The Securities and Exchange Commission (SEC) has received an application from Invesco Capital Management LLC and related entities to amend a previous order that allowed them certain exemptions for actively-managed exchange-traded funds (ETFs). The amendment seeks to provide more flexibility in the creation of "Creation Baskets," which are the collections of securities used to buy and sell ETF shares. Specifically, Invesco wants to include different securities or different weightings in these baskets compared to what the current Substitute Basket holds. The aim is to improve efficiency, reduce costs, and better manage the funds, provided that these changes do not harm the funds or their investors. The SEC will grant the exemption unless a hearing is requested by February 8, 2021.
Simple Explanation
The SEC is looking at a request from Invesco to change some rules about how they put together packages of stuff (called baskets) used to buy and sell pieces of their money funds (ETFs). They want to make these baskets more flexible so it costs less and works better, as long as it doesn't hurt the people who invest their money in these funds.