered as a broker-dealer or 

affiliated with a broker-dealer, such 

person or entity has erected and will 

maintain a ‘‘fire wall’’ between the 

person or entity and the broker-dealer 

with respect to access to information 

concerning the composition and/or 

changes to each Fund’s Actual Portfolio, 

Proxy Portfolio, and/or Custom Basket, 

as applicable. 

Description of the Funds 

According to the Registration 

Statement, the Adviser will identify a 

Proxy Portfolio for each Fund that is 

designed to replicate the daily 

performance of each Fund’s Actual 

Portfolio and will only include 

securities and investments in which 

each Fund may invest. While each 

Fund’s Proxy Portfolio and Actual 

Portfolio will hold some of the same 

securities, the Proxy Portfolio and 

Actual Portfolio may not include 

identical securities. 

The composition of the Proxy 

Portfolio will be published on the 

Funds’ website 

(www.americancenturyetfs.com) each 

Business Day before the commencement 

of trading of each Fund’s Shares. The 

Funds’ website will include the 

following information for each portfolio 

holding in the Proxy Portfolio: (1) ticker 

symbol; (2) CUSIP or other identifier; (3) 

description of holding; (4) quantity of 

each security or other asset held; and (5) 

percentage weight of the holding in the 

Proxy Portfolio. The Proxy Portfolio will 

be reconstituted daily, and the Adviser 

will not make intra-day changes to the 

Proxy Portfolio except to correct errors 

in the published Proxy Portfolio. 

Each Fund will, at the end of each 

trading day, calculate the percentage 

weight overlap between the holdings of 

its Proxy Portfolio and the Actual 

Portfolio (the ‘‘Proxy Overlap’’) that 

formed the basis for each Fund’s 

calculation of NAV at the end of the 

prior Business Day by taking the lesser 

weight of each asset held in common 

between the Actual Portfolio and the 

Proxy Portfolio and adding the totals. 

Each 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 


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14Pursuant to the Application and Exemptive 

Order, the permissible investments for each Fund 

include only the following instruments: exchangetraded funds, exchange-traded notes, exchangetraded common stocks, exchange-traded preferred 

stocks, exchange-traded American Depositary 

Receipts, exchange-traded real estate investment 

trusts, exchange-traded commodity pools, 

exchange-traded metal trusts, exchange-traded 

currency trusts and exchange-traded futures that 

trade contemporaneously with each Fund’s shares. 

In addition, each Fund may hold cash and cash 

equivalents (short-term U.S. Treasury securities, 

government money market funds, and repurchase 

agreements). Pursuant to the Application and 

Exemptive Order, neither 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. 

15The term ‘‘Normal Market Conditions’’ 

includes, but is not limited to, the absence of 

trading halts in the applicable financial markets 

generally; operational issues (e.g., systems failure) 

causing dissemination of inaccurate market 

information; or force majeure type events such as 

natural or manmade disaster, act of God, armed 

conflict, act of terrorism, riot or labor disruption or 

any similar intervening circumstance. 

16See supra, note 14. 

17Each Fund’s broad-based securities benchmark 

index is identified in its current Registration 

Statement. 

18The Adviser represents that, to the extent the 

Trust effects the creation or redemption of Shares 

in cash on any given day, such transactions will be 

effected in the same manner for all Authorized 

Participants (as defined below) placing trades with 

each Fund on that day. 

Application and Exemptive Order.14

Any foreign common stocks held by 

each 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. 

American Century Focused Dynamic 

Growth ETF 

According to the Registration 

Statement, the Fund’s investment 

objective is long-term capital growth. 

The Fund will, under Normal Market 

Conditions,15 invest primarily in U.S. 

exchange-listed equity securities. The 

Adviser looks for stocks of companies it 

believes will increase in value over 

time. In implementing this strategy, the 

Adviser makes investment decisions 

based primarily on its analysis of 

individual companies, rather than on 

broad economic forecasts. Management 

of the Fund is based on the belief that, 

over the long term, stock price 

movements follow growth in earnings, 

revenues and/or cash flow. The Adviser 

uses a variety of analytical research 

tools and techniques to identify the 

stocks of companies that meet the 

Fund’s investment criteria. In addition 

to investing primarily in U.S. exchangelisted equity securities, the Fund may 

also invest in exchange-traded funds, 

exchange-listed ADRs, U.S. exchangelisted equity futures contracts, and U.S. 

exchange-listed equity index futures 

contracts. The Fund may also hold cash 

and cash equivalents without limitation. 

American Century Focused Large Cap 

Value ETF 

According to the Registration 

Statement, the Fund’s investment 

objective is long-term capital growth. 

The Fund will, under Normal Market 

Conditions, invest primarily in U.S. 

exchange-listed equity securities. The 

Adviser looks for stocks of companies 

whose stock price may not reflect the 

company’s value. The Adviser attempts 

to purchase the stocks of these 

undervalued companies and hold each 

stock until the price has increased to, or 

is higher than, a level the Adviser 

believes more accurately reflects the fair 

value of the company. The Adviser may 

sell stocks from the Fund’s portfolio if 

it believes a stock no longer meets its 

valuation criteria, if a stock’s risk 

parameters outweigh its return 

opportunity, more attractive alternatives 

are identified, or specific events alter a 

stock’s prospects. In addition to 

investing primarily in U.S. exchangelisted equity securities, the Fund may 

also invest in exchange-traded funds, 

exchange-listed ADRs, U.S. exchangelisted equity futures contracts, and U.S. 

exchange-listed equity index futures 

contracts. The Fund may also hold cash 

and cash equivalents without limitation. 

Investment Restrictions 

Shares of each Fund will conform to 

the initial and continued listing criteria 

under Rule 8.601–E. Each 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.16

Each Fund’s investments, including 

derivatives, will be consistent with its 

investment objectives and will not be 

used to enhance leverage (although 

certain derivatives and other 

investments may result in leverage). 

That is, each Fund’s investments will 

not be used to seek performance that is 

the multiple or inverse multiple (e.g., 

2X or –3X) of each Fund’s primary 

broad-based securities benchmark index 

(as defined in Form N–1A).17

Purchases and Redemptions 

According to the Registration 

Statement, the Trust will issue and sell 

Shares of each Fund only in specified 

minimum size ‘‘Creation Units’’ on a 

continuous basis through the Distributor 

at their NAV next determined after 

receipt of an order, on any Business 

Day, in proper form. The NAV of each 

Fund’s Shares will be calculated each 

Business Day as of the close of regular 

trading on the Exchange, ordinarily 4:00 

p.m. Eastern Time (‘‘E.T.’’). A Creation 

Unit will generally consist of at least 

5,000 Shares. 

According to the Registration 

Statement, Shares of each Fund will be 

purchased and redeemed in Creation 

Units. Creation Units will generally be 

purchased in-kind through the deposit 

of a designated portfolio of securities 

(the ‘‘Deposit Securities’’), which will 

typically replicate the Proxy Portfolio, 

plus the ‘‘Cash Component,’’ which is 

an amount equal to the difference 

between the NAV of each Fund’s shares 

(per Creation Unit) and the market value 

of the Deposit Securities or ‘‘Cash 

Deposit’’ (as defined below), as 

applicable. The Cash Component serves 

the function of compensating for any 

differences between the NAV per 

Creation Unit and the market value of 

the Deposit Securities or Cash Deposit, 

as applicable. The Cash Deposit is a 

‘‘cash in lieu’’ amount that the Trust 

may permit or require to be added to the 

Cash Component to replace any Deposit 

Security. The names and quantities of 

the instruments that constitute the 

Deposit Securities will be the same as 

the Proxy Portfolio, except to the extent 

that a Fund requires purchases and 

redemptions to be made entirely or in 

part on a cash basis. Together, the 

Deposit Securities or Cash Deposit, as 

applicable, and the Cash Component 

constitute the ‘‘Fund Deposit,’’ which 

represents the minimum initial and 

subsequent investment amount for a 

Creation Unit of each Fund. 

Creation Units of each Fund may be 

purchased and/or redeemed entirely or 

partially for cash in the Trust’s 

discretion. When full or partial cash 

purchases or redemptions of Creation 

Units are available or specified for a 

Fund, they will be effected in 

essentially the same manner as in-kind 

purchases or redemptions thereof.18

The identity and number of shares 

comprising a Creation Unit may change 

from time to time. Each Fund, through 

the National Securities Clearing 

Corporation (the ‘‘NSCC’’), will make 

available on each Business Day, 

immediately prior to the opening of 

business on the Exchange, the list of the 

names and the required number of 

shares of each Deposit Security or the 

required amount of Cash Deposit, as 


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68688 Federal Register / Vol. 88, No. 191 / Wednesday, October 4, 2023 / Notices 

19According to the Registration Statement, an 

‘‘Authorized Participant’’ is (i) a broker-dealer or 

other participant in the clearing process through the 

Continuous Net Settlement System of the NSCC or 

(ii) a DTC Participant, that has executed an AP 

Agreement with the Distributor. 

20The records relating to Bid/Ask Prices will be 

retained by each 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 each 

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 of each 

Fund is the official closing price on the Exchange. 

21The ‘‘premium/discount’’ refers to the 

premium or discount to the NAV at the end of a 

trading day and will be calculated based on the last 

Bid/Ask Price on a given trading day. 

22See note 4, supra. Rule 8.601–E (c)(3) provides 

that the website for each series of Active Proxy 

Portfolio Shares shall disclose the information 

regarding the Proxy Portfolio as provided in the 

exemptive relief pursuant to the 1940 Act 

applicable to such series, including the following, 

to the extent applicable: (i) Ticker symbol; (ii) 

CUSIP or other identifier; (iii) Description of 

holding; (iv) Quantity of each security or other asset 

held; and (v) Percentage weighting of the holding 

in the portfolio. 

23See note 8, supra. 24See NYSE Arca Rule 7.12–E. 

applicable, to be included in the Fund 

Deposit. The published Fund Deposit 

will apply until such time as the nextannounced composition of the Deposit 

Securities is made available, and there 

will be no intra-day changes except to 

correct errors in the published Fund 

Deposit. The Fund Deposit will be 

published each Business Day regardless 

of whether a Fund decides to issue or 

redeem Creation Units entirely or in 

part on a cash basis. The identity of the 

Fund Securities that will be applicable 

to redemption requests received in 

proper form on a Business Day will also 

be made available prior to the opening 

of business on the Exchange on each 

Business Day. 

All orders to purchase or redeem 

Creation Units must be placed with the 

Distributor by or through an Authorized 

Participant, who may engage in creation 

or redemption transactions directly with 

each Fund.19 Orders to purchase or 

redeem Creation Units will be accepted 

until the ‘‘Order Cut-Off Time,’’ 

generally 2:00 p.m. E.T., on each 

Business Day in order to receive the 

NAV of Shares of each Fund on that 

Business Day. The date on which an 

order to purchase or redeem Creation 

Units is placed is referred to as the 

‘‘Transmittal Date.’’ When the Exchange 

closes earlier than normal, a Fund may 

require orders for Creation Units to be 

placed earlier in the Business Day. 

Availability of Information 

The Funds’ website 

(www.americancentiryetfs.com) will 

include a form of the prospectus for 

each Fund that may be downloaded. 

The Funds’ website will include on a 

daily basis, per Share for each Fund: (1) 

the prior Business Day’s NAV; (2) the 

prior Business Day’s ‘‘Closing Price’’ or 

‘‘Mid-Point of the Bid/Ask Price at 

Close’’; 20 and (3) a calculation of the 

premium/discount of such Closing Price 

or Mid-Point of the Bid/Ask Price at 

Close against such NAV.21 The Adviser 

has represented that the Funds’ 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 each Fund as may be required 

for other ETFs under Rule 6c–11 under 

the 1940 Act, as amended. The Funds’ 

website will also disclose the 

information required under Rule 8.601– 

E(c)(3).22 The Funds’ website and 

information will be publicly available at 

no charge. 

The identity and quantity of 

investments in the Proxy Portfolio for 

each Fund will be publicly available on 

the Funds’ website before the 

commencement of trading in Shares of 

each Fund on each Business Day. The 

website will also include information 

relating to the Proxy Overlap, as 

discussed above. With respect to each 

Custom Basket utilized by each Fund, 

each Business Day, before the opening 

of trading in the Core Trading Session 

(as defined in NYSE Arca Rule 7.34–E 

(a)), the Funds’ website will also 

include the composition of any Custom 

Basket transacted on the previous 

Business Day, except a Custom Basket 

that differs from the Proxy Portfolio 

only with respect to cash. 

Typical mutual fund-style annual, 

semi-annual and quarterly disclosures 

contained in each Fund’s 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, and no less than 60 days after the 

end of every fiscal quarter. 

Investors can also obtain each Fund’s 

SAI, Shareholder Reports, Form N–CSR, 

N–PORT, and Form N–CEN. The 

prospectus, SAI, and Shareholder 

Reports are available free upon request, 

and those documents and the Form N– 

CSR, N–PORT, and Form N–CEN may 

be viewed on-screen or downloaded 

from the Commission’s website. The 

Exchange also notes that pursuant to the 

Application, each Fund must comply 

with Regulation Fair Disclosure, which 

prohibits selective disclosure of any 

material non-public information. 

Information regarding the market 

price of Shares of each Fund and trading 

volume in Shares of each Fund, 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 of each Fund will be 

published daily in the financial section 

of newspapers. 

Quotation and last sale information 

for the Shares of each Fund and U.S. 

exchange-traded instruments (excluding 

futures contracts) will be available via 

the Consolidated Tape Association 

(‘‘CTA’’) high-speed line, from the 

exchanges on which such securities 

trade, or through major market data 

vendors or subscription services. 

Quotation and last sale information for 

futures contracts will be available from 

the exchanges on which they trade. 

Intraday price information for all 

exchange-traded instruments, which 

include all eligible instruments except 

cash and cash equivalents, will be 

available from the exchanges on which 

they trade, or through major market data 

vendors or subscription services. 

Intraday price information for cash 

equivalents is available through major 

market data vendors, subscription 

services and/or pricing services. 

Trading Halts 

With respect to trading halts, the 

Exchange may consider all relevant 

factors in exercising its discretion to 

halt or suspend trading in the Shares of 

each Fund.24 Trading in Shares of each 

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 of 

each Fund inadvisable. Trading in the 

Shares of each Fund will be subject to 

NYSE Arca Rule 8.601–E(d)(2)(D), 

which sets forth circumstances under 

which Shares of each 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; 


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Federal Register / Vol. 88, No. 191 / Wednesday, October 4, 2023 / Notices 68689 

25FINRA 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. 

26For a list of the current members of ISG, see 

www.isgportal.org. 

or (b) whether other unusual conditions 

or circumstances detrimental to the 

maintenance of a fair and orderly 

market are present. If the Exchange 

becomes aware that the NAV, Proxy 

Portfolio, or Actual Portfolio with 

respect to a series of Active Proxy 

Portfolio Shares is not disseminated to 

all market participants at the same time, 

the Exchange shall halt trading in such 

series until such time as the NAV, Proxy 

Portfolio, or Actual Portfolio is available 

to all market participants at the same 

time. 

Trading Rules 

The Exchange deems the Shares of 

each Fund to be equity securities, thus 

rendering trading in the Shares of each 

Fund subject to the Exchange’s existing 

rules governing the trading of equity 

securities. Shares of each Fund 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 of each Fund 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 of each 

Fund during all trading sessions. 

A minimum of 100,000 Shares for 

each 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 

of each Fund, will obtain a 

representation from the Trust that (i) the 

NAV per Share of each Fund will be 

calculated daily, (ii) the NAV, Proxy 

Portfolio, and the Actual Portfolio for 

each Fund will be made publicly 

available to all market participants at 

the same time, and (iii) the Trust and 

any person acting on behalf of the Trust 

will comply with Regulation Fair 

Disclosure under the Act, including 

with respect to any Custom Basket. 

With respect to Active Proxy Portfolio 

Shares, all of the Exchange member 

obligations relating to product 

description and prospectus delivery 

requirements will continue to apply in 

accordance with Exchange rules and 

federal securities laws, and the 

Exchange and the Financial Industry 

Regulatory Authority, Inc. (‘‘FINRA’’) 

will continue to monitor Exchange 

members for compliance with such 

requirements. 

Surveillance 

The Exchange represents that trading 

in the Shares of each Fund 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 of each Fund 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. 

The Exchange or FINRA, on behalf of 

the Exchange, or both, will 

communicate as needed regarding 

trading in the Shares of each Fund and 

underlying exchange-traded instruments 

with other markets and other entities 

that are members of the ISG, and the 

Exchange or FINRA, on behalf of the 

Exchange, or both, may obtain trading 

information regarding trading such 

securities and underlying exchangetraded instruments from such markets 

and other entities. In addition, the 

Exchange may obtain information 

regarding trading in such securities and 

underlying exchange-traded instruments 

from markets and other entities that are 

members of ISG or with which the 

Exchange has in place a comprehensive 

surveillance sharing agreement.26

The Adviser will make available daily 

to FINRA and the Exchange the Actual 

Portfolio of the Fund, upon request, as 

necessary to assist with the performance 

of the surveillances and investigations 

referred to above. 

In addition, the Exchange also has a 

general policy prohibiting the 

distribution of material, non-public 

information by its employees. 

Commentary .03 to NYSE Arca Rule 

8.601–E provides that the Exchange will 

implement and maintain written 

surveillance procedures applicable to 

Active Proxy Portfolio Shares. As part of 

these surveillance procedures, the 

Investment Company’s investment 

adviser will, upon request by the 

Exchange or FINRA, on behalf of the 

Exchange, make available to the 

Exchange or FINRA the daily Actual 

Portfolio holdings of each series of 

Active Proxy Portfolio Shares. The 

Exchange believes that the ability to 

access the information on an as needed 

basis will provide it with sufficient 

information to perform the necessary 

regulatory functions associated with 

listing and trading series of Active 

Proxy Portfolio Shares on the Exchange, 

including the ability to monitor 

compliance with the initial and 

continued listing requirements as well 

as the ability to surveil for manipulation 

of Active Proxy Portfolio Shares. 

The Exchange will utilize its existing 

procedures to monitor issuer 

compliance with the requirements of 

Rule 8.601–E. For example, the 

Exchange will continue to use intraday 

alerts that will notify Exchange 

personnel of trading activity throughout 

the day that may indicate that unusual 

conditions or circumstances are present 

that could be detrimental to the 

maintenance of a fair and orderly 

market. The Exchange will require from 

the issuer of a series of Active Proxy 

Portfolio Shares, upon initial listing and 

periodically thereafter, a representation 

that it is in compliance with Rule 

8.601–E. The Exchange notes that 

Commentary .01 to Rule 8.601–E 

requires an issuer of Active Proxy 

Portfolio Shares to notify the Exchange 

of any failure to comply with the 

continued listing requirements of Rule 

8.601–E. In addition, the Exchange will 

require issuers to represent that they 

will notify the Exchange of any failure 

to comply with the terms of applicable 

exemptive and no-action relief. As part 

of its surveillance procedures, the 

Exchange will rely on the foregoing 

procedures to become aware of any noncompliance with the requirements of 

Rule 8.601–E. 

With respect to each Fund, all 

statements and representations made in 

this filing regarding (a) the description 

of the portfolio, (b) limitations on 

portfolio holdings, or (c) the 

applicability of Exchange listing rules 

specified in this rule filing shall 

constitute continued listing 

requirements for listing the Shares of 

each Fund on the Exchange. The 

Exchange will obtain a representation 

from the Trust, prior to commencement 

of trading in the Shares of each Fund, 

that it will advise the Exchange of any 


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68690 Federal Register / Vol. 88, No. 191 / Wednesday, October 4, 2023 / Notices 

27 15 U.S.C. 78f(b). 

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

29The Exchange represents that, for initial and 

continued listing, each Fund will be in compliance 

with Rule 10A–3 under the Act, as provided by 

NYSE Arca Rule 5.3–E. 

30See note 14, supra. 

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). 

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.29

With respect to the proposed listing 

and trading of Shares of each Fund, the 

Exchange believes that the proposed 

rule change is designed to prevent 

fraudulent and manipulative acts and 

practices in that the Shares of each 

Fund will be listed and traded on the 

Exchange pursuant to the initial and 

continued listing criteria in NYSE Arca 

Rule 8.601–E. 

Each Fund’s holdings will conform to 

the permissible investments as set forth 

in the Application and Exemptive 

Order, and the holdings will be 

consistent with all requirements in the 

Application and Exemptive Order.30

The Exchange or FINRA, on behalf of 

the Exchange, or both, will 

communicate as needed regarding 

trading in the Shares of each Fund and 

underlying exchange-traded instruments 

with other markets and other entities 

that are members of the ISG, and the 

Exchange or FINRA, on behalf of the 

Exchange, or both, may obtain trading 

information regarding trading in the 

Shares of each Fund and underlying 

exchange-traded instruments from such 

markets and other entities. In addition, 

the Exchange may obtain information 

regarding trading in the Shares of each 

Fund and underlying exchange-traded 

instruments from markets and other 

entities that are members of ISG or with 

which the Exchange has in place a 

comprehensive surveillance sharing 

agreement. Any foreign common stocks 

held by a 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 of each Fund 

in a manner that will not lead to 

significant deviations between the 

Shares of each Fund’s Closing Price or 

Bid/Ask Price and NAV. 

Each 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, each Fund’s investments will 

not be used to seek performance that is 

the multiple or inverse multiple (e.g., 

2X or –3X) of a Fund’s primary broadbased securities benchmark index (as 

defined in Form N–1A). 

The proposed rule change is designed 

to promote just and equitable principles 

of trade and to protect investors and the 

public interest in that the Exchange will 

obtain a representation from the Trust 

that the NAV per Share of each Fund 

will be calculated daily and that the 

NAV, Proxy Portfolio, Actual Portfolio 

and/or Custom Basket, as applicable, for 

each Fund will be made available to all 

market participants at the same time. 

Investors can obtain each Fund’s SAI, 

shareholder reports, and its Form N– 

CSR, Form N–PORT, and Form N–CEN. 

Each Fund’s SAI and shareholder 

reports will be available free upon 

request, and those documents and the 

Form N–CSR, Form N–PORT, and Form 

N–CEN may be viewed on-screen or 

downloaded from the Commission’s 

website. 

Commentary .03 to NYSE Arca Rule 

8.601–E provides that the Exchange will 

implement and maintain written 

surveillance procedures applicable to 

Active Proxy Portfolio Shares. As part of 

these surveillance procedures, the 

Investment Company’s investment 

adviser will, upon request by the 

Exchange or FINRA, on behalf of the 

Exchange, make available to the 

Exchange or FINRA the daily portfolio 

holdings of each series of Active Proxy 

Portfolio Shares. The Exchange believes 

that the ability to access the information 

on an as needed basis will provide it 

with sufficient information to perform 

the necessary regulatory functions 

associated with listing and trading 

series of Active Proxy Portfolio Shares 

on the Exchange, including the ability to 

monitor compliance with the initial and 

continued listing requirements as well 

as the ability to surveil for manipulation 

of Active Proxy Portfolio Shares. With 

respect to each Fund, the Adviser will 

make available daily to FINRA and the 

Exchange the portfolio holdings of each 

Fund upon request as necessary to 

facilitate the performance of the 

surveillances and investigations referred 

to above. 

The Exchange will utilize its existing 

procedures to monitor compliance with 

the requirements of Rule 8.601–E. For 

example, the Exchange will continue to 

use intraday alerts that will notify 

Exchange personnel of trading activity 

throughout the day that may indicate 

that unusual conditions or 

circumstances are present that could be 

detrimental to the maintenance of a fair 

and orderly market. The Exchange will 

require from the 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 of each 

Fund to notify the Exchange of any 

failure to comply with the continued 

listing requirements of Rule 8.601–E. In 

addition, the Exchange will require the 

issuer to represent that it will notify the 

Exchange of any failure to comply with 

the terms of applicable exemptive and 

no-action relief. The Exchange will rely 

on the foregoing procedures to become 

aware of any non-compliance with the 

requirements of Rule 8.601–E. 

In addition, with respect to each 

Fund, a large amount of information 

will be publicly available regarding each 

Fund and the Shares of each Fund, 

thereby promoting market transparency. 

Quotation and last sale information 

for the Shares of each Fund and U.S. 

exchange-traded instruments (excluding 

futures contracts) will be available via 

the CTA high-speed line, from the 

exchanges on which such securities 

trade, or through major market data 

vendors or subscription services. 

Quotation and last sale information for 

futures contracts will be available from 

the exchanges on which they trade. 

Intraday price information for all 

exchange-traded instruments, which 

include all eligible instruments except 

cash and cash equivalents, will be 

available from the exchanges on which 

they trade, or through major market data 

vendors or subscription services. 

Intraday price information for cash 

equivalents is available through major 

market data vendors, subscription 

services and/or pricing services. 

The Funds’ website will include a 

form of the prospectus that may be 


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Federal Register / Vol. 88, No. 191 / Wednesday, October 4, 2023 / Notices 68691 

31See note 4, supra. 

32See note 14, supra. 

33 15 U.S.C. 78s(b)(3)(A)(iii). 

34 17 CFR 240.19b–4(f)(6). 

35 17 CFR 240.19b–4(f)(6)(iii). 

36See supra notes 10 and 11. 

37For 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). 

downloaded, and additional data 

relating to NAV and other applicable 

quantitative information, updated on a 

daily basis. Trading in Shares of each 

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 of each Fund inadvisable. 

Trading in the Shares of each Fund will 

be subject to NYSE Arca Rule 8.601– 

E(d)(2)(D), which sets forth 

circumstances under which Shares of 

each Fund will be halted. In addition, 

as noted above, investors will have 

ready access to the Proxy Portfolio and 

quotation and last sale information for 

the Shares of each Fund. 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 

of each Fund on each Business Day. The 

Shares of each Fund will conform to the 

initial and continued listing criteria 

under Rule 8.601–E.31

Each 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.32

Any foreign common stocks held by a 

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 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 

Adviser, prior to commencement of 

trading in the Shares of each Fund, 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). 

As noted above, the Exchange has in 

place surveillance procedures relating to 

trading in the Shares of each Fund 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 of 

each Fund. 

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 additional actively-managed ETFs 

that have characteristics different from 

existing actively-managed and index 

ETFs and would introduce additional 

competition among various ETF 

products to the benefit of investors. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were solicited 

or received with respect to the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The Exchange has filed the proposed 

rule change pursuant to Section 

19(b)(3)(A)(iii) of the Act 33 and Rule 

19b–4(f)(6) thereunder.34 Because the 

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 

prior to 30 days from the date on which 

it was filed, or such shorter time as the 

Commission may designate, if 

consistent with the protection of 

investors and the public interest, the 

proposed rule change has become 

effective pursuant to Section 19(b)(3)(A) 

of the Act and Rule 19b–4(f)(6)(iii) 

thereunder. 

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) 35 permits 

the Commission to designate a shorter 

time if such action is consistent with the 

protection of investors and the public 

interest. The Exchange has requested 

that the Commission waive the 30-day 

operative delay so that the proposal may 

become operative immediately upon 

filing. The Exchange notes that the 

Commission has approved and noticed 

for immediate effectiveness proposed 

rule changes to permit listing and 

trading on the Exchange of Active Proxy 

Portfolio Shares similar to the Funds,36

and this proposal raises no novel legal 

or regulatory issues. Thus, the 

Commission believes that waiver of the 

30-day operative delay is consistent 

with the protection of investors and the 

public interest. Accordingly, the 

Commission hereby waives the 30-day 

operative delay and designates the 

proposed rule change operative upon 

filing.37

At any time within 60 days of the 

filing of such proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• 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–2023–67 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–2023–67. 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 


lotter on DSK11XQN23PROD with NOTICES1
68692 Federal Register / Vol. 88, No. 191 / Wednesday, October 4, 2023 / Notices 

38 17 CFR 200.30–3(a)(12), (59). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3See Exchange Rule 1.5(p). 

4On August 8, 2022, the Commission approved 

SR–MEMX–2022–10, which proposed rules for the 

trading of options on the Exchange. See Securities 

Exchange Act Release No. 95445 (August 8, 2022), 

87 FR 49894 (August 12, 2022) (SR–MEMX–2022– 

010). The Exchange plans to launch MEMX Options 

in September of 2023. 

5The Exchange takes into account any CMTA 

transfers when determining the ultimate clearing 

firm for a transaction. CMTA or Clearing Member 

Trade Assignment is a form of ‘‘give up’’ whereby 

the position will be assigned to a specific clearing 

firm at the OCC. 

6Throughout this filing, ‘‘executing clearing 

firm’’ means the clearing firm through which the 

entering broker indicated that the transaction would 

be cleared at the time it entered the original order 

which executed, and that clearing firm could be a 

designated ‘‘give up’’, if applicable. The executing 

clearing firm may be the ultimate clearing firm if 

no CMTA transfer occurs. If a CMTA transfer 

occurs, however, the ultimate clearing firm would 

be the clearing firm that the position was 

transferred to for clearing via CMTA. 

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 

a.m. and 3 p.m. Copies of the filing also 

will be available for inspection and 

copying at the principal office of the 

Exchange. Do not include personal 

identifiable information in submissions; 

you should submit only information 

that you wish to make available 

publicly. We may redact in part or 

withhold entirely from publication 

submitted material that is obscene or 

subject to copyright protection. All 

submissions should refer to file number 

SR–NYSEARCA–2023–67 and should be 

submitted on or before October 25, 

2023. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.38

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–22039 Filed 10–3–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–98585; File No. SR–MEMX– 

2023–25] 

Self-Regulatory Organizations; MEMX 

LLC; Notice of Filing and Immediate 

Effectiveness of a Proposed Rule 

Change To Amend the Exchange’s Fee 

Schedule To Establish an Options 

Regulatory Fee 

September 28, 2023. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on 

September 27, 2023, MEMX LLC 

(‘‘MEMX’’ or the ‘‘Exchange’’) filed with 

the Securities and Exchange 

Commission (the ‘‘Commission’’) the 

proposed rule change as described in 

Items I, II, and III 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 is filing with the 

Commission a proposed rule change to 

amend the Exchange’s fee schedule 

applicable to Members 3 (the ‘‘Fee 

Schedule’’) pursuant to Exchange Rules 

15.1(a) and (c) to adopt an Options 

Regulatory Fee (‘‘ORF’’) that would 

automatically sunset on September 30, 

2024. The Exchange proposes to 

implement the changes to the Fee 

Schedule pursuant to this proposal on 

September 27, 2023. The text of the 

proposed rule change is provided in 

Exhibit 5. 

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 

Exchange 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 these 

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 aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

In preparation for the launch of the 

Exchange’s options market (‘‘MEMX 

Options’’),4 the Exchange proposes to 

establish an ORF in the amount of 

$0.0015 per contract side. The amount 

of the proposed fee is based on 

historical industry volume, projected 

volumes on the Exchange, and projected 

Exchange regulatory costs. The 

Exchange’s proposed ORF should 

balance the Exchange’s regulatory 

revenue against the anticipated 

regulatory costs. As discussed more 

fully below, the Exchange proposes that 

the ORF will automatically sunset on 

September 30, 2024. 

The per-contract ORF will be 

collected by the Options Clearing 

Corporation (‘‘OCC’’) on behalf of the 

Exchange for each options transaction, 

cleared or ultimately cleared by an 

Exchange member in the ‘‘customer’’ 

range, regardless of the exchange on 

which the transaction occurs. The ORF 

is collected from either: (1) a Member 

that was the ultimate clearing firm 5 for 

the transaction; or (2) a non-Member 

that was the ultimate clearing firm 

where a Member was the executing 

clearing firm 6 for the transaction. 

To illustrate how the ORF will be 

assessed and collected, the Exchange 

provides the following set of examples. 

1. For all transactions executed on the 

Exchange, if the ultimate clearing firm 

is a Member of the Exchange, the ORF 

is assessed to and collected from that 

Member. If the ultimate clearing firm is 

not a Member of the Exchange, the ORF 

is collected from that non-Member 

clearing firm but assessed to the 

executing clearing firm. 

2. If the transaction is executed on an 

away exchange, the ORF is only 

assessed and collected if either the 

executing clearing firm or ultimate 

clearing firm are Members of the 

Exchange. If the ultimate clearing firm 

is a Member of the Exchange, the ORF 

is assessed to and collected from that 

ultimate clearing firm. If the ultimate 

clearing firm is not a Member of the 

Exchange, the ORF is assessed to the 

executing clearing firm (again, only if 

that executing clearing firm is a Member 

of the Exchange), and collected from the 

ultimate clearing firm. Thus, to reiterate, 

if neither the executing clearing firm nor 

the ultimate clearing firm are members 

of the Exchange, no ORF is assessed or 

collected. 

Finally, the Exchange will not assess 

the ORF on outbound linkage trades. 

‘‘Linkage trades’’ are tagged in the 

Exchange’s system, so the Exchange can 

distinguish them from other trades. A 

customer order routed to another 

exchange results in the appearance of 

two customer trades, one from the 

originating exchange and one from the 

recipient exchange. Charging ORF on 

both trades could result in doubleVerDate Sep<11>2014 20:21 Oct 03, 2023 Jkt 262001 PO 00000 Frm 00134 Fmt 4703 Sfmt 4703 E:\FR\FM\04OCN1.SGM 04OCN1

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