UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

First Amended and Restated Application for an order under Section 6(c) of the Investment Company Act of 1940, as amended (the “1940 Act”), for an exemption from Sections 2(a)(32), 5(a)(1), 22(d) and 22(e) of the 1940 Act and Rule 22c-1 under the 1940 Act, and under Sections 6(c) and 17(b) of the 1940 Act for an exemption from Sections 17(a)(1) and 17(a)(2) of the 1940 Act.

All communications and orders to:

Patrick Secor, Esq.

Eaton Vance Management

Two International Place

Boston, MA 02110

With a copy to:

Barry I. Pershkow, Esq.

Chapman and Cutler, LLP

1717 Rhode Island Avenue, N.W., 8th Floor

Washington, DC 20036

(202) 478-6492; pershkow@chapman.com

Page 1 of 56 sequentially numbered pages.
As filed with the U.S. Securities and Exchange Commission on May 4, 2022

TABLE OF CONTENTS

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

I. Summary of Application

In this amended and restated application (“Application”), Eaton Vance Management (the “Initial Adviser”) and Eaton Vance Exchange-Traded Fund Trust (the “Trust” and, collectively with the Initial Adviser, “Applicants”) request an order under Section 6(c) of the Investment Company Act of 1940, as amended (“1940 Act”), for an exemption from Sections 2(a)(32), 5(a)(1), 22(d) and 22(e) of the 1940 Act and Rule 22c-1 under the 1940 Act, and under Sections 6(c) and 17(b) of the 1940 Act for an exemption from Sections 17(a)(1) and 17(a)(2) of the 1940 Act (“Order”). The Application seeks relief to permit the creation and operation of exchange-traded funds (“ETFs”) that employ a novel method of supporting efficient secondary market trading of fund shares as described herein (the “Clearhedge™ Method”).¹ In the view of Applicants, the proposal set forth in this Application offers significant investor benefits not attainable through either existing ETFs that disclose their full portfolio holdings on a daily basis or other models of Portfolio-Protected ETFs (as defined below) approved to date.

No form having been specifically prescribed for this Application, the Applicants proceed under Rule 0-2 of the General Rules and Regulations of the U.S. Securities and Exchange Commission (“Commission”).

A. Scope of Requested Relief

Applicants are seeking an exemption from Sections 2(a)(32), 5(a)(1), 17(a), 22(d) and 22(e) of the 1940 Act and Rule 22c-l under the 1940 Act to permit the Trust to create and operate a series of the Trust (“Initial Fund”) that will offer exchange-traded shares (“Shares”).

Applicants request that the Order apply not only to the Initial Fund, but also to any future series of the Trust offering Shares, as well as other registered open-end management investment companies or series thereof offering Shares (collectively, “Future Funds”). Any Future Fund will: (i) be advised by the Initial Adviser or an entity controlling, controlled by or under common control with the Initial Adviser (the Initial Adviser and each such controlling or controlled entity, the “Adviser”); and (ii) comply with the terms and conditions of the Application. The Initial Fund and Future Funds together are the “Funds.”

Applicants further request that, following approval, the terms and conditions of the Order may apply to other registered open-end management investment companies or series thereof not advised by the Adviser (“Licensed Funds”). Applicants anticipate that the Adviser or an affiliate thereof will enter into license agreements with the registered investment advisers advising the Licensed Funds (each, a “Licensed Adviser,” and, together with the Licensed Funds, “Future Applicants”). Future Applicants will apply for a separate exemptive order that incorporates by reference all the terms and conditions of this Application and any amendments thereto.

The Commission has a long history of issuing orders on exemptive applications to permit the operation of ETFs of varied descriptions, and in 2019 adopted Rule 6c-11 under the 1940 Act (“ETF Rule”) that permits ETFs that meet certain conditions to operate without exemptive relief.² As addressed below, the Funds will not meet all the conditions of the ETF Rule, including the requirement to publicly disclose their complete portfolio holdings on a current daily basis. In this respect, the requested relief is similar to the relief granted by the Commission in 2019 and 2000 to other applicants seeking to operate ETFs that do not disclose their full portfolio holdings daily (“Portfolio-Protected ETFs”).³ The requested relief is novel and differs from that previously granted for Portfolio-Protected ETFs in that the Funds would: (i) utilize the Clearhedge Method to seek to maintain effective arbitrage in Fund Shares; (ii) seek relief from Section 17(a) to permit Specified Affiliated Persons (as defined below) to engage in Clearhedge Swaps (as defined below) with the Funds; (iii) have the ability to utilize Baskets (as defined below) that differ from the NAV Reference Portfolio (as described below);⁴ and (iv)

have the ability to invest in the same broad array of Permissible Investments (as defined below) as generally permissible for investment by registered open-end funds.⁵

As requested, the Order would permit: (i) Shares of the Funds to be listed on a U.S. national securities exchange as defined in Section 2(a)(26) of the 1940 Act (“Exchange”) and to trade in the secondary market on and away from the Listing Exchange (as defined below) at negotiated prices set by the market, rather than at the Fund’s next-determined net asset value (“NAV”) per Share;⁶ (ii) Shares to be redeemable only in specified multi-Share aggregations (“Creation Units”);⁷ (iii) certain affiliated persons of the Trust to purchase and redeem Creation Units in kind and to engage in Clearhedge Swap (as defined below) transactions with the Funds as described herein; and (iv) Funds that invest in securities or other instruments listed or trading primarily in non-U.S. markets (“Foreign Instruments”) to pay redemption proceeds more than seven calendar days after Shares are tendered for redemption.

All entities that currently intend to rely on the Order are named as Applicants. Any entity that relies on the Order in the future will comply with the terms and conditions of the Application.

B. ETF Arbitrage Efficiency and Disclosure of Fund Holdings

The ETF Rule conditions its availability on the public disclosure of the subject ETF’s full portfolio holdings on a current daily basis.⁸ In that regard, the ETF Rule requires that, before commencement of daily trading in an ETF’s shares, the ETF discloses on its website the identities and quantities of all of the portfolio investments held by the ETF that will form the basis for the ETF’s calculation of its NAV that day (the “NAV Portfolio”). The principal purpose of disclosing an ETF’s current NAV Portfolio is to enable market makers and other arbitrageurs to identify potential arbitrage⁹ profit opportunities in trading the ETF’s shares and to hedge the market risk of their positions in such shares.¹⁰ The arbitrage trading engaged in by market makers and other arbitrageurs active in an ETF’s shares is widely understood to play a critical role in ensuring that the shares trade with tight bid-ask spreads¹¹ and at market prices that are close to the current value per share of the ETF’s NAV Portfolio.¹² In Applicants’ view, when arbitrage trading is easy to manage and low-risk, competition among market makers and other arbitrageurs seeking to earn reliable, low-risk profits drives down the costs to buy and sell an ETF’s shares.¹³

Applicants assert, however, that disclosing an ETF’s NAV Portfolio on a current daily basis can harm shareholders by providing other market participants with information that can enable them to trade in front of the ETF’s portfolio transactions (“front-running”), thereby raising the ETF’s costs to buy and sell. Disclosing an ETF’s full current holdings each day also enables other market participants to replicate the ETF’s portfolio positioning and exploit its manager’s investment insights (“free-riding”). As a result, while disclosing an ETF’s current NAV Portfolio facilitates an arbitrage process that supports trading of the ETF’s shares at market prices close to the shares’ underlying value, the ETF’s investment returns may be adversely affected.

Accordingly, Applicants propose to offer ETFs that incorporate a novel method of facilitating efficient arbitrage that does not require a Fund to disclose its NAV Portfolio on a

current daily basis.¹⁴ As described below, Applicants submit that use of the proposed Clearhedge Method will enable Fund Shares to trade at bid-ask spreads and premiums/discounts to underlying Share values that are consistent with the trading experience of similarly invested ETFs that publicly disclose their full portfolio holdings on a daily basis. Unlike currently approved models of Portfolio-Protected ETFs, Applicants submit that the Clearhedge Method will support efficient secondary market trading of Shares of Funds invested across all types of assets generally permissible for investment by registered open-end funds, including Foreign Instruments trading outside U.S. market hours and unlisted market instruments trading over the counter (“OTC”). As an additional advantage, Applicants expect the Funds to provide greater transparency of investor trading costs than offered by existing ETFs.¹⁵

II. The Proposal

A. Applicants

1. The Trust The Trust is a Massachusetts business trust registered with the Commission as an open-end management investment company. The Trust will be organized as a series fund and may have multiple series offered pursuant to a registration statement on Form N-1A filed with the Commission under the Securities Act of 1933 (“Securities Act”), and the 1940 Act (“Registration Statement”). The Trust’s Registration Statement will include a prospectus (“Prospectus”) and Statement of Additional Information (“SAI”) relating to each Fund. The Trust will be overseen by a board of trustees (“Board”) that meets the composition requirements of Section 10 of the 1940 Act.¹⁶

2. The Initial Adviser The Initial Adviser, Eaton Vance Management, will be investment adviser to the Initial Fund. The Initial Adviser is a Massachusetts business trust located at Two International Place, Boston, MA 02110 and an indirect, wholly owned subsidiary of Morgan Stanley. The Initial Adviser is registered with the Commission as an investment adviser under the Investment Advisers Act of 1940 (“Advisers Act”). Any Adviser to a Future Fund will be registered as an investment adviser under the Advisers Act prior to serving as the investment adviser to any Fund. Subject to the

oversight and authority of the Board, each Fund’s Adviser will develop and manage the Fund’s overall investment program. The Adviser will arrange for, and oversee, the provision of necessary services to the Fund (including custodial, transfer agency and administration services) and furnish office facilities, equipment, services and executive and administrative personnel necessary for managing the investment program of the Fund. The Adviser may enter into sub-advisory agreements with other investment advisers to serve as sub-advisers of the Fund (each a “Sub-Adviser”). Any Sub-Adviser will be registered under the Advisers Act.

B. The Distributor

The Trust will enter into an agreement with one or more broker-dealers registered under the Securities Exchange Act of 1934, as amended (“Exchange Act,” and such persons registered under the Exchange Act, “Brokers”) to serve as the distributor and principal underwriter (“Distributor”) of Creation Units of Fund Shares. Each Distributor will comply with the terms and conditions of this Application and will distribute Creation Units on an agency basis. A Fund’s Distributor may be an affiliated person of the Fund’s Adviser and/or Sub-Adviser. No Distributor is or will be affiliated with any Exchange on which Shares are listed (“Listing Exchange”).

C. The Funds

Applicants currently expect the Initial Fund to be Eaton Vance Global Opportunities ETF, which is described in Appendix A. Each Fund will adopt fundamental policies consistent with the 1940 Act. The Funds will seek to maintain the required diversification and otherwise conduct their operations so as to qualify for treatment as regulated investment companies (“RICs”) under the Internal Revenue Code of 1986 (“Code”). Subject to compliance with its Registration Statement disclosures, each Fund may invest in any type of security, other market instrument or other asset in which registered open-end funds generally may permissibly invest consistent with the 1940 Act, the rules thereunder and any Commission staff interpretations thereof (collectively, “Permissible Investments).” None of the Funds will be leveraged/inverse funds within the meaning of Rule 18f-4 under the 1940 Act.

D. Shares and Shareholders

Shareholders of each Fund will have one vote per Share (or per dollar of Share value) with respect to matters regarding the Trust or the respective Fund for which a shareholder vote is taken, consistent with the requirements of the 1940 Act, the rules promulgated thereunder and applicable state law.

Shares will be registered in book-entry form only, and the Funds will not issue Share certificates. The Depository Trust Company, a limited purpose trust company organized under the laws of the State of New York (“DTC”), or its nominee will be the record or registered owner of all outstanding Shares. Beneficial ownership of Shares will be shown on the records of DTC or DTC-participating institutions (e.g., Brokers, banks, trust companies and other financial institutions) (“DTC Participants”). Dividends and other distributions to Fund shareholders will

be declared and paid in the same manner as by other registered open-end investment companies.¹⁷

Shareholders will exercise their rights in Shares indirectly through DTC and DTC Participants. The references herein to owners or holders of Shares shall reflect the rights of persons holding an interest in such securities as they may indirectly exercise such rights through DTC and DTC Participants, except as otherwise specified. No shareholder shall have the right to receive a certificate representing Shares. Delivery of all notices, statements, reports and other communications to a Fund’s shareholders will be at the Fund’s or Adviser’s expense, and will be made using the customary practices and the facilities of DTC and DTC Participants.

E. Exchange Listing and Secondary Market Trading of Shares

Shares of each Fund will be listed on an Exchange and traded in the secondary market in the same manner as shares of other ETFs. Except as permitted by the relief requested from Section 17(a), no affiliated person, or affiliated person of an affiliated person, of the Funds will maintain a secondary market in Shares.

Applicants expect the Listing Exchange for each Fund to select, designate or appoint one or more market makers (collectively, “Exchange Market Makers”) for the Fund’s Shares.¹⁸ As long as a Fund operates in reliance on the Order, its Shares will be listed on an Exchange.

In the secondary market, Shares will trade at negotiated prices determined by the balance of supply and demand for Shares and other market factors. Market trading prices of Shares may be above, at or below the current value per Share of the Fund’s NAV Portfolio. Because the market trading prices of Shares will be disciplined by an arbitrage process facilitated by the use of the Clearhedge Method described below, Applicants expect Share prices to be at or close to the NAV per Share.¹⁹ Secondary market purchases and sales of Shares will be subject to customary brokerage fees and other charges. No Fund or Distributor will make secondary market sales of Shares to Brokers at a concession.

Applicants anticipate that the trading price of a Share will normally range from $10 to $30.²⁰

F. The Clearhedge Method of Facilitating Efficient Share Arbitrage

1. Overview The Funds would not disclose their NAV Portfolios on a current daily basis. Instead, the Funds would seek to facilitate efficient Share arbitrage by: (i) publicly disclosing, prior to the beginning of U.S. market trading each day that the Fund’s Shares are available for trading on the Listing Exchange (a “Business Day”), a “NAV Reference Portfolio” that is designed to closely track the daily performance of the Fund’s corresponding NAV Portfolio and whose holdings consist of Permissible Investments available for trading throughout U.S. market hours and (and possibly also cash); and (ii) providing for market makers, arbitrageurs and other liquidity providers active in a Fund’s Shares or their agents (“Liquidity Providers”) to enter into special-purpose total return swap transactions with the Fund, whereby the Fund and Liquidity Provider counterparty would exchange payments based on the relative total returns of a reference amount of the Fund’s current NAV Portfolio and the NAV Reference Portfolio (a “Clearhedge Swap”).²¹ Using the proposed Clearhedge Method, a Liquidity Provider could offset the market risk of its long (and short) positions in Fund Shares by: (i) selling (buying) the instruments constituting the NAV Reference Portfolio (or a suitable substitute);²² and (ii) engaging in Clearhedge Swap transactions to offset the “basis risk”²³ between its exposure to the NAV Reference Portfolio and

exposure to the NAV Portfolio arising from the Liquidity Provider’s net position in Shares. By varying the size and direction (i.e., long or short) of its NAV Reference Portfolio and Clearhedge Swap positions at times and amounts corresponding to intraday changes in its Share positions, a Liquidity Provider could manage its inventory risk in Shares with substantially the same precision as if the Liquidity Provider knew the composition of the NAV Portfolio.

Each Fund’s NAV Reference Portfolio will consist of Permissible Investments available for trading throughout U.S. market hours (and possibly also cash) selected by the Fund’s Adviser using an optimization process, which is designed to enable the NAV Reference Portfolio to closely track the daily performance of the Fund’s corresponding NAV Portfolio. The composition of a Fund’s NAV Reference Portfolio would vary from the current NAV Portfolio as the Adviser deems necessary to maintain the confidentiality of the Fund’s current trading activity. On each Business Day, before commencement of trading of Shares, each Fund will post to its website the “NAV Reference Portfolio Overlap” for the prior Business Day, which will be calculated by taking the lesser percentage weight of each asset held in common between the NAV Portfolio that formed the basis for the Fund’s calculation of NAV for the prior Business Day and the NAV Reference Portfolio in effect for such day, and adding the totals.²⁴

Using the Clearhedge Method described herein, Applicants expect Liquidity Providers to be able to hedge the market risks of their positions in Shares within close tolerance levels across all types of Funds holding Permissible Investments and over varying market conditions. Applicants submit that the Funds’ Shares will exhibit better secondary market trading performance than the shares of similarly invested existing Portfolio-Protected ETFs, which do not afford Liquidity Providers a comparable ability to precisely hedge their fund share positions.

As a general matter, the shares of ETFs investing in Foreign Instruments trading outside U.S. market hours and/or less-liquid OTC instruments are understood to be more difficult for market makers and other arbitrageurs to efficiently arbitrage than shares of ETFs investing exclusively in U.S. Exchange-Traded Instruments, Synchronously Traded Listed Foreign Instruments, and cash and cash equivalents. This is primarily because arbitrageurs holding positions in ETFs investing in Foreign Instruments trading outside U.S. market hours and/or less-liquid OTC instruments typically cannot sell or buy offsetting amounts of the ETF’s underlying

In this example, the NAV Reference Portfolio Overlap is 3% (lesser of 3% and 5%) with respect to Security X and 2% (lesser of 4% and 2%) with respect to Security Y. The Fund’s NAV Reference Portfolio Overlap is calculated as the sum of the overlap percentages of all instruments held in common between the NAV Portfolio and the NAV Reference Portfolio.

holdings at the same time as they buy or sell the ETF’s shares over the course of each Business Day.

Relative to existing ETFs holdings positions in Foreign Instruments trading outside U.S. market hours and/or less-liquid OTC instruments, the Clearhedge Method will provide Liquidity Providers with substantially enhanced ability to manage the risk of their positions in Shares. Using the Clearhedge Method, a Liquidity Provider could offset the market risk of its long (and short) positions in Shares of a Fund holding Foreign Instruments trading outside U.S. market hours and/or less-liquid OTC instruments by: (i) selling (buying) the instruments constituting the Fund’s NAV Reference Portfolio at the same time as the Liquidity Provider buys (sells) Fund Shares; and (ii) engaging in Clearhedge Swap transactions to offset the basis risk between its exposure to the NAV Reference Portfolio and exposure to the NAV Portfolio arising from the Liquidity Provider’s net position in Shares. Because each Fund’s NAV Reference Portfolios would include only Permissible Investments that are available for trading throughout U.S. market hours (and possibly also cash), each Liquidity Provider could effectively manage the risk of its positions in Shares to the same extent as if the Fund’s underlying holdings could be sold or bought throughout U.S. market hours.²⁵ This feature of the Clearhedge Method provides a particular advantage over other models of Portfolio-Protected ETFs for Funds investing in Foreign Instruments that trade outside U.S. market hours. Because other models of Portfolio-Protected ETFs do not include a basis risk hedging mechanism (like Clearhedge Swaps), such ETFs could not limit the composition of their proxy portfolios to include only instruments trading throughout U.S. market hours without potentially compromising hedge effectiveness, thereby exposing such ETF’s Liquidity Providers to greater risk and their shareholders to higher costs to buy and sell shares.

2. Identification of Potential Arbitrage Profit Opportunities An arbitrage trade in Fund Shares may be initiated when a Liquidity Provider identifies an opportunity to either buy Shares below, or sell Shares above, the current value per Share of the Fund’s NAV Portfolio. Liquidity Providers will have available two means of estimating the current value per Share of a Fund’s NAV Portfolio for this purpose: (i) the Liquidity Provider could, on a continuous intraday basis, calculate its own values of the disclosed NAV Reference Portfolio from pricing sources at the Liquidity Provider’s disposal; and (ii) the Liquidity Provider could reference the “Dynamic Intraday Indicative Values” (or “DIIVs”) of the NAV Portfolio that will be disclosed publicly

by each Fund at 15-second intervals throughout the Listing Exchange’s regular trading session each Business Day.

In calculating a Fund’s DIIVs, positions held in the Fund’s NAV Portfolio (“Portfolio Instruments”) that are trading actively when DIIVs are determined will be valued equal to the current bid-ask midpoint (“Mid Pricing”). Portfolio Instruments trading principally in markets that are closed or otherwise not having readily available market quotations when DIIVs are determined will generally be subject to fair valuation adjustments as determined in accordance with the Fund’s pricing procedures (“Fair Value Pricing”).²⁶

Applicants anticipate that differences in returns between a Fund’s NAV Portfolio and NAV Reference Portfolio will be sufficiently small for the NAV Reference Portfolio to provide Liquidity Providers with a reliable means of estimating the current intraday value per Share of the Fund’s NAV Portfolio. The daily disclosure of the NAV Reference Portfolio Overlap will assist Liquidity Providers in evaluating the extent to which the performance of the NAV Portfolio and NAV Reference Portfolio may deviate. Applicants submit that, used in combination, the estimated NAV Portfolio values that a Liquidity Provider could derive from disclosure of the Fund’s NAV Reference Portfolio holdings and the publicly disseminated DIIVs will enable Liquidity Providers to estimate the current value per Share of a Fund’s NAV Portfolio with sufficient precision to support highly efficient Share arbitrage.²⁷

3. Share Arbitrage Process To establish an arbitrage position in Fund Shares once a potential arbitrage profit opportunity is

identified, a Liquidity Provider would buy Shares below, or sell Shares above, the current estimated value per Share of the Fund’s NAV Portfolio. To hedge its exposure to market risk in its long (or short) Share position using the Clearhedge Method, the Liquidity Provider would, at the same time: (i) sell (buy) the instruments constituting the NAV Reference Portfolio; and (ii) enter into a Clearhedge Swap transaction with the Fund to offset the basis risk between the NAV Reference Portfolio and the NAV Portfolio.²⁸ By varying the size and direction of its NAV Reference Portfolio and Clearhedge Swap positions at times and amounts corresponding to changes in its Share positions, the Liquidity Provider could maintain a hedged exposure as its inventory position in Shares moves up or down over the course of each Business Day.

When a Liquidity Provider has accumulated a long (or short) position in Shares equal in size to one or more Creation Units, the Liquidity Provider could unwind its Share position at NAV, minus or plus the Transaction Fee (as defined below) that applies, by transacting with the Fund through an Authorized Participant (as defined below) to redeem (purchase) Creation Units. To lock in its arbitrage profits, the Liquidity Provider would, at the same time: (i) buy (sell) its positions in the NAV Reference Portfolio instruments; (ii) close its Clearhedge Swap positions; and (iii) sell (buy) the Basket Instruments (as defined below) received (delivered) in the Creation Unit redemption (purchase).²⁹

4. Composition and Dissemination of NAV Reference Portfolios The NAV Reference Portfolio specified for a Fund on a given Business Day will be determined by the Fund’s Adviser, and consist of Permissible Investments available for trading throughout the Listing Exchange’s regular trading session whose aggregate performance the Adviser expects to be highly correlated with the performance of the Fund’s NAV Portfolio (and possibly also cash). A Fund’s NAV Reference Portfolio will vary from the current NAV Portfolio to the degree that the Adviser deems appropriate to maintain the confidentiality of the Fund’s current trading program. Instruments being acquired will generally be excluded from the NAV Reference Portfolio until their purchase is completed, and instruments being sold may not be removed until the sale program is completed. Other Portfolio Instruments held on a given Business Day may

be excluded from the Fund’s NAV Reference Portfolio for that day.³⁰ Whenever Portfolio Instruments are excluded, the NAV Reference Portfolio may include proportionately more cash or other Portfolio Instruments, or may substitute other Permissible Investments not included in the NAV Portfolio, for the excluded Portfolio Instruments.

For Funds holding positions in Foreign Instruments trading outside U.S. market hours and/or less-liquid OTC instruments, the NAV Reference Portfolio will consist of Permissible Investments available for trading throughout the Listing Exchange’s regular trading session (and possibly also cash), which may include a range of instruments that trade throughout U.S. market hours, including Exchange-traded ADRs, Exchange-traded stocks of non-U.S. issuers and other U.S. Exchange-Traded Instruments; Synchronously Traded Listed Foreign Instruments; and liquid OTC fixed income and equity instruments. Applicants submit that the available universe of eligible instruments is sufficiently broad to enable the construction of NAV Reference Portfolios that will closely track the performance of the NAV Portfolios of Funds investing across all types of Permissible Investments, including international and global equities and U.S., international and global fixed income. Because the Fair Value Pricing of Foreign Instruments trading outside U.S. market hours necessarily references, and relies upon, the current pricing of correlated instruments trading actively during U.S. market hours, the close performance tracking of a Fund’s NAV Reference Portfolio versus its NAV Portfolio can be maintained even when the primary trading markets for the Fund’s Foreign Instruments are closed. The Adviser will determine a Fund’s NAV Reference Portfolio in effect each Business Day, giving primary consideration to: (i) the liquidity of the NAV Reference Portfolio instruments throughout U.S. market trading hours; (ii) the expected intraday performance correlation between the NAV Reference Portfolio as a whole and the Fund’s NAV Portfolio; and (iii) maintaining the confidentiality of the Fund’s current investment program. For Funds whose NAV Portfolio includes equities, the Adviser will generally seek to reflect in the Fund’s NAV Reference Portfolio the principal factor exposures (including equity market, value, momentum and size) and other characteristics of the NAV Portfolio’s equity investments. For Funds whose NAV Portfolio includes fixed income instruments, the Adviser will generally seek to construct the Fund’s NAV Reference Portfolio so that it approximates the duration, convexity, currency, credit and other characteristics of the NAV Portfolio’s fixed income instruments.

Each Business Day, before the opening of trading on a Fund’s Listing Exchange, the Fund will post to its freely available public website and cause to be published through the National Securities Clearing Corporation (“NSCC”) the names and quantities of the instruments constituting its current NAV Reference Portfolio for that day. At the discretion of the Adviser, a Fund may elect to disclose its NAV Reference Portfolio for a particular Business Day prior to the close of market trading on the preceding Business Day.³¹

5. Clearhedge Swap Agreements Prior to the initial listing of its Shares on an Exchange and the commencement of secondary market trading, each Fund will enter into “Master Swap Agreements” with Liquidity Providers intending to be active in the Fund’s Shares, setting forth the terms and conditions of the Fund’s Clearhedge Swaps. The Master Swap Agreements will provide for the Fund and a Liquidity Provider to enter into contracts whereby each party would agree to make payments to, and receive payments from, the other party based on the relative total returns of a reference amount of the Fund’s current NAV Portfolio and NAV Reference Portfolio.

The terms of the Master Swap Agreements will provide for the cash settlement of all outstanding Clearhedge Swap positions at the end of each Business Day, based on their values as of the “NAV Calculation Time,” generally 4:00 p.m. ET, on such day. The material terms and conditions of a Fund’s Master Swap Agreements and all contracts thereunder will be the same for all participating Liquidity Providers, except for differences in timing and reference amounts.³² Applicants represent that each Fund will maintain Master Swap Agreements with at least two Liquidity Providers and make available Clearhedge Swaps at all times that the Fund is listed for trading on an Exchange.³³

Consistent with the experience of existing ETFs, Applicants expect Liquidity Providers active in a Fund’s Shares commonly to hold positions in Shares for periods longer than a single Business Day. Liquidity Providers maintaining positions in Shares from one Business Day to the next may utilize “Rollover Clearhedge Swaps” to hedge the basis risk between exposure to the Fund’s NAV Portfolio represented by the Liquidity Provider’s carryover position in Shares and a position in the NAV Reference Portfolio maintained by the Liquidity Provider as a partial hedge. Rollover Clearhedge Swaps are entered into at the NAV Calculation Time on a given Business Day for close and settlement on the following Business Day. Other than being entered into as of the NAV Calculation Time (generally coinciding with the U.S. market close), Rollover Clearhedge Swaps are no different in form or substance from other Clearhedge Swaps; for Liquidity Providers, the process of entering into and exiting from swap positions is exactly the same. Consistent with other Clearhedge Swaps, the NAV Portfolio and NAV Reference Portfolio that apply to a Rollover Clearhedge Swap are those in effect on the Business Day the swap closes and settles.³⁴

The Liquidity Provider party to each Clearhedge Swap contract would initiate and determine the reference amount of each transaction entered into under the contract, which would generally correspond in size, and offset in direction, to the Liquidity Provider’s purchases and sales of Fund Shares.³⁵ Subject to the limitations set forth in the following paragraph, a Liquidity Provider with a Master Swap Agreement in place with a Fund could enter into Clearhedge Swap transactions at any time during market trading hours of the Fund’s Listing Exchange. Applicants expect Liquidity Providers normally to vary the amounts of their Clearhedge Swap positions at times and amounts corresponding to changes in their Share positions. If, for example, a Liquidity Provider holding a (long or short) position in a Fund’s Shares and offsetting (short or long) Net Reference Portfolio instrument and Clearhedge Swap positions were to sell 20,000 Shares, Applicants would expect the Liquidity Provider normally to buy NAV Reference Portfolio instruments and enter into Clearhedge Swap transactions with a notional value equivalent to 20,000 Shares providing for the Liquidity Provider to pay cash at settlement to the extent the NAV Reference Portfolio outperforms the NAV Portfolio and to receive cash at settlement to the extent the NAV Portfolio outperforms the NAV Reference Portfolio. If the Liquidity Provider were to later sell 5,000 Shares, Applicants would expect the Liquidity Provider normally to buy NAV Reference Portfolio instruments and enter into

Clearhedge Swap transactions with a notional value equivalent to 5,000 Shares providing for the Liquidity Provider to receive cash at settlement to the extent the NAV Reference Portfolio outperforms the NAV Portfolio and to pay cash at settlement to the extent the NAV Portfolio outperforms the NAV Reference Portfolio.

Because Clearhedge Swaps expose a Fund to the risk that variations in the performance of its NAV Portfolio and NAV Reference Portfolio will cause the Fund to incur swap settlement payment obligations, the Funds’ Master Swap Agreements will provide that Liquidity Providers may enter into Clearhedge Swaps only for purposes of hedging their net positions in Fund Shares, and the size of each Liquidity Provider’s allowable Clearhedge Swap positions is constrained. At any time: (i) the aggregate net reference amount of each Liquidity Provider’s outstanding Clearhedge Swap positions with a Fund may not exceed such Liquidity Provider’s net long or short exposure to the Fund’s NAV Portfolio represented by the Liquidity Provider’s net position in Shares; and (ii) the aggregate net reference amount of each Liquidity Provider’s outstanding Clearhedge Swap positions with a Fund may not exceed the value of a designated number of the Fund’s Creation Units set forth in the Master Swap Agreement (or contracts thereunder), except for positions entered into during U.S. market trading hours on the current Business Day prior to the NAV Calculation Time.³⁶

Subject to the adjustments in Clearhedge Swap settlement terms described in the next paragraph, a Liquidity Provider with a net long position in a Fund’s Shares, a net short position in the Fund’s NAV Reference Portfolio and a Clearhedge Swap position to hedge the basis risk between the two would pay cash to the Fund upon swap settlement when the NAV Portfolio outperforms the NAV Reference Portfolio over the term of the swap, and receive cash from the Fund when the opposite is true. Subject to the same adjustments, a Liquidity Provider with a net short position in a Fund’s Shares, a net long position in the Fund’s NAV Reference Portfolio and a Clearhedge Swap position to hedge the basis risk between the two would pay cash to the Fund upon swap settlement when the NAV Reference Portfolio outperforms the NAV Portfolio over the term of the swap, and receive cash from the Fund when the opposite is true.

Pursuant to the Master Swap Agreements, individual Clearhedge Swap contracts may provide for the total return of the NAV Reference Portfolio for purposes of interim and final swap valuations and payments at settlement to be adjusted upward or downward by a

predetermined amount specified by the Adviser to reflect the Adviser’s projection of relative total returns of the NAV Portfolio and NAV Reference Portfolio.³⁷ In addition, the terms of a Fund’s Clearhedge Swap contracts are expected to provide for payments to the Fund at settlement from the Liquidity Provider parties that are designed to offset the cost of Clearhedge Swap pricing and administration. Such payments would be specified in advance by the Adviser and may vary based on the number of discrete transactions entered into, the reference amount of individual transactions and/or the net reference amount of outstanding positions under the contract held by each Liquidity Provider party. All adjustments in Clearhedge Swap settlement terms in effect for a given Fund would apply equally to all Liquidity Providers. The Liquidity Provider party to any Clearhedge Swap contract will receive notice from the Adviser of all adjustments in settlement terms prior to the execution of any transaction under the contract.³⁸

Each Fund will adopt and implement policies and procedures regarding the operation of Clearhedge Swaps, which would be covered by the Fund’s compliance program and other requirements under Rule 38a-1 under the 1940 Act. Applicants affirm that the Funds’ policies and procedures relating to Clearhedge Swaps will provide that a Fund’s Adviser, Distributor and related parties may not use payment amounts to Liquidity Providers in settlement of Clearhedge Swaps to pay for Fund distribution, unless made pursuant to a plan under Rule 12b-1 under the 1940 Act or otherwise made consistent with the 1940 Act, the rules thereunder or Commission staff interpretations thereof.

6. Clearhedge Swap Pricing Each Fund will engage one or more third-party pricing services (“Swap Pricing Agents”) to value the Fund’s NAV Portfolio and NAV Reference Portfolio at one-second intervals throughout the regular trading session of the Listing Exchange each Business Day. The same NAV Portfolio and NAV Reference Portfolio valuations will apply to all Clearhedge Swap transactions executed at a given time, and not vary among counterparties.

The intraday valuation process performed with respect to the NAV Portfolio and NAV Reference Portfolio by the Swap Pricing Agent will utilize substantially the same process that the

Fund uses, and the Board oversees, for its daily NAV calculation. Consistent with the calculation of a Fund’s DIIVs, instruments trading actively at the time of swap pricing will be valued using Mid Pricing, and instruments trading principally in markets that are closed or otherwise not having readily available market quotations when swap valuations are determined will generally be valued using Fair Value Pricing.³⁹ Other than dissemination frequency, valuations of a Fund’s NAV Portfolio for purposes of pricing Clearhedge Swaps would be the same as reflected in the Fund’s DIIVs. Each Fund’s Swap Pricing Agent will use the same process to determine NAV Portfolio and NAV Reference Portfolio values for Clearhedge Swap purposes as used in calculating the Fund’s DIIVs.

The valuations of a Fund’s NAV Portfolio determined at one-second intervals will be treated as Confidential Fund Information (as defined below) and not disclosed, either publicly or privately, to Liquidity Providers or other parties not subject to a duty of confidentiality and prohibited from trading on the basis of this information. No intraday valuation information would be provided to any Clearhedge Swap counterparty or other Liquidity Provider, directly or indirectly, other than (i) as determined as of the calculation time of one of the Fund’s publicly disseminated DIIVs and (ii) as provided to such party at or after the time such DIIV is publicly disseminated. Each Swap Pricing Agent and every other Fund service provider will be subject to a duty of confidentiality and prohibited from trading (for its own account or on behalf of others) on the basis of any material, non-public information with respect to the subject Fund communicated to or held by them, including the names and quantities of the instruments constituting the Fund’s current NAV Portfolio and all valuations thereof determined by the Swap Pricing Agent that are not publicly disclosed.⁴⁰

7. Clearhedge Swap Administration Each Fund will engage a “Swap Administrator” to administer the Fund’s Clearhedge Swap contracts and transactions thereunder. A Fund’s Swap Administrator may be the same as its custodian, fund administrator, Swap Pricing Agent or other service provider. Like the Swap Pricing Agent, each Fund’s Swap Administrator will be subject to a duty of confidentiality and prohibited from trading (for its own account or on behalf of others) on the basis of Confidential Fund Information in its possession.

The duties and responsibilities of each Fund’s Swap Administrator would include: (i) establishing and maintaining real-time electronic communications connecting the Swap Administrator with the Swap Pricing Agent, the Fund and each Liquidity Provider with an active Master Swap Agreement in place for such Fund; (ii) receiving from the Swap Pricing Agent current valuations of the NAV Portfolio and NAV Reference Portfolio; (iii) entering (and confirming back) orders from Liquidity Providers for Clearhedge Swap transactions; (iv) calculating current reference amounts and values of all outstanding Clearhedge Swap positions; (v) communicating to the Fund current reference amounts and calculated values of all outstanding Clearhedge Swap positions;⁴¹ (vi) communicating to each Liquidity Provider current reference amounts and calculated position values⁴² of the Liquidity Provider’s outstanding Clearhedge Swap positions; (vii) providing notice to the Fund and each Liquidity Provider of any collateral requirements that apply and implementing or directing movements of collateral where provided for; (viii) providing notice to the Fund and each Liquidity Provider of daily closing balances of outstanding Clearhedge Swap positions and implementing movements of cash to settle the closing of Clearhedge Swap transactions; (ix) maintaining books and records of the Fund’s Master Swap Agreements, contracts and transactions thereunder; (x) upon the request of the Fund, providing for inspection or audit of the books and records of the Fund’s Master Swap Agreements, contracts and transactions thereunder; and (xi) upon the request of any Liquidity

Provider that is party to a Master Swap Agreement with the Fund, providing for inspection or audit of the books and records of the Liquidity Provider’s Master Swap Agreements, contracts and transactions.

Each Fund will incur certain costs in connection with the pricing and administration of Clearhedge Swaps, including fees and expenses of the Swap Pricing Agent and Swap Administrator. Applicants expect the Funds to offset such costs by incorporating into swap contract terms appropriately sized payments from the Liquidity Provider parties as described below.

8. Funds’ Exposure to Clearhedge Swap Positions Because each Clearhedge Swap transaction entered into by a Liquidity Provider active in a Fund’s Shares will involve the Fund as counterparty, use of the Clearhedge Method to facilitate efficient Share arbitrage will expose the Fund to the risk that variations in the performance of the NAV Portfolio and the NAV Reference Portfolio cause the Fund to incur swap settlement payment obligations. In Applicants’ view, the potential impact of Clearhedge Swap settlement payments on Fund returns is inherently constrained, can be readily managed using commonly available portfolio techniques to the extent warranted and is amply justified by the potential benefit to Fund shareholders of lowering the cost they pay to buy and sell Shares while avoiding the front-running and free-riding costs and risks associated with disclosing the Fund’s NAV Portfolio on a current daily basis. Applicants are committed to ensuring that the Funds’ returns over time are not diminished by their use of Clearhedge Swaps and associated Fund hedging activities, and are confident that the Funds can be managed to avoid such harm.

As an initial matter, the amount of a Fund’s potential exposure to payment obligations in connection with use of the Clearhedge Method will be limited by the terms and conditions of the Master Swap Agreements, which will provide that:

Assuming that all or substantially all of the Liquidity Providers active in a Fund’s Shares engage in Clearhedge Swaps to the maximum extent possible, the notional amount of a Fund’s net daily exposure to Clearhedge Swap positions would accumulate over the course of a Business Day by approximately the amount of net investor buying or selling of Shares on that Business

Day. When investors⁴³ are net buyers of a Fund’s Shares, the Fund would assume a net short position in the outperformance of the NAV Portfolio over the NAV Reference Portfolio, with a reference amount approximately equal to the amount of net investor buying of Shares on that Business Day. Conversely, when investors are net sellers of a Fund’s Shares, the Fund would assume a net long position in the outperformance of the NAV Portfolio over the NAV Reference Portfolio with a reference amount approximately equal to the amount of net investor selling of Shares on that Business Day. Payments at settlement of Clearhedge Swaps would flow from the Fund to Liquidity Providers in respect of (i) periods of net investor buying during which the NAV Portfolio outperforms the NAV Reference Portfolio and (ii) periods of net investor selling during which the NAV Portfolio underperforms the NAV Reference Portfolio. Payments at settlement of Clearhedge Swaps would flow from Liquidity Providers to the Fund in respect of (i) periods of net investor selling during which the NAV Portfolio outperforms the NAV Reference Portfolio and (ii) periods of net investor buying during which the NAV Portfolio underperforms the NAV Reference Portfolio.

A Fund’s potential exposure to Clearhedge Swap settlement obligations will be constrained by two factors: (i) the net notional amount of the Fund’s swap positions will generally relate to the daily amount of net investor buying or selling of the Fund’s Shares,⁴⁴ which will normally be a small fraction of the Fund’s total net assets; and (ii) the NAV Reference Portfolio in each swap transaction will be selected based in significant part on the Adviser’s expectation that the NAV Reference Portfolio’s performance will be closely correlated to the performance of the NAV Portfolio. Accordingly, Applicants submit that the likelihood of exposures to Clearhedge Swap positions having a material impact on a Fund’s NAV on any given Business Day is small.

Example: Assume that a Fund’s NAV Portfolio and NAV Reference Portfolio have 92% overlap, and that the non-overlapping portion of the NAV Portfolio outperforms the corresponding portion of the NAV Reference Portfolio by 5% on a given Business Day. With these assumptions, the NAV Portfolio would outperform the NAV Reference Portfolio by 0.40% on that day.

Without any mitigating action, a Fund with 3% average net long exposure to the outperformance of the NAV Portfolio over the NAV Reference Portfolio (corresponding, for example, to net investor selling of Shares that day equal to 3% of the Fund’s total net

assets) would be expected to experience a positive performance impact of approximately 1.2 basis points (0.012%) that day (less than one quarter of a cent per Share on a $20 NAV). A Fund with 3% average short exposure to the outperformance of the NAV Portfolio over the NAV Reference Portfolio would be expected to experience approximately the same amount of negative performance impact, absent any mitigating action.

While Applicants believe that, without mitigation, a Fund’s exposure to Clearhedge Swap positions is unlikely to have a material effect on a Fund’s daily NAV, several actions are potentially available to reduce any impact.

First, the terms of a Fund’s Clearhedge Swap contracts may be structured to incorporate the Adviser’s expectation for the relative total return of the NAV Portfolio versus the NAV Reference Portfolio. For example, if the Adviser expects the NAV Portfolio to outperform the NAV Reference Portfolio by an average of one basis point (0.01 percent) per Business Day (corresponding to approximately 2.5 percent annually), the terms of the Fund’s Clearhedge Swap contracts could specify that the parties will exchange payments based on the relative returns of the NAV Portfolio versus the NAV Reference Portfolio plus one basis point per Business Day. While the daily impact of an adjustment in contract terms of this magnitude on swap settlement payments (and Fund returns) would likely be quite small, over time the mitigating effect could be meaningful.

Second, the terms of a Fund’s Clearhedge Swap contracts are expected to provide for payments to the Fund at settlement from the Liquidity Provider parties that are designed to offset the cost of Clearhedge Swap pricing and administration. Such payments would be specified in advance by the Adviser and may vary based on the number of discrete transactions entered into, the reference amount of individual transactions and/or the net reference amount of outstanding positions under the contract held by a Liquidity Provider party.

Third, a Fund’s Adviser could use portfolio management techniques to manage the Fund’s exposure to market risk in its Clearhedge Swap positions by transacting in physical securities or other instruments to offset the market exposures assumed through the swaps. Using data on the Fund’s current swap positions communicated in real-time by the Swap Administrator, the Adviser could detect when a Fund’s aggregate net swap exposures have increased to a level where offsetting portfolio activity may be appropriate. Different from Liquidity Providers, a Fund’s Adviser would have complete information regarding the Fund’s investment strategy, current portfolio holdings and net swap exposures, positioning the Adviser to readily address any portfolio imbalances or added market risk arising from the Fund’s exposure to Clearhedge Swap positions.

On an overall basis, Applicants submit that any adverse effects on Fund performance of Clearhedge Swap exposures are likely to be small, and can be readily mitigated using terms built into swap contracts and compensating adjustments in the Fund’s other investment exposures implemented by the Adviser. The use of Clearhedge Swaps enables Liquidity Providers to transfer the basis risk they would otherwise assume in hedging their positions in Shares to the associated Fund, which can accurately assess and readily manage such risk because, unlike Liquidity Providers, the Fund has ongoing visibility into its own investment strategy, current portfolio holdings and net swap exposures across counterparties. While use of the Clearhedge

Method can benefit Fund shareholders by facilitating efficient Share arbitrage – and thereby lowering investor trading costs – Applicants do not expect offsetting harm to Fund returns.

The following example illustrates how a Fund’s Adviser could use transactions in market instruments to manage the Fund’s exposure to Clearhedge Swap settlement obligations:

Example. Assume a Fund with net assets of $200 million holds a 4.0% position in ABC common stock (ABC) that the Fund’s Adviser wishes not to disclose by including in the Fund’s NAV Reference Portfolio. Assume further that the Fund’s NAV Reference Portfolio substitutes a 4.0% position in XYZ common stock (XYZ) for the undisclosed ABC holding, and that the Fund’s NAV Portfolio and NAV Reference Portfolio are otherwise identical.

Assume that at the 9:30 AM market open on a given Business Day, an institutional investor buys 1,000,000 Shares of the Fund with a current value of $20.00 per Share, equivalent to 10% of the Fund’s current net assets (Applicants note that they expect daily net investor buying or selling aggregating 10% of more of a Fund’s net assets to occur only very rarely, if at all).

Assume further that the institutional buyer’s Shares are acquired from a Liquidity Provider that immediately hedges its position by (i) buying an equivalent quantity of NAV Reference Portfolio instruments and (ii) entering into a Clearhedge Swap with a notational value equivalent to 1,000,000 Shares that provides for the Liquidity Provider to pay the Fund the return of the NAV Reference Portfolio and receive from the Fund the return of the NAV Portfolio.

Assume further that the Fund’s Adviser, upon receiving notice of the very large Clearhedge Swap transaction, acts immediately to hedge its potential exposure to swap settlement obligations by purchasing a 0.40% Fund position in ABC and selling a 0.40% position in XYZ. Assume further that no other Clearhedge Swap transactions take place that day, and that the Clearhedge Swap position and the Fund’s offsetting positions in ABC and XYZ are maintained for the balance of the day.

Assume that positive intraday news for ABC causes its stock to increase in price by 5%, and negative intraday news for XYZ causes its stock to decline in price by 5% over the balance of the day. As a result of the performance deviation between ABC and XYZ, the return of the NAV Portfolio exceeds the return of the NAV Reference Portfolio over the swap term by 0.40% (= 4.0% position size x 10% ABC/XYZ performance deviation) (Applicants note that they expect the deviation in performance between a Fund’s NAV Portfolio and NAV Reference Portfolio to be significantly less than 0.40% on most days).

To settle the Clearhedge Swap at the end of the day, the Fund pays the Liquidity Provider the notional amount of the swap multiplied by the excess return of the NAV Portfolio over the NAV Reference Portfolio, which is $80,000 (= 1,000,000 Shares x $20 per Share x 0.40%). (See Table 1.)

The offsetting positions in ABC and XYZ entered into by the Fund generate intraday gains of $80,000 (= 0.40% x $200,000,000 x 5% + 0.40% x $200,000,000 x 5%). (See Table 2.) Gains on the Fund’s positions in ABC and XYZ fully offset the Fund’s swap settlement payment obligations.

Table 1

Table 2

Inclusion of the above example should not suggest that Funds will regularly enter into portfolio transactions to offset their potential Clearhedge Swap settlement obligations; in fact, Applicants expect such transactions to occur only rarely. Rather, the example is intended to illustrate how offsetting portfolio transactions can be used by a Fund’s Adviser to substantially eliminate risk to Fund performance from Clearhedge Swap exposures that could otherwise arise under extreme circumstances.

G. Purchases and Redemptions of Creation Units

1. General The Trust will issue and redeem Creation Units of Shares of each Fund through the Fund’s Distributor on a continuous basis at the NAV per Share next determined after an order in proper form is received. The NAV per Share of each Fund is expected to be determined as of 4:00 p.m. ET each Business Day. The Trust will issue and redeem Creation Units of Fund Shares only on a Business Day.⁴⁵

All orders to purchase Creation Units of a Fund must be placed with the Fund’s Distributor by or through an “Authorized Participant,” which is a member of, or participant in, a clearing agency registered with the Commission that has a written agreement with the Fund or one of its service providers permitting the Authorized Participant to transact with the Fund to

purchase and redeem Creation Units. An investor does not have to be an Authorized Participant to purchase or redeem Creation Units, but must place an order through, and make appropriate arrangements with, an Authorized Participant. Except as permitted by the relief requested from Section 17(a), no promoter, principal underwriter (e.g., the Distributor) or affiliated person of a Fund, or any affiliated person of such person, will be an Authorized Participant in the Fund’s Shares.

2. Creation and Redemption Baskets To keep costs low and permit Funds to be as fully invested as possible, Shares will be issued and redeemed only in Creation Units, and generally on an in-kind basis. Accordingly, except where a Basket (as defined below) includes cash under the circumstances specified below, each Fund will issue Creation Units in exchange for in-kind deposits of its current “Creation Basket” instruments and redeem Creation Units by making in-kind distributions of its current “Redemption Basket” instruments. Applicants expect that the names and quantities of the instruments that constitute the Creation Basket and the Redemption Basket for a Fund (each, a “Basket” and collectively, the “Baskets”) will generally be the same as the Fund’s NAV Reference Portfolio, except to the extent that the Fund requires purchases and redemptions to be made entirely or in part on a cash basis,⁴⁶ or in the case of Baskets that otherwise differ from the NAV Reference Portfolio as described below. If there is a difference between the net asset value attributable to a Creation Unit and the aggregate market value of the Creation Basket or Redemption Basket instruments (“Basket Instruments”) exchanged for the Creation Unit, the party conveying the lower value will pay to the other an amount in cash equal to that difference (the “Cash Balancing Amount”). To preserve the confidentiality of Fund trading activities, Applicants anticipate that a Fund’s Baskets will normally not be a pro rata representation of the Fund’s Portfolio Instruments.

Each Fund will adopt and implement policies and procedures that set forth detailed parameters for the determination of Basket Instruments and the construction of Baskets. Although the Funds are expected generally to issue and redeem Creation Units primarily on an in-kind basis, Baskets may consist entirely of cash. The Creation Basket and Redemption Basket in effect for a Fund on a given Business Day may be the same or may differ.

In certain circumstances, a Fund may determine that it is desirable to issue and redeem Shares using Baskets that differ from the NAV Reference Portfolio beyond cash substitutions. In such circumstances, Applicants may seek to improve the functioning of the Fund by using Baskets that include instruments that are not included in the NAV Reference Portfolio, or that are included in the NAV Reference Portfolio but in different weightings.⁴⁷ Each Business Day,

before the open of trading on a Fund’s Listing Exchange, the Fund will publish on its website the composition of any Basket exchanged with an Authorized Participant on the previous Business Day that differed from such Business Day’s NAV Reference Portfolio other than with respect to cash.

Fundamentally, the act of constructing Baskets is a portfolio management function. In constructing a Creation Basket, a Fund’s Adviser decides which assets to “purchase” for the portfolio. Similarly, the Adviser decides which assets to “sell” when it constructs a Redemption Basket. Enabling a Fund’s Adviser to make available Baskets that differ from the NAV Reference Portfolio when it is in the Fund’s best interest to do so should improve operational efficiency and reduce trading costs, which should have a positive impact on the effectiveness of the arbitrage mechanism.

A Fund will use the Basket flexibility described above only in circumstances under which the Adviser believes there will be no harm to the Fund or its shareholders, and in order to benefit the Fund and its shareholders by reducing costs, increasing efficiency and improving trading.

By using Baskets that includes instruments that are not included in the NAV Reference Portfolio, or are included in different percentages, and by publishing such Baskets on its website as noted above, a Fund would provide market participants with additional information about which instruments it adds or removes from its portfolio. However, the Fund will not disclose to Authorized Participants or other market participants any information about the overlap between the instruments of any Basket different from the NAV Reference Portfolio, on the one hand, and the NAV Portfolio, on the other hand. In addition, Applicants will not use such Basket flexibility in situations where such publication may provide sufficiently useful information to either predict the Fund’s current positions or pending or upcoming trades so as to front-run them or to ascertain the Fund’s current NAV Portfolio as to free-ride on the Adviser’s investment decisions. The Adviser will use the Basket flexibility only after the Adviser has concluded that the risks of front-running and free-riding are not present with respect to a particular security included in the Basket that is not included in the NAV Reference Portfolio or included with a different weighting.

A Fund that normally issues and redeems Creation Units in kind may require purchases and redemptions to be made entirely or partly on a cash basis.⁴⁸ In such an instance, the Fund will announce, before the open of trading on a given Business Day, that all purchases, all redemptions or all purchases and redemptions of Creation Units on that day will be made wholly or partly in cash. A Fund may also determine, upon receiving a Creation Unit purchase or redemption order from an Authorized Participant, to have the purchase or redemption, as applicable, be made entirely or in part in cash. The Funds will only enter into cash creation and redemption transactions in circumstances where cash transactions are determined by the Adviser to be in the best interest of the Fund and its shareholders. All determinations by the Adviser to transact in cash will be in accordance with the Funds’ policies and procedures governing Basket construction.

Each Fund will adopt and implement policies and procedures regarding the composition of Creation Baskets and Redemption Baskets, including any Basket that differs from the NAV Reference Portfolio, in accordance with the requirements for ETFs operating under the ETF Rule, except that, for purposes of Condition A.10., only Baskets that differ from the NAV Reference Portfolio will be treated as a “custom basket” under section (c)(3) of the ETF Rule. Each Fund’s Basket policies and procedures will be covered by the Fund’s compliance program and other requirements under Rule 38a-1 under the 1940 Act.

3. Transaction Fees A Fund may recoup the settlement costs charged to it by NSCC and DTC and the estimated trading costs to the Fund of converting the Basket instruments to or from the desired portfolio composition by imposing transaction fees on investors purchasing or redeeming Creation Units (“Transaction Fee”). Because the DTC clearing process (“DTC Process”) is generally more expensive than the NSCC clearing process (“NSCC Process”), investors purchasing or redeeming through the DTC Process may pay higher Transaction Fees than investors transacting through the NSCC Process.⁴⁹  No Fund will impose sales charges on purchases of Shares. The Transaction Fee will be borne only by purchasers and redeemers of Creation Units and will be limited to amounts that have been determined to be appropriate by the Adviser to defray the transaction expenses that

will be incurred by a Fund when an investor purchases or redeems Creation Units.⁵⁰ The purpose of the Transaction Fee is to protect the existing shareholders of the Funds from the dilutive costs associated with the purchase and redemption of Creation Units.⁵¹ Transaction Fees will differ for each Fund. Variations in the Transaction Fee may be made from time to time.

4. Timing of Orders All orders to purchase or redeem Creation Units of a Fund, whether using the NSCC Process or the DTC Process, must be received by the Fund’s Distributor no later than the NAV Calculation Time (generally 4:00 p.m. ET) on the date the order is placed (“Transmittal Date”) in order for the purchasing or redeeming investor to receive the NAV determined on the Transmittal Date. The Funds may require certain order types to be submitted at earlier times. Any such order types will be described in each Fund's registration statement. On days when its Listing Exchange closes earlier than normal, a Fund may require orders to be placed earlier in the day.

H. Availability of Investor Information

Applicants are committed to providing investors with ready access to Fund information important to understanding and evaluating the Funds’ investment objectives and principal investment policies, the costs and risks of investing, the Fund’s portfolio positioning and current and historical trading and investment performance results. Applicants assert that the Funds will provide a great deal of information to help investors make informed decisions and to understand the nature of their investments.

Relative to existing ETFs, Applicants propose for the Funds to provide enhanced disclosure of investor trading cost information to assist Fund investors in measuring their individual trading costs and making better-informed buy and sell decisions. In Applicants’ view, in addition to any commissions that apply, the cost to buy an ETF’s shares is appropriately measured by the premium to the corresponding value per share of the fund’s underlying net assets at which shares are acquired, and the cost to sell an ETF’s shares is appropriately measured by the discount from the corresponding value per share at which shares are sold.⁵²  In

Applicants’ view, variations in premiums and discounts often contribute far more to the trading costs paid by ETF investors than commissions, bid-ask spreads and other factors.⁵³

Applicants view the inability of ETF investors to readily measure and evaluate their trading costs as a significant deficiency of the ETF structure as it now stands. Enhanced disclosure of the Funds’ investor trading cost information will not only assist investors in making more informed Share trading decisions, but may further benefit investors by promoting increased competition among Liquidity Providers and thereby lowering the costs investors pay to buy and sell Shares.

As described below, Applicants propose for the Funds to provide enhanced disclosure of investor trading costs principally by applying improved standards in the calculation of DIIVs, posting current DIIVs on Fund websites and also including on Fund websites daily updated information and data regarding the Fund’s DIIVs, NAV per Share, market trading prices of Shares, bid-ask spreads and volume of Shares traded, as well as disclosure of the Fund’s current DIIV and NAV valuation practices and calculation methodology. This information will enable Fund investors to estimate their Share trading costs by comparing their trade execution prices to indicative values of the Fund’s NAV Portfolio at closely corresponding times, and to compare their estimated trading costs to the Shares’ trading cost history and the trading cost experience of other Funds.

Website disclosures of each Fund’s current DIIV and NAV valuation practices and calculation methodology will include clear explanations of (i) how the Fund values Portfolio Instruments that trade principally in markets that are closed when DIIVs are calculated and/or at the NAV Calculation Time, including whether such Portfolio Instruments are valued based principally on local market closing prices or whether valuations are adjusted from local closing prices using Fair Value Pricing; and (b) whether Portfolio Instruments that trade principally in OTC markets are generally valued at the bid side of the market or at the midpoint of the bid-ask spread using Mid Pricing. As described above, in determining each Fund’s DIIVs and NAVs, Applicants generally intend to apply Fair Value Pricing in valuing Foreign Instruments trading principally outside U.S. market hours and to use Mid Pricing in the valuation of Portfolio Instruments that trade principally OTC. In calculating DIIVs, Portfolio Instruments trading actively at the time of DIIV determination will be valued using Mid Pricing.

1. Dynamic Intraday Indicative Values The Trust will arrange for the calculation and dissemination at 15-second intervals throughout the regular trading session of the Listing Exchange (generally 9:30 a.m. to  

4:00 p.m. ET) each Business Day of a DIIV (i.e., Dynamic Intraday Indicative Value) of each Fund’s Shares. Fund DIIVs will represent the estimated value per Share of the Fund’s NAV Portfolio at the time of calculation. DIIVs will be calculated by dividing the Fund’s “Estimated Fund Value” (as defined below) as of the time of calculation by the number of outstanding Shares of the Fund. “Estimated Fund Value” is the sum of the estimated amount of cash held in a Fund’s portfolio, the estimated amount of accrued assets, such as interest, dividends and distributions owed to a Fund, and the estimated value of the securities and other instruments held in the Fund’s portfolio, minus the estimated amount of the Fund’s accrued liabilities. Each Fund’s DIIVs will be disseminated through the facilities of the consolidated tape and also posted in real-time to the Fund’s website. DIIVs will be disseminated and displayed with two decimals of precision (i.e., rounded to the nearest penny).

Each Fund, or its custodian, will provide a “DIIV Pricing Agent” each Business Day the names and quantities of each of the Fund’s Portfolio Instruments and the Fund’s current accrued expenses and liabilities.⁵⁴ In calculating DIIVs, Portfolio Instruments trading actively at the time of DIIV determination will be valued using Mid Pricing. Portfolio Instruments trading principally in markets that are closed or otherwise not having readily available market quotations when DIIVs are determined will generally be valued using Fair Value Pricing in accordance with the Fund’s pricing procedures.

The DIIVs disseminated throughout the regular trading session of the Listing Exchange each Business Day for each Fund will be based on the same names and quantities of Portfolio Instruments as used to calculate the Fund’s NAV on that day.⁵⁵ Applicants expect each Fund’s DIIV Pricing Agent to be the same as the Swap Pricing Agent, but a Fund may employ different DIIV Pricing Agents and Swap Pricing Agents.

The purpose of disseminating Fund DIIVs is twofold: (i) to provide investors in Shares with information useful in determining and evaluating their individual trading costs; and (ii) to assist Liquidity Providers active in a Fund’s Shares in identifying potential arbitrage profit opportunities, as described above.⁵⁶

The Funds will adopt uniform procedures governing the calculation and dissemination of DIIVs, and the Adviser will bear responsibility for the oversight of that process (“DIIV Procedures”). The Adviser will also, as part of that oversight process, periodically, but no less than annually, review the DIIV Procedures.⁵⁷ Any material changes to the procedures will be submitted to the Board committee with oversight over audit and related matters (“Audit Committee”) for review. The methodology for calculating the DIIV will be disclosed in each Fund’s SAI. In addition to the DIIV Procedures, a governance group of the Adviser (or its delegate) (“Governance Group”) will monitor the accuracy and dissemination of each Fund’s DIIVs throughout the regular trading session of the Listing Exchange each Business Day and track whether there were any material errors in the disseminated DIIVs. The Adviser and the Governance Group will oversee the DIIV Pricing Agent’s controls, methodologies, policies and procedures in a manner based on the Adviser’s oversight of third-party pricing vendors. The Adviser annually will report to the Board’s Audit Committee on this oversight, as well as information regarding any material errors or issues of which the Adviser and the Governance Group become aware during the year.⁵⁸

2. Information Available on Fund Websites Each Fund will maintain a website that is publicly available free of charge which discloses current Fund information and contains links to current Fund documents, including a fact sheet, summary and full Prospectus, SAI and shareholder reports. Before the opening of U.S. market trading each Business Day, each Fund’s NAV Reference Portfolio in effect for that day will be posted to the website. As described above, each Fund’s website will also include current DIIVs updated at 15-second intervals throughout the regular trading session of the Listing Exchange each Business Day and provide a clear explanation of the Fund’s current DIIV and NAV valuation practices and calculation methodology.

Each Fund’s website will display the following Fund information for the prior Business Day:

and the premium or discount to NAV per Share of the Bid-Ask Price (expressed as a percentage);

The website will also include daily updated tables and line graphs showing for each calendar quarter over the past five years (or the life of a Fund, if shorter) the frequency distribution and range of each of the above Fund data items. In addition, each Fund’s website will include a daily updated record of the time and amount of all DIIVs determined and disseminated intraday, and the premium or discount to DIIV of the bid-ask midpoint at corresponding times (expressed as a percentage), over the past 20 Business Days. Each Fund’s website will include all information that ETFs operating under the ETF Rule are required to provide on their websites.

3. Information Available via Electronic Media Applicants expect current and historical Share trading information, including most recent market trading prices, current best bid and best offer prices, and the volume of Shares traded on the current Business Day, will be available for the Funds throughout each Business Day on Brokers’ computer screens and other electronic data services on the same basis as available for existing ETFs.

4. Payments in Settlement of Clearhedge Swaps Each Fund will provide disclosure on its website of the aggregate net dollar amount of consideration paid or received by the Fund in settlement of Clearhedge Swap transactions during the preceding calendar quarter, together with the maximum, average and minimum daily amount of net Clearhedge Swap settlement amounts paid or received during the period and the standard deviation of the daily net Clearhedge Swap settlement amounts. All such information (the “Clearhedge Swap Website Disclosures”) will be updated no later than ten Business Days after the end of each calendar quarter.

5. Disclosure of Fund Holdings Each Fund will disclose the names and quantities of its Portfolio Instruments at least once each quarter within 60 days of quarter-end, in compliance with the disclosure requirements of registered open-end investment companies. A Fund may provide public disclosure of its holdings more frequently, and on a more timely basis, than the minimum requirement (such as monthly

with a 30-day lag). The Funds’ disclosure practices are designed to maintain the confidentiality of each Fund’s portfolio trading information and are generally expected to be comparable to those of mutual funds that invest in a similar fashion.

The names and quantities of a Fund’s current Portfolio Instruments will not be disclosed publicly. All private communication of a Fund’s current Portfolio Instruments will be limited to Fund service providers and other eligible recipients subject to a duty of confidentiality and prohibited from trading (for themselves or others) on the basis of the disclosed information.⁵⁹

Applicants are aware of the possible risk that other market participants could become able to reverse engineer a Fund’s current NAV Portfolio based on time-series analysis of DIIVs, other publicly disclosed Fund information (including daily NAV Reference Portfolio and Basket disclosures) and/or disclosures to Liquidity Providers in respect of their Clearhedge Swap positions.⁶⁰ In Applicants’ view, among the principal factors determining a Fund’s susceptibility to reverse engineering are: (i) the price range of the Fund’s Shares; (ii) the number of decimal points of precision at which DIIVs are displayed; (iii) the frequency of DIIV dissemination; and (iv) the valuation parameters applied in determining DIIVs. In general, a Fund will be more exposed to reverse engineering the higher the Share price range, the greater the precision of disclosed DIIVs, the more frequently DIIVs are disseminated and the greater the variability of the pricing inputs used in calculating DIIVs.

Based on the proposed scaling of Share prices to a range of $10 to $30, the display of DIIVs rounded to the nearest penny, dissemination of DIIVs at 15-second intervals and the use  

of bid-ask midpoints in determining DIIVs,⁶¹ Applicants submit that the risk of a Fund’s NAV Portfolio being reverse engineered with sufficient accuracy or regularity to harm shareholders is remote. As part of its oversight responsibilities, the Adviser will monitor each Fund’s susceptibility to reverse engineering and adjust Fund policies and procedures relating to the calculation, display and dissemination of DIIVs (and/or other Fund policies and procedures) as deemed appropriate to further mitigate reverse engineering risks.

I. Sales and Marketing Materials; Prospectus Disclosure

Applicants will take steps to avoid investor confusion between the Funds and ETFs that disclose their full portfolio holdings on a current daily basis. Applicants will make clear the distinctive features of the Funds in each Fund’s Prospectus, SAI, website, and marketing materials.

In a prominent location near the Fund’s name, on both the outside front cover of each Fund’s Prospectus and Summary Prospectus, as well as each Fund’s website and any marketing material, the Fund will include the following legend (the “Legend”), unless otherwise requested by the staff of the Commission:

This ETF is different from traditional ETFs.

Traditional ETFs tell the public what assets they hold each day. This ETF will not. This may create additional risks for your investment. For example:

The differences between this ETF and other ETFs may also have advantages. By keeping certain information about the ETF secret, the ETF may face less risk that other traders can predict or copy its investment strategy. This may improve the ETF’s performance. If other traders are able to copy or predict the ETF’s investment strategy, however, this may hurt the ETF’s performance.

For additional information regarding the unique attributes and risks of the ETF, see section [X – i.e., the later discussion of the NAV Reference Portfolio and the risks of the ETF] below.

Further, in its Prospectus, marketing materials and website, each Fund will describe in plain English the nature and purpose of the Clearhedge Method, including how the NAV Reference Portfolio and Baskets are designed to differ from the Fund’s actual NAV Portfolio, and where an investor can get access to the NAV Reference Portfolio, NAV Reference Portfolio Overlap and related information. Each Fund’s Prospectus will discuss the additional costs and risks that use of the Clearhedge Method may impose on the Fund and its investors, including that it will expose the Fund to the risk that variations in the performance of the NAV Portfolio and the NAV Reference Portfolio could cause the Fund to incur swap settlement payment obligations, and will describe in detail and in plain English that (i) although the Clearhedge Method is intended to provide information to allow for an effective arbitrage mechanism that will keep the market price of Shares at or close to the underlying NAV per Share, there is a risk (which may increase during periods of market disruption or volatility) that market prices will vary significantly from the underlying NAV per Share; (ii) ETFs trading on the basis of the Clearhedge Method may trade at wider bid-ask spreads and more variable premiums/discounts than ETFs that publish their portfolios on a daily basis, especially during periods of market disruption or volatility, and therefore may cost investors more to trade; and (iii) although the Fund seeks to benefit from keeping its portfolio information secret, market participants may attempt to use time-series analysis of DIIVs, other publicly disclosed Fund information (including daily NAV Reference Portfolio and Basket disclosures) and/or disclosures to Liquidity Providers in respect of their Clearhedge Swap positions to identify a Fund’s trading strategy, which, if successful, could result in such market participants engaging in certain predatory trading practices that may have the potential to harm the Fund and its shareholders.

The Funds will also disclose that because the Shares are traded in the secondary market, a Broker may charge a commission to execute a transaction in Shares, and an investor also may incur the cost of the spread between the price at which a dealer will buy Shares and the somewhat higher price at which a dealer will sell Shares.

J. Investor Benefits of the Proposed Funds

Applicants submit that the Fund structure described herein offers significant investor benefits in addition to those attainable through existing ETFs.

Relative to existing ETFs, the Funds offers the potential advantages of:

Unlike Portfolio-Protected ETFs operating pursuant to exemptive relief granted by the Commission in 2019 and 2020, the Funds could invest in the same wide array of Permissible Investments as generally permissible for investment by registered open-end funds. The precise Liquidity Provider risk management afforded by use of the Clearhedge Method, including for Funds investing principally in Foreign Instruments trading outside U.S. market hours and in less-liquid OTC instruments, provides assurance that the Shares will trade with tight bid-ask spreads and consistently narrow premium/discounts to underlying value across all types of Funds holding Permissible Investments and over varying market conditions.

Notwithstanding Applicants’ expectations for the Clearhedge Method to work as intended and provide the potential investor benefits outlined above, these stated benefits are subject to risk and may not be achieved.

K. Monitoring of Fund Operations

The Adviser will be responsible for managing each Fund’s application of the Clearhedge Method and monitoring its effectiveness, including consideration of the secondary market trading of the Fund’s Shares (including bid-ask spreads and premiums/discounts to underlying Share values), the impact of the Fund’s Clearhedge Swap exposures on Fund investment risks and returns, and Liquidity Providers’ compliance with the allowable limits on the use of Clearhedge Swaps. As part of its overall oversight responsibilities, the Board will periodically review and approve: (i) the Fund’s use of the Clearhedge Method, including cash payments made between a Fund and Liquidity Providers pursuant to Clearhedge Swaps and associated costs to Fund shareholders; (ii) how the Adviser assesses and manages risk with respect to the Fund’s use of Clearhedge Swaps, including risk to the Fund in connection with Liquidity Providers’ compliance with the allowable limits on the use of Clearhedge Swaps; and (iii) the Fund’s disclosure of its use of Clearhedge Swaps in its offering documents and periodic reports consistent with relevant Commission guidance. The Adviser will monitor the calculation and dissemination of each Fund’s DIIVs and oversee the DIIV Pricing Agent’s controls, methodologies, policies and procedures. The Adviser will similarly oversee the performance of the Swap Pricing Agent and Swap Administrator. As part of its oversight of Fund service providers, the Adviser will, on an ongoing basis, monitor and evaluate the effectiveness of each service provider’s data security policies and procedures with respect to Confidential Fund Information in its possession. At least annually, the Adviser will provide a report to the Board describing the results of its oversight of each Fund service provider and identifying any material performance issues.

For at least the first three years after launch of each Fund,⁶² the Adviser will promptly call a meeting of the Board, or a designated Committee thereof (and present to the Board or Committee for its consideration, recommendations for appropriate remedial measures) and the Board or Committee will promptly meet:⁶³ (i) if the Fund’s “Tracking Error”⁶⁴ exceeds 1.00%; (ii) if, for 30 or more days in any quarter or 15 days in a row: (a) the absolute difference between the Closing Price or Bid-Ask Price, on the one hand, and NAV, on the other, exceeds 2.00%; or

(b) the bid-ask spread exceeds 2.00%;⁶⁵ or (iii) the aggregate detriment to Fund performance (based on total return at NAV) from net payments made and received by the Fund in settlement of Clearhedge Swaps and related Fund hedging transactions exceeds either: (a) 0.50% of NAV over the life of the Fund; or (b) 0.25% of NAV in any calendar year. In each case, the Board or Committee will consider the continuing viability of the Fund, whether shareholders are being harmed, and what, if any, action would be appropriate to, among other things, narrow the Tracking Error, premium/discount, bid-ask spread or the adverse impact on Fund performance of payments in settlement of Clearhedge Swap and related Fund hedges, as applicable.⁶⁶ The Board or Committee will then decide whether to take any such action. Potential actions may include, but are not limited to: changing lead market makers; listing the Fund on a different Exchange; changing the size of Creations Units; modifying the Fund’s application of the Clearhedge Method, the terms of its Clearhedge Swaps or its Clearhedge Swap hedging strategies; changing the Fund’s investment objective or principal investment strategies; and liquidating the Fund.

The range of corrective measures may vary depending on the particular facts and circumstances relating to a Fund’s operations. The Board or Committee may consider additional corrective measures if deemed necessary.

In addition, to the extent the Adviser determines that an instrument held in a Fund’s NAV Portfolio, but not in the NAV Reference Portfolio, does not have readily available market quotations and such circumstance may affect the reliability of the Clearhedge Method as an arbitrage mechanism, that information, along with the identity and weighting of that instrument in the Fund’s NAV Portfolio, will be publicly disclosed on the Fund’s website.⁶⁷ Applicants assert that in situations where an instrument in the NAV Reference Portfolio does not have readily available market quotations, Liquidity Providers will have enough information to determine the value of the instrument and evaluate the accuracy of the market price of Shares.⁶⁸ The Adviser will also assess other appropriate remedial measures.

L. Protecting Confidential Fund Information

Because the Funds will not publicly disclose their portfolio holdings daily, the selective disclosure of material nonpublic information, including information other than portfolio information, would be more likely to provide an unfair advantage to the recipient than in other ETFs that disclose their full portfolio holdings each Business Day. Accordingly, the Funds and persons acting on behalf of the Funds will agree to be subject to the requirements of, and comply with, Regulation Fair Disclosure as if it applied to them (except that the exemptions provided in Rule 100(b)(2)(iii)⁶⁹ therein will not apply).

The composition of each Fund’s NAV Portfolio will be considered material nonpublic information under the codes of ethics of the Fund, the Adviser, any Fund Sub-Adviser and the Distributor. The agreements related to each Fund’s other service providers and any other party given access to the Fund’s NAV Portfolio, including the custodian, administrator, Swap Administrator, Swap Pricing Agent and fund accountant, will include appropriate confidentiality provisions and generally prohibit such parties from trading based upon this information.

The selective dissemination of a Fund’s Basket that deviates from the NAV Reference Portfolio could, in and of itself, raise potential selective disclosure concerns because it could give the recipients of such a Basket potential insight into the composition of the Fund’s NAV Portfolio and/or the Fund’s future portfolio trading that is not available to all market participants. The Basket flexibility described above in Section G.2. is designed to mitigate concerns about selective disclosure of material nonpublic information. First, a Fund’s use of, and conversations about, Baskets that would result in such disclosure would effectively be limited by the Funds’ obligation to comply with Regulation Fair Disclosure. Second, as noted above, each Business Day, before the open of trading on a Fund’s Listing Exchange, the Fund will publish on its website the composition of any Basket paid or received by the Fund on the previous Business Day that differed from such Business Day’s NAV Reference Portfolio other than for cash substitutions.

III. Request for Exemptive Relief and Legal Analysis

Applicants request an Order under Section 6(c) of the 1940 Act for an exemption from Sections 2(a)(32), 5(a)(1), 22(d) and 22(e) of the 1940 Act and Rule 22c-1 under the 1940 Act, under Sections 6(c) and 17(b) of the 1940 Act for an exemption from Sections 17(a)(1) and 17(a)(2) of the 1940 Act.

Section 6(c) of the 1940 Act provides that the Commission may exempt any person, security or transaction, or any class of persons, securities or transactions, from any provisions of the 1940 Act if and to the extent that such exemption is necessary or appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the 1940 Act. Section 17(b) of the 1940 Act provides that the Commission will grant an exemption from the provisions of Section 17(a) of the 1940 Act if

evidence establishes that the terms of the proposed transaction are reasonable and fair, including the consideration to be paid or received, and do not involve overreaching on the part of any person concerned, that the proposed transaction is consistent with the policy of each registered investment company concerned and that the proposed transaction is consistent with the general purposes of the 1940 Act.

A. The Exemption is Necessary or Appropriate in the Public Interest

Applicants submit that the exemptive relief requested by this Application is both necessary and appropriate in the public interest. Reflecting the Commission’s concerns about the adequacy of their share arbitrage efficiency and investor costs to buy and sell their shares, existing Portfolio-Protected ETFs are permitted to invest only in U.S. Exchange-Traded Instruments, Synchronously Traded Listed Foreign Instruments, and cash and cash equivalents. Currently available Portfolio-Protected ETFs are not allowed to invest in Foreign Instruments that trade outside U.S. market hours or in fixed-income securities and other non-cash instruments that trade OTC. Because Foreign Instruments trading outside U.S. market hours and non-cash OTC instruments constitute a large percentage of the global investment opportunity set, existing Portfolio-Protected ETFs are significantly constrained in the types of portfolio assets they can hold and the types of investment opportunities they can provide shareholders.

The proposed Funds seek to remedy the limited underlying assets and investment strategies available to investors in Portfolio-Protected ETFs by providing that their Permissible Investments may include all types of assets generally permissible for investment by registered open-end funds. Traditional ETFs, which have the same investment flexibility as proposed for the Funds, are required to disclose their full portfolio holdings on a daily basis. Applicants assert that disclosing an ETF’s current portfolio holdings can harm shareholder returns by facilitating front-running of the fund’s trades and may limit the availability of proprietary investment strategies as ETFs due to managers’ concerns about free-riding.

Different from other models of Portfolio-Protected ETFs approved to date, the Clearhedge Method would provide a mechanism by which Liquidity Providers can offset the basis risk between their net positions in Shares and their NAV Reference Portfolio (or equivalent) positions held as a hedge. Because entering into Clearhedge Swaps would enable a Fund’s Liquidity Providers to perfect their Share hedges to an extent not possible for other models of Portfolio-Protected ETFs, Applicants expect the Shares to exhibit better secondary market trading performance than shares of existing Portfolio-Protected ETFs holding similar investments and to support efficient secondary market trading of Funds holding Foreign Instruments trading outside U.S. market hours and/or less-liquid OTC instruments.

While use of the Clearhedge Method can benefit Fund shareholders by facilitating efficient Share arbitrage – thereby lowering investor costs to buy and sell Shares – Applicants acknowledge that use of the Clearhedge Method will expose the Funds to certain costs and risks, including the risk that Fund returns over time will be diluted by payments in settlement of Clearhedge Swaps. In Applicants’ view, the potential impact of Clearhedge Swap settlement payments on Fund returns is inherently constrained, can be readily managed using commonly available portfolio techniques to the extent warranted and is amply justified by the potential benefits to Fund shareholders of lowering the cost they pay to buy and sell Shares while avoiding

the front-running and free-riding costs and risks associated with disclosing the Fund’s NAV Portfolio on a current daily basis. Applicants are committed to ensuring that the Funds’ returns over time are not diminished by their use of Clearhedge Swaps and associated Fund hedging activities, and are confident that the Funds can be managed to avoid such harm.

On an overall basis, Applicants submit that the many potential benefits to investors that the Funds offer – in particular, the ability to gain access to portfolio investments and investment strategies not available through existing Portfolio-Protected ETFs – substantially outweigh potential concerns about adverse investment or trading performance and other costs and risks in connection with the Funds’ use of the Clearhedge Method, all of which would be disclosed to investors in great detail.

B. The Exemption is Consistent with the Protection of Investors and the Purposes Fairly Intended by the Policy and Provisions of the 1940 Act

1. Sections 2(a)(32) and 5(a)(1) of the 1940 Act

Section 5(a)(1) of the 1940 Act defines an “open-end company” as a management investment company that is offering for sale or has outstanding any redeemable security of which it is the issuer. Section 2(a)(32) of the 1940 Act defines a redeemable security as any security, other than short-term paper, under the terms of which the holder, upon its presentation to the issuer, is entitled to receive approximately his or her proportionate share of the issuer’s current net assets, or the cash equivalent. Because Shares will not be individually redeemable, a question arises as to whether the definitional requirements of a “redeemable security” or an “open-end company” under the 1940 Act would be met by the Funds. In light of this question, Applicants request an Order under Section 6(c) granting an exemption from Sections 5(a)(1) and 2(a)(32) that would permit the Trust to register as an open-end management investment company and redeem Shares only in Creation Units.

Investors may purchase Creation Units of Shares from each Fund, and holders of Creation Units may redeem them in accordance with the provisions of the 1940 Act. Because each Fund’s Shares will be listed on an Exchange, investors will also have the ability to buy and sell Shares throughout U.S. market trading hours each Business Day in the secondary market.

Applicants assert that the Funds will not present any new issues with respect to the exemptions that allow current ETFs to redeem their shares only in Creation Units. Moreover, Applicants assert that the Funds’ use of the Clearhedge Method will facilitate efficient Share arbitrage, enabling investors to buy and sell Shares in the secondary market at prices that are at or close to NAV. Further, as described above, Applicants assert that the proposed Fund disclosures are sufficient to safeguard against investor confusion. Thus, Applicants submit that the Funds’ proposed method of issuing and redeeming Shares and secondary market trading of Shares is appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the 1940 Act.

2. Section 22(d) of the 1940 Act and Rule 22c-1 under the 1940 Act

Section 22(d) of the 1940 Act, among other things, prohibits a dealer from selling a redeemable security that is being currently offered to the public by or through a principal underwriter, except at a current public offering price described in the Prospectus. Rule 22c-1 under the 1940 Act generally requires that a dealer selling, redeeming or repurchasing a redeemable security do so only at a price based on the NAV next computed after receipt of a tender of such security for redemption or of an order to purchase or sell such security.

Shares of each Fund will be listed on an Exchange and will trade in the secondary market on and away from the Listing Exchange⁷⁰ throughout each Business Day’s U.S. trading hours. Secondary market trading in Shares will take place at negotiated, market-determined prices, not at a current offering price described in the Fund’s Prospectus or a price based on NAV. Thus, purchases and sales of Shares in the secondary market will not comply with Section 22(d) and Rule 22c-1. Applicants request an exemption under Section 6(c) from Section 22(d) and Rule 22c-1 to permit the Shares to trade at negotiated prices.

The concerns sought to be addressed by Section 22(d) and Rule 22c-1 with respect to pricing are equally satisfied by the proposed method of pricing Shares. While there is little legislative history regarding Section 22(d), its provisions, as well as those of Rule 22c-1, appear to have been designed to: (i) prevent dilution caused by certain riskless-trading schemes by principal underwriters and contract dealers; (ii) prevent unjust discrimination or preferential treatment among buyers resulting from sales at different prices; and (iii) ensure an orderly distribution of investment company shares by eliminating price competition from Brokers offering shares at less than the published sales price and repurchasing shares at more than the published redemption price.⁷¹

Applicants assert that none of these purposes will be thwarted by permitting Shares to trade in the secondary market at negotiated prices. Secondary market trading in Shares will not involve the Funds as parties and cannot result in dilution of an investment in Shares. To the extent a Fund’s Shares trade at different prices over the course of a given Business Day or from day to day, such variances will occur as a result of changes in the balance of supply and demand for Shares and other market forces, not as a result of unjust or discriminatory manipulation. In this factual setting, Applicants do not believe that the Funds could be managed or manipulated to produce benefits for one group of purchasers or sellers of Shares to the detriment of others. Accordingly, Applicants submit that secondary market transactions in Shares will not lead to discrimination or preferential treatment among purchasers and sellers. Applicants also do not believe that the fact that Creation Units could be purchased or redeemed at NAV, while individual Shares could be bought or sold only at negotiated, market-determined prices, creates the potential for discrimination or preferential treatment among investors. As described above,

Applicants assert that use of the Clearhedge Method will facilitate efficient Share arbitrage, which should limit differences between secondary market trading prices of Shares and the value per Share of the Fund’s NAV Portfolio at corresponding times. Accordingly, all investors should be able to transact in Shares at prices at or close to the NAV per Share, whether by buying or selling individual Shares in the secondary market or by transacting directly with the Fund in Creation Units. Any profits generated by Liquidity Providers in arbitraging Shares would not be a result of unjust discriminatory or preferential treatment between Liquidity Providers and other Fund shareholders, but instead would derive from arbitrage trading that benefits Fund shareholders by working to reduce the difference between secondary market trading prices of Shares and the Fund’s current NAV per Share. Applicants contend that the proposed distribution system also will be orderly. Anyone may buy or sell Shares by trading in the secondary market or by transacting with the issuing Fund in Creation Units through an Authorized Participant. Therefore, no Broker or dealer should have an advantage over any other Broker or dealer in the sale of Shares.

As noted above, Applicants assert that the ability to buy and sell Shares at prices determined intraday will be an attractive feature to many investors, offering a key advantage to investors over the once-daily pricing of mutual funds. The fact that Shares trade intraday at market-determined prices would be prominently disclosed to investors.

Applicants also believe that the Funds will not present any new concerns with respect to the exemptions that allow ETF shares to trade at negotiated prices. With proper disclosure to all parties, the Funds will not create any new potential for discrimination or preferential treatment among investors purchasing and selling Shares in the secondary market or those purchasing and redeeming Creation Units. Applicants, therefore, believe that the proposed buying and selling of Shares at negotiated prices is appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the 1940 Act.

3. Section 22(e) of the 1940 Act

Section 22(e) of the Act provides that, except under circumstances not relevant to this request:⁷²

No registered company shall suspend the right of redemption, or postpone the date of payment or satisfaction upon redemption of any redeemable security in accordance with its terms for more than seven days after the tender of such security to the company or its agent designated for that purpose for redemption…

Applicants seek an exemption from the seven-day redemption delivery requirement of Section 22(e) of the Act under the circumstances described below.⁷³

Applicants observe that the settlement of redemptions of Creation Units of the Funds is contingent not only on the settlement cycle of the U.S. securities markets but also on the delivery cycles present in foreign markets in which those Funds invest. Applicants have been advised that, under certain circumstances, the delivery cycles for transferring Portfolio Instruments to redeeming investors, coupled with local market holiday schedules, will require a delivery process of up to fifteen (15) calendar days, rather than the seven (7) calendar days required by Section 22(e). Therefore, Applicants request relief from Section 22(e) with respect to a Fund’s delivery of Foreign Instruments in its Redemption Basket when delivered in kind, in order to provide payment or satisfaction of redemptions more than seven days after tender. A Fund will deliver the Foreign Instruments as soon as practicable, but in all cases no later than fifteen (15) days following the tender of a Creation Unit.

Applicants submit that Congress adopted Section 22(e) of the Act to prevent unreasonable, undisclosed or unforeseen delays in the actual payment of redemption proceeds. Applicants propose that allowing redemption payments for Creation Units of a Fund to be made within up to 15 calendar days would not be inconsistent with the spirit and intent of Section 22(e). Applicants suggest that a redemption payment occurring within up to 15 calendar days following a redemption request would adequately afford investor protection.

Applicants desire to incorporate the creation and redemption mechanism for Creation Units of each Fund as much as possible into the processing and settlement cycles for securities deliveries currently practicable in the principal market(s) for the Portfolio Instruments of a given Fund. Currently, Applicants believe that no significant additional system or operational procedures will be needed to purchase or redeem Creation Units beyond those already generally in place in the relevant jurisdiction. Applicants believe that this approach may make creations and redemptions of Creation Units less costly to administer, enhance the appeal of the product to institutional participants and thereby promote the liquidity of Shares in the secondary market with benefits to all holders thereof. As noted above, Applicants may utilize in-kind redemptions. Applicants are not seeking relief from Section 22(e) with respect to Funds that do not effect redemptions in kind.

Given the rationale for what amounts to a delay typically of a few days in the redemption process on certain occasions and given the facts as recited above, Applicants believe that the redemption mechanism described above will not lead to unreasonable, undisclosed or unforeseen delays in the redemption process. Applicants assert that the request for relief from the strict seven (7) day rule imposed by Section 22(e) is not inconsistent with the standards articulated in Section 6(c). Given the facts as recited above, Applicants assert that the granting of the requested relief is consistent with the protection of investors and the purposes fairly intended by the policies and provisions of the Act.

On the basis of the foregoing, Applicants submit that (i) the protections intended to be afforded by Section 22(e) are adequately addressed by the proposed method and securities delivery cycles for redeeming Creation Units and (ii) the relief requested is appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the Act.

4. Sections 17(a)(1) and 17(a)(2) of the 1940 Act

Section 17(a)(1) of the 1940 Act, among other things, makes it unlawful

[f]or any affiliated person or promoter of or principal underwriter for a registered investment company ... or any affiliated person of such a person, promoter, or principal underwriter, acting as principal, knowingly to sell any security or other property to such registered company or to any company controlled by such registered company, unless such sale involves solely (A) securities of which the buyer is the issuer, (B) securities of which the seller is the issuer and which are part of a general offering to the holders of a class of its securities or (C) securities deposited with a trustee of a unit investment trust ... by the depositor thereof.

Section 17(a)(2) of the 1940 Act makes it unlawful

[f]or any affiliated person or promoter of or principal underwriter for a registered investment company ... or any affiliated person of such a person, promoter, or principal underwriter, acting as principal ... knowingly to purchase from such registered company, or from any company controlled by such registered company, any security or other property (except securities of which the seller is the issuer).

Pursuant to Section 2(a)(3)(A) of the 1940 Act, an “affiliated person” of a person includes “any person directly or indirectly owning, controlling, or holding with the power to vote, 5 per centum or more of the outstanding voting securities of such other person;” pursuant to Section 2(a)(3)(C) of the 1940 Act, an “affiliated person” of a person includes “any person, directly or indirectly, controlling, controlled by or under common control with, such other person.”

Section 2(a)(9) of the 1940 Act defines “control” as

...the power to exercise a controlling influence over the management or policies of a company, unless such power is solely the result of an official position with such company. Any person who owns beneficially, either directly or through one or more controlled companies, more than 25 per centum of the voting securities of a company shall be presumed to control such company. Any person who does not so own more than 25 per centum of the voting securities of any company shall be presumed not to control such company.

The Funds may be deemed to be controlled by the Adviser, and hence affiliated persons of each other. In addition, the Funds may be deemed to be under common control with any other registered investment company, or series thereof, advised by the Adviser (an “Affiliated Fund”).

A person could own 5 percent or more of a Fund, making that investor a first-tier affiliate of the Fund under Section 2(a)(3)(A), or in excess of 25 percent of a Fund, making that investor a first-tier affiliate of the Fund under Section 2(a)(3)(C). In addition, there exists a possibility that, with respect to an Affiliated Fund, a person could own 5 percent or more, or in excess of 25 percent, of such Affiliated Fund, making that investor a second-tier affiliate of a Fund. For so long as such an investor is deemed to be an affiliate of a Fund, Sections 17(a)(l) and 17(a)(2) could be read to prohibit such person from effectuating in-kind purchases and redemptions of the Fund’s Creation Units or to prohibit such person from engaging in Clearhedge Swap transactions with the Fund.

Section 17(b) provides that the Commission will grant an exemption from the provisions of Section 17(a) if evidence establishes that the terms of the proposed transaction are reasonable and fair, including the consideration to be paid or received, and do not involve overreaching on the part of any person concerned, that the proposed transaction is consistent with the policy of each registered investment company concerned and that the proposed transaction is consistent with the general purposes of the 1940 Act.⁷⁴ Applicants seek an exemption from Sections 17(a)(1) and 17(a)(2) pursuant to Sections 6(c) and 17(b) to permit persons that are first-tier affiliates or second-tier affiliates of the Funds solely by virtue of: (i) holding 5 percent or more, or in excess of 25 percent, of the outstanding Shares of one or more Funds; (ii) having an affiliation with a person with an ownership interest described in (i); or (iii) holding 5 percent or more, or more than 25 percent, of the Shares of one or more Affiliated Funds (“Specified Affiliated Persons”), to effectuate in-kind purchases and redemptions of Creation Units and to engage in Clearhedge Swap transactions with a Fund.

In-Kind Baskets

Applicants assert that no useful purpose would be served by prohibiting Specified Affiliated Persons from making in-kind purchases or in-kind redemptions of Creation Units of Shares of a Fund. Both the deposit procedures for in-kind purchases of Creation Units and the redemption procedures for in-kind redemptions will be effectuated in exactly the same manner for all purchases and redemptions and for all purchasers and redeemers. There will be no discrimination among purchasers or redeemers. The Basket Instruments consist of Permissible Investments that are appropriate, in type and amount, for inclusion in light of the Fund’s investment objectives and policies, current portfolio holdings and current trading program. All Basket Instruments will be valued in the same manner as they are valued for purposes of calculating the Fund’s NAV, including Fair Value Pricing as applicable, and such valuation will be made in the same manner regardless of the identity of the purchaser or redeemer. Further, the total consideration paid for the purchase or redemption of a Creation Unit will be based on the NAV per Share of such Fund, as calculated in accordance with the policies and procedures set forth in its Registration Statement. As described above, the Baskets will be selected by the Adviser in part to obscure the subject Fund’s current trading activity. An affiliated person, or an affiliated person of an affiliated person, of a Fund, would, as described above, have no motive to

unduly influence the identities or quantities of the instruments in a Fund’s Baskets because they would generally not correspond to the Fund’s underlying holdings. Accordingly, Applicants submit that there is no motivation for purchasers or redeemers of Creation Units to influence the selection of the Basket Instruments. Under these circumstances, Applicants do not believe that in-kind purchases and redemptions will result in abusive self-dealing or overreaching of a Fund by any person transacting in Creation Units. In addition, Applicants note that the ability of a Fund to take deposits and make redemptions in kind may aid in achieving the Fund’s investment objectives by reducing flow-related trading costs and enabling the Fund to be more fully invested, minimizing cash drag. In-kind Creation Unit transactions may also increase a Fund’s tax efficiency and promote efficient secondary market trading of Shares by reducing the Transaction Fees applicable to purchases and redemptions of Creation Units.

Clearhedge Swaps

Applicants similarly assert that no useful purpose would be served by prohibiting Specified Affiliated Persons from engaging in Clearhedge Swap (including Rollover Clearhedge Swap) transactions with a Fund. Such transactions are designed to benefit Fund shareholders by facilitating efficient Share arbitrage, thereby lowering the costs investors pay to buy and sell Shares, while protecting against the harmful effects of front-running and free-riding. A Liquidity Provider’s use of Clearhedge Swaps (including Rollover Clearhedge Swaps) would be subject to restrictions designed to limit Funds’ exposure to market risk in such swaps, including limits on each Liquidity Provider’s permissible Clearhedge Swap (including Rollover Clearhedge Swap) positions (relating to the amount of such Liquidity Provider’s positions in Shares) and the requirement that all Clearhedge Swap positions outstanding at the end of each Business Day (including all Rollover Clearhedge Swap positions) close and settle at such time. Applicants assert that the potential costs and risks to a Fund of using the Clearhedge Method are inherently constrained, readily managed and amply justified by the potential benefits to Fund shareholders of lowering the cost they pay to buy and sell Shares while avoiding the front-running and free-riding costs and risks associated with disclosing the Fund’s NAV Portfolio on a current daily basis. Applicants are committed to ensuring that the Funds’ returns over time are not diminished by their use of Clearhedge Swaps and associated Fund hedging activities, and are confident that the Funds can be managed to avoid such harm.

Importantly, all Liquidity Providers will be treated equally in respect of their participation in Clearhedge Swaps (including Rollover Clearhedge Swaps). The material terms and conditions of a Fund’s Master Swap Agreements and all contracts thereunder will be the same for all Liquidity Providers, except for differences in timing and reference amounts. A Fund will not favor one Liquidity Provider over any other. Based on the anticipated net benefits of Clearhedge Swaps (including Rollover Clearhedge Swaps) to Fund shareholders, Applicants assert that no useful purpose would be served by prohibiting Liquidity Providers that are Specified Affiliated Persons of a Fund from engaging in Clearhedge Swap (including Rollover Clearhedge Swap) transactions on the same basis as other Liquidity Providers.

For the reasons set forth above, Applicants contend that, with respect to the relief requested pursuant to Section 17(b), the terms of the proposed transactions, including the consideration to be paid or received, are reasonable and fair and do not involve overreaching on the part of any person concerned, and that the proposed transactions are consistent with the

policy of each registered investment company concerned and with the general purposes of the 1940 Act. Applicants also contend that, with respect to the relief requested pursuant to Section 6(c), the requested exemption for the proposed transactions is appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the 1940 Act. Thus, Applicants request the Order under Sections 6(c) and 17(b) in respect of Sections 17(a)(1) and 17(a)(2).

C. Discussion of Precedent

The requested relief is similar to the structural relief granted by the Commission beginning in 2019 to other applicants seeking to operate Portfolio-Protected ETFs that do not publicly disclose their full portfolio holdings on a current daily basis,⁷⁵ except that the Funds would: (i) utilize the Clearhedge Method to maintain effective arbitrage in Fund Shares; (ii) seek relief from Section 17(a) to permit Specified Affiliated Persons to engage in Clearhedge Swaps with the Funds; (iii) have the ability to utilize Baskets that differ from the NAV Reference Portfolio;⁷⁶ and (iv) be permitted to invest in all the same types of assets as generally permissible for investment by registered open-end funds.

In light of the Funds’ proposed use of the Clearhedge Method described herein to facilitate efficient Share arbitrage, Applicants submit that the Commission has a strong basis for approving the Order. Because use of the Clearhedge Method would enable Liquidity Providers active in a Fund’s Shares to tightly manage their exposure to basis risk arising from differences in performance of the NAV Portfolio and NAV Reference Portfolio, Applicants expect the Funds to consistently demonstrate efficient Share arbitrage and low shareholder trading costs across all types of Funds holding Permissible Investments and over varying market conditions. Applicants believe the investor benefits of using the Clearhedge Method will be especially pronounced during periods of market disruption or heightened volatility. As an additional advantage, the Funds will provide substantially greater transparency of investor trading costs than provided by other ETFs.

Notwithstanding Applicants’ expectations for the Clearhedge Method to work as intended and provide the potential investor benefits outlined above, these stated benefits are subject to risk and may not be achieved. Because Clearhedge Swaps will involve the Fund as counterparty, use of the Clearhedge Method will expose the Fund to making and receiving payments upon swap settlement. In Applicants’ view, the potential impact on Fund returns is inherently constrained, readily managed and fully justified by the potential benefits to Fund shareholders of lowering the cost they pay to buy and sell Shares while avoiding the front-running and free-riding costs and risks associated with disclosing the Fund’s NAV Portfolio on a current daily basis. Applicants are committed to ensuring that the Funds’ returns over time are not diminished by their use of Clearhedge Swaps and associated Fund hedging activities, and are confident that the Funds can be managed to avoid such harm.

IV. Conditions

Applicants agree that any Order of the Commission granting the requested relief will be subject to the following conditions:

V. Procedural Matters

Applicants file this Application in accordance with Rule 0-2 under the 1940 Act. Pursuant to Rule 0-2(f) under the 1940 Act, Applicants state that their address is indicated on the cover page of this Application. Applicants request that all communications concerning this Application be directed and copied to the persons listed on the cover page of the Application.

In accordance with Rule 0-2(c) under the 1940 Act, Applicants state that all actions necessary to authorize the execution and filing of this Application have been taken, and the persons signing and filing this document are authorized to do so on behalf of the Applicants pursuant to their corporate organizational documents and, in the case of the Trust, the attached resolutions. Applicants also have attached the verifications required by Rule 0-2(d) under the 1940 Act.

In accordance with Rule 0-5 under the 1940 Act, Applicants request that the Commission issue the requested Order without holding a hearing.

Based on the facts, analysis and conditions in the Application, Applicants respectfully request that the Commission issue an Order under Sections 6(c) and 17(b) of the 1940 Act granting the relief requested by this Application.

EATON VANCE EXCHANGE-TRADED FUND TRUST

The undersigned states that she has duly executed the attached amended and restated Application dated May 4, 2022 for and on behalf of Eaton Vance Exchange-Traded Fund Trust; that she is a Trustee of such entity; and that all action necessary to authorize the undersigned to execute and file such instrument has been taken. The undersigned further states that she is familiar with such instrument and the contents thereof, and that the facts therein set forth are true to the best of her knowledge, information and belief.

EATON VANCE MANAGEMENT

The undersigned states that she has duly executed the attached amended and restated Application dated May 4, 2022 for and on behalf of Eaton Vance Management; that she is a Vice President of Eaton Vance Management; and that all action necessary to authorize the undersigned to execute and file such instrument has been taken. The undersigned further states that she is familiar with such instrument and the contents thereof, and that the facts therein set forth are true to the best of her knowledge, information and belief.

RESOLUTIONS OF EATON VANCE EXCHANGE-TRADED FUND TRUST

RESOLVED, that the filing by the Trust of an application for an order of the United States Securities and Exchange Commission be, and it hereby is, authorized and approved:

(1) Under Section 6(c) of the Investment Company Act of 1940 (the “1940 Act”), for an exemption from Sections 2(a)(32), 5(a)(1), 22(d) and 22(e) of the 1940 Act and Rule 22c-1 thereunder; and

(2) Under Sections 6(c) and 17(b) of the 1940 Act, for an exemption from Sections 17(a)(1) and 17(a)(2) of the 1940 Act;

to permit, among other things:

(a) each of the Trust’s series (collectively referred to as “Funds”) to issue shares of beneficial interest (“Shares”) that are generally redeemable only in specified multi-Share aggregations;

(b) listing of Shares on a national securities exchange as defined in Section 2(a)(26) of the 1940 Act and the trading of Shares in the secondary market on and away from the listing exchange;

(c) relief from the seven calendar day redemption requirement for certain Funds under specified limited circumstances; and

(d) certain affiliated persons of a Fund to deposit into, and receive from, the Fund securities and other instruments in connection with the issuance and redemption of Shares of such Fund and to engage in swap transactions with the Fund; and

(3) such other relief as the officers of the Trust, in consultation with Trust counsel, deem necessary, desirable or appropriate; and it is further;

RESOLVED, that a Trustee or the proper officers of the Trust, with the assistance of Trust counsel or others as may be required, are hereby authorized to prepare, execute and file any and all amendments to such application as may be necessary or appropriate; and it is further;

RESOLVED, that such application shall be executed by or on behalf of the Trust by a Trustee or one or more of its officers, and that the proper officers or a Trustee of the Trust, now or hereafter appointed, are hereby authorized to take any and all further actions that may be necessary or appropriate to effectuate the foregoing resolutions with respect to the application and the matters described therein.

Appendix A

Initial Fund

Applicants currently expect the Initial Fund to be Eaton Vance Global Opportunities ETF, an actively managed global equity ETF seeking total return by investing in a diversified portfolio of U.S. and international equity securities and other Permissible Investments.

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