[Federal Register Volume 85, Number 136 (Wednesday, July 15, 2020)]
[Notices]
[Pages 42926-42927]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-15290]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 33923; File No. 812-15093]


J.P. Morgan Exchange-Traded Fund Trust, et al.

July 10, 2020.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Notice.

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    Notice of an application for an order under section 6(c) of the 
Investment Company Act of 1940 (``Act'') for an exemption from sections 
2(a)(32), 5(a)(1), and 22(d) of the Act and rule 22c-1 under the Act, 
under sections 6(c) and 17(b) of the Act for an exemption from sections 
17(a)(1) and 17(a)(2) of the Act, and under section 12(d)(1)(J) of the 
Act for an exemption from sections 12(d)(1)(A) and 12(d)(1)(B) of the 
Act.
    Applicants: J.P. Morgan Exchange-Traded Fund Trust (the ``Trust''), 
J.P. Morgan Investment Management Inc. (the ``Adviser'') and JPMorgan 
Distribution Services, Inc. (the ``Distributor'').
    Summary of Application: Applicants request an order (``Order'') 
that permits: (a) ActiveShares ETFs (as described in the Reference 
Order (as defined below)) to issue shares (``Shares'') redeemable in 
large aggregations only (``creation units''); (b) secondary market 
transactions in Shares to occur at negotiated market prices rather than 
at net asset value; (c) certain affiliated persons of an ActiveShares 
ETF to deposit securities into, and receive securities from, the 
ActiveShares ETF in connection with the purchase and redemption of 
creation units; and (d) certain registered management investment 
companies and unit investment trusts outside of the same group of 
investment companies as the ActiveShares ETFs to acquire Shares of the 
ActiveShares ETFs. The Order would incorporate by reference terms and 
conditions of a previous order granting the same relief sought by 
applicants, as that order may be amended from time to time (``Reference 
Order'').\1\
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    \1\ Precidian ETFs Trust, et al., Investment Company Act Release 
Nos. 33440 (April 8, 2019) (notice) and 33477 (May 20, 2019) 
(order).
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    Filing Date: The application was filed on February 3, 2020.
    Hearing or Notification of Hearing: An order granting the requested 
relief will be issued unless the Commission orders a hearing. 
Interested persons may request a hearing by emailing the Commission's 
Secretary at Secretarys-Office@sec.gov and serving applicants with a 
copy of the request by email. Hearing requests should be received by 
the Commission by 5:30 p.m. on August 4, 2020, and should be 
accompanied by proof of service on applicants, in the form of an 
affidavit or, for lawyers, a certificate of service. Pursuant to Rule 
0-5 under the Act, hearing requests should state the nature of the 
writer's interest, any facts bearing upon the desirability of a hearing 
on the matter, the reason for the request, and the issues contested. 
Persons who wish to be notified of a hearing may request notification 
by emailing the Commission's Secretary at Secretarys-Office@sec.gov.

ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 
Secretarys-Office@sec.gov. Applicants: Gregory S. Samuels, J.P. Morgan 
Investment Management Inc., gregory.s.samuels@jpmchase.com; Elizabeth 
A. Davin, J.P. Morgan Investment Management Inc., 
elizabeth.a.davin@jpmorgan.com; and Allison M. Fumai, Dechert LLP, 
allison.fumai@dechert.com.

FOR FURTHER INFORMATION CONTACT: Laura J. Riegel, Senior Counsel, at 
(202) 551-3038 or Trace W. Rakestraw, Branch Chief, at (202) 551-6825 
(Division of Investment Management, Chief Counsel's Office).

SUPPLEMENTARY INFORMATION: The following is a summary of the 
application. The complete application may be obtained via the 
Commission's website by searching for the file number, or for an 
applicant using the Company name box, at http://www.sec.gov/search/search.htm or by calling (202) 551-8090.

Applicants

    1. The Trust is a statutory trust organized under the laws of the 
State of Delaware and will consist of one or more series operating as 
ActiveShares ETFs. The Trust is registered as an open-end management 
investment company under the Act. Applicants seek relief with respect 
to one fund (the ``Initial Fund'') and Funds (as defined below). The 
Funds will operate as ActiveShares ETFs as described in the Reference 
Order.\2\
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    \2\ To facilitate arbitrage, an ActiveShares ETF disseminates a 
``verified intraday indicative value'' or ``VIIV,'' reflecting the 
value of its portfolio holdings, calculated every second during the 
trading day. To protect the identity and weightings of its portfolio 
holdings, an ActiveShares ETF sells and redeems its Shares in 
creation units to authorized participants only through an 
unaffiliated broker-dealer acting on an agency basis.
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    2. The Adviser, a Delaware corporation, will be the investment 
adviser to the Initial Fund. An Adviser (as defined below) will serve 
as investment adviser to each Fund. The Adviser is, and any other 
Adviser will be, registered as an investment adviser under the 
Investment Advisers Act of 1940 (``Advisers Act''). The Adviser may 
enter into sub-advisory agreements with other investment advisers to 
act as sub-advisers with respect to the Funds (each a ``Sub-Adviser''). 
Any Sub-Adviser will be registered under the Advisers Act.
    3. The Distributor is a Delaware corporation and a broker-dealer 
registered under the Securities Exchange Act of 1934, as amended, and 
will act as the principal underwriter of Shares of the Funds. 
Applicants request that the requested relief apply to any distributor 
of Shares, whether affiliated or unaffiliated with the Adviser and/or 
Sub-Adviser (included in the term ``Distributor''). Any Distributor 
will comply with the terms and conditions of the Order.

Applicants' Requested Exemptive Relief

    4. Applicants seek the requested Order under section 6(c) of the 
Act for an exemption from sections 2(a)(32), 5(a)(1), and 22(d) of the 
Act and rule 22c-1 under the Act, under sections 6(c) and 17(b) of the 
Act for an exemption from sections 17(a)(1) and 17(a)(2) of the Act, 
and under section 12(d)(1)(J) of the Act for an exemption from sections 
12(d)(1)(A) and 12(d)(1)(B) of the Act. The requested Order would 
permit applicants to offer ActiveShares ETFs. Because the relief 
requested is the same as the relief granted by the Commission under the 
Reference Order and because the Adviser has entered into a licensing 
agreement with Precidian Funds LLC in order to offer ActiveShares 
ETFs,\3\ the Order would incorporate by reference the terms and 
conditions of the Reference Order.
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    \3\ Aspects of the Funds are covered by intellectual property 
rights, including but not limited to those which are described in 
one or more patent applications.
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    5. Applicants request that the Order apply to the Initial Fund and 
to any other existing or future open-end

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management investment company or series thereof that: (a) Is advised by 
the Adviser or any entity controlling, controlled by, or under common 
control with the Adviser (any such entity included in the term 
``Adviser''); (b) operates as an ActiveShares ETF as described in the 
Reference Order; and (c) complies with the terms and conditions of the 
Order and of the Reference Order, which is incorporated by reference 
into the Order (each such company or series and the Initial Fund, a 
``Fund'').\4\
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    \4\ All entities that currently intend to rely on the Order are 
named as applicants. Any other entity that relies on the Order in 
the future will comply with the terms and conditions of the Order 
and of the Reference Order, which is incorporated by reference into 
the Order.
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    6. Section 6(c) of the Act provides that the Commission may exempt 
any person, security or transaction, or any class of persons, 
securities or transactions, from any provisions of the Act, if and to 
the extent that such exemption is necessary or appropriate in the 
public interest and consistent with the protection of investors and the 
purposes fairly intended by the policy and provisions of the Act. 
Section 17(b) of the Act authorizes the Commission to exempt a proposed 
transaction from section 17(a) of the Act if evidence establishes that 
the terms of the transaction, including the consideration to be paid or 
received, are reasonable and fair and do not involve overreaching on 
the part of any person concerned, and the transaction is consistent 
with the policies of the registered investment company and the general 
purposes of the Act. Section 12(d)(1)(J) of the Act provides that the 
Commission may exempt any person, security, or transaction, or any 
class of persons, securities or transactions, from any provision of 
section 12(d)(1) if the exemption is consistent with the public 
interest and the protection of investors. Applicants submit that for 
the reasons stated in the Reference Order the requested relief meets 
the exemptive standards under sections 6(c), 17(b) and 12(d)(1)(J) of 
the Act.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-15290 Filed 7-14-20; 8:45 am]
BILLING CODE 8011-01-P


