The SEC Division of Corporation Finance granted exemptive relief to two separate exchange-traded funds ("ETFs") from requirements under Exchange Act Rule 14e-5 (Prohibiting purchases outside of a tender offer). (See here and here for the no-action letters).
The exemption was granted based 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 purchase 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
- except for the relief granted under the no-action letters, "any broker-dealer acting as a dealer-manager of a tender offer" will be obligated to comply with Exchange Act Rule 14e-5.
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.
