[Federal Register Volume 87, Number 103 (Friday, May 27, 2022)]
[Notices]
[Pages 32215-32221]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-11397]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-94961; File No. SR-NYSEArca-2022-30]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Permit the Use 
of Custom Baskets by Certain Series of Active Proxy Portfolio Shares 
Listed and Traded on the Exchange Pursuant to NYSE Arca Rule 8.601-E

May 23, 2022.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given 
that, on May 12, 2022, NYSE Arca, Inc. (``NYSE Arca'' or ``Exchange'') 
filed with the Securities and Exchange Commission (``Commission'') the 
proposed rule change as described in Items I and II below, which Items 
have been prepared

[[Page 32216]]

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\ 15 U.S.C. 78a.
    \3\ 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 facilitate the use of Custom Baskets by 
certain series of Active Proxy Portfolio Shares listed and traded on 
the Exchange pursuant to NYSE Arca Rule 8.601-E. 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 adopted NYSE Arca Rule 8.601-E for the purpose of 
permitting the listing and trading, or trading pursuant to unlisted 
trading privileges, of Active Proxy Portfolio Shares, which are 
securities issued by an actively managed open-end investment management 
company.\4\ The Exchange subsequently amended Rule 8.601-E to provide 
for the use of Custom Baskets, which are portfolios of securities that 
are different from the Proxy Portfolio and are otherwise consistent 
with the exemptive relief issued pursuant to the Investment Company Act 
of 1940 (the ``1940 Act'') applicable to a series of Active Proxy 
Portfolio Shares.\5\
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    \4\ See Securities Exchange Act Release No. 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) 
(the ``Natixis Approval Order'').
    \5\ See Securities Exchange Act Release No. 93120 (September 24, 
2021), 86 FR 54257 (September 30, 2021) (SR-NYSEArca-2021-64) (the 
``Custom Basket Approval Order'').
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Background
    Rule 8.601-E sets forth certain rules related to the listing and 
trading of Active Proxy Portfolio Shares. Under Rule 8.601-E(c)(1), the 
term Active Proxy Portfolio Shares means a security that (a) is issued 
by an investment company registered under the 1940 Act (an ``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 or Custom Basket, as 
applicable, 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 
or Custom Basket, as applicable, 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) defines the term ``Actual Portfolio'' as 
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) defines the term ``Proxy Portfolio'' as 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 1940 Act applicable to such 
series. 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.
    Rule 8.601-E(c)(4) defines the term ``Custom Basket'' as a 
portfolio of securities that is different from the Proxy Portfolio and 
is otherwise consistent with the exemptive relief issued pursuant to 
the 1940 Act applicable to a series of Active Proxy Portfolio Shares.
Proposed Rule Change
    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. 
Pursuant to this provision, the Exchange submitted proposals relating 
to the following series of Active Proxy Portfolio Shares that are 
currently listed and traded on the Exchange (each, a ``Fund'' and, 
collectively, the ``Funds''): \6\
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    \6\ The approval orders and notices of immediate effectiveness 
pursuant to which shares of the Funds are listed and traded are 
referred to collectively herein as the ``Prior Filings.''

 Natixis U.S Equity Opportunities ETF \7\
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    \7\ See Natixis Approval Order, supra note 4.
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 T. Rowe Price Blue Chip Growth ETF, T. Rowe Price Dividend 
Growth ETF, T. Rowe Price Growth Stock ETF, and T. Rowe Price Equity 
Income ETF \8\
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    \8\ See Securities Exchange Act Release No. 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) (the 
``T. Rowe Price Approval Order'').
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 American Century Mid Cap Growth Impact ETF and American 
Century Sustainable Equity ETF \9\
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    \9\ See Securities Exchange Act Release No. 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) (the 
``American Century Approval Order'').
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 Natixis Vaughan Nelson Select ETF and Natixis Vaughan Nelson 
Mid Cap ETF \10\
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    \10\ See Securities Exchange Act Release No. 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) (the ``Natixis Vaughan Approval Order'').
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 Stance Equity ESG Large Cap Core ETF \11\
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    \11\ See Securities Exchange Act Release No. 91266 (March 5, 
2021), 86 FR 13930 (March 11, 2021) (SR-NYSEArca-2020-104) (Order 
Approving a Proposed Rule Change, as Modified by Amendment No. 2, to 
List and Trade Shares of the Stance Equity ESG Large Cap Core ETF 
under NYSE Arca Rule 8.601-E) (the ``Stance Approval Order'').

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[[Page 32217]]

 T. Rowe Price U.S. Equity Research ETF \12\
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    \12\ See Securities Exchange Act Release No. 91322 (March 15, 
2021), 86 FR 14980 (March 19, 2021) (SR-NYSEArca-2021-17) (Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change Relating 
to Listing and Trading of Shares of the T. Rowe Price U.S. Equity 
Research ETF under NYSE Arca Rule 8.601-E) (the ``T. Rowe Price 
Notice'').
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 Fidelity Sustainability U.S. Equity ETF and Fidelity Women's 
Leadership ETF \13\
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    \13\ See Securities Exchange Act Release No. 91514 (April 8, 
2021), 86 FR 19657 (April 14, 2021) (SR-NYSEArca-2021-23) (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) (the ``Fidelity Notice'').
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 Putnam Sustainable Future ETF, Putnam Sustainable Leaders ETF, 
Putnam Focused Large Cap Growth ETF, and Putnam Focused Large Cap Value 
ETF \14\
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    \14\ See Securities Exchange Act Release No. 91895 (May 13, 
2021), 86 FR 27126 (May 19, 2021) (SR-NYSEArca-2021-39) (Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change to List 
and Trade Shares of the Putnam Focused Large Cap Growth ETF; Putnam 
Focused Large Cap Value ETF; Putnam Sustainable Future ETF; and 
Putnam Sustainable Leaders ETF) (the ``Putnam Notice'').
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 American Century Sustainable Growth ETF \15\
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    \15\ See Securities Exchange Act Release No. 92052 (May 27, 
2021), 86 FR 29810 (June 3, 2021) (SR-NYSEArca-2021-44) (Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change to List 
and Trade Shares of the American Century Sustainable Growth ETF) 
(the ``American Century Notice'').
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 Nuveen Dividend Growth ETF, Nuveen Small Cap Select ETF, and 
Nuveen Winslow Large-Cap Growth ESG ETF \16\
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    \16\ See Securities Exchange Act Release No. 92104 (June 3, 
2021), 86 FR 30635 (June 9, 2021) (SR-NYSEArca-2021-46) (Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change to List 
and Trade Shares of the Nuveen Santa Barbara Dividend Growth ETF, 
Nuveen Small Cap Select ETF, and Nuveen Winslow Large-Cap Growth ESG 
ETF Under NYSE Arca Rule 8.601-E) (the ``Nuveen Notice'').
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 Nuveen Growth Opportunities ETF \17\
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    \17\ See Securities Exchange Act Release No. 92958 (September 
13, 2021), 86 FR 51933 (September 17, 2021) (SR-NYSEArca-2021-77) 
(Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change to List and Trade Shares of the Nuveen Growth Opportunities 
ETF Under NYSE Arca Rule 8.601-E) (the ``Nuveen Growth Opportunities 
Notice'').
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 Schwab Ariel ESG ETF \18\
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    \18\ See Securities Exchange Act Release No. 93264 (October 6, 
2021), 86 FR 56989 (October 13, 2021) (SR-NYSEArca-2021-84) (Notice 
of Filing and Immediate Effectiveness of Proposed Rule Change to 
List and Trade Shares of the Schwab Ariel ESG ETF) (the ``Schwab 
Notice'').

    The Exchange proposes to modify representations made in each Fund's 
original filing that provided for the creation and redemption of shares 
using the Proxy Portfolio or cash. Specifically, the Exchange proposes 
to permit each Fund to use a Custom Basket, in addition to a Proxy 
Portfolio or cash, to create or redeem shares in accordance with its 
respective exemptive relief and current Rule 8.601-E. The Exchange 
believes that updating such representations to permit the Funds to use 
Custom Baskets, to the extent consistent with the terms of a Fund's 
exemptive relief, would benefit the investing public and the 
marketplace by providing greater flexibility in the creation and 
redemption process for shares of Active Proxy Portfolio Shares and 
would promote competition among various ETF products.
    Accordingly, the issuers of each Fund each represent that it and 
any person acting on behalf of the series of Active Proxy Portfolio 
Shares which are the subject of this filing will comply with Regulation 
Fair Disclosure under the Act,\19\ including with respect to any Custom 
Basket. Each issuer also represents that for each Custom Basket 
utilized by each Fund, each business day, before the opening of trading 
during the Exchange's Core Trading Session (as defined in Rule 7.34-
E(a)), each Fund will make publicly available on its website the 
composition of any Custom Basket transacted on the previous business 
day, except a Custom Basket that differs from the applicable Proxy 
Portfolio only with respect to cash.
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    \19\ 17 CFR 243.100-243.103. Regulation Fair Disclosure provides 
that whenever an issuer, or any person acting on its behalf, 
discloses material non-public information regarding that issuer or 
its securities to certain individuals or entities--generally, 
securities market professionals, such as stock analysts, or holders 
of the issuer's securities who may well trade on the basis of the 
information--the issuer must make public disclosure of that 
information.
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    Finally, the issuers of each Fund each represent that the adviser 
and sub-adviser(s), as applicable, to each of the Funds each represent 
that, if the adviser and/or sub-adviser(s), as applicable, is 
registered as a broker-dealer or is affiliated with a broker-dealer, 
such adviser and/or sub-adviser(s), as applicable, has erected and will 
maintain a ``fire wall'' between the adviser and/or sub-adviser(s), as 
applicable, 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 the applicable Fund's 
Actual Portfolio, Proxy Portfolio, and/or Custom Basket, as applicable. 
The issuers of each Fund each also represent that any person related to 
the investment adviser or Investment Company who make decisions 
pertaining to the applicable Fund's Actual Portfolio, Proxy Portfolio, 
and/or Custom Basket, as applicable, or who have access to non-public 
information regarding the Actual Portfolio, Proxy Portfolio, and/or 
Custom Basket, as applicable, or changes thereto are subject to 
procedures reasonably designed to prevent the use and dissemination of 
material non-public information regarding the Actual Portfolio, Proxy 
Portfolio, and/or Custom Basket, as applicable, or changes thereto.
    In the event that (a) a Fund's adviser or sub-adviser(s), as 
applicable, becomes registered as a 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 newly affiliated with a 
broker-dealer, it will implement and maintain a ``fire wall'' with 
respect to personnel of the broker-dealer or broker-dealer affiliate, 
as applicable, regarding access to information concerning the 
composition and/or changes to the Actual Portfolio, Proxy Portfolio, 
and/or Custom Basket, as applicable, and will be subject to procedures 
designed to prevent the use and dissemination of material non-public 
information regarding the applicable Actual Portfolio, Proxy Portfolio, 
and/or Custom Basket, as applicable.
    Any person or entity, including any service provider for any of the 
Funds, who has access to non-public information regarding the Actual 
Portfolio, Proxy Portfolio, and/or Custom Basket, as applicable, or 
changes thereto for a Fund will be subject to procedures reasonably 
designed to prevent the use and dissemination of material non-public 
information regarding the Actual Portfolio, Proxy Portfolio, or Custom 
Basket, as applicable, or changes thereto. Furthermore, any person or 
entity that is registered as a broker-dealer or affiliated with a 
broker-dealer, must have 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 such 
Actual Portfolio, Proxy Portfolio, or Custom Basket, as applicable.
    Each Fund will comply with the above-described conditions as well 
as the conditions of the applicable exemptive order, and the Exchange 
proposes to update the listing rule for each Fund's shares accordingly. 
Except for the changes noted above, all other representations made in 
the Prior Filings for each of the Funds remain unchanged and will 
continue to

[[Page 32218]]

constitute continued listing requirements for each of the Funds.\20\ 
The Funds will also continue to comply with the requirements of Rule 
8.601-E. The Funds each represent that that [sic] are currently in 
compliance with Rule 8.601-E, as amended by the Custom Basket Approval 
Order, and will continue to comply with all requirements of Rule 8.601-
E, as amended by the Custom Basket Approval Order.
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    \20\ See notes 7-18, supra.
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The Natixis Model Funds
    The Natixis U.S. Equity Opportunities ETF, Natixis Vaughan Nelson 
Select ETF, and Natixis Vaughan Nelson Mid Cap ETF (the ``Natixis 
Funds'') are series of the Natixis ETF Trust II. The Natixis ETF Trust 
II and NYSE Group, Inc. filed an application for an order under Section 
6(c) of the 1940 Act for exemptions from various provisions of the 1940 
Act and rules thereunder (the ``Prior Natixis Application'').\21\ On 
December 10, 2019, the Commission issued an order under the 1940 Act 
granting the exemptions requested in the Prior Natixis Application (the 
``Prior Natixis Exemptive Order'').\22\
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    \21\ See Investment Company Act Release No. 33684 (November 14, 
2019) (File No. 812-14870).
    \22\ See Investment Company Act Release No. 33711 (December 10, 
2019) (File No. 812-14870).
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    The American Century Mid Cap Growth Impact ETF, American Century 
Sustainable Equity ETF, and American Century Sustainable Growth ETF 
(the ``American Century Funds'') are series of the American Century ETF 
Trust. The American Century ETF Trust filed an application for an order 
under Section 6(c) of the 1940 Act for exemptions from various 
provisions of the 1940 Act and rules thereunder (the ``American Century 
Application'').\23\ On May 12, 2020, the Commission issued an order 
under the 1940 Act granting the exemptions requested in the American 
Century Application (the ``American Century Exemptive Order'').\24\ The 
American Century Application and American Century Exemptive Order 
incorporate by reference the terms and conditions of the Prior Natixis 
Exemptive Order, as such order may be amended from time to time.
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    \23\ See Investment Company Act Release No. 33841 (April 16, 
2020) (File No. 812-15082).
    \24\ See Investment Company Act Release No. 33862 (May 12, 2020) 
(File No. 812-15082).
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    The Nuveen Dividend Growth ETF, Nuveen Small Cap Select ETF, Nuveen 
Winslow Large-Cap Growth ESG ETF, and Nuveen Growth Opportunities ETF 
(the ``Nuveen Funds'') are series of the Nushares ETF Trust. The 
Nushares ETF Trust filed an application for an order under Section 6(c) 
of the 1940 Act for exemptions from various provisions of the 1940 Act 
and rules thereunder (the ``Nuveen Application'').\25\ On May 4, 2021, 
the Commission issued an order under the 1940 Act granting the 
exemptions requested in the Nuveen Application (the ``Nuveen Exemptive 
Order'').\26\ The Nuveen Application and Nuveen Exemptive Order 
incorporate by reference the terms and conditions of the Prior Natixis 
Exemptive Order, as such order may be amended from time to time.
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    \25\ See Investment Company Act Release No. 34243 (April 8, 
2021) (File No. 812-15199).
    \26\ See Investment Company Act Release No. 34265 (May 4, 2021) 
(File No. 812-15199).
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    The Schwab Ariel ESG ETF (the ``Schwab Fund'') is a series of the 
Schwab Strategic Trust. The Schwab Strategic Trust filed an application 
for an order under Section 6(c) of the 1940 Act for exemptions from 
various provisions of the 1940 Act and rules thereunder (the ``Schwab 
Application'').\27\ On July 7, 2021, the Commission issued an order 
under the 1940 Act granting the exemptions requested in the Schwab 
Application (the ``Schwab Exemptive Order'').\28\ The Schwab 
Application and Schwab Exemptive Order incorporate by reference the 
terms and conditions of the Prior Natixis Exemptive Order, as such 
order may be amended from time to time.
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    \27\ See Investment Company Act Release No. 34298 (June 11, 
2021) (File No. 812-15216).
    \28\ See Investment Company Act Release No. 34323 (July 7, 2021) 
(File No. 812-15216).
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    Under the Prior Natixis Exemptive Order (and, accordingly, the 
exemptive orders described above that incorporate the terms and 
conditions of the Prior Natixis Exemptive Order), each of the Natixis 
Funds, American Century Funds, Nuveen Funds, and the Schwab Fund 
(collectively, the ``Natixis Model Funds'') is required to publish a 
Proxy Portfolio, which is designed to closely track its daily 
performance but will not be a Fund's Actual Portfolio. The Prior 
Natixis Application stated that a Natixis Model Fund's Proxy Portfolio 
would be designed to reflect the economic exposures and risk 
characteristics of such fund's actual holdings on each trading day, 
which would be achieved by performing an analysis of such fund's Actual 
Portfolio (the ``Factor Model''). Each Natixis Model Fund would have a 
universe of securities (the ``Model Universe'') that would be used to 
generate its Proxy Portfolio. The Model Universe would be comprised 
solely of securities that a Natixis Model Fund can purchase and would 
be a financial index or stated portfolio of securities from which a 
Natixis Model Fund's investments would be selected. The results of the 
Factor Model analysis of a Natixis Model Fund's Actual Portfolio would 
then be applied to such fund's Model Universe. The daily rebalanced 
Proxy Portfolio would then be generated as a result of this Model 
Universe analysis with the Proxy Portfolio being a small sub-set of the 
Model Universe. The Factor Model would be applied to both the Actual 
Portfolio and the Model Universe to construct a Natixis Model Fund's 
Proxy Portfolio that performs in a manner substantially identical to 
the performance of its Actual Portfolio. Investments made by the 
Natixis Model Funds will comply with the conditions set forth in the 
Prior Natixis Application and the Prior Natixis Exemptive Order.\29\
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    \29\ See Natixis Approval Order, supra note 4; Natixis Vaughan 
Approval Order, supra note 10; American Century Approval Order, 
supra note 9; American Century Notice, supra note 15; Nuveen Notice, 
supra note 16; Nuveen Growth Opportunities Notice, supra note 17; 
Schwab Notice, supra note 18.
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    On August 31, 2020, and as amended on November 16, 2020 and 
December 8, 2020, the Natixis ETF Trust II sought to amend the Prior 
Natixis Exemptive Order (the ``Updated Natixis Application'') to enable 
the Natixis Funds to use Creation Baskets \30\ that include instruments 
that are not in the Proxy Portfolio, or are included in the Proxy 
Portfolio but in different weightings (i.e., for purposes of this 
filing, Custom Baskets).\31\ On February 9, 2021, the Commission issued 
an order permitting the Natixis Funds to use Custom Baskets that 
include instruments that are not included, or are included with 
different weightings, in a Natixis Model Fund's Proxy Portfolio (the 
``Updated Natixis Order'').\32\
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    \30\ Pursuant to the Prior Natixis Exemptive Order and the 
exemptive orders described above that incorporate the terms and 
conditions of the Prior Natixis Exemptive Order, a Creation Basket 
with respect to the Natixis Model Funds consists of the instruments 
that purchasers would deposit and that shareholders would receive 
upon purchasing or redeeming shares of the funds.
    \31\ See Investment Company Act Release No. 34171 (January 12, 
2021) (File No. 812-15157).
    \32\ See Investment Company Act Release No. 34192 (February 9, 
2021) (File No. 812-15157).
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    The Exchange thus proposes to update the listing rules for each of 
the Natixis Model Funds to reflect the terms and conditions of the 
Updated Natixis Order. Specifically, the Exchange proposes to reflect 
that each of the Natixis Model Funds will comply with the terms of the 
Updated Natixis Application and the Updated Natixis Order and, 
accordingly, are permitted to use Custom Baskets that include 
instruments that are not included, or are

[[Page 32219]]

included with different weightings, in a Natixis Model Fund's Proxy 
Portfolio.
The T. Rowe Price Model Funds
    Shares of the T. Rowe Price Blue Chip Growth ETF, T. Rowe Price 
Dividend Growth ETF, T. Rowe Price Growth Stock ETF, T. Rowe Price 
Equity Income ETF, and T. Rowe Price U.S. Equity Research ETF (the ``T. 
Rowe Funds'') are issued by T. Rowe Price Exchange-Traded Funds, Inc. 
T. Rowe Price Exchange-Traded Funds, Inc. filed an application for an 
order under Section 6(c) of the 1940 Act for exemptions from various 
provisions of the 1940 Act and rules thereunder (the ``Prior T. Rowe 
Application'').\33\ On December 10, 2019, the Commission issued an 
order under the 1940 Act granting the exemptions requested in the Prior 
T. Rowe Application (the ``Prior T. Rowe Exemptive Order'').\34\
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    \33\ See Investment Company Act Release No. 33685 (November 14, 
2019) (File No. 812-14214).
    \34\ See Investment Company Act Release No. 33713 (December 10, 
2019) (File No. 812-14214).
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    Under the Prior T. Rowe Exemptive Order, the T. Rowe Funds are 
required to publish a Proxy Portfolio, which is a basket of securities 
and cash that, while different from a T. Rowe Fund's portfolio, is 
designed to closely track its daily performance. The Prior T. Rowe 
Application stated that each T. Rowe Fund's Proxy Portfolio will be 
determined such that at least 80% of its total assets will overlap with 
the portfolio weightings of such fund. Investments made by the T. Rowe 
Funds will comply with the conditions set forth in the Prior T. Rowe 
Application and the Prior T. Rowe Exemptive Order.\35\
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    \35\ See T. Rowe Price Approval Order, supra note 8; T. Rowe 
Price Notice, supra note 12.
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    On February 4, 2021, and as amended on March 30, 2021, T. Rowe 
Price Exchange-Traded Funds, Inc. sought to amend the Prior T. Rowe 
Exemptive Order (the ``Updated T. Rowe Application'') to permit use of 
Creation Baskets \36\ that include instruments that are not included, 
or are included with different weightings, in a T. Rowe Fund's Proxy 
Portfolio (i.e., for purposes of this filing, Custom Baskets).\37\ On 
May 18, 2021, the Commission issued an amended order permitting the T. 
Rowe Funds to use Custom Baskets that include instruments that are not 
included, or are included with different weightings in a T. Rowe Fund's 
Proxy Portfolio (the ``Updated T. Rowe Order'').\38\
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    \36\ Pursuant to the Prior T. Rowe Exemptive Order, a Creation 
Basket with respect to the T. Rowe Funds consists of the instruments 
that purchasers would deposit and that shareholders would receive 
upon purchasing or redeeming shares of the funds.
    \37\ See Investment Company Act Release No. 34248 (April 22, 
2021) (File No. 812-15197).
    \38\ See Investment Company Act Release No. 34272 (May 18, 2021) 
(File No. 812-15197).
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    The Exchange thus proposes to update the listing rules for the T. 
Rowe Funds to reflect the terms and conditions of the Updated T. Rowe 
Order. Specifically, the Exchange proposes to reflect that the T. Rowe 
Funds will comply with the terms of the Updated T. Rowe Application and 
the Updated T. Rowe Order and, accordingly, are permitted to use Custom 
Baskets that include instruments that are not included, or are included 
with different weightings, in a T. Rowe Fund's Proxy Portfolio.
The Fidelity Model Funds
    Shares of the Fidelity Sustainability U.S. Equity ETF and Fidelity 
Women's Leadership ETF (the ``Fidelity Funds'') are issued by the 
Fidelity Covington Trust. Fidelity Beach Street Trust (``Beach 
Street''), Fidelity Management & Research Company (``FMR''), and 
Fidelity Distributors Corporation (``FDC'') 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 
(the ``Prior Fidelity Application'').\39\ On December 10, 2019, the 
Commission issued an order (the ``Prior Fidelity Exemptive Order'') 
under the 1940 Act granting the relief sought in the Application.\40\ 
The Fidelity Funds are subject to the relief set forth in the Prior 
Fidelity Exemptive Order because FMR is the investment adviser to the 
Fidelity Funds.
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    \39\ See Investment Company Act Release No. 33683 (November 14, 
2019) (File No. 812-14364).
    \40\ See Investment Company Act Release No. 33712 (December 10, 
2019) (File No. 812-14364).
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    The Putnam Sustainable Future ETF, Putnam Sustainable Leaders ETF, 
Putnam Focused Large Cap Growth ETF, and Putnam Focused Large Cap Value 
ETF (the ``Putnam Funds'') are series of the Putnam ETF Trust. The 
Putnam ETF Trust filed an application for an order under Section 6(c) 
of the 1940 Act for exemptions from various provisions of the 1940 Act 
and rules thereunder (the ``Putnam Application'').\41\ On May 10, 2021, 
the Commission issued an order under the 1940 Act granting the 
exemptions requested in the Putnam Application (the ``Putnam Exemptive 
Order'').\42\ The Putnam Application and Putnam Exemptive Order 
incorporate by reference the terms and conditions of the Prior Fidelity 
Exemptive Order, as such order may be amended from time to time.
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    \41\ See Investment Company Act Release No. 34245 (April 15, 
2021) (File No. 812-15203).
    \42\ See Investment Company Act Release No. 34266 (May 10, 2021) 
(File No. 812-15203).
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    Under the Prior Fidelity Exemptive Order, each of the Fidelity 
Funds and Putnam Funds (collectively, the ``Fidelity Model Funds'') is 
required to publish a Proxy Portfolio that is a basket of securities 
and cash that, while different from a fund's portfolio, is designed to 
closely track its daily performance. Such Proxy Portfolio 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; and (3) cash and cash equivalents. 
Investments made by the Fidelity Model Funds will comply with the 
conditions set forth in the Prior Fidelity Application and the Prior 
Fidelity Exemptive Order.\43\
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    \43\ See Fidelity Notice, supra note 13; Putnam Notice, supra 
note 14.
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    On October 30, 2020, and as amended on April 2, 2021, June 11, 
2021, and June 30, 2021, Beach Street, FMR, FDC, and Fidelity Covington 
Trust sought to amend the Prior Fidelity Exemptive Order (the ``Updated 
Fidelity Application'') to permit the use of Creation Baskets \44\ that 
include instruments that are not included, or are included with 
different weightings, in a fund's Proxy Portfolio (i.e., for purposes 
of this filing, Custom Baskets). On August 5, 2021, the Commission 
issued an order granting the relief requested (the ``Updated Fidelity 
Order'').
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    \44\ Pursuant to the Prior Fidelity Exemptive Order, a Creation 
Basket with respect to the Fidelity Model Funds consists of the 
instruments that purchasers would deposit and that shareholders 
would receive upon purchasing or redeeming shares of the funds.
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    The Exchange thus proposes to update the listing rules for the 
Fidelity Model Funds to reflect the terms and conditions of the Updated 
Fidelity Order. Specifically, the Exchange proposes to reflect that the 
Fidelity Model Funds will comply with the terms of the Updated Fidelity 
Application and the Updated Fidelity Order and, accordingly, are 
permitted to use Custom Baskets that include instruments that are not 
included, or are included with different weightings, in a Fidelity 
Model Fund's Proxy Portfolio.
Stance Equity ESG Large Cap Core ETF
    Shares of the Stance Equity ESG Large Cap Core ETF (the ``Stance 
Fund'' or ``Blue Tractor Model Fund'') are issued by The RBB Fund, Inc. 
The RBB Fund, Inc. filed an application for an order under Section 6(c) 
of the 1940 Act for exemptions from various provisions of the 1940 Act 
and rules thereunder (the

[[Page 32220]]

``RBB Application'').\45\ On February 26, 2021, the Commission issued 
an order (the ``RBB Exemptive Order'') under the 1940 Act granting the 
exemptions requested in the RBB Application.\46\ The RBB Application 
and RBB Exemptive Order incorporate by reference the terms and 
conditions of the exemptive order granted to Blue Tractor ETF Trust and 
Blue Tractor Group, LLC, as such order may be amended from time to time 
(the ``Prior Blue Tractor Exemptive Order'').\47\
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    \45\ See Investment Company Act Release No. 34189 (February 5, 
2021) (File No. 812-15165).
    \46\ See Investment Company Act Release No. 34215 (February 26, 
2021) (File No. 812-15165).
    \47\ See Investment Company Act Release No. 34221 (March 8, 
2021) (File No. 812-15162). The Prior Blue Tractor Exemptive Order 
was granted in response to an application filed by Blue Tractor ETF 
Trust and Blue Tractor Group, LLC for an order under Section 6(c) of 
the 1940 Act for exemptions from various provisions of the 1940 Act 
and rules thereunder (the ``Prior Blue Tractor Application''). See 
Investment Company Act Release Nos. 33682 (November 14, 2019) (Prior 
Blue Tractor Application) and 33710 (December 10, 2019) (Prior Blue 
Tractor Exemptive Order) (File No. 812-14625).
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    Under the Prior Blue Tractor Exemptive Order and thus the RBB 
Exemptive Order, the Stance Fund is required to publish a Proxy 
Portfolio that is a basket of securities and cash that, while different 
from the fund's portfolio, is designed to closely track its daily 
performance. Specifically, each day, a proprietary algorithmic process 
will be applied to the Stance Fund's portfolio to generate a basket of 
securities and cash the performance of which is designed to closely 
track the daily performance of the fund's portfolio. Investments made 
by the Stance Fund will comply with the conditions set forth in the RBB 
Exemptive Order and the Prior Blue Tractor Exemptive Order.\48\
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    \48\ See Stance Approval Order, supra note 11.
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    On September 18, 2020, and as amended on January 19, 2021, Blue 
Tractor ETF Trust and Blue Tractor Group, LLC sought to amend the Prior 
Blue Tractor Exemptive Order (the ``Updated Blue Tractor Application'') 
to permit use of Creation Baskets \49\ that include instruments that 
are not included, or are included with different weightings, in a 
fund's Proxy Portfolio (i.e., for purposes of this filing, Custom 
Baskets).\50\ On March 9, 2021, the Commission issued an amended order 
that, among other things, permits the use of Custom Baskets that 
include instruments that are not included, or are included with 
different weightings in a fund's Proxy Portfolio (the ``Updated Blue 
Tractor Order'').\51\
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    \49\ Pursuant to the Prior Blue Tractor Exemptive Order and the 
RBB Exemptive Order, a Creation Basket with respect to the Stance 
Fund consists of the instruments that purchasers would deposit and 
that shareholders would receive upon purchasing or redeeming shares 
of the fund.
    \50\ See Investment Company Act Release No. 34194 (February 10, 
2021) (File No. 812-15162).
    \51\ See Investment Company Act Release No. 34221 (March 9, 
2021) (File No. 812-15162).
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    The Exchange thus proposes to update the listing rule for the 
Stance Fund to reflect the terms and conditions of the Updated Blue 
Tractor Order. Specifically, the Exchange proposes to reflect that the 
Stance Fund will comply with the terms of the Updated Blue Tractor 
Application and the Updated Blue Tractor Order and, accordingly, are 
permitted to use Custom Baskets that include instruments that are not 
included, or are included with different weightings, in the Stance 
Fund's Proxy Portfolio.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\52\ in general, and furthers the 
objectives of Section 6(b)(5) of the Act,\53\ 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.
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    \52\ 15 U.S.C. 78f(b).
    \53\ 15 U.S.C. 78f(b)(5).
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    The proposed rule change is designed to remove impediments to and 
perfect the mechanism of a free and open market and, in general, to 
protect investors and the public interest because it would permit each 
of the Funds to use Custom Baskets, to the extent consistent with their 
applicable exemptive relief and in accordance with amended NYSE Arca 
Rule 8.601-E. The Exchange believes that the proposal, which would 
permit the Funds to use Custom Baskets that include instruments that 
are not included, or are included with different weightings, in a 
Fund's Proxy Portfolio raises no novel issues under the Act.\54\ In 
addition, the Funds' use of Custom Baskets would be consistent with, 
and contemplated by, amended Rule 8.601-E, and the Exchange believes 
that the proposed rule change would remove impediments to and perfect 
the mechanism of a free and open market and, in general, protect 
investors and the public interest because, to the extent the Funds wish 
to utilize Custom Baskets, the Funds will continue to be required to 
meet the initial and continued listing criteria set forth in Rule 
8.601-E.
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    \54\ See note 5, supra.
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    The proposed rule change is also designed to prevent fraudulent and 
manipulative acts and practices, promote just and equitable principles 
of trade, remove impediments to and perfect the mechanism of a free and 
open market, and, in general, to protect investors and the public 
interest because, as noted above, all other representations made in the 
prior filings for the Funds remain unchanged and will continue to 
constitute continuing listing requirements for the Funds.
    For these reasons, the Exchange believes that the proposal is 
consistent with the Act.

B. Self-Regulatory Organization's Statement on Burden on Competition

    In accordance with Section 6(b)(8) of the Act,\55\ 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. As noted above, the proposed rule change 
reflects amendments to the exemptive orders applicable to the Funds and 
would thus permit the Funds to operate consistent with their exemptive 
relief. The Exchange does not believe that the proposed change imposes 
any burden on competition, and, to the extent that the proposed rule 
change would continue to permit listing and trading of the Funds, the 
Exchange believes that the proposal could promote competition among 
various ETF products, to the benefit of investors.
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    \55\ 15 U.S.C. 78f(b)(8).
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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 \56\ and Rule 19b-
4(f)(6) thereunder.\57\
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    \56\ 15 U.S.C. 78s(b)(3)(A).
    \57\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires a self-regulatory organization 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.

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[[Page 32221]]

    A proposed rule change filed under Rule 19b-4(f)(6) \58\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\59\ 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 proposed 
rule change may take effect upon filing. The Commission notes that each 
Fund seeking to use Custom Baskets pursuant to this rule change 
represents that it is currently in compliance with Rule 8.601-E, as 
amended by the Custom Basket Approval Order, and will continue to 
comply with all requirements of Rule 8.601-E, as amended by the Custom 
Basket Approval Order. In addition, the Exchange represents that all 
other representations made in the prior filings for the Funds remain 
unchanged and will continue to constitute continuing listing 
requirements for the Funds. The Commission believes that waiver of the 
30-day operative delay is consistent with the protection of investors 
and the public interest because the proposed rule change does not raise 
any new or novel issues.\60\ Accordingly, the Commission waives the 30-
day operative delay and designates the proposal operative upon 
filing.\61\
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    \58\ 17 CFR 240.19b-4(f)(6).
    \59\ 17 CFR 240.19b-4(f)(6)(iii).
    \60\ See the Custom Basket Approval Order, supra note 5. See 
also Securities Exchange Act Nos. 93546 (November 9, 2021) 86 FR 
63429 (November 16, 2021) (SR-CboeBZX-2021-075) (Notice of Filing 
and Immediate Effectiveness of a Proposed Rule Change to Reflect a 
Modification to the Permitted Components of the Tracking Baskets of 
the Invesco Real Assets ESG ETF and Invesco US Large Cap Core ESG 
ETF).
    \61\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    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 [email protected]. Please include 
File Number SR-NYSEArca-2022-30 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-2022-30. 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-2022-30 and should be submitted 
on or before June 17, 2022.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\62\
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    \62\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-11397 Filed 5-26-22; 8:45 am]
BILLING CODE 8011-01-P


