Document ID: SEC-2023-0473-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc.
Posted Date: 2023-05-01T04:00Z

[Federal Register Volume 88, Number 83 (Monday, May 1, 2023)]
[Notices]
[Pages 26636-26639]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-09078]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-97378; File No. SR-NYSEARCA-2023-34]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Amend Certain 
Representations Relating to the Hennessy Stance ESG Large Cap ETF

April 25, 2023.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on April 21, 2023, NYSE Arca, Inc. (``NYSE Arca'' or the 
``Exchange'') filed with the Securities and Exchange Commission (the 
``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\ 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 make changes to certain representations 
made in the proposed rule change previously filed with the Securities 
and Exchange Commission (the ``Commission'' or ``SEC'') pursuant to 
Rule 19b-4 relating to the Hennessy Stance ESG Large Cap ETF, shares of 
which are currently listed and traded on the Exchange 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,

[[Page 26637]]

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 Commission has approved the listing and trading on the Exchange 
of shares (``Shares'') of the Hennessy Stance ESG Large Cap ETF (the 
``Fund''),\3\ under NYSE Arca Rule 8.601-E, which governs the listing 
and trading of Active Proxy Portfolio Shares, which are securities 
issued by an actively managed open-end investment management 
company.\4\ Shares of the Fund are currently listed and traded on the 
Exchange under NYSE Arca Rule 8.601-E.\5\ The Shares of the Fund are 
issued by Hennessy Funds Trust (the ``Issuer''), a statutory trust 
organized under the laws of the State of Delaware and registered with 
the Commission as an open-end management investment company. The Fund's 
investment adviser is Hennessy Advisors, Inc. (the ``Adviser'').
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    \3\ See Securities Exchange Act Release No. 96559 (December 21, 
2022), 87 FR 79919 (December 28, 2022) (SR-NYSEARCA-2022-84) (Notice 
of Filing and Immediate Effectiveness of Proposed Rule Change to 
Amend Certain Representations) (Renaming the Fund from Stance Equity 
ESG Large Cap Core ETF to Hennessy Stance ESG Large Cap ETF).
    \4\ See Securities Exchange Act Release No. 89185 (June 29, 
2020), 85 FR 40328 (July 6, 2020) (SR-NYSEArca-2019-95) (Approval of 
a Proposed Rule Change 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). 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 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 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.''
    \5\ The Commission previously approved the listing and trading 
of the shares of the Fund. See Securities Exchange Act Nos. 91266 
(March 5, 2021) 86 FR 13930 (March 11, 2021) (SR-NYSEArca-2020-104) 
(Order Approving a Proposed Rule Change, as Modified by Amendment 
No. 2, To List and Trade Shares of the Stance Equity ESG Large Cap 
Core ETF Under NYSE Arca Rule 8.601-E) (``Approval Order''); and 
90665 (December 15, 2020) 85 FR 83129 (December 21, 2020) (SR-
NYSEArca-2020-104) (Notice of Filing of Proposed Rule Change To List 
and Trade Shares of the Stance Equity ESG Large Cap Core ETF Under 
NYSE Arca Rule 8.601-E) (``Notice''). (The Approval Order and the 
Notice are referred to collectively herein as the ``Releases'').
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    The Releases stated that the Fund will invest primarily in 
exchange-traded equity securities of U.S. large capitalization issuers 
by investing mainly in companies that meet environmental, social and 
governance (``ESG'') standards, as determined by the Adviser. The 
Exchange proposes to update the investment strategy employed by the 
Fund to provide that the Fund may invest in exchange-traded equity 
securities of U.S. small- and medium-capitalization issuers that meet 
ESG standards, as determined by the Adviser, while continuing to invest 
primarily in exchange-traded equity securities of U.S. large-
capitalization issuers that meet ESG standards, as determined by the 
Adviser.\6\
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    \6\ The Fund filed a registration statement on Form N-1A under 
the Securities Act of 1933 (File No. 033-52154) and the Investment 
Company Act of 1940 (File No. 811-07168), which became effective on 
December 23, 2022 (the ``Registration Statement''). The Fund's 
final, definitive prospectus, dated as of December 23, 2022, was 
filed pursuant to Rule 497(c) of the Securities Act of 1933 on 
December 28, 2022, and contains the current name and investment 
strategy of the Fund (the ``Final Prospectus''). A supplement to the 
Final Prospectus containing the new name and revised strategy, as 
described herein, was filed on February 27, 2023 pursuant to Rule 
497(e) of the Securities Act of 1933 (the ``Supplement''). The 
description of the Fund and the Shares contained herein are based on 
the Registration Statement, the Final Prospectus and the Supplement. 
The change to the Fund's investment strategy as described herein 
will be implemented effective as of the close of business on April 
27, 2023.
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    The Adviser believes the change to the Fund's investment strategy 
(as described herein) is appropriate and consistent with the best 
interest of the Fund and Fund shareholders. In connection with the 
change, the Fund's investment objective and principal investment 
strategies will remain substantially the same. While the Fund will have 
an increased ability to focus on investing in exchange-traded equity 
securities of U.S. small- and medium-capitalization issuers that meet 
ESG standards, the Fund will continue to invest primarily in exchange-
traded equity securities of U.S. large-capitalization issuers that meet 
ESG standards, as determined by the Adviser. The Adviser further 
believes that this strategy change is not material because (1) the 
investment objective will remain the same and the principal investment 
strategies will remain substantially the same; (2) the Fund will 
continue to primarily invest in equity securities of large-
capitalization companies; and (3) the principal investment risks are 
substantially the same.
    As of the close of business on April 27, 2023, the Fund's non-
material strategy change will be effected to allow the Fund an 
increased ability to focus on investing in exchange-traded equity 
securities of U.S. small- and medium-capitalization issuers that meet 
ESG standards, while continuing to invest primarily in exchange-traded 
equity securities of U.S. large-capitalization issuers that meet ESG 
standards, as determined by the Adviser. Accordingly, as of the close 
of business on April 27, 2023, the name of the Fund will change from 
Hennessy Stance ESG Large Cap ETF to Hennessy Stance ESG ETF.
    The investment objective of the Fund, which is to seek long-term 
capital appreciation, will remain unchanged.
    Except for the changes noted above, all other representations made 
in the Releases remain unchanged.\7\ The Fund will comply with all 
continued listing requirements under Rule 8.601-E, including all other 
requirements and conditions set forth in the applicable exemptive 
order.
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    \7\ See supra note 5.
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2. Statutory Basis
    The basis under the Act for this proposed rule change is the 
requirement under Section 6(b)(5) \8\ that an exchange have rules that 
are 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, in general, to protect investors and the public interest.
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    \8\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the proposed rule change is designed to 
prevent fraudulent and manipulative acts and practices, and is designed 
to promote just and equitable principles of trade and to protect 
investors and the

[[Page 26638]]

public interest. Consistent with the representations in the Releases, 
the Fund will continue to seek its investment objective by investing in 
exchange-traded securities of issuers that meet ESG standards. As a 
result of the change to the Fund's investment strategy, the Exchange is 
proposing to amend certain representations in the Releases regarding 
the universe of securities in which the Fund may invest and consistent 
with that change, to rename the Fund.
    The Adviser believes the change to the Fund's investment strategy 
is appropriate and consistent with the best interest of the Fund and 
Fund shareholders. In connection with the change, the Fund's investment 
objective and principal investment strategies will remain substantially 
the same. While the Fund will have an increased ability to focus on 
investing in exchange-traded equity securities of U.S. small- and 
medium-capitalization issuers that meet ESG standards, the Fund will 
continue to invest primarily in exchange-traded equity securities of 
U.S. large-capitalization issuers that meet ESG standards, as 
determined by the Adviser. The Adviser further believes that this 
strategy change is not material because (1) the investment objective 
will remain the same and the principal investment strategies will 
remain the substantially the same; (2) the Fund will continue to 
primarily invest in equity securities of large-capitalization 
companies; and (3) the principal investment risks are substantially the 
same. The proposed changes to the investment strategy will remain 
consistent with applicable requirements under the 1940 Act.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purpose of the Act. The Exchange believes the 
proposed rule change will not impose a burden on competition and will 
benefit investors and the marketplace by permitting continued listing 
and trading of Shares of the Fund following implementation of the 
changes described above, which changes would not impact the investment 
objective of the Fund.

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)(iii) of the Act \9\ and Rule 
19b-4(f)(6) thereunder.\10\
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    \9\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \10\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires the Exchange 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.
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    A proposed rule change filed under Rule 19b-4(f)(6) \11\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\12\ the Commission 
may designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has asked 
the Commission to waive the 30-day operative delay so that the proposal 
may become operative immediately upon filing. The Commission believes 
that waiver of the 30-day operative delay is consistent with the 
protection of investors and the public interest because the proposal 
does not raise any new or novel issues and doing so will allow the 
Shares to continue to be listed and traded on the Exchange without 
interruption in a manner that is consistent with the Commission's prior 
Approval Order and the applicable requirements under the Investment 
Company Act of 1940. Accordingly, the Commission hereby waives the 30-
day operative delay and designates the proposal operative upon 
filing.\13\
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    \11\ 17 CFR 240.19b-4(f)(6).
    \12\ 17 CFR 240.19b-4(f)(6)(iii).
    \13\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    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. If the Commission 
takes such action, the Commission shall institute proceedings under 
Section 19(b)(2)(B) \14\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \14\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-NYSEARCA-2023-34 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-2023-34. This 
file number should be included on the subject line if email is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's internet website (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent 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.
    Do not include personal identifiable information in submissions; 
you should submit only information that you wish to make available 
publicly. We may redact in part or withhold entirely from publication 
submitted material that is obscene or subject to copyright protection. 
All submissions should refer to File Number SR-NYSEARCA-2023-

[[Page 26639]]

34 and should be submitted on or before May 22, 2023.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-09078 Filed 4-28-23; 8:45 am]
BILLING CODE 8011-01-P