[Federal Register Volume 87, Number 97 (Thursday, May 19, 2022)]
[Notices]
[Pages 30524-30531]
[FR Doc No: 2022-10734]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-94908; File No. SR-NYSEArca-2022-28]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To List and Trade
Shares of the Principal Real Estate Active Opportunities ETF Under NYSE
Arca Rule 8.601 (Active Proxy Portfolio Shares)

May 13, 2022.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given
that, on May 4, 2022, NYSE Arca, Inc. (``NYSE Arca'' or ``Exchange'')
filed with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I and II below, which Items
have been prepared by the Exchange. The Commission is publishing this
notice to solicit comments on the proposed rule change from interested
persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to to list and trade shares of the Principal
Real Estate Active Opportunities ETF under NYSE Arca Rule 8.601-E. The
proposed rule change is available on the Exchange's website at
www.nyse.com, at the principal office of the Exchange, and at the
Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

    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.

A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange has adopted NYSE Arca Rule 8.601-E for the purpose of
permitting the listing and trading, or trading pursuant to unlisted
trading privileges (``UTP''), of Active Proxy Portfolio Shares, which
are securities issued by an actively managed open-end investment
management company.\4\ Commentary .01 to Rule 8.601-E requires the
Exchange to file separate proposals under Section 19(b) of the Act
before listing and trading any series of Active Proxy Portfolio Shares
on the Exchange. Therefore, the Exchange is submitting this proposal in
order to list and trade shares (``Shares'') as Active Proxy Portfolio
Shares of the Principal Real Estate Active Opportunities ETF (the
``Fund'') under Rule 8.601-E.
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    \4\ See Securities Exchange Act Release No. 89185 (June 29,
2020), 85 FR 40328 (July 6, 2020) (SR-NYSEArca-2019-95). Rule 8.601-
E(c)(1) provides that ``[t]he term ``Active Proxy Portfolio Share''
means a security that (a) is issued by a investment company
registered under the Investment Company Act of 1940 (``Investment
Company'') organized as an open-end management investment company
that invests in a portfolio of securities selected by the Investment
Company's investment adviser consistent with the Investment
Company's investment objectives and policies; (b) is issued in a
specified minimum number of shares, or multiples thereof, in return
for a deposit by the purchaser of the Proxy Portfolio or Custom
Basket, as applicable, and/or cash with a value equal to the next
determined net asset value (``NAV''); (c) when aggregated in the
same specified minimum number of Active Proxy Portfolio Shares, or
multiples thereof, may be redeemed at a holder's request in return
for the Proxy Portfolio or Custom Basket, as applicable, and/or cash
to the holder by the issuer with a value equal to the next
determined NAV; and (d) the portfolio holdings for which are
disclosed within at least 60 days following the end of every fiscal
quarter.'' Rule 8.601-E(c)(2) provides that ``[t]he term ``Actual
Portfolio'' means the identities and quantities of the securities
and other assets held by the Investment Company that shall form the
basis for the Investment Company's calculation of NAV at the end of
the business day.'' Rule 8.601-E(c)(3) provides that ``[t]he term
``Proxy Portfolio'' means a specified portfolio of securities, other
financial instruments and/or cash designed to track closely the
daily performance of the Actual Portfolio of a series of Active
Proxy Portfolio Shares as provided in the exemptive relief pursuant
to the Investment Company Act of 1940 applicable to such series.''
Rule 8.601-E(c)(4) provides that the term ``Custom Basket'' means a
portfolio of securities that is different from the Proxy Portfolio
and is otherwise consistent with the exemptive relief issued
pursuant to the Investment Company Act of 1940 applicable to a
series of Active Proxy Portfolio Shares.
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Key Features of Active Proxy Portfolio Shares
    While funds issuing Active Proxy Portfolio Shares will be actively-
managed and, to that extent, will be similar to Managed Fund Shares,
Active Proxy Portfolio Shares differ from Managed Fund Shares in the
following important respects. First, in contrast to Managed Fund
Shares, which are actively-managed funds listed and traded under NYSE
Arca Rule 8.600-E \5\ and for which a ``Disclosed Portfolio'' is
required to be disseminated at least once daily,\6\ the portfolio for
an issue of Active Proxy Portfolio Shares will be publicly disclosed
within at least 60 days following the end of every fiscal quarter in
accordance with normal disclosure requirements otherwise applicable to
open-end management investment companies registered under the
Investment Company Act of 1940 (the ``1940 Act'').\7\ The composition
of

the portfolio of an issue of Active Proxy Portfolio Shares would not be
available at commencement of Exchange listing and trading. Second, in
connection with the creation and redemption of Active Proxy Portfolio
Shares, such creation or redemption may be exchanged for a Proxy
Portfolio or Custom Basket, as applicable, and/or cash with a value
equal to the next-determined NAV. A series of Active Proxy Portfolio
Shares will disclose the Proxy Portfolio on a daily basis, which, as
described above, is designed to track closely the daily performance of
the Actual Portfolio of a series of Active Proxy Portfolio Shares,
instead of the actual holdings of the Investment Company, as provided
by a series of Managed Fund Shares. As set forth in NYSE Arca Rule
8.601-E(d)(2)(B)(ii), for Active Proxy Portfolio Shares using a Custom
Basket, each Business Day,\8\ before the opening of trading in the Core
Trading Session (as defined in NYSE Arca Rule 7.34-E (a)), the
Investment Company shall make publicly available on its website the
composition of any Custom Basket transacted on the previous Business
Day, except a Custom Basket that differs from the applicable Proxy
Portfolio only with respect to cash.
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    \5\ The Commission has previously approved listing and trading
on the Exchange of a number of issues of Managed Fund Shares under
NYSE Arca Rule 8.600-E. See, e.g., Securities Exchange Act Release
Nos. 57801 (May 8, 2008), 73 FR 27878 (May 14, 2008) (SR-NYSEArca-
2008-31) (order approving Exchange listing and trading of twelve
actively-managed funds of the WisdomTree Trust); 60460 (August 7,
2009), 74 FR 41468 (August 17, 2009) (SR-NYSEArca-2009-55) (order
approving listing of Dent Tactical ETF); 63076 (October 12, 2010),
75 FR 63874 (October 18, 2010) (SR-NYSEArca-2010-79) (order
approving Exchange listing and trading of Cambria Global Tactical
ETF); 63802 (January 31, 2011), 76 FR 6503 (February 4, 2011) (SR-
NYSEArca-2010-118) (order approving Exchange listing and trading of
the SiM Dynamic Allocation Diversified Income ETF and SiM Dynamic
Allocation Growth Income ETF). The Commission also has approved a
proposed rule change relating to generic listing standards for
Managed Fund Shares. See Securities Exchange Act Release No. 78397
(July 22, 2016), 81 FR 49320 (July 27, 2016) (SR-NYSEArca-2015-110)
(amending NYSE Arca Equities Rule 8.600 to adopt generic listing
standards for Managed Fund Shares).
    \6\ NYSE Arca Rule 8.600-E(c)(2) defines the term ``Disclosed
Portfolio'' as the identities and quantities of the securities and
other assets held by the Investment Company that will form the basis
for the Investment Company's calculation of net asset value at the
end of the business day. NYSE Arca Rule 8.600-E(d)(2)(B)(i) requires
that the Disclosed Portfolio will be disseminated at least once
daily and will be made available to all market participants at the
same time.
    \7\ A mutual fund is required to file with the Commission its
complete portfolio schedules for the second and fourth fiscal
quarters on Form N-CSR under the 1940 Act. Information reported on
Form N-PORT for the third month of a fund's fiscal quarter will be
made publicly available 60 days after the end of a fund's fiscal
quarter. Form N-PORT requires reporting of a fund's complete
portfolio holdings on a position-by-position basis on a quarterly
basis within 60 days after fiscal quarter end. Investors can obtain
a series of Active Proxy Portfolio Shares' Statement of Additional
Information (``SAI''), its Shareholder Reports, its Form N-CSR,
filed twice a year, and its Form N-CEN, filed annually. A series of
Active Proxy Portfolio Shares' SAI and Shareholder Reports will be
available free upon request from the Investment Company, and those
documents and the Form N-PORT, Form N-CSR, and Form N-CEN may be
viewed on-screen or downloaded from the Commission's website at
www.sec.gov.
    \8\ ``Business Day'' is defined to mean any day that the
Exchange is open, including any day when the Fund satisfies
redemption requests as required by Section 22(e) of the 1940 Act.
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    The Commission has previously approved \9\ and noticed for
immediate effectiveness \10\ the listing and trading on the Exchange of
series of Active Proxy Portfolio Shares under NYSE Arca Rule 8.601-E.
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    \9\ See Securities Exchange Act Release Nos. 89185 (June 29,
2020), 85 FR 40328 (July 6, 2020) (SR-NYSEArca-2019-95) (Notice of
Filing of Amendment No. 6 and Order Granting Accelerated Approval of
a Proposed Rule Change, as Modified by Amendment No. 6, to Adopt
NYSE Arca Rule 8.601-E to Permit the Listing and Trading of Active
Proxy Portfolio Shares and To List and Trade Shares of the Natixis
U.S. Equity Opportunities ETF Under Proposed NYSE Arca Rule 8.601-
E); 89192 (June 30, 2020), 85 FR 40699 (July 7, 2020) (SR-NYSEArca-
2019-96) (Notice of Filing of Amendment No. 5 and Order Granting
Accelerated Approval of a Proposed Rule Change, as Modified by
Amendment No. 5, to List and Trade Two Series of Active Proxy
Portfolio Shares Issued by the American Century ETF Trust under NYSE
Arca Rule 8.601-E); 89191 (June 30, 2020), 85 FR 40358 (July 6,
2020) (SR-NYSEArca-2019-92) (Notice of Filing of Amendment No. 3 and
Order Granting Accelerated Approval of a Proposed Rule Change, as
Modified by Amendment No. 3, to List and Trade Four Series of Active
Proxy Portfolio Shares Issued by T. Rowe Price Exchange-Traded
Funds, Inc. under NYSE Arca Rule 8.601-E); 89438 (July 31, 2020), 85
FR 47821 (August 6, 2020) (SR-NYSEArca-2020-51) (Order Granting
Approval of a Proposed Rule Change, as Modified by Amendment No. 2,
to List and Trade Shares of Natixis Vaughan Nelson Select ETF and
Natixis Vaughan Nelson MidCap ETF under NYSE Arca Rule 8.601-E).
    \10\ See Securities Exchange Act Release Nos. 92104 (June 3,
2021), 86 FR 30635 (June 9, 2021) (NYSEArca-2021-46) (Notice of
Filing and Immediate Effectiveness of Proposed Rule Change to List
and Trade Shares of the Nuveen Santa Barbara Dividend Growth ETF,
Nuveen Small Cap Select ETF, and Nuveen Winslow Large-Cap Growth ESG
ETF Under NYSE Arca Rule 8.601-E (Active Proxy Portfolio Shares);
and 92958 (September 13, 2021), 86 FR 51933 (September 17, 2021)
(NYSEArca-2021-77) (Notice of Filing and Immediate Effectiveness of
Proposed Rule Change To List and Trade Shares of the Nuveen Growth
Opportunities ETF Under NYSE Arca Rule 8.601-E (Active Proxy
Portfolio Shares).
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    The Shares of the Fund will be issued by the Principal Exchange-
Traded Funds (the ``Trust''), which is organized as a statutory trust
organized under the laws of Delaware and registered with the Commission
as an open-end management investment company. Principal Global
Investors, LLC will be the investment adviser to the Fund (the
``Adviser''). State Street Bank and Trust Company will serve as the
Fund's transfer agent, custodian, and will conduct certain
administrative functions. ALPS Distributors, Inc. will act as the
distributor (the ``Distributor'') for the Fund.\11\
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    \11\ The Trust is registered under the 1940 Act. On February 9,
2022, the Trust filed a post-effective amendment to its registration
statement on Form N-1A under the 1940 Act relating to the Fund (File
No. 333-201935) (the ``Registration Statement''). On February 9,
2022, the Trust, the Distributor, and the Adviser, filed an
application for an order under Section 6(c) of the 1940 Act for
exemptions from various provisions of the 1940 Act and rules
thereunder (File No. 812-15308, dated February 9, 2022) (the
``Application''). See Investment Company Act Release No. 34345 (July
27, 2021). On April 26, 2022, the Commission issued an order (the
``Exemptive Order'') under the 1940 Act granting the exemptions
requested in the Application (Investment Company Act Release No.
34571, April 26, 2022). Investments made by the Fund will comply
with the conditions set forth in the Application and the Exemptive
Order. See, e.g., note 13, infra. The description of the operation
of the Fund herein is based, in part, on the Registration Statement,
the Application and the Exemptive Order. The Exchange will not
commence trading in Shares of the Fund until the Registration
Statement is effective.
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    Commentary .04 to NYSE Arca Rule 8.601-E provides that, if the
investment adviser to the Investment Company issuing Active Proxy
Portfolio Shares is registered as a broker-dealer or is affiliated with
a broker-dealer, such investment adviser will erect and maintain a
``fire wall'' between the investment adviser and personnel of the
broker-dealer or broker-dealer affiliate, as applicable, with respect
to access to information concerning the composition and/or changes to
such Investment Company's Actual Portfolio, Proxy Portfolio, and/or
Custom Basket, as applicable. Any person related to the investment
adviser or Investment Company who makes decisions pertaining to the
Investment Company's Actual Portfolio, Proxy Portfolio, and/or Custom
Basket, as applicable, or has access to non-public information
regarding the Investment Company's Actual Portfolio, Proxy Portfolio,
and/or the Custom Basket, as applicable, or changes thereto must be
subject to procedures reasonably designed to prevent the use and
dissemination of material non-public information regarding the Actual
Portfolio, Proxy Portfolio, and/or the Custom Basket, as applicable, or
changes thereto. Commentary .04 is similar to Commentary .03(a)(i) and
(iii) to NYSE Arca Rule 5.2-E(j)(3); however, Commentary .04, in
connection with the establishment of a ``fire wall'' between the
investment adviser and the broker-dealer, reflects the applicable open-
end fund's portfolio, not an underlying benchmark index, as is the case
with index-based funds.\12\ Commentary .04 is also similar to
Commentary .06 to Rule 8.600-E related to Managed Fund Shares, except
that Commentary .04 relates to establishment and maintenance of a
``fire wall'' between the investment adviser and personnel of the
broker-dealer or broker-dealer affiliate, as applicable, applicable to
an Investment Company's Actual Portfolio, Proxy Portfolio, and/or
Custom Basket, as applicable, or changes thereto, and not just to the
underlying portfolio, as is the case with Managed Fund Shares.
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    \12\ An investment adviser to an open-end fund is required to be
registered under the Investment Advisers Act of 1940 (the ``Advisers
Act''). As a result, the Adviser and its related personnel will be
subject to the provisions of Rule 204A-1 under the Advisers Act
relating to codes of ethics. This Rule requires investment advisers
to adopt a code of ethics that reflects the fiduciary nature of the
relationship to clients as well as compliance with other applicable
securities laws. Accordingly, procedures designed to prevent the
communication and misuse of non-public information by an investment
adviser must be consistent with Rule 204A-1 under the Advisers Act.
In addition, Rule 206(4)-7 under the Advisers Act makes it unlawful
for an investment adviser to provide investment advice to clients
unless such investment adviser has (i) adopted and implemented
written policies and procedures reasonably designed to prevent
violations, by the investment adviser and its supervised persons, of
the Advisers Act and the Commission rules adopted thereunder; (ii)
implemented, at a minimum, an annual review regarding the adequacy
of the policies and procedures established pursuant to subparagraph
(i) above and the effectiveness of their implementation; and (iii)
designated an individual (who is a supervised person) responsible
for administering the policies and procedures adopted under
subparagraph (i) above.
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    In addition, Commentary .05 to Rule 8.601-E provides that any
person or entity, including a custodian, Reporting

Authority, distributor, or administrator, who has access to non-public
information regarding the Investment Company's Actual Portfolio, the
Proxy Portfolio, or the Custom Basket, as applicable, or changes
thereto, must be subject to procedures reasonably designed to prevent
the use and dissemination of material non-public information regarding
the applicable Investment Company Actual Portfolio, the Proxy
Portfolio, or the Custom Basket, as applicable, or changes thereto.
Moreover, if any such person or entity is registered as a broker-dealer
or affiliated with a broker-dealer, such person or entity will erect
and maintain a ``fire wall'' between the person or entity and the
broker-dealer with respect to access to information concerning the
composition and/or changes to such Investment Company Actual Portfolio,
Proxy Portfolio, or Custom Basket, as applicable.
    The Adviser is not registered as a broker-dealer but is affiliated
with broker-dealers. The Adviser has implemented and will maintain a
``fire wall'' with respect to such broker-dealer affiliates regarding
access to information concerning the composition of and/or changes to
the Fund's Actual Portfolio, Proxy Portfolio, and/or Custom Basket, as
applicable.
    In the event (a) the Adviser becomes registered as a broker-dealer
or becomes newly affiliated with a broker-dealer, or (b) any new
adviser or sub-adviser is a registered broker-dealer, or becomes
affiliated with a broker-dealer, it will implement and maintain a
``fire wall'' with respect to its relevant personnel or its broker-
dealer affiliate regarding access to information concerning the
composition and/or changes to the Fund's Actual Portfolio, Proxy
Portfolio, and/or Custom Basket, as applicable, and will be subject to
procedures designed to prevent the use and dissemination of material
non-public information regarding the Fund's Actual Portfolio, Proxy
Portfolio, and/or Custom Basket, as applicable, or changes thereto. Any
person related to the Adviser or the Fund who makes decisions
pertaining to the Fund's Actual Portfolio, the Proxy Portfolio, or
Custom Basket, as applicable, or has access to non-public information
regarding the Fund's Actual Portfolio, the Proxy Portfolio, and/or the
Custom Basket, as applicable, or changes thereto are subject to
procedures reasonably designed to prevent the use and dissemination of
material non-public information regarding the Fund's Actual Portfolio,
the Proxy Portfolio, and/or the Custom Basket, as applicable, or
changes thereto.
    In addition, any person or entity, including any service provider
for the Fund, who has access to non-public information regarding the
Fund's Actual Portfolio, the Proxy Portfolio, and/or the Custom Basket,
as applicable, or changes thereto, will be subject to procedures
reasonably designed to prevent the use and dissemination of material
non-public information regarding the Fund's Actual Portfolio, the Proxy
Portfolio, and/or the Custom Basket, as applicable, or changes thereto.
Moreover, if any such person or entity is registered as a broker-dealer
or affiliated with a broker-dealer, such person or entity has erected
and will maintain a ``fire wall'' between the person or entity and the
broker-dealer with respect to access to information concerning the
composition and/or changes to the Fund's Actual Portfolio, Proxy
Portfolio, and/or Custom Basket, as applicable.
Description of the Fund
    According to the Registration Statement, the Adviser will identify
a ``Tracking Basket'' \13\ for the Fund, which is designed to closely
track the daily performance of the Fund but is not the Fund's Actual
Portfolio. The Tracking Basket is comprised of (1) select recently
disclosed portfolio holdings (``Strategy Components''); (2) liquid ETFs
that convey information about the types of instruments (that are not
otherwise fully represented by the Strategy Components) in which the
fund invests (``Representative ETFs''); and (3) cash and cash
equivalents.
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    \13\ The ``Tracking Basket'' is the Proxy Portfolio for purposes
of Rule 8.601-E(c)(3).
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    Representative ETFs are selected for inclusion in the Tracking
Basket such that, when aggregated with the other Tracking Basket
components, the Tracking Basket corresponds to the Fund's overall
holdings exposure.
    The Fund will publish on its website a Tracking Basket before the
commencement of trading of the Fund's Shares on each Business Day, and
the Adviser will not make intra-day changes to the Tracking Basket
except to correct errors in the published Tracking Basket. Disclosure
of the Tracking Basket will be compliant with Rule 8.601-E(c)(3).
    In addition, on each Business Day before the commencement of
trading in Shares on the listing exchange, the Fund publishes Tracking
Basket Weight Overlap on its website. The Tracking Basket Weight
Overlap is the percentage weight overlap between the holdings of the
prior Business Day's Tracking Basket compared to the holdings of the
Fund that formed the basis for the Fund's calculation of NAV at the end
of the prior Business Day. It is calculated by taking the lesser weight
of each asset held in common between the Fund's Actual Portfolio and
the Tracking Basket, and adding the totals. The Tracking Basket Weight
Overlap is intended to provide investors with an understanding of the
degree to which the Tracking Basket and the Fund's Actual Portfolio
overlap and help investors evaluate the risk that the performance of
the Tracking Basket may deviate from the performance of the portfolio
holdings of the Fund.
    The Fund's holdings will conform to the permissible investments as
set forth in the Application and Exemptive Order, and the holdings will
be consistent with all requirements in the Application and Exemptive
Order.\14\ Any foreign common stocks held by the Fund will be traded on
an exchange that is a member of the Intermarket Surveillance Group
(``ISG'') or with which the Exchange has in place a comprehensive
surveillance sharing agreement.
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    \14\ Pursuant to the Application and Exemptive Order, the
permissible investments for the Fund include only the following
instruments: ETFs traded on a U.S. exchange; exchange-traded notes
(``ETNs'') traded on a U.S. exchange; U.S. exchange-traded common
stocks, common stocks listed on a foreign exchange that trade on
such exchange contemporaneously with the Shares (``foreign common
stocks'') in the Exchange's Core Trading Session (normally, 9:30
a.m. to 4:00 p.m. Eastern Time (``E.T.'')); U.S. exchange-traded
preferred stocks, U.S. exchange-traded American Depositary Receipts
(``ADRs''); U.S. exchange-traded real estate investment trusts; U.S.
exchange-traded commodity pools; U.S. exchange-traded metals trusts;
U.S. exchange-traded currency trusts; and U.S. exchange-traded
futures that trade contemporaneously with the Shares. In addition,
the Fund may hold cash and cash equivalents (short-term U.S.
Treasury securities, government money market funds, and repurchase
agreements). Pursuant to the Application and Exemptive Order, the
Fund will not hold short positions or invest in derivatives other
than U.S. exchange-traded futures, will not borrow for investment
purposes, and will not purchase any securities that are illiquid
investments at the time of purchase.
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    According to the Registration Statement, the Fund's investment
objective is to seek total return. Under normal market conditions, the
Fund will invest at least 80% of its net assets (including the amount
of any borrowings for investment purposes) in securities of companies
principally engaged in the real estate industry at the time of
purchase.\15\
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    \15\ Real estate companies include real estate investment trusts
(``REITs'') and non-REITs. REITs are pooled investment vehicles that
invest in income producing real estate, real estate related loans,
or other types of real estate interests. REITs are corporations or
business trusts that are permitted to eliminate corporate level
federal income taxes by meeting certain requirements of the Internal
Revenue Code.

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    The Fund seeks to minimize its investments in traditional real
estate sectors (e.g., conventional office, retail, apartments, and
industrial) because of changing investor preferences and shifting
economic and social factors. The Fund, instead, seeks to favor
investments in growing non-traditional real estate sectors that are
benefiting from these economic and societal shifts (e.g., data centers,
wireless towers, and single-family rentals).
Investment Restrictions
    The Shares of the Fund will conform to the initial and continued
listing criteria under Rule 8.601-E. The Fund's holdings will be
limited to and consistent with permissible holdings as described in the
Application and Exemptive Order and all requirements in the Application
and Exemptive Order.\16\ The Fund's investments, including derivatives,
will be consistent with its investment objective and will not be used
to enhance leverage (although certain derivatives and other investments
may result in leverage). That is, the Fund's investments will not be
used to seek performance that is the multiple or inverse multiple
(e.g., 2X or -3X) of the Fund's primary broad-based securities
benchmark index (as defined in Form N-1A).\17\
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    \16\ See note 14, supra.
    \17\ The Fund's performance is benchmarked against the FTSE
NAREIT All Equity REITs Index.
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Creations and Redemptions of Shares
    According to the Registration Statement, the Trust will issue and
sell Shares of the Fund only in specified minimum size ``Creation
Units'' through the Distributor on a continuous basis at their NAV next
determined after receipt of an order in proper form on any Business
Day. The NAV of the Fund's Shares will be calculated each Business Day
as of the close of regular trading on the Exchange, ordinarily 4:00
p.m. E.T. A Creation Unit will consist of at least 20,000 Shares.
    According to the Registration Statement, Shares of the Fund will be
purchased and redeemed in Creation Units. Creation Units generally can
be purchased or redeemed in-kind in exchange for the Strategy
Components included in the Fund's Tracking Basket, together with an
amount of cash corresponding to the value of the Representative ETFs
and cash and cash equivalents that form the remainder of the Tracking
Basket.
    Fund Shares may be redeemed only in Creation Units at their NAV
next determined after receipt of a redemption request in proper form by
the Distributor and only on a Business Day. The redemption proceeds for
a Creation Unit will consist of the in-kind redemption basket (``In-
Kind Redemption Basket'') and a cash redemption amount (``Cash
Redemption Amount''), or an all cash payment (``Cash Value''), in all
instances equal to the value of a Creation Unit.
    The Cash Redemption Amount will typically include an amount,
reflecting the difference, if any, between the NAV of a Creation Unit
and the market value of the securities in the In-Kind Redemption Basket
(the ``Balancing Amount''). If the NAV per Creation Unit exceeds the
market value of the securities in the In-Kind Redemption Basket, the
Fund pays the Balancing Amount to the redeeming investor. By contrast,
if the NAV per Creation Unit is less than the market value of the
securities in the In-Kind Redemption Basket, the redeeming investor
pays the Balancing Amount to the Fund.
    Each Business Day, prior to the opening of trading on the Exchange,
the Fund will publish through the National Securities Clearing
Corporation the names and the required number of shares of each
security in the In-Kind Redemption Basket to be included in the current
redemption proceeds for the Fund (based on information at the end of
the previous Business Day) (subject to correction). If applicable, the
Fund will also make available on each Business Day, the estimated cash
component (``Cash Component'' or Cash Value, effective through and
including the previous Business Day, per Creation Unit.
    All orders to purchase or redeem Creation Units must be placed with
the Distributor by or through an Authorized Participant. Orders to
purchase or redeem Creation Units will be accepted until the ``Order
Cut-Off Time,'' generally expected to be 4:00 p.m. E.T. for in-kind
creation and redemption baskets (``In-Kind Creation and Redemption
Baskets''), and 2:00 p.m. E.T. for Custom Baskets (which includes cash
value) transactions. Accordingly, In-Kind Creation and Redemption
Baskets are expected to be accepted until the close of regular trading
on the Exchange on each Business Day, which is usually 4:00 p.m. E.T.
On days when the Exchange or bond markets close earlier than normal
(such as the day before a holiday), the Order Cut-Off Time is expected
to track the Exchange or bond markets closing and be similarly earlier
than normal.
Availability of Information
    The Fund's website (www.principalfunds.com) will include a form of
the prospectus for the Fund that may be downloaded. The Fund's website
will include on a daily basis, per Share of the Fund, the prior
Business Day's NAV, the prior Business Day's ``Closing Price'' or
``Bid/Ask Price,'' \18\ and a calculation of the premium/discount of
such Closing Price or Bid/Ask Price against such NAV.\19\ The Adviser
has represented that the Fund's website will also provide: (1) Any
other information regarding premiums/discounts as may be required for
other ETFs under Rule 6c-11 under the 1940 Act, as amended, and (2) any
information regarding the bid/ask spread for the Fund as may be
required for other ETFs under Rule 6c-11 under the 1940 Act, as
amended. The Fund's website also will disclose the information required
under Rule 8.601-E(c)(3).\20\ The website and information will be
publicly available at no charge.
---------------------------------------------------------------------------

    \18\ The records relating to Bid/Ask Prices will be retained by
the Fund or its service providers. The ``Bid/Ask Price'' is the
midpoint of the highest bid and lowest offer based upon the National
Best Bid and Offer as of the time of calculation of the Fund's NAV.
The ``National Best Bid and Offer'' is the current national best bid
and national best offer as disseminated by the Consolidated
Quotation System or UTP Plan Securities Information Processor. The
``Closing Price'' of Shares is the official closing price of the
Shares on the Exchange.
    \19\ The ``premium/discount'' refers to the premium or discount
to the NAV at the end of a trading day and will be calculated based
on the last Bid/Ask Price or the Closing Price on such trading day.
    \20\ See note 4, supra. Rule 8.601-E(c)(3) provides that the
website for each series of Active Proxy Portfolio Shares shall
disclose the information regarding the Proxy Portfolio as provided
in the exemptive relief pursuant to the 1940 Act applicable to such
series, including the following, to the extent applicable: (i)
Ticker symbol; (ii) CUSIP or other identifier; (iii) Description of
holding; (iv) Quantity of each security or other asset held; and (v)
Percentage weighting of the holding in the portfolio.
---------------------------------------------------------------------------

    The identity and quantity of investments in the Tracking Basket for
the Fund will be publicly available on the Fund's website before the
commencement of trading in Shares on each Business Day. The website
will also include information relating to the Tracking Basket Weight
Overlap, as discussed above. With respect to each Custom Basket
utilized by a series of Active Proxy Portfolio shares, before the
opening of trading in the Core Trading Session (as defined in NYSE Arca
Rule 7.34-E(a)), the Investment Company shall make publicly available
on its website the composition of any Custom Basket transacted on the
previous Business Day, except a Custom Basket that differs from the
applicable Proxy Portfolio only with respect to cash.
    Typical mutual fund-style annual, semi-annual and quarterly
disclosures contained in the Fund's Commission

filings will be provided on the Fund's website on a current basis.\21\
Thus, the Fund will publish the portfolio contents of its Actual
Portfolio on a periodic basis, and no less than 60 days after the end
of every fiscal quarter.
---------------------------------------------------------------------------

    \21\ See note 7, supra.
---------------------------------------------------------------------------

    Investors can also obtain the Fund's SAI, Shareholder Reports, Form
N-CSR, N-PORT, and Form N-CEN. The prospectus, SAI, and Shareholder
Reports are available free upon request, and those documents and the
Form N-CSR, N-PORT, and Form N-CEN may be viewed on-screen or
downloaded from the Commission's website. The Exchange also notes that
pursuant to the Application, the Fund must comply with Regulation Fair
Disclosure, which prohibits selective disclosure of any material non-
public information.
    Information regarding the market price of Shares and trading volume
in Shares, will be continually available on a real-time basis
throughout the day on brokers' computer screens and other electronic
services. The previous day's closing price and trading volume
information for the Shares will be published daily in the financial
section of newspapers.
    Quotation and last sale information for the Shares and U.S.
exchange-traded instruments (excluding futures contracts) will be
available via the Consolidated Tape Association (``CTA'') high-speed
line, from the exchanges on which such securities trade, or through
major market data vendors or subscription services. Quotation and last
sale information for futures contracts will be available from the
exchanges on which they trade. Intraday price information for all
exchange-traded instruments, which include all eligible instruments
except cash and cash equivalents, will be available from the exchanges
on which they trade, or through major market data vendors or
subscription services. Intraday price information for cash equivalents
is available through major market data vendors, subscription services
and/or pricing services.
Trading Halts
    With respect to trading halts, the Exchange may consider all
relevant factors in exercising its discretion to halt or suspend
trading in the Shares of the Fund.\22\ Trading in Shares of the Fund
will be halted if the circuit breaker parameters in NYSE Arca Rule
7.12-E have been reached. Trading also may be halted because of market
conditions or for reasons that, in the view of the Exchange, make
trading in the Shares inadvisable. Trading in the Shares will be
subject to NYSE Arca Rule 8.601-E(d)(2)(D), which sets forth
circumstances under which Shares of the Fund will be halted.
---------------------------------------------------------------------------

    \22\ See NYSE Arca Rule 7.12-E.
---------------------------------------------------------------------------

    Specifically, Rule 8.601-E(d)(2)(D) provides that the Exchange may
consider all relevant factors in exercising its discretion to halt
trading in a series of Active Proxy Portfolio Shares. Trading may be
halted because of market conditions or for reasons that, in the view of
the Exchange, make trading in the series of Active Proxy Portfolio
Shares inadvisable. These may include: (a) The extent to which trading
is not occurring in the securities and/or the financial instruments
composing the Proxy Portfolio and/or Actual Portfolio; or (b) whether
other unusual conditions or circumstances detrimental to the
maintenance of a fair and orderly market are present. If the Exchange
becomes aware that the NAV, Proxy Portfolio, or Actual Portfolio with
respect to a series of Active Proxy Portfolio Shares is not
disseminated to all market participants at the same time, the Exchange
shall halt trading in such series until such time as the NAV, Proxy
Portfolio, or Actual Portfolio is available to all market participants
at the same time.
Trading Rules
    The Exchange deems the Shares to be equity securities, thus
rendering trading in the Shares subject to the Exchange's existing
rules governing the trading of equity securities. Shares will trade on
the NYSE Arca Marketplace in all trading sessions in accordance with
NYSE Arca Rule 7.34-E(a). As provided in NYSE Arca Rule 7.6-E, the
minimum price variation (``MPV'') for quoting and entry of orders in
equity securities traded on the NYSE Arca Marketplace is $0.01, with
the exception of securities that are priced less than $1.00 for which
the MPV for order entry is $0.0001.
    The Shares will conform to the initial and continued listing
criteria under NYSE Arca Rule 8.601-E. The Exchange has appropriate
rules to facilitate trading in the Shares during all trading sessions.
    A minimum of 100,000 Shares for the Fund will be outstanding at the
commencement of trading on the Exchange. In addition, pursuant to Rule
8.601-E(d)(1)(B), the Exchange, prior to commencement of trading in the
Shares, will obtain a representation from the Trust that the NAV per
Share of the Fund will be calculated daily, that the NAV, Proxy
Portfolio, and the Actual Portfolio for the Fund will be made publicly
available to all market participants at the same time, and the Trust
and any person acting on behalf of the Trust will comply with
Regulation Fair Disclosure under the Securities Exchange Act of 1934,
including with respect to any Custom Basket.
    With respect to Active Proxy Portfolio Shares, all of the Exchange
member obligations relating to product description and prospectus
delivery requirements will continue to apply in accordance with
Exchange rules and federal securities laws, and the Exchange and the
Financial Industry Regulatory Authority, Inc. (``FINRA'') will continue
to monitor Exchange members for compliance with such requirements.
Surveillance
    The Exchange represents that trading in the Shares will be subject
to the existing trading surveillances, administered by the Exchange, as
well as cross-market surveillances administered by FINRA on behalf of
the Exchange, which are designed to detect violations of Exchange rules
and applicable federal securities laws.\23\ The Exchange represents
that these procedures are adequate to properly monitor Exchange trading
of the Shares in all trading sessions and to deter and detect
violations of Exchange rules and federal securities laws applicable to
trading on the Exchange.
---------------------------------------------------------------------------

    \23\ FINRA conducts cross-market surveillances on behalf of the
Exchange pursuant to a regulatory services agreement. The Exchange
is responsible for FINRA's performance under this regulatory
services agreement.
---------------------------------------------------------------------------

    The surveillances referred to above generally focus on detecting
securities trading outside their normal patterns, which could be
indicative of manipulative or other violative activity. When such
situations are detected, surveillance analysis follows and
investigations are opened, where appropriate, to review the behavior of
all relevant parties for all relevant trading violations.
    The Exchange or FINRA, on behalf of the Exchange, or both, will
communicate as needed regarding trading in the Shares and underlying
exchange-traded instruments with other markets and other entities that
are members of the ISG, and the Exchange or FINRA, on behalf of the
Exchange, or both, may obtain trading information regarding trading
such securities and underlying exchange-traded instruments from such
markets and other entities. In addition, the Exchange may obtain
information regarding trading in such securities and underlying
exchange-traded instruments from markets and other entities that are
members of ISG or

with which the Exchange has in place a comprehensive surveillance
sharing agreement.\24\
---------------------------------------------------------------------------

    \24\ For a list of the current members of ISG, see
www.isgportal.org.
---------------------------------------------------------------------------

    The Adviser will make available daily to FINRA and the Exchange the
Actual Portfolio of the Fund, upon request, in order to facilitate the
performance of the surveillances referred to above.
    In addition, the Exchange also has a general policy prohibiting the
distribution of material, non-public information by its employees.
    Commentary .03 to NYSE Arca Rule 8.601-E provides that the Exchange
will implement and maintain written surveillance procedures for Active
Proxy Portfolio Shares. As part of these surveillance procedures, the
Investment Company's investment adviser will, upon request by the
Exchange or FINRA, on behalf of the Exchange, make available to the
Exchange or FINRA the daily Actual Portfolio holdings of each series of
Active Proxy Portfolio Shares. The Exchange believes that the ability
to access the information on an as needed basis will provide it with
sufficient information to perform the necessary regulatory functions
associated with listing and trading series of Active Proxy Portfolio
Shares on the Exchange, including the ability to monitor compliance
with the initial and continued listing requirements as well as the
ability to surveil for manipulation of Active Proxy Portfolio Shares.
    The Exchange will utilize its existing procedures to monitor issuer
compliance with the requirements of Rule 8.601-E. For example, the
Exchange will continue to use intraday alerts that will notify Exchange
personnel of trading activity throughout the day that may indicate that
unusual conditions or circumstances are present that could be
detrimental to the maintenance of a fair and orderly market. The
Exchange will require from the issuer of a series of Active Proxy
Portfolio Shares, upon initial listing and periodically thereafter, a
representation that it is in compliance with Rule 8.601-E. The Exchange
notes that Commentary .01 to Rule 8.601-E requires an issuer of Active
Proxy Portfolio Shares to notify the Exchange of any failure to comply
with the continued listing requirements of Rule 8.601-E. In addition,
the Exchange will require the issuer to represent that it will notify
the Exchange of any failure to comply with the terms of applicable
exemptive and no-action relief. As part of its surveillance procedures,
the Exchange will rely on the foregoing procedures to become aware of
any non-compliance with the requirements of Rule 8.601-E.
    With respect to the Fund, all statements and representations made
in this filing regarding (a) the description of the portfolio or
reference asset, (b) limitations on portfolio holdings or reference
assets, or (c) the applicability of Exchange listing rules specified in
this rule filing shall constitute continued listing requirements for
listing the Shares on the Exchange. The Exchange will obtain a
representation from the Trust, prior to commencement of trading in the
Shares of the Fund, that it will advise the Exchange of any failure by
the Fund to comply with the continued listing requirements, and,
pursuant to its obligations under Section 19(g)(1) of the Act, the
Exchange will monitor for compliance with the continued listing
requirements. If the Fund is not in compliance with the applicable
listing requirements, the Exchange will commence delisting procedures
under NYSE Arca Rule 5.5-E(m).
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\25\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\26\ in particular, in that it
is designed to prevent fraudulent and manipulative acts and practices,
to promote just and equitable principles of trade, to remove
impediments to and perfect the mechanism of a free and open market and
a national market system, and, in general, to protect investors and the
public interest.\27\
---------------------------------------------------------------------------

    \25\ 15 U.S.C. 78f(b).
    \26\ 15 U.S.C. 78f(b)(5).
    \27\ The Exchange represents that, for initial and continued
listing, the Fund will be in compliance with Rule 10A-3 under the
Act, as provided by NYSE Arca Rule 5.3-E.
---------------------------------------------------------------------------

    With respect to the proposed listing and trading of Shares of the
Fund, the Exchange believes that the proposed rule change is designed
to prevent fraudulent and manipulative acts and practices in that the
Shares will be listed and traded on the Exchange pursuant to the
initial and continued listing criteria in NYSE Arca Rule 8.601-E.
    The Fund's holdings will conform to the permissible investments as
set forth in the Application and Exemptive Order, and the holdings will
be consistent with all requirements in the Application and Exemptive
Order.\28\
---------------------------------------------------------------------------

    \28\ See note 14, supra.
---------------------------------------------------------------------------

    The Exchange or FINRA, on behalf of the Exchange, or both, will
communicate as needed regarding trading in the Shares and underlying
exchange-traded instruments with other markets and other entities that
are members of the ISG, and the Exchange or FINRA, on behalf of the
Exchange, or both, may obtain trading information regarding trading in
the Shares and underlying exchange-traded instruments from such markets
and other entities. In addition, the Exchange may obtain information
regarding trading in the Shares and underlying exchange-traded
instruments from markets and other entities that are members of ISG or
with which the Exchange has in place a comprehensive surveillance
sharing agreement. Any foreign common stocks held by the Fund will be
traded on an exchange that is a member of the ISG or with which the
Exchange has in place a comprehensive surveillance sharing agreement.
    The daily dissemination of the identity and quantity of Tracking
Basket component investments, together with the right of Authorized
Participants to create and redeem each day at the NAV, will be
sufficient for market participants to value and trade Shares in a
manner that will not lead to significant deviations between the Shares'
Bid/Ask Price and NAV.
    The Fund's investments, including derivatives, will be consistent
with its investment objective and will not be used to enhance leverage
(although certain derivatives and other investments may result in
leverage). That is, the Fund's investments will not be used to seek
performance that is the multiple or inverse multiple (e.g., 2X or -3X)
of the Fund's primary broad-based securities benchmark index (as
defined in Form N-1A).\29\
---------------------------------------------------------------------------

    \29\ The Fund's performance is benchmarked against the FTSE
NAREIT All Equity REITs Index.
---------------------------------------------------------------------------

    The proposed rule change is designed to promote just and equitable
principles of trade and to protect investors and the public interest in
that the Exchange will obtain a representation from the Trust that the
NAV per Share of the Fund will be calculated daily and that the NAV,
Tracking Basket, Actual Portfolio, and/or Custom Basket, as applicable,
for the Fund will be made available to all market participants at the
same time. Investors can obtain the Fund's SAI, shareholder reports,
and its Form N-CSR, Form N-PORT, and Form N-CEN. The Fund's SAI and
shareholder reports will be available free upon request from the Fund,
and those documents and the Form N-CSR, Form N-PORT, and Form N-CEN may
be viewed on-screen or downloaded from the Commission's website.
    Commentary .03 to NYSE Arca Rule 8.601-E provides that the Exchange
will

implement and maintain written surveillance procedures for Active Proxy
Portfolio Shares. As part of these surveillance procedures, the
Investment Company's investment adviser will, upon request by the
Exchange or FINRA, on behalf of the Exchange, make available to the
Exchange or FINRA the daily portfolio holdings of each series of Active
Proxy Portfolio Shares. The Exchange believes that the ability to
access the information on an as needed basis will provide it with
sufficient information to perform the necessary regulatory functions
associated with listing and trading series of Active Proxy Portfolio
Shares on the Exchange, including the ability to monitor compliance
with the initial and continued listing requirements as well as the
ability to surveil for manipulation of Active Proxy Portfolio Shares.
With respect to the Fund, the Adviser will make available daily to
FINRA and the Exchange the portfolio holdings of the Fund upon request
in order to facilitate the performance of the surveillances referred to
above.
    The Exchange will utilize its existing procedures to monitor
compliance with the requirements of Rule 8.601-E. For example, the
Exchange will continue to use intraday alerts that will notify Exchange
personnel of trading activity throughout the day that may indicate that
unusual conditions or circumstances are present that could be
detrimental to the maintenance of a fair and orderly market. The
Exchange will require from the Trust, upon initial listing and
periodically thereafter, a representation that it is in compliance with
Rule 8.601-E. The Exchange notes that Commentary .01 to Rule 8.601-E
requires the issuer of the Shares to notify the Exchange of any failure
to comply with the continued listing requirements of Rule 8.601-E. In
addition, the Exchange will require the issuer to represent that it
will notify the Exchange of any failure to comply with the terms of
applicable exemptive and no-action relief. The Exchange will rely on
the foregoing procedures to become aware of any non-compliance with the
requirements of Rule 8.601-E.
    In addition, with respect to the Fund, a large amount of
information will be publicly available regarding the Fund and the
Shares, thereby promoting market transparency.
    Quotation and last sale information for the Shares and U.S.
exchange-traded instruments (excluding futures contracts) will be
available via the CTA high-speed line, from the exchanges on which such
securities trade, or through major market data vendors or subscription
services. Quotation and last sale information for futures contracts
will be available from the exchanges on which they trade. Intraday
price information for all exchange-traded instruments, which include
all eligible instruments except cash and cash equivalents, will be
available from the exchanges on which they trade, or through major
market data vendors or subscription services. Intraday price
information for cash equivalents is available through major market data
vendors, subscription services and/or pricing services.
    The website for the Fund will include a form of the prospectus that
may be downloaded, and additional data relating to NAV and other
applicable quantitative information, updated on a daily basis. Trading
in Shares of the Fund will be halted if the circuit breaker parameters
in NYSE Arca Rule 7.12-E have been reached or because of market
conditions or for reasons that, in the view of the Exchange, make
trading in the Shares inadvisable. Trading in the Shares will be
subject to NYSE Arca Rule 8.601-E(d)(2)(D), which sets forth
circumstances under which Shares of the Fund will be halted. In
addition, as noted above, investors will have ready access to the
Tracking Basket and quotation and last sale information for the Shares.
The identity and quantity of investments in the Tracking Basket will be
publicly available on the Fund's website before the commencement of
trading in Shares on each Business Day. The Shares will conform to the
initial and continued listing criteria under Rule 8.601-E.\30\
---------------------------------------------------------------------------

    \30\ See note 4, supra.
---------------------------------------------------------------------------

    The Fund's holdings will conform to the permissible investments as
set forth in the Application and Exemptive Order, and the holdings will
be consistent with all requirements in the Application and Exemptive
Order.\31\ Any foreign common stocks held by the Fund will be traded on
an exchange that is a member of the ISG or with which the Exchange has
in place a comprehensive surveillance sharing agreement.
---------------------------------------------------------------------------

    \31\ See note 14, supra.
---------------------------------------------------------------------------

    The proposed rule change is designed to perfect the mechanism of a
free and open market and, in general, to protect investors and the
public interest in that it will facilitate the listing and trading of
an additional type of actively-managed exchange-traded product that
will enhance competition among market participants, to the benefit of
investors and the marketplace. The Exchange will obtain a
representation from the Adviser, prior to commencement of trading in
the Shares of the Fund, that it will advise the Exchange of any failure
by the Fund to comply with the continued listing requirements, and,
pursuant to its obligations under Section 19(g)(1) of the Act, the
Exchange will monitor for compliance with the continued listing
requirements. If the Fund is not in compliance with the applicable
listing requirements, the Exchange will commence delisting procedures
under NYSE Arca Rule 5.5-E(m).
    As noted above, the Exchange has in place surveillance procedures
relating to trading in the Shares and may obtain information via ISG
from other exchanges that are members of ISG or with which the Exchange
has entered into a comprehensive surveillance sharing agreement. In
addition, as noted above, investors will have ready access to
information regarding quotation and last sale information for the
Shares.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The Exchange believes the
proposed rule change would permit listing and trading of an additional
actively-managed ETF that has characteristics different from existing
actively-managed and index ETFs and would introduce additional
competition among various ETF products to the benefit of investors.

C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others

    No written comments were solicited or received with respect to the
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

    Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \32\ and Rule 19b-
4(f)(6) thereunder.\33\
---------------------------------------------------------------------------

    \32\ 15 U.S.C. 78s(b)(3)(A).
    \33\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change, along
with a brief description and text of the proposed rule change, at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.

---------------------------------------------------------------------------

    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the
Act normally does not become operative for 30 days after the date of
its filing. However, Rule 19b-4(f)(6)(iii) \34\ permits the Commission
to designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has
requested that the Commission waive the 30-day operative delay so that
the proposal may become operative immediately upon filing. The Exchange
notes that the Commission has approved and noticed for immediate
effectiveness proposed rule changes to permit listing and trading on
the Exchange of Active Proxy Portfolio Shares similar to the Fund.\35\
The proposed listing rule for the Fund raises no novel legal or
regulatory issues. Thus, the Commission believes that waiver of the 30-
day operative delay is consistent with the protection of investors and
the public interest. Accordingly, the Commission hereby waives the 30-
day operative delay and designates the proposed rule change operative
upon filing.\36\
---------------------------------------------------------------------------

    \34\ 17 CFR 240.19b-4(f)(6)(iii).
    \35\ See supra notes 9 and 10.
    \36\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of such proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include
File Number SR-NYSEArca-2022-28 on the subject line.

Paper Comments

     Send paper comments in triplicate to: Secretary,
Securities and Exchange Commission, 100 F Street NE, Washington, DC
20549-1090.

All submissions should refer to File Number SR-NYSEArca-2022-28. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549 on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-NYSEArca-2022-28 and should be submitted
on or before June 9, 2022.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\37\
---------------------------------------------------------------------------

    \37\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-10734 Filed 5-18-22; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 86, Number 205 (Wednesday, October 27, 2021)]
[Notices]
[Pages 59397-59399]
[FR Doc No: 2021-23388]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket Nos. FDA-2020-E-1902; FDA-2020-E-1903; and FDA-2020-E-1904]

Determination of Regulatory Review Period for Purposes of Patent
Extension; INREBIC

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice.

-----------------------------------------------------------------------

SUMMARY: The Food and Drug Administration (FDA or the Agency) has
determined the regulatory review period for INREBIC and is publishing
this notice of that determination as required by law. FDA has made the
determination because of the submission of applications to the Director
of the U.S. Patent and Trademark Office (USPTO), Department of
Commerce, for the extension of a patent which claims that human drug
product.

DATES: Anyone with knowledge that any of the dates as published (see
the SUPPLEMENTARY INFORMATION) are incorrect may submit either
electronic or written comments and ask for a redetermination by
December 27, 2021. Furthermore, any interested person may petition FDA
for a determination regarding whether the applicant for extension acted
with due diligence during the regulatory review period by April 25,
2022. See ``Petitions'' in the SUPPLEMENTARY INFORMATION section for
more information.

ADDRESSES: You may submit comments as follows. Please note that late,
untimely filed comments will not be considered. Electronic comments
must be submitted on or before December 27, 2021. The https://www.regulations.gov electronic filing system will accept comments until
11:59 p.m. Eastern Time at the end of December 27, 2021. Comments
received by mail/hand delivery/courier (for written/paper submissions)
will be considered timely if they are postmarked or the delivery

service acceptance receipt is on or before that date.

Electronic Submissions

    Submit electronic comments in the following way:
     Federal eRulemaking Portal: https://www.regulations.gov.
Follow the instructions for submitting comments. Comments submitted
electronically, including attachments, to https://www.regulations.gov
will be posted to the docket unchanged. Because your comment will be
made public, you are solely responsible for ensuring that your comment
does not include any confidential information that you or a third party
may not wish to be posted, such as medical information, your or anyone
else's Social Security number, or confidential business information,
such as a manufacturing process. Please note that if you include your
name, contact information, or other information that identifies you in
the body of your comments, that information will be posted on https://www.regulations.gov.
     If you want to submit a comment with confidential
information that you do not wish to be made available to the public,
submit the comment as a written/paper submission and in the manner
detailed (see ``Written/Paper Submissions'' and ``Instructions'').

Written/Paper Submissions

    Submit written/paper submissions as follows:
     Mail/Hand Delivery/Courier (for written/paper
submissions): Dockets Management Staff (HFA-305), Food and Drug
Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852.
     For written/paper comments submitted to the Dockets
Management Staff, FDA will post your comment, as well as any
attachments, except for information submitted, marked and identified,
as confidential, if submitted as detailed in ``Instructions.''
    Instructions: All submissions received must include the Docket Nos.
FDA-2020-E-1902, FDA-2020-E-1903, and FDA-2020-E-1904 for
``Determination of Regulatory Review Period for Purposes of Patent
Extension; INREBIC.'' Received comments, those filed in a timely manner
(see ADDRESSES), will be placed in the docket and, except for those
submitted as ``Confidential Submissions,'' publicly viewable at https://www.regulations.gov or at the Dockets Management Staff between 9 a.m.
and 4 p.m., Monday through Friday,<PHONE_NUMBER>.
     Confidential Submissions--To submit a comment with
confidential information that you do not wish to be made publicly
available, submit your comments only as a written/paper submission. You
should submit two copies total. One copy will include the information
you claim to be confidential with a heading or cover note that states
``THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.'' The Agency will
review this copy, including the claimed confidential information, in
its consideration of comments. The second copy, which will have the
claimed confidential information redacted/blacked out, will be
available for public viewing and posted on https://www.regulations.gov.
Submit both copies to the Dockets Management Staff. If you do not wish
your name and contact information to be made publicly available, you
can provide this information on the cover sheet and not in the body of
your comments and you must identify this information as
``confidential.'' Any information marked as ``confidential'' will not
be disclosed except in accordance with Sec.  10.20 (21 CFR 10.20) and
other applicable disclosure law. For more information about FDA's
posting of comments to public dockets, see 80 FR 56469, September 18,
2015, or access the information at: https://www.govinfo.gov/content/pkg/FR-2015-09-18/pdf/2015-23389.pdf.
    Docket: For access to the docket to read background documents or
the electronic and written/paper comments received, go to https://www.regulations.gov and insert the docket number, found in brackets in
the heading of this document, into the ``Search'' box and follow the
prompts and/or go to the Dockets Management Staff, 5630 Fishers Lane,
Rm. 1061, Rockville, MD 20852,<PHONE_NUMBER>.

FOR FURTHER INFORMATION CONTACT: Beverly Friedman, Office of Regulatory
Policy, Food and Drug Administration, 10903 New Hampshire Ave., Bldg.
51, Rm. 6250, Silver Spring, MD 20993,<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

I. Background

    The Drug Price Competition and Patent Term Restoration Act of 1984
(Pub. L. 98-417) and the Generic Animal Drug and Patent Term
Restoration Act (Pub. L. 100-670) generally provide that a patent may
be extended for a period of up to 5 years so long as the patented item
(human drug or biologic product, animal drug product, medical device,
food additive, or color additive) was subject to regulatory review by
FDA before the item was marketed. Under these acts, a product's
regulatory review period forms the basis for determining the amount of
extension an applicant may receive.
    A regulatory review period consists of two periods of time: A
testing phase and an approval phase. For human drug products, the
testing phase begins when the exemption to permit the clinical
investigations of the drug becomes effective and runs until the
approval phase begins. The approval phase starts with the initial
submission of an application to market the human drug product and
continues until FDA grants permission to market the drug product.
Although only a portion of a regulatory review period may count toward
the actual amount of extension that the Director of USPTO may award
(for example, half the testing phase must be subtracted as well as any
time that may have occurred before the patent was issued), FDA's
determination of the length of a regulatory review period for a human
drug product will include all of the testing phase and approval phase
as specified in 35 U.S.C. 156(g)(1)(B).
    FDA has approved for marketing the human drug product, INREBIC
(fedratinib), indicated for the treatment of adult patients with
intermediate-2 or high-risk primary or secondary (post-polycythemia
vera or post-essential thrombocythemia) myelofibrosis. Subsequent to
this approval, the USPTO received patent term restoration applications
for INREBIC (U.S. Patent Nos. 7,528,143; 7,825,246; and 8,138,199) from
Impact Biomedicines, Inc., and the USPTO requested FDA's assistance in
determining the patents' eligibility for patent term restoration. In a
letter dated January 4, 2021, FDA advised the USPTO that this human
drug product had undergone a regulatory review period and that the
approval of INREBIC represented the first permitted commercial
marketing or use of the product. Thereafter, the USPTO requested that
FDA determine the product's regulatory review period.

II. Determination of Regulatory Review Period

    FDA has determined that the applicable regulatory review period for
INREBIC is 4,285 days. Of this time, 4,059 days occurred during the
testing phase of the regulatory review period, while 226 days occurred
during the approval phase. These periods of time were derived from the
following dates:
    1. The date an exemption under section 505(i) of the Federal Food,
Drug, and Cosmetic Act (FD&C Act) (21 U.S.C. 355(i)) became effective:
November 24, 2007. FDA has verified the applicant's claims that the
date the investigational new drug application became effective was on
November 24, 2007.

    2. The date the application was initially submitted with respect to
the human drug product under section 505 of the FD&C Act: January 3,
2019. FDA has verified the applicant's claims that the new drug
application (NDA) for INREBIC (NDA 212327) was initially submitted on
January 3, 2019.
    3. The date the application was approved: August 16, 2019. FDA has
verified the applicant's claims that NDA 212327 was approved on August
16, 2019.
    This determination of the regulatory review period establishes the
maximum potential length of a patent extension. However, the USPTO
applies several statutory limitations in its calculations of the actual
period for patent extension. In its applications for patent extension,
this applicant seeks 1,271 days, 1,523 days or 1,796 days of patent
term extension.

III. Petitions

    Anyone with knowledge that any of the dates as published are
incorrect may submit either electronic or written comments and, under
21 CFR 60.24, ask for a redetermination (see DATES). Furthermore, as
specified in Sec.  60.30 (21 CFR 60.30), any interested person may
petition FDA for a determination regarding whether the applicant for
extension acted with due diligence during the regulatory review period.
To meet its burden, the petition must comply with all the requirements
of Sec.  60.30, including but not limited to: Must be timely (see
DATES), must be filed in accordance with Sec.  10.20, must contain
sufficient facts to merit an FDA investigation, and must certify that a
true and complete copy of the petition has been served upon the patent
applicant. (See H. Rept. 857, part 1, 98th Cong., 2d sess., pp. 41-42,
1984.) Petitions should be in the format specified in 21 CFR 10.30.
    Submit petitions electronically to https://www.regulations.gov at
Docket Nos. FDA-2013-S-0610. Submit written petitions (two copies are
required) to the Dockets Management Staff (HFA-305), Food and Drug
Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852.

    Dated: October 19, 2021.
Lauren K. Roth,
Associate Commissioner for Policy.
[FR Doc. 2021-23388 Filed 10-26-21; 8:45 am]
BILLING CODE 4164-01-P