Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Amendment No. 2 and Order Granting Accelerated Approval of a Proposed Rule Change, as Modified by Amendment No. 2, To Adopt New Rule 5.2-E(j)(9) To Permit the Generic Listing and Trading of Class Exchange-Traded Fund Shares

<NOTICE> SECURITIES AND EXCHANGE COMMISSION <DEPDOC>[Release No. 34-104251; File No. SR-NYSEARCA-2025-39]</DEPDOC> <SUBJECT>Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Amendment No. 2 and Order Granting Accelerated Approval of a Proposed Rule Change, as Modified by Amendment No. 2, To Adopt New Rule 5.2-E(j)(9) To Permit the Generic Listing and Trading of Class Exchange-Traded Fund Shares</SUBJECT> <DATE>November 24, 2025.</DATE> On May 28, 2025, NYSE Arca, Inc. (“NYSE Arca” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)  <SU>1</SU> <FTREF/> and Rule 19b-4 thereunder, <SU>2</SU> <FTREF/> a proposed rule change to adopt new Rule 5.2-E(j)(9) to permit the generic listing and trading of Class Exchange-Traded Fund Shares. The proposed rule change was published for comment in the <E T="04">Federal Register</E> on June 10, 2025. <SU>3</SU> <FTREF/> <FTNT> <SU>1</SU>  15 U.S.C. 78s(b)(1). </FTNT> <FTNT> <SU>2</SU>  17 CFR 240.19b-4. </FTNT> <FTNT> <SU>3</SU>   <E T="03">See</E> Securities Exchange Act Release No. 103189 (June 4, 2025), 90 FR 24463. </FTNT> On July 15, 2025, pursuant to Section 19(b)(2) of the Act, <SU>4</SU> <FTREF/> the Commission designated a longer period within which to approve the proposed rule change, disapprove the proposed rule change, or institute proceedings to determine whether to disapprove the proposed rule change. <SU>5</SU> <FTREF/> On September 4, 2025, the Exchange filed Amendment No. 1 to the proposed rule change, and on September 5, 2025, the Commission issued notice of filing of Amendment No. 1 to the proposed rule change and instituted proceedings pursuant to Section 19(b)(2)(B) of the Act  <SU>6</SU> <FTREF/> to determine whether to approve or disapprove the proposed rule change, as modified by Amendment No. 1. <SU>7</SU> <FTREF/> On November 19, 2025, the Exchange filed Amendment No. 2, which amended and replaced the proposed rule change, as modified by Amendment No. 1, in its entirety. <SU>8</SU> <FTREF/> The Commission has received no comments regarding the proposed rule change. <FTNT> <SU>4</SU>  15 U.S.C. 78s(b)(2). </FTNT> <FTNT> <SU>5</SU>   <E T="03">See</E> Securities Exchange Act Release No. 103457, 90 FR 34044 (July 18, 2025). </FTNT> <FTNT> <SU>6</SU>  15 U.S.C. 78s(b)(2)(B). </FTNT> <FTNT> <SU>7</SU>   <E T="03">See</E> Securities Exchange Act Release No. 103885, 90 FR 43655 (Sept. 10, 2025). </FTNT> <FTNT> <SU>8</SU>  Amendment No. 2 to the proposed rule change is available on the Commission's website at: <E T="03">https://www.sec.gov/comments/sr-nysearca-2025-39/srnysearca202539-677567-2074914.pdf.</E> </FTNT> The Commission is publishing this notice and order to solicit comments on the proposed rule change, as modified by Amendment No. 2, from interested persons and to grant approval of the proposed rule change, as modified by Amendment No. 2, on an accelerated basis. <HD SOURCE="HD1">I. The Exchange's Description of the Proposal, as Modified by Amendment No. 2</HD> The Exchange proposes to (1) adopt a new Rule 5.2-E(j)(9) to permit the generic listing and trading of Class Exchange-Traded Fund (“ETF”) Shares, and (2) make certain conforming changes to the Exchange's rules to accommodate the proposed listing of Class ETF Shares. This Amendment No. 2 to SR-NYSEARCA-2025-39 replaces SR-NYSEARCA-2025-39 and Amendment No. 1 thereto as originally filed and supersedes such filings in their entirety. The proposed rule change is available on the Exchange's website at <E T="03">www.nyse.com</E> and at the principal office of the Exchange. <HD SOURCE="HD1">II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change</HD> In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements. <HD SOURCE="HD2">A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change</HD> <HD SOURCE="HD3">1. Purpose</HD> The Exchange proposes to (1) adopt a new Rule 5.2-E(j)(9) to permit the generic listing and trading, or trading pursuant to unlisted trading privileges, of Class ETF Shares; and (2) make certain conforming changes to the Exchange's rules to accommodate the proposed listing of Class ETF Shares. <SU>9</SU> <FTREF/> <FTNT> <SU>9</SU>  The Exchange notes that Cboe BZX Exchange, Inc. (“BZX”) and The Nasdaq Stock Market LLC (“Nasdaq”) have filed substantially similar rule filings. <E T="03">See</E> Securities Exchange Act Release Nos. 103188 (June 4, 2025), 90 FR 24457 (June 10, 2025) (SR-CboeBZX-2025-076) & 103072 (May 20, 2025), 90 FR 22373 (May 27, 2025) (SR-NASDAQ-2025-037). </FTNT> Consistent with other products (specifically, Investment Company Units listed pursuant to Rule 5.2-E(j)(3), Managed Fund Shares listed pursuant to Rule 8.600-E, and ETF Shares listed pursuant to Rule 5.2-E(j)(8)), Class ETF Shares would be permitted to be listed and traded on the Exchange without prior Commission approval order or notice of effectiveness pursuant to Section 19(b) of the Act. <SU>10</SU> <FTREF/> <FTNT> <SU>10</SU>  Rule 19b-4(e)(1) provides that the listing and trading of a new derivative securities product by a self-regulatory organization (“SRO”) is not deemed a proposed rule change, pursuant to paragraph (c)(1) of Rule 19b-4, if the Commission has approved, pursuant to Section 19(b) of the Act, the SRO's trading rules, procedures and listing standards for the product class that would include the new derivative securities product and the SRO has a surveillance program for the product class. As contemplated by proposed Rule 5.2-E(j)(9), the Exchange proposes to establish generic listing standards for Class ETF Shares of the ETF Class (as defined herein) that would be required to operate as an ETF pursuant to the Multi-Class Fund Exemptive Relief (as defined herein) and be in compliance with the conditions and requirements of Rule 6c-11 under the Investment Company Act of 1940 (the “Investment Company Act”), except as noted in the Multi-Class Fund Exemptive Relief. Class ETF Shares listed under proposed Rule 5.2-E(j)(9) would therefore not need a separate proposed rule change pursuant to Rule 19b-4 before it can be listed and traded on the Exchange. </FTNT> <HD SOURCE="HD3">Background</HD> There are numerous applications for exemptive relief for Class ETF Shares currently before the Commission  <SU>11</SU> <FTREF/> requesting exemptive relief similar to that previously granted to other funds. <SU>12</SU> <FTREF/> The current proposal would provide for the “generic” listing and/or trading of Class ETF Shares under proposed Rule 5.2-E(j)(9) on the Exchange. <FTNT> <SU>11</SU>   <E T="03">See</E> DFA Investment Dimensions Group Inc. and Dimensional Investment Group Inc., (amendment filed March 31, 2025); F/m Investments LLC (amendment filed April 10, 2025); Fidelity Hastings Street Trust and Fidelity Management & Research Company (amendment filed April 11, 2025); Morgan Stanley Institutional Fund Trust and Morgan Stanley Investment Management Inc. (amendment filed April 11, 2025); BlackRock Funds (amendment filed April 15, 2025); Guinness Atkinson Funds (amendment filed April 17, 2025); Metropolitan West Funds, TCW ETF Trust, and TCW Funds, Inc. (amendment filed April 22, 2025); and Northern Funds and Northern Trust Investments, Inc. (amendment filed May 2, 2025). </FTNT> <FTNT> <SU>12</SU>   <E T="03">See</E> note 13, <E T="03">infra.</E> </FTNT> The Commission began granting limited relief for The Vanguard Group, Inc. (“Vanguard”) in 2000 to offer certain index-based open-end management investment companies with Class ETF Shares. <SU>13</SU> <FTREF/> After this relief was granted, there was limited public discourse about Class ETF Shares until 2019, when the prospect of providing blanket exemptive relief to Class ETF Shares was addressed in the Commission's adoption of Rule 6c-11 under the Investment Company Act (the “ETF Rule”). <SU>14</SU> <FTREF/> The ETF Rule permits ETFs that satisfy certain conditions to operate without the expense or delay of obtaining an exemptive order. However, the ETF Rule did not provide blanket exemptive relief to allow for Class ETF Shares as part of the final rule. Instead, the Commission concluded that Class ETF Shares should request relief through the exemptive application process so that the Commission may assess all relevant policy considerations in the context of the facts and circumstances of particular applicants. The Exchange adopted Rule 5.2-E(j)(8)  <SU>15</SU> <FTREF/> shortly after implementation of the ETF Rule and, because the ETF Rule did not provide blanket relief to the Class ETF Shares listed on the Exchange pursuant to previously granted exemptive relief and there were no exemptive applications before the Commission at that time, the Exchange did not propose to include any language comparable to what is being proposed herein. <FTNT> <SU>13</SU>   <E T="03">See</E> Vanguard Index Funds, Investment Company Act Release Nos. 24680 (Oct. 6, 2000) (notice) and 24789 (Dec. 12, 2000) (order). The Commission itself, as opposed to the Commission staff acting under delegated authority, considered the original Vanguard application and determined that the relief was appropriate in the public interest and consistent with the protec ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 86k characters. 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