How SEC Rule 6c-11 Changed U.S. ETF Operations and Disclosure

Summary

This document summarizes the SEC’s 2019 adoption of Rule 6c-11, which lets many ETFs operate under the Investment Company Act of 1940 and list without seeking an individual exemptive order. It frames the rule around regulatory exemptions, custom creation and redemption baskets, and standardized disclosure. The account says active and passive ETFs receive similar treatment, while certain structures—including unit investment trusts, leveraged or inverse funds, layered funds, and semi-transparent ETFs—remain outside the rule and require separate treatment.

The operational changes described include allowing non-pro-rata custom baskets and different basket files for different authorized participants. ETFs must publish actual holdings after the close, but the summary says disclosure need not precede creation or redemption acceptance; it also notes that basket files and intraday indicative values need not be published. The document is a brief secondary summary, not the rule text, and cautions that U.S. ETF regulation differs from China’s. It offers no analysis of implementation costs or market effects beyond noting increased active ETF launches.

Key ideas

• Rule 6c-11 established a common operating framework for many U.S. ETFs without individual exemptive orders.
• The rule permits custom baskets that do not proportionally match fund holdings.
• Funds covered by the rule must disclose holdings after the market close.
• Some ETF structures remain outside the rule and require separate regulatory treatment.
• The summary warns that U.S. ETF rules differ from those in China.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.