NYSE Arca Pushes New Class ETF Rules for Faster Fund Trading
Published Date: 9/10/2025
Notice
Summary
NYSE Arca wants to make it easier to list and trade a new type of exchange-traded fund (ETF) called Class ETFs by adding a new rule. This change could affect investors and fund managers by speeding up how these ETFs get listed and traded, with no extra costs mentioned yet. The SEC is now reviewing the proposal and will decide soon whether to approve it or not.
Analyzed Economic Effects
4 provisions identified: 2 benefits, 2 costs, 0 mixed.
Generic Listing Without SEC Order
The Exchange would permit the generic listing and trading of Class ETF Shares under proposed Rule 5.2-E(j)(9) so that eligible funds may list and trade Class ETF Shares without a separate prior Commission approval order or notice of effectiveness under Section 19(b) of the Securities Exchange Act of 1934 (i.e., without a separate Rule 19b-4 filing).
New ETF Class Available to Investors
Class ETF Shares that meet proposed Rule 5.2-E(j)(9) would be treated as equity securities and may be listed and traded on the Exchange, subject to the Exchange's full set of equity trading rules and Rule 7.34-E(a) trading hours. If you have investments, this creates an additional type of exchange-traded fund you could buy or sell on the Exchange, provided the issuer meets the rule's conditions and any applicable exemptive relief.
Trading Halts and Delisting Conditions
The Exchange may halt trading or commence delisting for Class ETF Shares if, among other things, the issuer fails to meet Rule 6c-11 or the Multi-Class Fund Exemptive Relief conditions, required disclosures (such as net asset value or daily portfolio disclosure) are not made available to all market participants, or if after the initial 12-month period there are fewer than 50 beneficial holders. These specific triggers are set out in proposed Rule 5.2-E(j)(9)(e)(2) and related provisions.
Issuer Compliance and Governance Requirements
Issuers of Class ETF Shares must meet the conditions of the Multi-Class Fund Exemptive Relief and comply with Rule 6c-11 (except as noted in the exemptive relief), implement surveillance, reporting (a Reporting Authority), firewalls for index or portfolio information, and comply with corporate governance requirements like Rule 10A-3; issuers must notify the Exchange promptly of any non-compliance.
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