The SEC Division of Corporation Finance (the "Division") granted to two exchange-traded funds exemptions (see here and here) from Exchange Act rules prohibiting purchases outside of a tender offer.
The relief is conditioned upon the following:
- "no purchases of subject securities or related securities made by broker-dealers acting as dealer-managers of a tender offer would be effected for the purpose of facilitating a tender offer";
- any purchases of a portfolio security by a dealer-manager during a tender offer will be effected as "adjustments to a basket of securities in the ordinary course of business" due to a change in the composition of the Fund's portfolio; and
- any broker-dealer acting as a dealer-manager of a tender offer must comply with Rule 14e-5, except for the relief granted in the Division's letters.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
