SEC Adopts Final Rule Updating ETF Approval Process

The SEC adopted a new rule and form amendments designed to modernize the regulation of exchange-traded funds ("ETFs") by effectively codifying existing Investment Company Act exemptive relief.

Specifically, the SEC:

• adopted Investment Company Act Rule 6c-11, which will provide qualifying ETFs with the ability to operate without having to obtain individual exemptive orders from the SEC;

• revoked prior exemptive relief given to qualifying ETFs and required that these ETFs comply with the conditions of Rule 6c-11;

• amended Forms N-1A and N-8B-2 to provide additional information on ETF trading and costs; and

• modified Form N-CEN to collect information upon which the ETFs may rely under Rule 6c-11.