On June 28, the Securities and Exchange Commission voted to propose a new rule and set of form amendments related to the approval process for certain exchange-traded funds (ETFs) that operate as open-ended funds (Proposal). Among other things, the Proposal calls for the creation of a new rule 6c-11 of the Investment Company Act of 1940 (Investment Company Act) that would allow ETFs that satisfy certain conditions to operate within the scope of the Investment Company Act and to come to market without applying for individual exemptive orders. Such proposed conditions include, but are not limited to, an ETF being required to provide daily portfolio transparency and historical information regarding premium discounts and bid-ask spreads on its website. The Proposal also calls for amendments to Form N-1A (the form used for purposes of registering ETFs structured as open-ended funds) and Form N-8B-2 (the form used for purposes of registering ETFs structured as unit investment trusts) to provide additional ETF-specific information that can be used by investors. The comment period for the Proposal will be open for 60 days after its publication in the Federal Register.

The press release announcing the Proposal is available here.