SEC Grants Exemptive Relief to Real Estate-related ETF

The SEC granted exemptive relief to a real estate-related ETF ("the Fund"). The Fund, which is actively managed by Principal Exchange-Traded Funds ("the Trust"), requested relief from SEA Rule 14e-5, which prohibits the purchase of shares outside of a tender offer.

In its request, the Trust cited similar relief the SEC granted to ETFs in 2019, but noted that the previously granted relief does not apply to the Fund because it does not rely on ICA Rule 6c-11.

The SEC granted relief to the Trust on the following provisions:

1. no purchases of subject securities or related securities made by broker-dealers acting as dealer-managers of a tender offer would be effected for the purpose of facilitating a tender offer;
2. any purchase of a portfolio security by a dealer-manager during a tender offer will be effected as adjustments to a basket of securities in the ordinary course of business, as the result of a change in the composition of the Fund's portfolio; and
3. except for the relief specifically granted herein, any broker-dealer acting as a dealer-manager of a tender offer will comply with SEA Rule 14e-5.