2018 Proposed ETF Rulemaking

On June 28, 2018 at an open meeting (the "Open Meeting"), the Securities and Exchange Commission ("SEC") unanimously voted to propose new Rule 6c-11 (the "Proposed Rule") under the Investment Company Act of 1940, as amended ("1940 Act"), which, if adopted, would permit exchange-traded funds ("ETFs") that satisfy certain conditions to organize and operate without the expense and delay of obtaining an exemptive order from the SEC. In addition to several key takeaways from the SEC release describing the proposals¹ (the "Release"), we describe the Proposed Rule in detail below and offer insights into how the Proposed Rule may affect ETFs and their sponsors.

KEY TAKEAWAYS

The Proposed Rule seeks to "create a consistent, transparent, and efficient regulatory framework for ETFs and to facilitate greater competition and innovation among ETFs."² If adopted, the Proposed Rule would significantly ease the regulatory burdens associated with bringing an ETF to market and