The SEC Division of Corporation Finance granted an exemption to an exchange-traded fund ("ETF") from certain requirements under Securities Exchange Act Rule 14e-5. Substantially similar relief was granted to an ETF on April 11, 2017 (see previous coverage). The exemption permits the following, subject to certain conditions:
- any broker-dealer that acts as the dealer-manager of a tender offer for a security in which the ETF invests may redeem shares in "creation unit" size aggregations for a redemption "basket" that may include a subject security or related security, as defined under Rule 14e-5(c);
- covered persons may engage in secondary market transactions with respect to the ETF's shares after the first public announcement of, and during, the tender offer; and
covered persons may make purchases of, or arrangements to purchase, subject securities or related securities in the secondary market, for the purpose of transferring such securities in order to purchase one or more "creation units" of shares.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
