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Blue Tractor Group files amended SEC application for new ETF structure


Blue Tractor Group has filed an amended and restated application with the US Securities and Exchange Commission (SEC) seeking exemptive relief from select provisions of the Investment Company Act of 1940 for a new exchange-traded fund (ETF) structure called a Shielded Alpha ETF.

A Shielded Alpha ETF would seek to incorporate the structural attributes and efficiency of a transparent actively managed ETF, while fully shielding the ETF's alpha generation strategy and portfolio trading from the market.
Referred to as the Shielded Alpha Solution, the patent pending algorithms and related performance metrics would seek to facilitate pricing, hedging and arbitrage without requiring the ETF to disclose its portfolio to the public or third parties on a daily basis.
Blue Tractor's Application was prepared by Michael W Mundt, a partner in the Washington DC office of Stradley Ronon Stevens & Young, and is available for review on the SEC's website through the EDGAR database.
Terence (Terry) Norman, founder of Blue Tractor and the originator of the concepts underpinning the Shielded Alpha ETF structure, says: "We have appreciated the feedback received from the SEC regarding our initial application submitted in March 2016 and are pleased to file an amended and restated application. We look forward to working with the SEC on this important initiative."
Simon Goulet, co-founder of Blue Tractor, adds: "With billions of dollars of equity assets under management in the US flowing into passive transparent ETFs, it will become a strategic imperative for traditional active managers to be able to offer investors actively managed products that could provide the trading and cost efficiencies of a transparent ETF, while still preserving proprietary alpha strategies."
The application indicates that Blue Tractor also seeks to enter into licensing agreements with unrelated investment advisers that could use the Shielded Alpha Solution for their own Shielded Alpha ETFs.

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