Document ID: SEC-2023-0236-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc.
Posted Date: 2023-03-02T05:00Z

[Federal Register Volume 88, Number 41 (Thursday, March 2, 2023)]
[Notices]
[Pages 13210-13218]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-04226]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-96972; File No. SR-NYSEArca-2023-15]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To List and Trade 
Shares of the JPMorgan Active Small Cap Value ETF Under NYSE Arca Rule 
8.601-E (Active Proxy Portfolio Shares)

February 24, 2023.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given 
that, on February 14, 2023, NYSE Arca, Inc. (``NYSE Arca'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II below, which Items have been prepared by the self-regulatory 
organization. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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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 JPMorgan 
Active Small Cap Value ETF under NYSE Arca Rule 8.601-E. 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

[[Page 13211]]

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'') as Active Proxy Portfolio 
Shares of the JPMorgan Active Small Cap Value ETF (the ``Fund'') under 
Rule 8.601-E.
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    \4\ See 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.''
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Key Features of Active Proxy Portfolio Shares
    While funds issuing Active Proxy Portfolio Shares will be actively-
managed and, to that extent, will be similar to Managed Fund Shares, 
Active Proxy Portfolio Shares differ from Managed Fund Shares in the 
following important respects. First, in contrast to Managed Fund 
Shares, which are actively-managed funds listed and traded under NYSE 
Arca Rule 8.600-E \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.
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    \5\ The Commission has previously approved listing and trading 
on the Exchange of a number of issues of Managed Fund Shares under 
NYSE Arca Rule 8.600-E. See, e.g., Securities Exchange Act Release 
Nos. 57801 (May 8, 2008), 73 FR 27878 (May 14, 2008) (SR-NYSEArca-
2008-31) (order approving Exchange listing and trading of twelve 
actively-managed funds of the WisdomTree Trust); 60460 (August 7, 
2009), 74 FR 41468 (August 17, 2009) (SR-NYSEArca-2009-55) (order 
approving listing of Dent Tactical ETF); 63076 (October 12, 2010), 
75 FR 63874 (October 18, 2010) (SR-NYSEArca-2010-79) (order 
approving Exchange listing and trading of Cambria Global Tactical 
ETF); 63802 (January 31, 2011), 76 FR 6503 (February 4, 2011) (SR-
NYSEArca-2010-118) (order approving Exchange listing and trading of 
the SiM Dynamic Allocation Diversified Income ETF and SiM Dynamic 
Allocation Growth Income ETF). The Commission also has approved a 
proposed rule change relating to generic listing standards for 
Managed Fund Shares. See Securities Exchange Act Release No. 78397 
(July 22, 2016), 81 FR 49320 (July 27, 2016) (SR-NYSEArca-2015-110) 
(amending NYSE Arca Equities Rule 8.600 to adopt generic listing 
standards for Managed Fund Shares).
    \6\ NYSE Arca Rule 8.600-E(c)(2) defines the term ``Disclosed 
Portfolio'' as the identities and quantities of the securities and 
other assets held by the Investment Company that will form the basis 
for the Investment Company's calculation of net asset value at the 
end of the business day. NYSE Arca Rule 8.600-E(d)(2)(B)(i) requires 
that the Disclosed Portfolio will be disseminated at least once 
daily and will be made available to all market participants at the 
same time.
    \7\ A mutual fund is required to file with the Commission its 
complete portfolio schedules for the second and fourth fiscal 
quarters on Form N-CSR under the 1940 Act. Information reported on 
Form N-PORT for the third month of a fund's fiscal quarter will be 
made publicly available 60 days after the end of a fund's fiscal 
quarter. Form N-PORT requires reporting of a fund's complete 
portfolio holdings on a position-by-position basis on a quarterly 
basis within 60 days after fiscal quarter end. Investors can obtain 
a 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.
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    The Commission has previously approved \9\ and noticed for 
immediate

[[Page 13212]]

effectiveness \10\ the listing and trading on the Exchange of series of 
Active Proxy Portfolio Shares under NYSE Arca Rule 8.601-E.
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    \9\ See Securities Exchange Act Release Nos. 89185 (June 29, 
2020), 85 FR 40328 (July 6, 2020) (SR-NYSEArca-2019-95) (Notice of 
Filing of Amendment No. 6 and Order Granting Accelerated Approval of 
a Proposed Rule Change, as Modified by Amendment No. 6, to Adopt 
NYSE Arca Rule 8.601-E to Permit the Listing and Trading of Active 
Proxy Portfolio Shares and To List and Trade Shares of the Natixis 
U.S. Equity Opportunities ETF Under Proposed NYSE Arca Rule 8.601-
E); 89192 (June 30, 2020), 85 FR 40699 (July 7, 2020) (SR-NYSEArca-
2019-96) (Notice of Filing of Amendment No. 5 and Order Granting 
Accelerated Approval of a Proposed Rule Change, as Modified by 
Amendment No. 5, to List and Trade Two Series of Active Proxy 
Portfolio Shares Issued by the American Century ETF Trust under NYSE 
Arca Rule 8.601-E); 89191 (June 30, 2020), 85 FR 40358 (July 6, 
2020) (SR-NYSEArca-2019-92) (Notice of Filing of Amendment No. 3 and 
Order Granting Accelerated Approval of a Proposed Rule Change, as 
Modified by Amendment No. 3, to List and Trade Four Series of Active 
Proxy Portfolio Shares Issued by T. Rowe Price Exchange-Traded 
Funds, Inc. under NYSE Arca Rule 8.601-E); 89438 (July 31, 2020), 85 
FR 47821 (August 6, 2020) (SR-NYSEArca-2020-51) (Order Granting 
Approval of a Proposed Rule Change, as Modified by Amendment No. 2, 
to List and Trade Shares of Natixis Vaughan Nelson Select ETF and 
Natixis Vaughan Nelson MidCap ETF under NYSE Arca Rule 8.601-E).
    \10\ See 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); 
and 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).
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    The Shares of the Fund will be issued by the J.P. Morgan Exchange-
Traded Fund Trust (the ``Trust''), which is organized as a Delaware 
statutory trust and registered with the Commission as an open-end 
management investment company.\11\ J.P. Morgan Investment Management 
Inc. will be the investment adviser and administrator to the Fund (the 
``Adviser''). JPMorgan Chase Bank will serve as the Fund's transfer 
agent, custodian, and sub-administrator. JPMorgan Distribution 
Services, Inc. will act as the distributor (the ``Distributor'') for 
the Fund.
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    \11\ The Trust is registered under the 1940 Act. On November 21, 
2022, the Trust filed an amended registration statement on Form N-1A 
under the 1940 Act relating to the Fund (File No. 333-191837) (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. 812-15383, 
dated September 6, 2022) (the ``Application''). See Investment 
Company Act Release No. 34747 (November 3, 2022). On November 30, 
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. 34767, November 30, 2022). 
Investments made by the Fund will comply with the conditions set 
forth in the Application and the Exemptive Order. See e.g., note 12, 
infra. The description of the operation of the Fund herein is based, 
in part, on the Registration Statement, the Application and the 
Exemptive Order. The Exchange will not commence trading in Shares of 
the Fund until the Registration Statement is effective.
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    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 the 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 the 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 broker-dealer, 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.
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    \12\ An investment adviser to an open-end fund is required to be 
registered under the Investment Advisers Act of 1940 (the ``Advisers 
Act''). As a result, the Adviser and its related personnel will be 
subject to the provisions of Rule 204A-1 under the Advisers Act 
relating to codes of ethics. This Rule requires investment advisers 
to adopt a code of ethics that reflects the fiduciary nature of the 
relationship to clients as well as compliance with other applicable 
securities laws. Accordingly, procedures designed to prevent the 
communication and misuse of non-public information by an investment 
adviser must be consistent with Rule 204A-1 under the Advisers Act. 
In addition, Rule 206(4)-7 under the Advisers Act makes it unlawful 
for an investment adviser to provide investment advice to clients 
unless such investment adviser has (i) adopted and implemented 
written policies and procedures reasonably designed to prevent 
violations, by the investment adviser and its supervised persons, of 
the Advisers Act and the Commission rules adopted thereunder; (ii) 
implemented, at a minimum, an annual review regarding the adequacy 
of the policies and procedures established pursuant to subparagraph 
(i) above and the effectiveness of their implementation; and (iii) 
designated an individual (who is a supervised person) responsible 
for administering the policies and procedures adopted under 
subparagraph (i) above.
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    In 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, the Proxy 
Portfolio, or the 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, the Proxy Portfolio, or 
the Custom Basket, as applicable, or changes thereto. Moreover, if any 
such person or entity is registered as a broker-dealer or affiliated 
with a broker-dealer, such person or entity will erect and maintain a 
``fire wall'' between the person or entity and the broker-dealer with 
respect to access to information concerning the composition and/or 
changes to such Investment Company Actual Portfolio, Proxy Portfolio, 
or Custom Basket, as applicable.
    The Adviser is not registered as a broker-dealer but is affiliated 
with broker-dealers. The Adviser has 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 
the Fund's Actual Portfolio, Proxy Portfolio, and/or Custom Basket, as 
applicable.
    In the event (a) the Adviser becomes registered as a broker-dealer 
or becomes newly affiliated with a broker-dealer, or (b) any new 
adviser or sub-adviser is a registered broker-dealer, or becomes 
affiliated with a broker-dealer, it will implement and maintain a 
``fire wall'' with respect to its relevant personnel or its broker-
dealer affiliate regarding access to information concerning the 
composition and/or changes to the Fund's Actual Portfolio, Proxy 
Portfolio, and/or Custom Basket, as applicable, and will be subject to 
procedures designed to prevent the use and dissemination of material 
non-public information regarding the Fund's Actual Portfolio, Proxy 
Portfolio, and/or Custom Basket, as applicable, or changes thereto. Any 
person related to the Adviser or the Fund who makes decisions 
pertaining to the Fund's Actual Portfolio, the Proxy Portfolio, or 
Custom Basket, as applicable, or has access to non-public information 
regarding the Fund's Actual Portfolio, the Proxy Portfolio, and/or the 
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 the Fund's Actual Portfolio, 
the Proxy Portfolio, and/or the Custom Basket, as applicable, or 
changes thereto.
    In addition, any person or entity, including any service provider 
for the

[[Page 13213]]

Fund, who has access to non-public information regarding the Fund's 
Actual Portfolio, the Proxy Portfolio, and/or the 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 the Fund's Actual Portfolio, the Proxy 
Portfolio, and/or the 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 the Fund's Actual Portfolio, Proxy 
Portfolio, and/or Custom Basket, as applicable.
Description of the Fund
    According to the Registration Statement, the Fund will generate a 
Proxy Portfolio that will be designed to closely track the daily 
performance of the Fund but will not be the Fund's Actual Portfolio. 
The Proxy Portfolio may be comprised of (1) some but not all of the 
Fund's actual holdings and (2) cash and cash equivalents. The Proxy 
Portfolio will include only certain securities that trade on a national 
securities exchange contemporaneously that trade on a national 
securities exchange contemporaneously [sic] with the Fund's Shares. The 
Fund will publish on its website the Proxy Portfolio before the 
commencement of trading of the Fund's Shares on each Business Day. In 
addition to the Proxy Portfolio, the Fund will disclose daily the 
percentage weight overlap between the holdings of the Proxy Portfolio 
and the Actual Portfolio that formed the basis for the Fund's 
calculation of NAV at the end of the prior Business Day (``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) 
(``Tracking Error''). Daily disclosure of the Proxy Portfolio, the 
Proxy Overlap, the Tracking Error and the other related proxy portfolio 
information is designed to ensure that investors can purchase and sell 
Fund shares in the secondary market at prices that are at or close to 
the underlying NAV per share of the Fund by enabling Authorized 
Participants and other market participants to accurately assess the 
profitability of arbitrage trades in Shares of the Fund.
    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.
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    \13\ Pursuant to the Application and Exemptive Order, the 
permissible investments for the Fund include only the following 
instruments: ETFs, Exchange-traded notes, Exchange-traded common 
stocks, common stocks listed on a foreign exchange that trade on 
such exchange contemporaneously with the Shares, Exchange-traded 
preferred stocks, Exchange-traded American depositary receipts, 
Exchange-traded real estate investment trusts, Exchange-traded 
commodity pools, Exchange-traded metals trusts, Exchange-traded 
currency trusts, and Exchange-traded futures that trade 
contemporaneously with the Shares, as well as cash and cash 
equivalents (short-term U.S. Treasury securities, government money 
market funds, and repurchase agreements). For purposes of the 
application, exchange-traded futures are U.S. listed futures 
contracts where the futures contract's reference asset is an asset 
that the Fund could invest in directly, or in the case of an index 
future, is based on an index of a type of asset that the Fund could 
invest in directly. All futures contracts that the Fund may invest 
in will be traded on a U.S. futures exchange. For purposes of this 
footnote only, ``Exchange'' means a national securities exchange as 
defined in section 2(a)(26) of the Act.
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    According to the Registration Statement, the Fund's investment 
objective is to seek to provide long-term capital appreciation. Under 
normal circumstances, the Fund will invest at least 80% of its assets 
in equity securities small cap companies.
Investment Restrictions
    The Shares of the Fund will conform to the initial and continued 
listing criteria under Rule 8.601-E. The Fund's holdings will be 
limited to and consistent with permissible holdings as described in the 
Application and Exemptive Order and all requirements in the Application 
and Exemptive Order.\14\ The Fund's investments, including derivatives, 
will be consistent with its investment objective and will not be used 
to enhance leverage (although certain derivatives and other investments 
may result in leverage). That is, the Fund's investments will not be 
used to seek performance that is the multiple or inverse multiple 
(e.g., 2X or -3X) of the Fund's primary broad-based securities market 
index (as defined in Form N-1A).\15\
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    \14\ Id.
    \15\ The Fund's broad-based securities benchmark index will be 
identified in a future amendment to its Registration Statement 
following the Fund's first full calendar year of performance.
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Creations and Redemptions of Shares
    According to the Registration Statement, Shares of the Fund may be 
acquired or redeemed directly from the Fund only in specified minimum 
size ``Creation Units'' as defined below or multiples thereof. The Fund 
will offer and issue Shares at the applicable NAV to broker-dealers and 
other financial intermediaries who are participants in the National 
Securities Clearing Corporation (``NSCC'') and who have signed an 
Authorized Participant Agreement with the Distributor (each, an 
``Authorized Participant''), and accepted by the Distributor, only in 
aggregations of a specified number of Shares (``Creation Units''), in 
exchange for a basket of securities and/or instruments (the ``Deposit 
Securities''), together with a deposit of a specified cash payment (the 
``Cash Component''). The NAV of the Fund's Shares will be calculated 
each Business Day as of the close of regular trading on the Exchange, 
ordinarily 4:00 p.m. Eastern Time (``E.T.''). A Creation Unit will 
consist of at least 5,000 Shares.
    In certain circumstances, the Fund may issue Creation Units solely 
in exchange for a specified all-cash payment (``Cash Deposit''). Shares 
of the Fund are likewise redeemable by the Fund only in Creation Units, 
generally in exchange for a basket of securities and instruments 
(``Redemption Securities''), together with a Cash Component. The names 
and quantities of the securities and instruments that constitute the 
Deposit Securities and Redemption Securities are generally the same as 
the Fund's Proxy Portfolio, except to the extent purchases and 
redemptions are made entirely or partially on a cash basis. In 
addition, the Fund may determine to use Custom Baskets that differ from 
the Proxy Portfolio in that they include instruments that are not in 
the Proxy Portfolio, or are included in the Proxy Portfolio but in 
different weightings. As with the offer and sale of Creation Units, the 
Fund may, in certain circumstances, redeem Creation Units in exchange 
for a specified all-cash payment.
    In order to initiate a creation order for a Creation Unit, an 
Authorized Participant must submit an irrevocable order to purchase 
Shares in proper form to the Distributor by the close of regular 
trading on the NYSE, typically 3:00 p.m. E.T. on a Business Day for 
creation of Creation Units to be effected based on the NAV of Shares of 
the Fund on that Business Day. The date on which an order to create 
Creation Units (or an order to redeem Creation Units, as discussed 
below) is placed is referred to

[[Page 13214]]

as the ``Transmittal Date.'' Orders must be transmitted by an 
Authorized Participant via the electronic order entry system, by 
telephone or other transmission method acceptable to JPMorgan Chase 
Bank and the Distributor pursuant to procedures set forth in the 
Authorized Participant Agreement.
    Fund Shares may be redeemed only in Creation Units at the NAV next 
determined after receipt of a redemption request in proper form and 
only on a Business Day. The redemption proceeds for a Creation Unit 
will generally consist of securities represented in the Proxy Portfolio 
or a Custom Basket (such securities, ``Fund Security'' or ``Fund 
Securities'') plus cash in an amount equal to the difference between 
the NAV of the Creation Unit being redeemed, as next determined after a 
receipt of a request in proper form, and the value of the Fund 
Securities, minus any fees. The Fund may substitute a ``cash-in-lieu'' 
amount to replace any Fund Security in certain limited circumstances. 
The amount of cash paid out in such cases will be equivalent to the 
value of the instrument listed as a Fund Security. In the event that 
the Fund Securities have a value greater than the NAV of the Creation 
Unit, a compensating cash payment equal to the difference will be 
included in the Cash Component required to be delivered by an 
Authorized Participant. In order to initiate a redemption order for a 
Creation Unit to be effected based on the NAV of Shares of the Fund on 
that Business Day, an Authorized Participant must submit an irrevocable 
order to redeem the Creation Unit in proper form to the Distributor by 
the close of regular trading on the NYSE, typically 3:00 p.m. E.T. on 
that Business Day.
Availability of Information
    The Fund's website (www.jpmorganfunds.com), which will be publicly 
available prior to the public offering of Shares, which will be 
publicly available prior to the public offering of Shares,[sic] will 
include a form of the prospectus for the Fund that may be downloaded. 
The Fund's website will include on a daily basis, per Share of the 
Fund, the prior Business Day's NAV, the prior Business Day's ``Closing 
Price'' or ``Bid/Ask Price'' \16\ and a calculation of the premium/
discount of such Closing Price or Bid/Ask Price against such NAV.\17\ 
The Adviser has represented that the Fund's 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 the 
Fund as may be required for other ETFs under Rule 6c-11 under the 1940 
Act, as amended. The Fund's website also will disclose the information 
required under Rule 8.601-E(c)(3).\18\
---------------------------------------------------------------------------

    \16\ The records relating to Bid/Ask Prices will be retained by 
the Fund or its service providers. The ``Bid/Ask Price'' is the 
midpoint of the highest bid and lowest offer based upon the National 
Best Bid and Offer as of the time of calculation of the 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.
    \17\ The ``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 or the Closing Price on such trading day.
    \18\ See note 4, supra. Rule 8.601-E(c)(3) provides that the 
website for each series of Active Proxy Portfolio Shares shall 
disclose the information regarding the Proxy Portfolio as provided 
in the exemptive relief pursuant to the 1940 Act applicable to such 
series, including the following, to the extent applicable:
    (i) Ticker symbol;
    (ii) CUSIP or other identifier;
    (iii) Description of holding;
    (iv) Quantity of each security or other asset held; and
     (v) Percentage weighting of the holding in the portfolio.
---------------------------------------------------------------------------

    The website and information will be publicly available at no 
charge.
    The identity and quantity of investments in the Proxy Portfolio for 
the Fund will be publicly available on the Fund's website before the 
commencement of trading in Shares on each Business Day. The website 
will also include information relating to the Proxy Overlap and the 
Tracking Error, as discussed above. With respect to each Custom Basket 
utilized by the Fund, each Business Day, before the opening of trading 
in the Core Trading Session (as defined in NYSE Arca Rule 7.34-E(a)), 
the Fund's 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 Fund's Commission filings will be provided 
on the Fund's website on a current basis.\19\ Thus, the 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.
---------------------------------------------------------------------------

    \19\ See note 7, supra.
---------------------------------------------------------------------------

    Investors can also obtain the Fund's SAI, Shareholder Reports, Form 
N-CSR, N-PORT, and Form N-CEN. The prospectus, SAI, and Shareholder 
Reports are available free upon request, and those documents and the 
Form N-CSR, N-PORT, and Form N-CEN may be viewed on-screen or 
downloaded from the Commission's website. The Exchange also notes that 
pursuant to the Application, the Fund 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 
exchange-traded instruments, which include all eligible instruments 
except cash and cash equivalents, will be available from the exchanges 
on which they trade, or through major market data vendors or 
subscription services. Intraday price information for cash equivalents 
is available through major market data vendors, subscription services 
and/or pricing services.
Trading Halts
    With respect to trading halts, the Exchange may consider all 
relevant factors in exercising its discretion to halt or suspend 
trading in the Shares of the Fund.\20\ Trading in Shares of the 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 the Fund will be halted.
---------------------------------------------------------------------------

    \20\ See NYSE Arca Rule 7.12-E.
---------------------------------------------------------------------------

    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

[[Page 13215]]

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 the 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 the NAV per 
Share of the Fund will be calculated daily, that the NAV, Proxy 
Portfolio, and the Actual Portfolio for the Fund will be made publicly 
available to all market participants at the same time, and the Trust 
and any person acting on behalf of the Trust will comply with 
Regulation Fair Disclosure under the Securities Exchange Act of 1934, 
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.\21\ 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.
---------------------------------------------------------------------------

    \21\ FINRA conducts cross-market surveillances on behalf of the 
Exchange pursuant to a regulatory services agreement. The Exchange 
is responsible for FINRA's performance under this regulatory 
services agreement.
---------------------------------------------------------------------------

    The surveillances referred to above generally focus on detecting 
securities trading outside their normal patterns, which could be 
indicative of manipulative or other violative activity. When such 
situations are detected, surveillance analysis follows and 
investigations are opened, where appropriate, to review the behavior of 
all relevant parties for all relevant trading violations.
    The Exchange or FINRA, on behalf of the Exchange, or both, will 
communicate as needed regarding trading in the Shares 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 
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.\22\
---------------------------------------------------------------------------

    \22\ For a list of the current members of ISG, see 
www.isgportal.org.
---------------------------------------------------------------------------

    The Adviser will make available daily to FINRA and the Exchange the 
Actual Portfolio of the 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 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. As part of its surveillance procedures, 
the Exchange will rely on the foregoing procedures to become aware of 
any non-compliance with the requirements of Rule 8.601-E.
    With respect to the Fund, all statements and representations made 
in this filing regarding (a) the description of the portfolio, (b) 
limitations on portfolio holdings, or (c) the applicability of Exchange 
listing rules specified in this rule filing shall constitute continued 
listing requirements for listing the Shares on

[[Page 13216]]

the Exchange. The Exchange will obtain a representation from the Trust, 
prior to commencement of trading in the Shares of the Fund, that it 
will advise the Exchange of any failure by the Fund to comply with the 
continued listing requirements, and, pursuant to its obligations under 
Section 19(g)(1) of the Act, the Exchange will monitor for compliance 
with the continued listing requirements. If the 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,\23\ in general, and furthers the 
objectives of Section 6(b)(5) of the Act,\24\ 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.\25\
---------------------------------------------------------------------------

    \23\ 15 U.S.C. 78f(b).
    \24\ 15 U.S.C. 78f(b)(5).
    \25\ The Exchange represents that, for initial and continued 
listing, the Fund will be in compliance with Rule 10A-3 under the 
Act, as provided by NYSE Arca Rule 5.3-E.
---------------------------------------------------------------------------

    With respect to the proposed listing and trading of Shares of the 
Fund, 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 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.\26\
---------------------------------------------------------------------------

    \26\ See note 13, supra.
---------------------------------------------------------------------------

    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 Fund will be 
traded on an exchange that is a member of the ISG or with which the 
Exchange has in place a comprehensive surveillance sharing agreement.
    The daily dissemination of the identity and quantity of Proxy 
Portfolio component investments, together with the right of Authorized 
Participants to create and redeem each day at the NAV, will be 
sufficient for market participants to value and trade Shares in a 
manner that will not lead to significant deviations between the Shares' 
Bid/Ask Price and NAV.
    The Fund's investments, including derivatives, will be consistent 
with its investment objective and will not be used to enhance leverage 
(although certain derivatives and other investments may result in 
leverage). That is, the Fund's investments will not be used to seek 
performance that is the multiple or inverse multiple (e.g., 2X or -3X) 
of the Fund's primary broad-based securities market 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 the Fund will be calculated daily and that the NAV, 
Proxy Portfolio, Actual Portfolio, and/or Custom Basket, as applicable, 
for the Fund will be made available to all market participants at the 
same time. Investors can obtain the Fund's SAI, shareholder reports, 
and its Form N-CSR, Form N-PORT, and Form N-CEN. The Fund's SAI and 
shareholder reports will be available free upon request from the Fund, 
and those documents and the Form N-CSR, Form N-PORT, and Form N-CEN may 
be viewed on-screen or downloaded from the Commission's website.
    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 Fund, the Adviser will make available daily to 
FINRA and the Exchange the portfolio holdings of the 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 the 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 Fund, a large amount of 
information will be publicly available regarding the Fund 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 exchange-traded instruments, which include 
all eligible instruments except cash and cash equivalents, will be 
available from the exchanges on which they trade, or through major 
market data vendors or subscription services. Intraday price 
information for cash equivalents is available through major market data 
vendors, subscription services and/or pricing services.

[[Page 13217]]

    The website for the Fund 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 Fund will be halted if the circuit breaker parameters 
in NYSE Arca Rule 7.12-E have been reached or because of market 
conditions or for reasons that, in the view of the Exchange, make 
trading in the Shares 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 the 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 Fund's 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.\27\
---------------------------------------------------------------------------

    \27\ See note 4, supra.
---------------------------------------------------------------------------

    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.\28\ 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.
---------------------------------------------------------------------------

    \28\ See note 15, supra.
---------------------------------------------------------------------------

    The proposed rule change is designed to perfect the mechanism of a 
free and open market and, in general, to protect investors and the 
public interest in that it will facilitate the listing and trading of 
an additional type of actively-managed exchange-traded product that 
will enhance competition among market participants, to the benefit of 
investors and the marketplace. The Exchange will obtain a 
representation from the Adviser, prior to commencement of trading in 
the Shares of the Fund, that it will advise the Exchange of any failure 
by the Fund to comply with the continued listing requirements, and, 
pursuant to its obligations under Section 19(g)(1) of the Act, the 
Exchange will monitor for compliance with the continued listing 
requirements. If the Fund is not in compliance with the applicable 
listing requirements, the Exchange will commence delisting procedures 
under NYSE Arca Rule 5.5-E(m).
    As noted above, the Exchange has in place surveillance procedures 
relating to trading in the Shares 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 an additional 
actively-managed ETF that has characteristics different from existing 
actively-managed and index ETFs and would introduce additional 
competition among various ETF products to the benefit of investors.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were solicited or received with respect to the 
proposed rule change.

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 \29\ and Rule 19b-
4(f)(6) thereunder.\30\
---------------------------------------------------------------------------

    \29\ 15 U.S.C. 78s(b)(3)(A).
    \30\ 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.
---------------------------------------------------------------------------

    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) \31\ 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.\32\ 
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.\33\
---------------------------------------------------------------------------

    \31\ 17 CFR 240.19b-4(f)(6)(iii).
    \32\ See supra notes 9 and 10.
    \33\ For 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).
---------------------------------------------------------------------------

    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 [email protected]. Please include 
File Number SR-NYSEArca-2023-15 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSEArca-2023-15. 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

[[Page 13218]]

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-2023-15, and should be 
submitted on or before March 23, 2023.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\34\
---------------------------------------------------------------------------

    \34\ 17 CFR 200.30-3(a)(12), (59).
---------------------------------------------------------------------------

J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2023-04226 Filed 3-1-23; 8:45 am]
BILLING CODE 8011-01-P