Newsflash: SEC Intends to Grant Exemptive Relief to Permit Exchange-Traded Managed Funds

November 10, 2014

On November 6, 2014, the Securities and Exchange Commission (“SEC”) issued notice of its intent to grant Eaton Vance Management (“Eaton Vance”) and related parties exemptive relief from various provisions of the Investment Company Act of 1940, as amended, to permit the offering of a new kind of registered open-end investment company – so-called “exchange-traded managed funds” or ETMFs.1 As described in more detail below, ETMFs are a hybrid between traditional mutual funds and exchange-traded funds (“ETFs”) in that, like mutual funds, they would not provide daily portfolio transparency, while featuring, like ETFs, secondary market trading, except that ETMF shares would trade on an exchange at prices based on net asset value (“NAV”) plus a premium/discount determined during the trading day. Interested persons may request a hearing on the matter by contacting the SEC on or before December 1, 2014. The SEC announced that an order granting the requested relief (“Order”) will be issued unless the SEC orders a hearing.

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