Exchange-Traded Funds

The Securities and Exchange Commission (the "Commission') is adopting a new rule under the Investment Company Act of 1940 (the "Investment Company Act' or the "Act') that will permit exchange- traded funds ("ETFs') that satisfy certain conditions to operate without the expense and delay of obtaining an exemptive order. In connection with the final rule, the Commission will rescind certain exemptive relief that has been granted to ETFs and their sponsors. The Commission also is adopting certain disclosure amendments to Form N-1A and Form N-8B-2 to provide investors who purchase and sell ETF shares on the secondary market with additional information regarding ETF trading and associated costs, regardless of whether such ETFs are structured as registered open-end management investment companies ("open-end funds') or unit investment trusts ("UITs'). Finally, the Commission is adopting related amendments to Form N-CEN. The final rule and form amendments are designed to create a consistent, transparent, and efficient regulatory framework for ETFs that are organized as open- end funds and to facilitate greater competition and innovation among ETFs. The Commission also is adopting technical amendments to Form N- CSR, Form N-1A, Form N-8B-2, Form N-PORT, and Regulation S-X.