15296 Federal Register / Vol. 87, No. 52 / Thursday, March 17, 2022 / Notices 

22 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3Rule 14.11(m)(3)(A) provides that ‘‘[t]he term 

‘‘Tracking Fund Share’’ means a security that (i) 

represents an interest in 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; (ii) is issued in 

a specified aggregate minimum number in return for 

a deposit of a specified Tracking Basket and/or a 

cash amount with a value equal to the next 

determined net asset value; (iii) when aggregated in 

the same specified minimum number, may be 

redeemed at a holder’s request, which holder will 

be paid a specified Tracking Basket and/or a cash 

amount with a value equal to the next determined 

net asset value; and (iv) the portfolio holdings for 

which are disclosed within at least 60 days 

following the end of every fiscal quarter. Rule 

14.11(m)(3)(E) provides that ‘‘[t]he term ‘‘Tracking 

Basket’’ means the identities and quantities of the 

securities and other assets included in a basket that 

is designed to closely track the daily performance 

of the Fund Portfolio, as provided in the exemptive 

relief under the Investment Company Act of 1940 

applicable to a series of Tracking Fund Shares.’’ 

4See Securities Exchange Act No. 88887 (May 15, 

2020) 85 FR 30990 (May 21, 2020) (SR–CboeBZX– 

2019–107) (Order Granting Approval of Proposed 

Rule change, as Modified by Amendment No. 5, to 

Adopt Rule 14.11(m) and to List and Trade Shares 

of the Fidelity Blue Chip Growth ETF, Fidelity Blue 

Chip Value ETF, and Fidelity New Millennium 

ETF) (the ‘‘Original Order’’). See also Securities 

Exchange Act No. 92946 (September 13, 2021) 86 

FR 51941 (September 17, 2021) (SR–CboeBZX– 

2021–060) (Notice of Filing and Immediate 

Effectiveness of a Proposed Rule Change To Reflect 

an Amendment to the Application and Exemptive 

Order Governing the Following Funds, Shares of 

Which Are Listed and Traded on the Exchange 

Under BZX Rule 14.11(m): Fidelity Growth 

Opportunities ETF, Fidelity Magellan ETF, Fidelity 

Real Estate Investment ETF, Fidelity Small-Mid Cap 

Opportunities ETF, Fidelity Blue Chip Value ETF, 

Electronic Comments 

• Use the Commission’s internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

CboeEDGX–2022–008 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–CboeEDGX–2022–008. 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–CboeEDGX–2022–008 and 

should be submitted on or before April 

7, 2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.22

Eduardo Aleman, 

Assistant Secretary. 

[FR Doc. 2022–05595 Filed 3–16–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94401; File No. SR– 

CboeBZX–2022–018] 

Self-Regulatory Organizations; Cboe 

BZX Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of 

Proposed Rule Change To Permit 

Certain Series of Tracking Fund 

Shares Issued by Fidelity Covington 

Trust, Which Are Listed and Traded on 

the Exchange Pursuant to Rule 

14.11(m), To Use Custom Baskets 

March 11, 2022. 

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

Securities Exchange Act of 1934 

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

notice is hereby given that on March 9, 

2022, Cboe BZX Exchange, Inc. filed 

with the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change as described in 

Items I and II below, which Items have 

been prepared by the Exchange. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

Cboe BZX Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘BZX’’) proposes to 

permit the Fidelity Blue Chip Growth 

ETF, Fidelity Blue Chip Value ETF, 

Fidelity New Millennium ETF, Fidelity 

Growth Opportunities ETF, Fidelity 

Magellan ETF, Fidelity Real Estate 

Investment ETF, and Fidelity Small-Mid 

Cap Opportunities ETF (collectively 

referred to as the ‘‘Funds’’), shares of 

which are listed and traded on the 

Exchange pursuant to BZX Rule 

14.11(m), to use Custom Baskets. 

The text of the proposed rule change 

is also available on the Exchange’s 

website (http://markets.cboe.com/us/ 

equities/regulation/rule_filings/bzx/), at 

the Exchange’s Office of the Secretary, 

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 

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 

The Exchange adopted BZX Rule 

14.11(m) for the purpose of permitting 

the listing and trading, or pursuant to 

unlisted trading privileges (‘‘UTP’’), of 

Tracking Fund Shares, which are 

securities issued by an actively managed 

open-end management investment 

company.3 Exchange Rule 

14.11(m)(2)(A) requires the Exchange to 

file separate proposals under Section 

19(b) of the Act before listing and 

trading any series of Tracking Fund 

Shares on the Exchange. Pursuant to 

this provision, the Exchange submitted 

proposals to list and trade shares 

(‘‘Shares’’) of Tracking Fund Shares of 

the Fidelity Blue Chip Growth ETF, 

Fidelity Blue Chip Value ETF, Fidelity 

New Millennium ETF,4 Fidelity Growth 


khammond on DSKJM1Z7X2PROD with NOTICES
Federal Register / Vol. 87, No. 52 / Thursday, March 17, 2022 / Notices 15297 

Fidelity Blue Chip Growth ETF, and Fidelity New 

Millennium ETF) (the ‘‘Subsequent Notice’’). 5See Securities Exchange Act No. 90530 

(November 30, 2020) 85 FR 78366 (December 4, 

2020) (SR–CboeBZX–2020–085) (Notice of Filing 

and Immediate Effectiveness of a Proposed Rule 

Change Relating to List and Trade Shares of the 

Fidelity Growth Opportunities ETF, Fidelity 

Magellan ETF, Fidelity Real Estate Investment ETF, 

and Fidelity Small-Mid Cap Opportunities ETF 

Under Rule 14.11(m)) (the ‘‘Original Notice’’, and 

together with the Original Order and Subsequent 

Notice the ‘‘Prior Filings’’). See also Securities 

Exchange Act No. 51943 (September 13, 2021) 86 

FR 51941 (September 17, 2021) (SR–CboeBZX– 

2021–060) (the Subsequent Notice). 

6See also Investment Company Act Release No. 

33683 (November 14, 2019), 84 FR 64140 

(November 20, 2019) (the Application) and 33712 

(December 10, 2019) (the Exemptive Order) (File 

No. 812–14364). 7See Investment Company Act Release No. 34326 

(July 9, 2021) 86 FR 37391 (July 15, 2021) (the 

notice of application to amend the Exemptive 

Order) and 34350 (August 5, 2021) (the order 

granting the amendment to the Exemptive Order) 

(File No. 812–15175). 8See Securities and Exchange Act No. 93147 

(September 28, 2021) 86 FR 54772 (October 4, 2021) 

(SR–CboeBZX–2021–053) (Order granting approval 

of a proposed rule to change to amend Rule 

14.11(m) (Tracking Fund Shares) to provide the use 

of Custom Baskets consistent with the exemptive 

relief issued pursuant to the Investment Company 

Act of 1940 applicable to a series of Tracking Fund 

Shares). 

9 17 CFR 243.100–243.103. Regulation Fair 

Disclosure provides that whenever an issuer, or any 

person acting on its behalf, discloses material 

nonpublic information regarding that issuer or its 

securities to certain individuals or entities— 

generally, securities market professionals, such as 

stock analysts, or holders of the issuer’s securities 

who may well trade on the basis of the 

information—the issuer must make public 

disclosure of that information. 

10As defined in Rule 14.11(m)(3)(B), the term 

‘‘Fund Portfolio’’ means the identities and 

quantities of the securities and other assets held by 

the Investment Company that will form the basis for 

the Investment Company’s calculation of net asset 

value at the end of the business day. 

11Supra notes 4 and 5. 

12 15 U.S.C. 78f(b). 

13 15 U.S.C. 78f(b)(5). 

Opportunities ETF, Fidelity Magellan 

ETF, Fidelity Real Estate Investment 

ETF, and Fidelity Small-Mid Cap 

Opportunities ETF (collectively referred 

to as the ‘‘Funds’’).5

The Funds are actively-managed 

exchange-traded funds for which 

Fidelity Covington Trust (the ‘‘Issuer’’), 

among others, submitted an application 

for exemptive relief (the ‘‘Application’’) 

which was granted under an exemptive 

order (the ‘‘Exemptive Order’’, and the 

Exemptive Order together with the 

Application the ‘‘Exemptive Relief’’) 

issued on December 10, 2019.6 Pursuant 

to the Exemptive Order, the Funds 

create shares in return for a deposit by 

the purchaser of, and redeem shares at 

a holder’s request in return for, a 

Tracking Basket or cash. Furthermore, 

the Original Notice and Original Order 

to list and trade shares of the Funds 

provided that each of the Funds would 

create and redeem their shares using the 

Tracking Basket or cash. 

On August 5, 2021, the Exemptive 

Order was amended to, among other 

things, permit the Issuer to allow the 

Funds to create and redeem their shares 

using cash, a Tracking Basket or a 

‘‘Custom Basket’’, which is a creation or 

redemption unit that differs from a 

fund’s Tracking Basket.7 Additionally, 

on September 28, 2021 the Commission 

approved the Exchange’s proposal to 

amend Exchange Rule 14.11(m) to 

provide for the use of Custom Baskets 

consistent with the Funds amended 

Exemptive Order.8

Now, the Exchange is submitting this 

proposal to modify representations 

made in the Original Notice and 

Original Order of each Fund that 

provided that creation and redemption 

units will occur using the Tracking 

Basket or cash. Specifically, the 

proposal permits the Funds to use a 

Custom Basket, in addition to a 

Tracking Basket or cash, to create or 

redeem their shares in accordance with 

their amended Exemptive Relief and 

amended Exchange Rule 14.11(m). 

Accordingly, the Issuer represents that it 

and any person acting on behalf of such 

fund will comply with Regulation Fair 

Disclosure under the Act,9 including 

with respect to any Custom Basket. The 

Issuer also represents that for each 

Custom Basket utilized by each Fund, 

each business day, before the opening of 

trading in Regular Trading Hours (as 

defined in Rule 1.5(w)), 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 

Tracking Basket only with respect to 

cash. Finally, the adviser and subadviser to each of the Funds each 

represent that a fire wall exists and will 

be maintained between the respective 

personnel at each of (i) the adviser and 

sub-adviser, and (ii) their respective 

affiliated broker-dealers with respect to 

access to information concerning the 

composition and/or changes to the 

applicable fund’s portfolio, Tracking 

Basket, and/or the Custom Basket, as 

applicable. Specifically, the adviser and 

the sub-adviser each represent that the 

personnel who make decisions on the 

applicable fund’s portfolio composition, 

Tracking Basket, and/or Custom Basket 

or who have access to nonpublic 

information regarding the Fund 

Portfolio,10 Tracking Basket, and/or 

Creation Basket or changes thereto are 

subject to procedures designed to 

prevent the use and dissemination of 

material non-public information 

regarding such portfolio, Tracking 

Basket, and/or Creation Basket. In the 

event that (a) the adviser or a subadviser becomes registered as a brokerdealer or newly affiliated with a brokerdealer; or (b) any new adviser or subadviser is a registered broker-dealer or 

becomes newly affiliated with a brokerdealer; it will implement and maintain 

a fire wall with respect to its relevant 

personnel or such broker-dealer affiliate, 

as applicable, regarding access to 

information concerning the composition 

and/or changes to the Fund Portfolio, 

Tracking Basket, and/or Creation Basket, 

and will be subject to procedures 

designed to prevent the use and 

dissemination of material nonpublic 

information regarding such portfolio, 

Tracking Basket, and/or Creation Basket. 

Any person or entity, including any 

service provider for any of the Funds, 

who has access to nonpublic 

information regarding the Fund 

Portfolio, Tracking Basket, and/or 

Creation Basket or changes thereto for 

the Custom Basket Fund will be subject 

to procedures designed to prevent the 

use and dissemination of material 

nonpublic information regarding the 

Fund Portfolio, Tracking Basket or 

Creation Basket or changes thereto. 

Further, any such person or entity that 

is registered as a broker-dealer or 

affiliated with a broker-dealer, must 

have 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 such 

Fund Portfolio, Tracking Basket, or 

Creation Basket. 

Each of the Funds will comply with 

the above-described conditions as well 

as the conditions of the Exemptive 

Order, as amended, and the Exchange is 

updating the listing rule for the Shares 

accordingly. Except for the changes 

noted above, all other representations 

made in the Prior Filings for each of the 

Funds 11 remain unchanged and will 

continue to constitute continued listing 

requirements for each of the Shares. The 

Funds will also continue to comply 

with the requirements of Rule 14.11(m). 

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with Act and 

the rules and regulations thereunder 

applicable to the Exchange and, in 

particular, the requirements of Section 

6(b) of the Act.12 Specifically, the 

Exchange believes the proposed rule 

change is consistent with the Section 

6(b)(5) 13 requirements that the rules of 

an exchange be designed to prevent 

fraudulent and manipulative acts and 


khammond on DSKJM1Z7X2PROD with NOTICES
15298 Federal Register / Vol. 87, No. 52 / Thursday, March 17, 2022 / Notices 

14Supra note 8. See also SR–CboeBZX–2022–016 

(filed March 4, 2022) (Notice of Filing and 

Immediate Effectiveness of a Proposed Rule Change 

to allow certain series of Tracking Fund shares to 

include select securities from the universe from 

which a Fund’s investments are selected in the 

Fund’s Tracking Basket and utilize Custom 

Baskets). 

15Supra notes 4 and 5. 

16 15 U.S.C. 78s(b)(3)(A). 

17 17 CFR 240.19b–4(f)(6). 

18 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6)(iii) requires a self-regulatory organization to 

give the Commission written notice of its intent to 

file the proposed rule change, along with a brief 

description and text of the proposed rule change, 

at least five business days prior to the date of filing 

of the proposed rule change, or such shorter time 

as designated by the Commission. The Exchange 

satisfied this requirement. 

19 17 CFR 240.19b–4(f)(6). 

20 17 CFR 240.19b–4(f)(6)(iii). 

21See Securities Exchange Act Release No. 93147, 

supra note 8. 

22For purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule’s impact on efficiency, competition, 

and capital formation. See 15 U.S.C. 78c(f). 23 17 CFR 200.30–3(a)(12). 

practices, to promote just and equitable 

principles of trade, to foster cooperation 

and coordination with persons engaged 

in regulating, clearing, settling, 

processing information with respect to, 

and facilitating transactions in 

securities, 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. 

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. The 

proposed amendment would permit 

each of the Funds the use of Custom 

Baskets, as provided in the amended 

Exemptive Order. The Exchange 

believes the proposal to permit the 

Funds the use of Custom Baskets is 

consistent with and contemplated by 

Rule 14.11(m), as amended, which the 

Commission found to be consistent with 

the Act.14

Except for the changes noted above, 

all other representations made in the 

prior proposed rule changes 15 remain 

unchanged and, as noted, will continue 

to constitute continuing listing 

requirements for the Funds. 

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 purpose of the Act. As noted, the 

proposed amendment is intended to 

permit each of the Funds the use of 

Custom Baskets, as provided in the 

amended Exemptive Order. The 

Exchange believes that these changes 

will not impose any burden on 

competition. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

The Exchange neither solicited nor 

received comments on the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing proposed rule 

change does not: (i) Significantly affect 

the protection of investors or the public 

interest; (ii) impose any significant 

burden on competition; and (iii) become 

operative for 30 days from the date on 

which it was filed, or such shorter time 

as the Commission may designate, it has 

become effective pursuant to Section 

19(b)(3)(A) of the Act 16 and Rule 19b– 

4(f)(6) 17 thereunder.18

A proposed rule change filed under 

Rule 19b–4(f)(6) 19 normally does not 

become operative prior to 30 days after 

the date of the filing. However, pursuant 

to Rule 19b–4(f)(6)(iii),20 the 

Commission may designate a shorter 

time if such action is consistent with the 

protection of investors and the public 

interest. The Exchange has asked the 

Commission to waive the 30-day 

operative delay so that the proposed 

rule change may take effect upon filing. 

The Exchange represents that the Funds 

will continue to comply with the 

requirements of BZX Rule 14.11(m). The 

Commission believes that waiver of the 

30-day operative delay is consistent 

with the protection of investors and the 

public interest because the proposed 

rule change does not raise any new or 

novel issues.21 Accordingly, the 

Commission waives the 30-day 

operative delay and designates the 

proposal operative upon filing.22

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

change should be approved or 

disapproved. 

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 (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

CboeBZX–2022–018 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–CboeBZX–2022–018. 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–CboeBZX–2022–018 and 

should be submitted on or before April 

7, 2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.23

Eduardo Aleman, 

Assistant Secretary. 

[FR Doc. 2022–05599 Filed 3–16–22; 8:45 am] 

BILLING CODE 8011–01–P 


khammond on DSKJM1Z7X2PROD with NOTICES