The exemptive relief filing is similar to other actively managed ETF filings, with four exceptions:
- The funds will not disclose holdings and trading activity, except in accordance with disclosure requirements.
- Regarding redemptions of Creation Units, “in kind” transactions will be effected through a blind trust for the benefit of the redeeming Authorized Participant and the blind trust will liquidate the portfolio securities without disclosing the identity of such securities to the Authorized Participant – APs redeem and create shares to keep the ETF’s price close to its net asset values.
- A fund’s shares will be redeemable to the fund for a limited period following certain circumstances.
- The funds come with a a Dividend Reinvestment Program.
In essence, the blind trust will withhold daily disclosures and prevent front runners – people who try to buy shares just before the fund makes its own allocations.
Eaton Vance earlier this year came up with the exchange traded managed funds as an alternative to traditional active ETFs. The ETMFs come with low-cost attributes that ETFs enjoy, but unlike ETFs, ETMFs are designed to disclose their holdings in full at least once quarter with a lag of not more than 60 days and will trade at prices based on the net asset value at the market close each day. [ETMFs Could Change the Fund Industry]
For more information on active ETFs, visit our actively managed ETFs category.
Max Chen contributed to this article.
