Document ID: SEC-2021-0510-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc.
Posted Date: 2021-04-14T04:00Z

[Federal Register Volume 86, Number 70 (Wednesday, April 14, 2021)]
[Notices]
[Pages 19657-19664]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-07597]

[[Page 19657]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-91514; File No. SR-NYSEArca-2021-23]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change List and Trade 
Shares of the: Fidelity Women's Leadership ETF and Fidelity 
Sustainability U.S. Equity ETF

    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 6, 2021, 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 list and trade shares of the following 
under NYSE Arca Rule 8.601-E: Fidelity Women's Leadership ETF and 
Fidelity Sustainability U.S. Equity 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.\3\ 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 Fidelity Women's Leadership ETF and Fidelity 
Sustainability U.S. Equity ETF (each a ``Fund'' and, collectively, the 
``Funds'') under Rule 8.601-E.
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    \3\ 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 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.''
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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 \4\ and for which a ``Disclosed Portfolio'' is 
required to be disseminated at least once daily,\5\ 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'').\6\ 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 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,

[[Page 19658]]

instead of the actual holdings of the Investment Company, as provided 
by a series of Managed Fund Shares.
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    \4\ 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. 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).
    \5\ 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.
    \6\ 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.
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    The Commission has previously approved listing and trading on the 
Exchange of series of Active Proxy Portfolio Shares under NYSE Arca 
Rule 8.601-E.\7\
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    \7\ 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) 
(``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) (``American Century Order''); 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) (``T. Rowe Price Approval Order''); 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); 90530 (November 30, 
2020), 85 FR 78366 (December 4, 2020) (SR-CboeBZX-2020-085) (Notice 
of Filing and Immediate Effectiveness of a Proposed Rule Change 
Relating to List and Trade Shares of the Fidelity Growth 
Opportunities ETF, Fidelity Magellan ETF, Fidelity Real Estate 
Investment ETF, and Fidelity Small-Mid Cap Opportunities ETF Under 
Rule 14.11(m) (Tracking Fund Shares)).
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    The Shares of the Fund will be issued by the Fidelity Covington 
Trust (the ``Trust''), which is organized as a business trust under the 
laws of the Commonwealth of Massachusetts and registered with the 
Commission as an open-end management investment company.\8\ Fidelity 
Management & Research Company LLC (the ``Adviser'') will be the 
investment adviser to the Funds. FMR Investment Management (UK) 
Limited, Fidelity Management & Research (Hong Kong) Limited, and 
Fidelity Management & Research (Japan) Limited will be the sub-advisers 
(each a ``Sub-Adviser'' and, collectively, the ``Sub-Advisers'') for 
the Funds. State Street Bank and Trust Company will serve as the Funds' 
custodian and transfer agent. Fidelity Distributors Company LLC will 
act as the distributor (the ``Distributor'') for the Funds.
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    \8\ The Trust is registered under the 1940 Act. On March 26, 
2021, the Trust filed a registration statement on Form N-1A under 
the 1940 Act relating to the Funds (File No. 811-07319) (the 
``Registration Statement''). Fidelity Beach Street Trust, Fidelity 
Management & Research Company, FMR Co., Inc., and Fidelity 
Distributors Corporation filed a ninth amended 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-
14364), dated November 8, 2019 (the ``Application''). On December 
10, 2019, the Commission issued an order (the ``Exemptive Order'') 
under the 1940 Act granting the relief sought in the Application 
(Investment Company Act Release No. 33712, December 10, 2019). The 
Funds are subject to the relief set forth in the Exemptive Order 
because Fidelity Management & Research Company will serve as the 
investment adviser to the Funds, and 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 and the 
Application. The Exchange will not commence trading in Shares of the 
Funds 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 and/or Proxy Portfolio. Any 
person related to the investment adviser or Investment Company who 
makes decisions pertaining to the Investment Company's Actual Portfolio 
and/or Proxy Portfolio or has access to non-public information 
regarding the Investment Company's Actual Portfolio and/or Proxy 
Portfolio 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 and/or Proxy Portfolio 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.\9\ 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 and/or Proxy Portfolio or changes 
thereto, and not just to the underlying portfolio, as is the case with 
Managed Fund Shares.
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    \9\ 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 Sub-Advisers 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.
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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 or the Proxy 
Portfolio 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 or the Proxy Portfolio 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 or Proxy Portfolio.
    The Adviser and Sub-Advisers are not registered as broker-dealers 
but are affiliated with broker-dealers. The Adviser and Sub-Advisers 
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 and/or 
Proxy Portfolio.
    In the event (a) the Adviser and/or a Sub-Adviser becomes 
registered as a

[[Page 19659]]

broker-dealer or becomes newly affiliated with a broker-dealer, or (b) 
any new adviser or sub-adviser is a registered broker-dealer, or 
becomes affiliated with a broker-dealer, it will implement and maintain 
a ``fire wall'' with respect to its relevant personnel or its broker-
dealer affiliate regarding access to information concerning the 
composition and/or changes to each Fund's Actual Portfolio and/or Proxy 
Portfolio, and will be subject to procedures designed to prevent the 
use and dissemination of material non-public information regarding each 
Fund's Actual Portfolio and/or Proxy Portfolio or changes thereto. Any 
person related to the Adviser, Sub-Adviser(s), or the Funds who makes 
decisions pertaining to a Fund's Actual Portfolio or the Proxy 
Portfolio or has access to non-public information regarding a Fund's 
Actual Portfolio and/or the Proxy Portfolio 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 and/or the Proxy Portfolio 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 or the Proxy Portfolio 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 and/or the Proxy Portfolio 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 and/or Proxy 
Portfolio.
Description of the Funds
    According to the Registration Statement, the Adviser will identify 
a ``Tracking Basket'' \10\ for each Fund. The Tracking Basket for each 
Fund is designed to closely track the daily performance of the Fund but 
is not the Fund's Actual Portfolio. The Tracking Basket is comprised of 
(1) select recently disclosed portfolio holdings (``Strategy 
Components''); (2) liquid ETFs that convey information about the types 
of instruments in which the fund invests that are not otherwise fully 
represented by Strategy Components (``Representative ETFs''); and (3) 
cash and cash equivalents. Representative ETFs will be selected for 
inclusion in the Tracking Basket such that, when aggregated with the 
other Tracking Basket components, the Tracking Basket corresponds to a 
Fund's overall holdings exposure. Each Fund will publish on its website 
a Tracking Basket for the Fund before the commencement of trading of 
the Fund's Shares on each ``Business Day,'' \11\ and the Adviser will 
not make intra-day changes to the Tracking Basket except to correct 
errors in the published Tracking Basket.
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    \10\ The ``Tracking Basket'' is the Proxy Portfolio for purposes 
of Rule 8.601-E(c)(3).
    \11\ ``Business Day'' is defined to mean any day that the 
Exchange is open, including any day when the Funds satisfy 
redemption requests as required by Section 22(e) of the 1940 Act.
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    In addition, on each Business Day, before commencement of trading 
of Shares, each Fund will publish on its website the ``Tracking Basket 
Weight Overlap,'' which is the percentage weight overlap between the 
holdings of the prior Business Day's Tracking Basket compared to the 
holdings of the Fund that formed the basis for each Fund's calculation 
of NAV at the end of the prior Business Day. The Tracking Basket Weight 
Overlap is calculated by taking the lesser weight of each asset held in 
common between a Fund's Actual Portfolio and the Tracking Basket and 
adding the totals. The Tracking Basket Weight Overlap is designed to 
provide investors with an understanding of how similar the Tracking 
Basket is to a Fund's Actual Portfolio in percentage terms.
Fidelity Women's Leadership 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.\12\ 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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    \12\ Pursuant to the Application and Exemptive Order, the 
permissible investments for the Funds 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 (``foreign common 
stocks''), exchange-traded preferred stocks, exchange-traded 
American Depositary Receipts (``ADRs''), 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. With the exception of foreign common 
stocks and cash and cash equivalents, all holdings of the Funds will 
be listed on a U.S. national securities exchange. For purposes of 
this filing, cash equivalents are short-term U.S. Treasury 
securities, government money market funds, and repurchase 
agreements. The Funds will not short positions, will not borrow for 
investment purposes, and will not purchase any securities that are 
illiquid investments at the time of purchase.
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    According to the Registration Statement, the Fund's investment 
objective is to seek long-term growth of capital. The Fund will 
normally invest at least 80% of its assets in equity securities of 
companies that the Adviser believes prioritizes and advances women's 
leadership and development. The Fund will generally invest in larger-
sized companies but may also make substantial investments in securities 
issued by medium and smaller companies. The Fund may invest up to 25% 
of its assets in a single company.
Fidelity Sustainability U.S. Equity 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 ISG or with which the Exchange has 
in place a comprehensive surveillance sharing agreement.
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    \13\ Id.
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    According to the Registration Statement, the Fund's investment 
objective is to seek long-term growth of capital. The Fund will 
primarily invest in equity securities and will normally invest at least 
80% of its assets in equity securities of U.S. companies that the 
Adviser believes have proven or improving sustainability practices, 
based on an evaluation of such companies' ESG profile. The Fund may 
also invest in companies that the Adviser believes deliver 
environmental or social impact through core business operations. The 
Fund may hold securities of large, medium, and/or small capitalization 
companies. The Fund may invest up to 25% of its assets in a single 
company.
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.\14\
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    \14\ Id.

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[[Page 19660]]

    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, the Funds' investments will not be used to seek 
performance that is the multiple or inverse multiple (e.g., 2X or -3X) 
of the Funds' primary broad-based securities benchmark index (as 
defined in Form N-1A).\15\
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    \15\ The Funds' 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.
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Creations and Redemptions of Shares
    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 through the Distributor at their NAV next 
determined after receipt of an order, on any Business Day, in proper 
form. The NAV of each Fund's Shares will be calculated each Business 
Day as of the close of regular trading on the Exchange, ordinarily 4:00 
p.m. Eastern Time (``E.T.''). A Creation Unit will generally consist of 
at least 25,000 Shares.
    According to the Registration Statement, Shares of the Funds will 
be purchased and redeemed in Creation Units and generally on an in-kind 
basis in exchange for the Strategy Components included in a Fund's 
Tracking Basket, together with an amount of cash corresponding to the 
value of the Representative ETFs and cash and cash equivalents that 
form the remainder of the Tracking Basket. Accordingly, except where 
the purchase or redemption will include cash, purchasers will be 
required to purchase Creation Units by making an in-kind deposit of 
specified instruments (``Deposit Instruments''), and shareholders 
redeeming their Shares will receive an in-kind transfer of specified 
instruments (``Redemption Instruments''). The composition of the 
instruments that constitute the Deposit Instruments and the Redemption 
Instruments for each Fund (collectively, the ``Creation Basket'') will 
be the same as a Fund's Tracking Basket, except to the extent purchases 
and redemptions are made entirely or in part on a cash basis.
    Creation Units of the Funds may be purchased and/or redeemed 
entirely for cash. When full or partial cash purchases of Creation 
Units are available or specified for the Funds, they will be effected 
in essentially the same manner as in-kind purchases thereof. The Funds 
may determine, upon receiving a purchase or redemption order from an 
Authorized Participant, to have the purchase or redemption, as 
applicable, be made entirely or in part in cash.\16\
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    \16\ The Adviser represents that, to the extent the Trust 
effects the creation or redemption of Shares in cash on any given 
day, such transactions will be effected in the same manner for all 
Authorized Participants placing trades with the Funds on that day.
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    If there is a difference between the NAV attributable to a Creation 
Unit and the aggregate market value of the Creation Basket exchanged 
for the Creation Unit, the party conveying instruments with the lower 
value will also pay to the other an amount in cash equal to that 
difference (the ``Cash Amount'').
    Each Fund will make available on each Business Day, immediately 
prior to the opening of business on the Exchange (9:30 a.m. E.T.), the 
names and quantities of the instruments comprising the Creation Basket, 
as well as the estimated Cash Amount (if any), for that day. The 
published Creation Basket will apply until a new Creation Basket is 
announced on the following Business Day, and there will be no intra-day 
changes to the Creation Basket except to correct errors in the 
published Creation Basket. The Tracking Basket 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.
    All orders to purchase Creation Units must be placed with the 
Distributor by or through an Authorized Participant. Conforming orders 
to purchase or redeem Creation Units will generally be accepted until 
the closing time of regular trading hours on the Exchange (ordinarily 
4:00 p.m. E.T.) (the ``Closing Time''). The date on which an order to 
purchase or redeem Creation Units is received and accepted is referred 
to as the ``Transmittal Date.'' All conforming Creation Unit orders 
must be received by the Distributor no later than the Closing 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 (www.fidelity.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, the 
prior Business Day's NAV and the ``Closing Price'' or ``Bid/Ask 
Price,'' \17\ and a calculation of the premium/discount of the Closing 
Price or Bid/Ask Price against such NAV.\18\ The Adviser has 
represented that the Funds' website will also provide: (1) Any other 
information regarding premiums/discounts as may be required for other 
ETFs under Rule 6c-11 under the 1940 Act, as amended, and (2) any 
information regarding the bid/ask spread for each Fund as may be 
required for other ETFs under Rule 6c-11 under the 1940 Act, as 
amended. The Funds' website also will disclose the information required 
under Rule 8.601-E(c)(3).\19\ The website and information will be 
publicly available at no charge.
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    \17\ The records relating to Bid/Ask Prices will be retained by 
the Funds or their service providers. The ``Bid/Ask Price'' is the 
midpoint of the highest bid and lowest offer based upon the National 
Best Bid and Offer as of the time of calculation of each Fund's NAV. 
The ``National Best Bid and Offer'' is the current national best bid 
and national best offer as disseminated by the Consolidated 
Quotation System or UTP Plan Securities Information Processor. The 
``Closing Price'' of Shares is the official closing price of the 
Shares on the Exchange.
    \18\ 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 a given trading 
day.
    \19\ See note 5, 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 identity and quantity of investments in the Tracking Basket 
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 Tracking Basket Weight 
Overlap, as discussed above.
    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.\20\ 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.
---------------------------------------------------------------------------

    \20\ See note 6, supra.
---------------------------------------------------------------------------

    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

[[Page 19661]]

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. 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 a Fund.\21\ 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.
---------------------------------------------------------------------------

    \21\ 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 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.
    A minimum of 100,000 Shares for each Fund will be outstanding at 
the commencement of trading on the Exchange. 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.
    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 each Fund will be calculated 
daily and that the NAV, Proxy Portfolio, and the Actual Portfolio for 
each Fund will be made available to all market participants at the same 
time.
    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.\22\ 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.
---------------------------------------------------------------------------

    \22\ 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.\23\
---------------------------------------------------------------------------

    \23\ 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 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.

[[Page 19662]]

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 non-compliance 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 or 
reference asset, (b) limitations on portfolio holdings or reference 
assets, 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,\24\ in general, and furthers the 
objectives of Section 6(b)(5) of the Act,\25\ 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.\26\
---------------------------------------------------------------------------

    \24\ 15 U.S.C. 78f(b).
    \25\ 15 U.S.C. 78f(b)(5).
    \26\ The Exchange represents that, for initial and continued 
listing, the Funds 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 
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.\27\
---------------------------------------------------------------------------

    \27\ See note 12, 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 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 Tracking 
Basket 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 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 -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, 
Tracking Basket, and Actual Portfolio for the Funds 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 Adviser 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

[[Page 19663]]

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. Intraday price information for all exchange-traded 
instruments, which include all eligible instruments except cash and 
cash equivalents, will be available from the exchanges on which they 
trade, or through major market data vendors or subscription services. 
Intraday price information for cash equivalents is available through 
major market data vendors, subscription services and/or pricing 
services.
    The 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 each Fund's 
Tracking Basket and quotation and last sale information for the Shares. 
The identity and quantity of investments in each Fund's Tracking Basket 
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.\28\
---------------------------------------------------------------------------

    \28\ See note 3, supra.
---------------------------------------------------------------------------

    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.\29\ 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.
---------------------------------------------------------------------------

    \29\ See note 12, supra.
---------------------------------------------------------------------------

    The components of each Fund's Actual Portfolio will (a) be listed 
on an exchange and the primary trading session of such exchange will 
trade synchronously with the Exchange's Core Trading Session, as 
defined in Rule 7.34-E(a); (b) with respect to exchange-traded futures, 
be listed on a U.S. futures exchange; or (c) consist of cash and cash 
equivalents.
    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 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.

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 \30\ and Rule 19b-
4(f)(6) thereunder.\31\
---------------------------------------------------------------------------

    \30\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \31\ 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.
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(f)(6) \32\ normally 
does not become operative for 30 days after the date of the filing. 
However, pursuant to Rule 19b-4(f)(6)(iii),\33\ 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 Exchange states that 
the Commission has previously approved proposed rule changes to permit 
listing and trading on the Exchange of Active Proxy Portfolio Shares 
similar to the Funds.\34\ The Exchange also states that the Commission 
has previously issued a

[[Page 19664]]

notice of filing and immediate effectiveness for a proposed rule change 
relating to the proposed listing on a national securities exchange of 
other issues of Active Proxy Portfolio Shares, and that the Funds will 
operate in a manner similar to such funds.\35\ For these reasons, 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 waives the 30-day operative delay and 
designates the proposed rule change operative upon filing.\36\
---------------------------------------------------------------------------

    \32\ 17 CFR 240.19b-4(f)(6).
    \33\ 17 CFR 240.19b-4(f)(6)(iii).
    \34\ See note 7, supra.
    \35\ See Securities Exchange Act Release No. 90530 (November 30, 
2020), 85 FR 78366 (December 4, 2020) (SR-CboeBZX-2020-085) (Notice 
of Filing and Immediate Effectiveness of a Proposed Rule Change 
Relating to List and Trade Shares of the Fidelity Growth 
Opportunities ETF, Fidelity Magellan ETF, Fidelity Real Estate 
Investment ETF, and Fidelity Small-Mid Cap Opportunities ETF Under 
Rule 14.11(m) (Tracking Fund Shares))
    \36\ 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 rule-comments@sec.gov. Please include 
File Number SR-NYSEArca-2021-23 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-2021-23. 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-2021-23 and should 
be submitted on or before May 5, 2021.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\37\
---------------------------------------------------------------------------

    \37\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-07597 Filed 4-13-21; 8:45 am]
BILLING CODE 8011-01-P