2019 has been a big year for the exchange-traded fund (ETF) industry, with a series of regulatory approvals that should foster innovation and increase competition. Most recently, on November 14, 2019, the SEC issued notices for four "semi-transparent" active ETF models – the T. Rowe, Fidelity, Blue Tractor, and Natixis/NYSE applications.1 This, of course, comes on the heels of the SEC's approval in September of the long-anticipated ETF Rule2 and the issuance of conditional exemptive relief relating to 1934 Act "class relief," 3 as well as the SEC's May approval of the Precidian's non-transparent active ETF exemptive application. 4 In addition, the three ETF listing exchanges, NYSE Arca, Cboe BZX and Nasdaq, have recently proposed changes to their listing rules for most ETFs that should, if approved by the SEC, simplify and streamline the initial and continuous listing standards for ETFs relying on the ETF Rule. 5

The "semi-transparent" models noticed for approval provide some transparency into the ETF's holdings and baskets available to authorized participants (APs) and other market participants. 6 While the T. Rowe, Fidelity, Blue Tractor and Natixis/NYSE models are somewhat similar in that they provide a measure of daily portfolio transparency to APs and other market participants, they differ from each other and are all markedly different from the Precidian model, which does not provide for any daily portfolio transparency to APs or other market participants. The following chart contains a brief comparison of some of the principal features of these non- and semi-transparent active ETF exemptive models.

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1 See T. Rowe Price Associates, Inc. et al. (File No. 812-14214)(Nov. 15, 2019) (notice), available at https://www.sec.gov/rules/ic/2019/ic-33685.pdf; Fidelity Beach Street Trust et al. (File No. 812-14364) (Nov. 15, 2019) (notice), available at https://www.sec.gov/rules/ic/2019/ic-33683.pdf; Blue Tractor ETF Trust et al. (File No. 812-14625) (Nov. 15, 2019) (notice), available at https://www.sec.gov/rules/ic/2019/ic-33682.pdf; Natixis Advisors, L.P., et al. (File No. 812-14870) (Nov. 15, 2019) (notice), available at https://www.sec.gov/rules/ic/2019/ic-33684.pdf. It is expected that these filings will become effective approximately 25 days after publication in the Federal Register.

2 Exchange-Traded Funds, Release Nos. 33-10695; IC-33646 (September 25, 2019), available at https://www.sec.gov/rules/final/2019/33-10695.pdf (the "Adopting Release"). The ETF Rule is discussed in a separate Ropes & Gray Alert.

3 Order Granting a Conditional Exemption From Exchange Act Section 11(d)(1) and Exchange Act Rules 10b-10, 15c1-5, 15c1-6 and 14e-5 for Certain Exchange Traded Funds, Release No. 34-87110 (September 25, 2019), available at https://www.sec.gov/rules/exorders/2019/34-87110.pdf.

4 See, e.g., Precidian ETFs Trust, et al., 1940 Act Rel. Nos. 33440 (April 8, 2019) and 33477 (May 20, 2019) (order) ("Precidian"), available at https://www.sec.gov/rules/ic/2019/ic-33477.pdf.

5 The NYSE Arca, Cboe BZX and Nasdaq proposals can be found here, here and here, respectively.

6 Invesco has also submitted an exemptive application seeking approval to operate semi-transparent active ETFs, but that filing was submitted in late September and has not yet been approved by the SEC. Invesco Capital Management LLC, et al., File No. 812-15070 (Sept., 25, 2019), available at https://www.sec.gov/Archives/edgar/data/102786/000119312519254770/d802828d40app.htm. Ropes & Gray assisted Invesco in preparing this filing.

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