30286 Federal Register / Vol. 87, No. 96 / Wednesday, May 18, 2022 / Notices 

25 17 CFR 240.17Ad–22(e)(6)(i). 

26 17 CFR 240.17Ad–22(e)(6)(iii). 

27 17 CFR 240.17Ad–22(e)(6)(v). 

28 17 CFR 240.17Ad–22(e)(23). 

29 17 CFR 240.17Ad–22(e)(23)(ii). 

30 15 U.S.C. 78q–1(b)(3)(F). 

31 17 CFR 240.17Ad–22(e)(6). 

32 17 CFR 240.19b–4(g). 

33Section 19(b)(2) of the Exchange Act grants to 

the Commission flexibility to determine what type 

of proceeding—either oral or notice and 

opportunity for written comments—is appropriate 

for consideration of a particular proposal by a selfregulatory organization. See Securities Act 

Amendments of 1975, Senate Comm. on Banking, 

Housing & Urban Affairs, S. Rep. No. 75, 94th 

Cong., 1st Sess. 30 (1975). 

34See Notice of Filing, supra note 4. 

35 17 CFR 200.30–3(a)(31). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

written policies and procedures 

reasonably designed to cover, if the 

covered clearing agency provides 

central counterparty services, its credit 

exposures to its participants by 

establishing a risk-based margin system 

that, among other things, (1) considers, 

and produces margin levels 

commensurate with, the risks and 

particular attributes of each relevant 

product, portfolio, and market 25 (2) 

calculates sufficient margin to cover its 

potential future exposure to participants 

in the interval between the last margin 

collection and the close out of positions 

following a participant default; 26 and 

uses an appropriate method for 

measuring credit exposure that accounts 

for relevant product risk factors and 

portfolio effects across products.27

• Rule 17Ad–22(e)(23) under the 

Exchange Act,28 which requires a 

covered clearing agency establish, 

implement, maintain, and enforce 

written policies and procedures 

reasonably designed to provide for, 

among other things, sufficient 

information to enable participants to 

identify and evaluate the risks, fees, and 

other material costs they incur by 

participating in the covered clearing 

agency.29

IV. Procedure: Request for Written 

Comments 

The Commission requests that 

interested persons provide written 

submissions of their views, data, and 

arguments with respect to the issues 

identified above, as well as any other 

concerns they may have with the 

Proposed Rule Change. In particular, the 

Commission invites the written views of 

interested persons concerning whether 

the Proposed Rule Change is consistent 

with Section 17A(b)(3)(F) of the 

Exchange Act,30 Rule 17Ad–22(e)(6) 

under the Exchange Act,31 or any other 

provision of the Exchange Act, or the 

rules and regulations thereunder. 

Although there do not appear to be any 

issues relevant to approval or 

disapproval that would be facilitated by 

an oral presentation of views, data, and 

arguments, the Commission will 

consider, pursuant to Rule 19b–4(g) 

under the Exchange Act,32 any request 

for an opportunity to make an oral 

presentation.33

Interested persons are invited to 

submit written data, views, and 

arguments regarding whether the 

Proposed Rule Change should be 

approved or disapproved by June 8, 

2022. Any person who wishes to file a 

rebuttal to any other person’s 

submission must file that rebuttal by 

June 22, 2022. 

The Commission asks that 

commenters address the sufficiency of 

OCC’s statements in support of the 

Proposed Rule Change, which are set 

forth in the Notice of Filing,34 in 

addition to any other comments they 

may wish to submit about the Proposed 

Rule Change. 

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– 

OCC–2022–001 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–OCC–2022–001. 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 such 

filing also will be available for 

inspection and copying at the principal 

office of OCC and on OCC’s website at 

https://www.theocc.com/CompanyInformation/Documents-and-Archives/ 

By-Laws-and-Rules. 

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–OCC–2022–001 and should 

be submitted on or before June 8, 2022. 

Rebuttal comments should be submitted 

by June 22, 2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.35

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–10616 Filed 5–17–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94902; File No. SR– 

NYSEArca–2022–29] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; 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) 

May 12, 2022. 

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 May 5, 

2022, 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 following under 

NYSE Arca Rule 8.601–E: IQ Winslow 


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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 a investment 

company registered under the Investment Company 

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

an open-end management investment company that 

invests in a portfolio of securities selected by the 

Investment Company’s investment adviser 

consistent with the Investment Company’s 

investment objectives and policies; (b) is issued in 

a specified minimum number of shares, or 

multiples thereof, in return for a deposit by the 

purchaser of the Proxy Portfolio 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. 

5The 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). 

6NYSE Arca Rule 8.600–E(c)(2) defines the term 

‘‘Disclosed Portfolio’’ as the identities and 

quantities of the securities and other assets held by 

the Investment Company that will form the basis for 

the Investment Company’s calculation of net asset 

value at the end of the business day. NYSE Arca 

Rule 8.600–E(d)(2)(B)(i) requires that the Disclosed 

Portfolio will be disseminated at least once daily 

and will be made available to all market 

participants at the same time. 

7A 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. 

8 ‘‘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. 

9See 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 

Continued 

Large Cap Growth ETF and IQ Winslow 

Focused Large Cap Growth 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 Active 

Proxy Portfolio Shares of the IQ 

Winslow Large Cap Growth ETF and IQ 

Winslow Focused Large Cap Growth 

ETF (each a ‘‘Fund’’ and, collectively, 

the ‘‘Funds’’) under Rule 8.601–E. 

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 5

and for which a ‘‘Disclosed Portfolio’’ is 

required to be disseminated at least 

once daily,6 the portfolio for an issue of 

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’’).7 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,8 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 9 and noticed for immediate 


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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) (the 

‘‘Natixis Order’’); 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). See 

also Securities Exchange Act Release Nos. 88887 

(May 15, 2020), 85 FR 30990 (May 21, 2020) (SR– 

CboeBZX–2019–107) (Notice of Filing of 

Amendment No. 5 and Order Granting Accelerated 

Approval of a Proposed Rule Change, as Modified 

by Amendment No. 5, to Adopt Rule 14.11(m), 

Tracking Fund Shares, and to List and Trade Shares 

of the Fidelity Blue Chip Value ETF, Fidelity Blue 

Chip Growth ETF, and Fidelity New Millennium 

ETF). 

10See 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); and 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). 

11The Trust is registered under the 1940 Act. On 

December 29, 2021 the Trust filed a registration 

statement on Form N–1A under the 1940 Act 

relating to the Funds (File No. 811–22379) (the 

‘‘Registration Statement’’). The Trust filed an 

application for an order under Section 6(c) of the 

1940 Act for exemptions from various provisions of 

the 1940 Act and rules thereunder (File No. 812– 

15294), dated December 29, 2021 and amended on 

March 14, 2022 (the ‘‘Application’’). See Investment 

Company Act Release No. 34554 (April 4, 2022). On 

April 29, 2022, the Commission issued an order (the 

‘‘Exemptive Order’’) under the 1940 Act granting 

the exemptions requested in the Application 

(Investment Company Act Release No. 34574, April 

29, 2022). Investments made by the Funds will 

comply with the conditions set forth in the 

Application and the Exemptive Order. The 

description of the operation of the Funds herein is 

based, in part, on the Registration Statement, 

Application, and Exemptive Order. The Exchange 

will not commence trading in Shares of the Funds 

until the Registration Statement is effective. 

12An 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 Advisor and Sub-Advisor and their 

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. 

effectiveness 10 the listing and trading 

on the Exchange of series of Active 

Proxy Portfolio Shares under NYSE 

Arca Rule 8.601–E. 

The Shares of the Funds will be 

issued by the IndexIQ Active ETF Trust 

(the ‘‘Trust’’), which is organized as a 

statutory trust under the laws of the 

state of Delaware and registered with 

the Commission as an open-end 

management investment company.11

IndexIQ Advisors LLC will be the 

investment advisor to the Funds (the 

‘‘Advisor’’). Winslow Capital 

Management, LLC will be the subadvisor (the ‘‘Sub-Advisor’’) for the 

Funds. The Bank of New York Mellon 

will serve as the Funds’ custodian (the 

‘‘Custodian’’) and transfer agent. ALPS 

Distributors, Inc. will act as the 

distributor (the ‘‘Distributor’’) for the 

Funds. 

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 

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.12 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 Advisor and Sub-Advisor are not 

registered as broker-dealers but are 

affiliated with broker-dealers. The 

Advisor and Sub-Advisor have 

implemented and will maintain a ‘‘fire 

wall’’ with respect to such broker-dealer 

affiliates 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. 


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13Pursuant to the Application and Exemptive 

Order, the permissible investments for the Funds 

include only the following instruments: ETFs 

traded on a U.S. exchange; exchange-traded notes 

(‘‘ETNs’’) traded on a U.S. exchange; U.S. exchangetraded common stocks; common stocks listed on a 

foreign exchange that trade on such exchange 

contemporaneously with the Shares (‘‘foreign 

common stocks’’) in the Exchange’s Core Trading 

Session (normally, 9:30 a.m. to 4:00 p.m. Eastern 

time (‘‘E.T.’’)); U.S. exchange-traded preferred 

stocks; U.S. exchange-traded American Depositary 

Receipts (‘‘ADRs’’); U.S. exchange-traded real estate 

investment trusts; U.S. exchange-traded commodity 

pools; U.S. exchange-traded metals trusts; U.S. 

exchange-traded currency trusts; and U.S. 

exchange-traded futures that trade 

contemporaneously with the Funds’ Shares. In 

addition, the Funds 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, the Funds 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. 

14According to the Registration Statement, large 

capitalization companies are companies having a 

market capitalization in excess of $4 billion at the 

time of purchase. 

15See note 13, supra. 

16See note 14, supra. 

In the event (a) the Advisor or SubAdvisor becomes registered as a brokerdealer or becomes newly affiliated with 

a broker-dealer, or (b) any new adviser 

or sub-adviser is a registered brokerdealer, 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 nonpublic information regarding each 

Fund’s Actual Portfolio, Proxy Portfolio, 

and/or Custom Basket, as applicable, or 

changes thereto. Any person related to 

the Advisor, Sub-Advisor, or the Funds 

who makes decisions pertaining to a 

Fund’s Actual Portfolio, Proxy Portfolio, 

or Custom Basket, as applicable, or has 

access to non-public information 

regarding a 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 a 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 the 

Funds, who has access to non-public 

information regarding a 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 a 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 a Fund’s Actual Portfolio, 

Proxy Portfolio, and/or Custom Basket, 

as applicable. 

Description of the Funds 

According to the Registration 

Statement, the Advisor will identify a 

Proxy Portfolio for each Fund, which is 

designed to recreate the daily 

performance of each Fund’s Actual 

Portfolio through a factor model 

analysis of the Fund’s Actual Portfolio 

and will only include securities and 

investments in which a Fund may 

invest. However, while the Proxy 

Portfolio and the Actual Portfolio will 

likely hold some or many of the same 

securities, the Proxy Portfolio and a 

Fund’s Actual Portfolio may not include 

identical securities. The composition of 

each Fund’s Proxy Portfolio will be 

published on the Funds’ website 

(newyorklifeinvestments.com) each 

Business Day and will include the 

following information for each portfolio 

holding in each Fund’s 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 Advisor will not make 

intra-day changes to the Proxy Portfolio 

except to correct errors in the published 

Proxy Portfolio. 

At the end of each trading day, each 

Fund will calculate the percentage 

weight overlap between its Proxy 

Portfolio and Actual Portfolio (the 

‘‘Proxy Overlap’’) and the standard 

deviation over the past three months of 

the daily proxy spread (i.e., the 

difference, in percentage terms, between 

the Proxy Portfolio per share NAV and 

that of the Actual Portfolio at the end of 

the trading day) (the ‘‘Tracking Error’’) 

and publish such information on the 

Funds’ website before the opening of 

trading each Business Day. 

IQ Winslow Large Cap Growth ETF 

The 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.13

Any foreign common stocks held by the 

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. 

According to the Registration 

Statement, the Fund’s investment 

objective is long-term growth of capital. 

The Fund will, under normal 

circumstances, invest at least 80% of its 

assets in large capitalization 

companies.14 The Fund will typically 

invest in domestic securities but is 

permitted to invest up to 20% of its net 

assets in depositary receipts issued by a 

trust (including ADRs) of foreign 

securities and in common stocks listed 

on a foreign exchange that trade on such 

exchange contemporaneously with the 

Shares. The Fund will invest in 

companies that the Sub-Advisor 

believes will provide an opportunity for 

achieving superior portfolio returns (i.e., 

returns in excess of the returns of the 

average stock ETF or mutual fund) over 

the long term or have the potential for 

above-average future earnings and cash 

flow growth with management focused 

on shareholder value. 

IQ Winslow Focused Large Cap Growth 

ETF 

The 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.15

Any foreign common stocks held by the 

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. 

According to the Registration 

Statement, the Fund’s investment 

objective is long-term capital growth. 

The Fund will, under normal 

circumstances, invest at least 80% of its 

assets in large capitalization 

companies.16 The Fund will typically 

invest in domestic securities but is 

permitted to invest up to 20% of its net 

assets in depositary receipts issued by a 

trust (including ADRs) of foreign 

securities and in common stocks listed 

on a foreign exchange that trade on such 

exchange contemporaneously with the 

Shares. The Fund will normally invest 

in a limited number of issuers and hold 

a core position of between 25 and 35 


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17See note 13, supra. 

18Each Fund’s broad-based securities benchmark 

index will be identified in a future amendment to 

its Registration Statement following the Funds’ first 

full calendar year of performance. 

19According to the Registration Statement, an 

‘‘Authorized Participant’’ is an institution that may 

engage in creation and redemption transactions 

directly with the Funds. 

20The Advisor 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 placing trades with the Funds on that 

day. 

21The ‘‘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 is the official closing price of the 

Shares on the Exchange. 

22The ‘‘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. 

23See 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; 

securities. The Fund will invest in 

companies that the Sub-Advisor 

believes will provide an opportunity for 

achieving superior portfolio returns (i.e., 

returns in excess of the returns of the 

average stock ETF or mutual fund) over 

the long term or have the potential for 

above-average future earnings and cash 

flow growth with management focused 

on shareholder value. 

Investment Restrictions 

The Shares of the Funds will conform 

to the initial and continued listing 

criteria under Rule 8.601–E. The Funds’ 

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.17

The Funds’ investments, including 

derivatives, will be consistent with their 

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 such Fund’s primary 

broad-based securities benchmark index 

(as defined in Form N–1A).18

Purchases and Redemptions 

According to the Registration 

Statement, the Trust will issue and sell 

Shares of the Funds only in specified 

minimum size ‘‘Creation Units’’ on a 

continuous basis on any Business Day 

through the Distributor at their NAV 

next determined after receipt of an order 

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. E.T. 

A Creation Unit will consist of at least 

10,000 Shares. 

According to the Registration 

Statement, Shares of the Funds will be 

purchased and redeemed in Creation 

Units. Creation Units will typically be 

purchased in-kind through the deposit 

of a designated portfolio of securities 

constituting a representation of the 

Fund’s portfolio (the ‘‘Deposit 

Securities’’) together with the deposit of 

a specified cash payment (the ‘‘Cash 

Component’’) (collectively, the ‘‘Fund 

Deposit’’). The Cash Component serves 

to compensate for any differences 

between the NAV per Creation Unit and 

the ‘‘Deposit Amount,’’ which is an 

amount equal to the market value of the 

Deposit Securities. In addition, the 

Trust may permit or require the 

substitution of an amount of cash (the 

‘‘cash in lieu’’ amount) 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 a Fund’s Proxy Portfolio, 

except to the extent purchases and 

redemptions are made entirely or in part 

on a cash basis. Creation Units will 

typically be redeemed in exchange for 

‘‘Fund Securities’’ (which may not be 

identical to the Deposit Securities) and 

a ‘‘Cash Redemption Amount,’’ which 

represents the difference between the 

NAV of the Shares being redeemed and 

the value of the Fund Securities. 

Creation Units of the Funds may be 

purchased and/or redeemed entirely or 

partially for cash in the Advisor’s or 

Sub-Advisor’s discretion. When full or 

partial cash purchases or redemptions of 

Creation Units are available or specified 

for the Funds, they will be effected in 

essentially the same manner as in-kind 

purchases or redemptions thereof. The 

Funds may determine, upon receiving a 

purchase or redemption order from an 

Authorized Participant,19 to have the 

purchase or redemption, as applicable, 

be made entirely or in part in cash.20

The identity and number of shares of 

the Deposit Securities required for a 

Fund Deposit may change from time to 

time. Each Business Day, prior to the 

opening of business on the Exchange, 

the Custodian will make available, 

through the National Securities Clearing 

Corporation, the names and quantities 

of each Deposit Security to be included 

in the Fund Deposit, as well as the 

estimated Cash Component. The 

published Fund Deposit will apply until 

such time as the next-announced 

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. Orders to purchase or 

redeem Creation Units will be accepted 

until the ‘‘Order Time,’’ generally 3:00 

p.m. E.T. The date on which an order 

to purchase or redeem Creation Units is 

placed is referred to as the ‘‘Transmittal 

Date.’’ All Creation Unit orders must be 

received by the Distributor no later than 

the Order Time in order to receive the 

NAV determined on 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 

(newyorklifeinvestments.com), which 

will be publicly available prior to the 

public offering of Shares, will include a 

form of the prospectus for the Funds 

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 ‘‘Bid/ 

Ask Price’’; 21 and (3) a calculation of 

the premium/discount of such Closing 

Price or Bid/Ask Price against such 

NAV.22 The Advisor 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 also will disclose the 

information required under Rule 8.601– 

E(c)(3).23 The website and information 

will be publicly available at no charge. 


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Federal Register / Vol. 87, No. 96 / Wednesday, May 18, 2022 / Notices 30291 

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

and 

(v) Percentage weighting of the holding in the 

portfolio. 

24See note 7, supra. 25See NYSE Arca Rule 7.12–E. 

26FINRA conducts cross-market surveillances on 

behalf of the Exchange pursuant to a regulatory 

services agreement. The Exchange is responsible for 

FINRA’s performance under this regulatory services 

agreement. 

The 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 on 

each Business Day. The website will 

also include information relating to the 

Proxy Overlap and Tracking Error for 

each Fund, as discussed above. With 

respect to each Custom Basket utilized 

by the Funds, 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 applicable Proxy Portfolio only with 

respect to cash. 

Typical mutual fund-style annual, 

semi-annual and quarterly disclosures 

contained in the Funds’ Commission 

filings will be provided on the Funds’ 

website on a current basis.24 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 the Funds’ 

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, the Funds must comply 

with Regulation Fair Disclosure, which 

prohibits selective disclosure of any 

material non-public information. 

Information regarding the market 

price of Shares and trading volume in 

Shares, 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 will be 

published daily in the financial section 

of newspapers. 

Quotation and last sale information 

for the Shares 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 exchangetraded 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 

a Fund.25 Trading in Shares of a Fund 

will be halted if the circuit breaker 

parameters in NYSE Arca Rule 7.12–E 

have been reached. Trading also may be 

halted because of market conditions or 

for reasons that, in the view of the 

Exchange, make trading in the Shares 

inadvisable. Trading in the Shares will 

be subject to NYSE Arca Rule 8.601– 

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

circumstances under which Shares of a 

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; 

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 to be 

equity securities, thus rendering trading 

in the Shares subject to the Exchange’s 

existing rules governing the trading of 

equity securities. Shares will trade on 

the NYSE Arca Marketplace in all 

trading sessions in accordance with 

NYSE Arca Rule 7.34–E(a). As provided 

in NYSE Arca Rule 7.6–E, the minimum 

price variation (‘‘MPV’’) for quoting and 

entry of orders in equity securities 

traded on the NYSE Arca Marketplace is 

$0.01, with the exception of securities 

that are priced less than $1.00 for which 

the MPV for order entry is $0.0001. 

The Shares will conform to the initial 

and continued listing criteria under 

NYSE Arca Rule 8.601–E. The Exchange 

has appropriate rules to facilitate 

trading in the Shares 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, 

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 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.26 The 

Exchange represents that these 

procedures are adequate to properly 

monitor Exchange trading of the Shares 

in all trading sessions and to deter and 

detect violations of Exchange rules and 

federal securities laws applicable to 

trading on the Exchange. 


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27For a list of the current members of ISG, see 

www.isgportal.org. 

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

29 15 U.S.C. 78f(b)(5). 

30The Exchange represents that, for initial and 

continued listing, the Funds will be incompliance 

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

NYSE Arca Rule 5.3–E. 

31See note 13, supra. 

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 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 exchange-traded instruments 

from such markets and other entities. In 

addition, the Exchange may obtain 

information regarding trading in such 

securities and underlying exchangetraded instruments from markets and 

other entities that are members of ISG or 

with which the Exchange has in place 

a comprehensive surveillance sharing 

agreement.27

The Advisor will make available daily 

to FINRA and the Exchange the Actual 

Portfolio of each Fund, upon request, in 

order to facilitate the performance of the 

surveillances 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 for Active 

Proxy Portfolio Shares. As part of these 

surveillance procedures, the Investment 

Company’s investment adviser will, 

upon request by the Exchange or 

FINRA, on behalf of the Exchange, make 

available to the Exchange or FINRA the 

daily 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 the Funds, 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 on 

the Exchange. The Exchange will obtain 

a representation from the Trust, prior to 

commencement of trading in the Shares 

of the Funds, that it will advise the 

Exchange of any failure by the Funds 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,28 in general, and 

furthers the objectives of Section 6(b)(5) 

of the Act,29 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.30

With respect to the proposed listing 

and trading of Shares of the Funds, the 

Exchange believes that the proposed 

rule change is designed to prevent 

fraudulent and manipulative acts and 

practices in that the Shares will be 

listed and traded on the Exchange 

pursuant to the initial and continued 

listing criteria in NYSE Arca Rule 

8.601–E. 

The Funds’ 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.31

The Exchange or FINRA, on behalf of 

the Exchange, or both, will 

communicate as needed regarding 

trading in the Shares 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 and 

underlying exchange-traded instruments 

from such markets and other entities. In 

addition, the Exchange may obtain 

information regarding trading in the 

Shares 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 the Funds 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 in a manner 

that will not lead to significant 

deviations between the Shares’ Closing 

Price or Bid/Ask Price and NAV. 

The Funds’ 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, the Funds’ investments will not 

be used to seek performance that is the 

multiple or inverse multiple (e.g., 2X or 


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Federal Register / Vol. 87, No. 96 / Wednesday, May 18, 2022 / Notices 30293 

32See note 4, supra. 33See note 13, supra. 

–3X) of the Funds’ primary broad-based 

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, and Actual 

Portfolio for each Fund will be made 

available to all market participants at 

the same time. Investors can obtain the 

Funds’ SAI, shareholder reports, and its 

Form N–CSR, Form N–PORT, and Form 

N–CEN. The Funds’ SAI and 

shareholder reports will be available 

free upon request from the Funds, 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 for Active 

Proxy Portfolio Shares. As part of these 

surveillance procedures, the Investment 

Company’s investment adviser will, 

upon request by the Exchange or 

FINRA, on behalf of the Exchange, make 

available to the Exchange or FINRA the 

daily portfolio holdings of each series of 

Active Proxy Portfolio Shares. The 

Exchange believes that the ability to 

access the information on an as needed 

basis will provide it with sufficient 

information to perform the necessary 

regulatory functions associated with 

listing and trading series of Active 

Proxy Portfolio Shares on the Exchange, 

including the ability to monitor 

compliance with the initial and 

continued listing requirements as well 

as the ability to surveil for manipulation 

of Active Proxy Portfolio Shares. With 

respect to the Funds, the Advisor will 

make available daily to FINRA and the 

Exchange the portfolio holdings of each 

Fund upon request in order to facilitate 

the performance of the surveillances 

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 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 the Funds, 

a large amount of information will be 

publicly available regarding the Funds 

and the Shares, thereby promoting 

market transparency. 

Quotation and last sale information 

for the Shares 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 exchangetraded 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 website for the Funds will 

include a form of the prospectus that 

may be downloaded, and additional 

data relating to NAV and other 

applicable quantitative information, 

updated on a daily basis. Trading in 

Shares of the Funds will be halted if the 

circuit breaker parameters in NYSE Arca 

Rule 7.12–E have been reached or 

because of market conditions or for 

reasons that, in the view of the 

Exchange, make trading in the Shares 

inadvisable. Trading in the Shares will 

be subject to NYSE Arca Rule 8.601– 

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

circumstances under which Shares of a 

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. The identity and quantity of 

investments in the Proxy Portfolio will 

be publicly available on the Funds’ 

website before the commencement of 

trading in Shares on each Business Day. 

The Shares will conform to the initial 

and continued listing criteria under 

Rule 8.601–E.32

The Funds’ 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.33

Any foreign common stocks held by the 

Funds 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 

Advisor, prior to commencement of 

trading in the Shares of the Funds, that 

it will advise the Exchange of any 

failure by the Funds 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 the 

Funds are 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 and may obtain 

information via ISG from other 

exchanges that are members of ISG or 

with which the Exchange has entered 

into a comprehensive surveillance 

sharing agreement. In addition, as noted 

above, investors will have ready access 

to information regarding quotation and 

last sale information for the Shares. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. The 

Exchange believes the proposed rule 

change would permit listing and trading 

of 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. 


lotter on DSK11XQN23PROD with NOTICES1
30294 Federal Register / Vol. 87, No. 96 / Wednesday, May 18, 2022 / Notices 

34 15 U.S.C. 78s(b)(3)(A). 

35 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 

has satisfied this requirement. 

36 17 CFR 240.19b–4(f)(6)(iii). 

37See supra notes 9 and 10. 

38For 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). 

39 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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 

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 34 and Rule 19b– 

4(f)(6) thereunder.35

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) 36 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 Fund.37

The proposed listing rule for the Fund 

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.38

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 (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

NYSEArca–2022–29 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–2022–29. This 

file number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

internet website (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549 on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of the 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–NYSEArca–2022–29 and 

should be submitted on or before June 

8, 2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.39

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–10618 Filed 5–17–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94897; File No. SR–ISE– 

2022–11] 

Self-Regulatory Organizations; Nasdaq 

ISE, LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend Routing 

Functionality in Connection With a 

Technology Migration 

May 12, 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 April 27, 

2022, Nasdaq ISE, LLC (‘‘ISE’’ 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 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 the Substance 

of the Proposed Rule Change 

The Exchange proposes to amend the 

following sections within Options 5, 

Order Protection and Locked and 

Crossed Markets: Section 2, Order 

Protection; Section 3, Locked and 

Crossed Markets; and Section 4, Order 

Routing to Other Exchanges. 

Additionally, the Exchange proposes 

to make corresponding amendments to 

the following sections within Options 3, 

Options Trading Rules: Section 5, Entry 

and Display of Single-Leg Orders; 

Section 7, Types of Orders and Order 

and Quote Protocols; Section 9, Trading 

Halts; Section 10, Priority of Quotes and 

Orders; and Section 11, Auction 

Mechanisms. Also, amendments are 

proposed to the following sections 

within Options 7, Pricing Schedule: 

Section 1, General Provisions; Section 3, 

Regular Order Fees and Rebates; and 

Section 6, Other Options Fees and 

Rebates. 


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