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NYSE Arca Proposal to Modify Listing Rules Subject to Longer Comment Period

August 26th| 2020


The SEC is taking additional time to consider NYSE Arca’s proposed amendments to its listing rules. The exchange’s proposal, which was first filed in June 2020, would amend NYSE Arca listing rules concerning Investment Company Units, Exchange-Traded Fund Shares, Managed Fund Shares and Managed Portfolio Shares to remove the listing requirement that, following the initial twelve-month period after commencement of trading of a series of these products on the Exchange, such series have at least 50 beneficial holders, and require that a series of Fund Shares have at least one creation unit outstanding on an initial and continued listing basis.


One purpose of the 50 beneficial owners requirement was to mitigate the risk of manipulation and lack of liquidity, which the exchange no longer believes is necessary because the website disclosure requirements of Rule 6c-11(c) of the Investment Company Act, together with the existing creation and redemption process, will adequately address those risks. The SEC now will have until October 5, 2020 to approve, disapprove, or institute proceedings to determine whether the rule change should go forward.

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