SEC Company Response from INVESCO QQQ TRUST, SERIES 1 (QQQ) (CIK 0001067839) — Aug 11, 2025
INVESCO QQQ TRUST, SERIES 1 (QQQ) (CIK 0001067839)
Date: Aug. 11, 2025 · CIK: 0001067839 · Accession: 0002061590-25-000159
AI Filing Summary & Sentiment
File numbers found in text: 811-08947
Letter
VIA EDGAR TRANSMISSION Attn: Sonny Oh Re: Invesco QQQ TrustSM, Series 1 (File no. 811-08947) Comments on Preliminary Proxy Materials for Special Shareholder Meeting
Dear Mr. Oh:
On behalf of the above-named registrant (the “Trust” or the “Fund”), the following are the Trust’s responses to the comments of the staff (the “Staff”) of the U.S. Securities and Exchange Commission (the “SEC”), which were communicated telephonically on July 29, 2025 with respect to the Trust’s preliminary proxy statement and related materials that were filed on July 17, 2025 (the “Proxy Statement”). Each Staff comment as we understand them is summarized below, followed by the Trust’s response to the comment. Any capitalized terms used herein that are not defined have the same meaning as in the Proxy Statement. We confirm that where changes are made to one section of the Proxy Statement, we will make conforming changes to similar disclosures throughout the Proxy Statement, as applicable.
1)
Comment: Consider clarifying in the letter to shareholders and the Notice of Special Meeting of Beneficial Owners (“Notice”) that the proposed conversion of the Fund from a UIT to an Open-End Fund will not occur unless all three Proposals are approved by shareholders.
Response: We have added language to the letter to shareholders and the Notice to state that the conversion will not occur unless all three Proposals are approved by shareholders.
2)
Comment: The first paragraph under the heading “Voting at the Meeting” on page 2 of the Proxy Statement states that beneficial owners of the Trust on the Record Date are entitled to one vote per share. Although the Record Date is set forth in the Notice, specify the actual Record Date in the Proxy Statement.
Response: We have revised the language in the Proxy Statement to state that the Record Date is August 15, 2025.
August 11, 2025
Page 2
3)
Comment: In the same paragraph on page 2 noted in Comment no. 2, pursuant to Item 6 of Schedule 14A, please also disclose the total number of outstanding shares.
Response: We have disclosed the number of outstanding shares in the cited paragraph.
4)
Comment: On page 5, the disclosure in the section “Questions and Answers about the Proposals” states: “If Shareholders approve the changes outlined in Proposal 1, and either of Proposal 2 or Proposal 3 receives an unfavorable vote, the changes set forth in Proposal 1 will not take effect.” Please revise the disclosure to state that all three Proposals will not take effect if any Proposal receives an unfavorable vote.
Response: We have revised the disclosure to state that all three Proposals will not take effect if any Proposal is not approved by shareholders.
5)
Comment: On page 5, the disclosure in the section “Questions and Answers about the Proposals” states: “If the Proposals are approved, Invesco will, and the Trustee may, gain certain enhanced benefits, establishing potential conflicts for QQQ…”. Consider rephrasing the word “establishing” in this sentence.
Response: We have revised the disclosure to state that “Invesco will, and the Trustee may, gain certain enhanced benefits, resulting in establishing potential conflicts for QQQ…”.
6)
Comment: On page 5, under the heading “Benefits to Invesco and Risks Associated with the Advisory Agreement,” the disclosure notes that “under the Advisory Agreement any marketing of the Trust would be paid out of Invesco’s unitary fee, inherently lowering Invesco’s revenue (and potential profits).” The Staff notes that the disclosure in this section and other sections of the Proxy Statement state that Marketing Expenses would be paid out of Invesco’s unitary fee. We also note that Section 6 of the Form of Advisory Agreement in Appendix G proposes to exclude any payments under the Trust’s 12b-1 plan. Further, on page 35 of the Proxy Statement in the discussion of Proposal 3, footnote 11 to the fee table comparing the Trust’s operating expenses before and after the conversion states that Invesco will pay for all Marketing Expenses from its profits earned from the management fee. Clarify the specific source of payments for such expenses and make conforming changes to this section and other similar disclosures in the Proxy Statement.
Response: Under the Trust’s present operating model as a UIT, as disclosed in the Proxy Statement, Invesco, as Sponsor, currently is entitled to receive reimbursement out of fund assets for Marketing Expenses of the Trust. Under the new proposed structure, the Trust (operating as an Open-End Fund) would no longer reimburse Invesco for any Marketing Expenses of the Trust out of its own assets. Instead, all Marketing Expenses of the Trust would be borne entirely by Invesco from its own resources, including any profits it made pursuant to the unitary fee authorized by the Advisory Agreement. As the SEC has noted, distribution related expenses may be “made out of the adviser's own resources (including, but not limited to, the profits under the advisory contract)” without implicating Rule 12b-1. See Payment of Asset-Based Sales Loads by Registered Open-End Management Investment Companies, SEC Rel. No. IC-16431 (June 13, 1988). The disclosure identified by the Staff was intended to make this point and to note that marketing would no longer be a expense of the Trust, but rather would be paid out of Invesco’s own resources, including any profits it might realize under the unitary fee,
August 11, 2025
Page 3
and to note that as a consequence there is no guarantee that Invesco will pay for the same amount of marketing for the Trust when it is an Open-End Fund as it spends currently for the Trust operating as a UIT. We have revised the disclosure to clarify this point and to make clear that any such payments are not elements of the unitary fee itself, but rather will come from Invesco’s own resources (including any potential profits derived from the unitary fee), consistent with SEC guidance.
We also confirm that Section 6 of the proposed Advisory Agreement excludes distribution related payments from the scope of the unitary fee by making clear that all such payments (which must necessarily be made pursuant to a 12b-1 plan approved by shareholders) are excluded from the scope of the unitary fee. We confirm that the Trust currently does not utilize a 12b-1 fee and has no present intention of seeking to implement such a fee. If a Rule 12b-1 Plan were to be implemented for the Trust in the future, any such plan would first require the vote of approval of at least a majority of the outstanding voting securities of the Trust.
7)
Comment: On page 6, under the heading “Benefits to Invesco and Risks Associated with Utilizing Invesco’s Affiliated Broker for Portfolio Transactions,” the disclosure states that “Invesco has established a commission schedule under the oversight of the board of trustees for the Invesco ETFs to ensure that Invesco discharges its best execution duties when placing transactions with an affiliate.” Please confirm supplementally, and consider clarifying in the disclosure, that the Fund and its Board will also be subject to certain regulatory requirements (see, for example, Rule 17e-1).
Response: We supplementally confirm that the Fund, in its operation as an Open-End Fund, would be subject to the regulatory requirements with respect to brokerage applicable to ETFs generally, including Section 17(e) and Rule 17e-1 thereunder. We also have added disclosure to this effect following the sentence cited by the Staff on page 6.
8)
Comment: On page 6, under the heading “Potential Risks of Changing QQQ’s Governance and Oversight Model,” please consider clarifying that the change in governance model also involves risks associated with the Fund being managed by an external adviser.
Response: We have added additional disclosure to the paragraph cited by the Staff explaining that the conversion also involves certain risks associated with management by an external adviser.
9)
Comment: On page 7, in the second paragraph under the heading “How do I provide my vote?”, the disclosure states: “Proxies marked ‘WITHHOLD’ (with respect to Proposal 1) or ‘ABSTAIN’ will not be voted ‘FOR’ a Proposal…”. Please clarify the distinction between “withhold” and “abstain.”
Response: We have revised the disclosure to change references from “WITHHOLD” in Proposal 1 to “ABSTAIN”, consistent with the language used for Proposal 3. As a result, both Proposals use the same language. We also will amend the draft Proxy Card to reflect this change.
10)
Comment: On page 7, in the second paragraph under the heading “How do I provide my vote?”, the disclosure states: “An unfavorable vote on Proposal 1 will result in the failure of Proposal 2 and Proposal 3. An unfavorable vote on either of Proposal 2 or Proposal 3 will not affect the
August 11, 2025
Page 4
Trust’s ability to implement Proposal 1, should it receive a favorable vote. However, the Trustee and the Sponsor do not intend to implement Proposal 1 unless all three Proposals (Proposal 1, Proposal 2 and Proposal 3) are approved.” Please clarify that the Fund’s proposed conversion from a UIT to an open-end ETF will not occur unless all three Proposals are approved by shareholders.
Response: We have revised the disclosure to clarify that the conversion will not occur unless all three Proposals are approved by shareholders.
11)
Comment: On page 7, under the heading “What is the deadline to submit my proxy by mail, telephone or the internet?”, the disclosure states that Invesco “must receive your proxy in time to be voted at the Meeting or any adjournments or postponements thereof, which means the proxy must be received prior to the closing of the polls of the Meeting or any adjournment or postponements thereof.” Clarify how far in advance of the Meeting it would be necessary to vote for the proxy to be received.
Response: There is no specific amount of time required for shareholders to provide their proxy in advance of the Meeting; rather, it must simply be received prior to the closing of the polls. If shareholders vote their shares by means other than in person, they must allow for sufficient time for their proxy to be received, relative to the nature of how they are submitting their proxy (e.g., via by mail, or by the internet). However, for purposes of clarity, we have revised the disclosure to provide shareholders notice of this fact.
12)
Comment: On page 8, the first paragraph under the heading “What is the vote necessary to approve the Proposals?” states that Proposal 3 requires “ the lesser of (a) the affirmative vote of 67% or more of the voting securities present or represented by proxy, if the holders of more than 50% of the outstanding voting securities of the Trust are present or represented by proxy, or (b) the affirmative vote of more than 50% of the outstanding voting securities of the Trust.” Please delete the first use of the phrase “or represented by proxy” from the disclosure in order to more closely align to the provisions of Section 2(a)(42) of the Investment Company Act of 1940 (the “1940 Act”).
Response: We have deleted the first use of the phrase “or represented by proxy” to more closely align the disclosure with the provisions of Section 2(a)(42) of the 1940 Act.
13)
Comment: On page 8, the second paragraph under the heading “What is the vote necessary to approve the Proposals?” states that abstentions and broker non-votes have the same effect as a vote “AGAINST” Proposal 2 and Proposal 3. The reference to Proposal 2 in this disclosure should be changed to Proposal 1.
Response: We have revised the disclosure to refer to Proposal 1.
14)
Comment: On page 8, the third paragraph under the heading “What is the vote necessary to approve the Proposals?” states that an unfavorable vote on either of Proposal 2 or Proposal 3 will not affect the Trust’s ability to implement Proposal 1. Please clarify this disclosure to indicate that all three Proposals will not take effect if any Proposal is not approved by shareholders. Please also reconcile this language with the language on page 7 of the Proxy Statement, in second paragraph under the heading “How do I provide my vote?”.
August 11, 2025
Page 5
Response: We have revised the disclosure to make clear that all three Proposals will not take effect if any Proposal is not approved by shareholders. In addition, we have included the information from the language cited on page 7.
15)
Comment: On page 10, in Proposal 1 under the heading “Background of the Proposal: Existing Structure and Proposed Conversion,” clarify that the Fund, as an open-end ETF, will adopt the registration statement of the UIT as its own registration statement for purposes of the Securities Act of 1933 (the “1933 Act”) and the Securities Exchange Act of 1934, and consistent with provisions of Rule 414(d) under the 1933 Act.
Response: We have included in the disclosure the statement required by Rule 414(d) with respect to the adoption of the registration statement.
16)
Comment: On page 10, under the heading “Background of the Proposal: Existing Structure and Proposed Conversion,” the disclosure states that the Trust also operates pursuant to exemptive relief granted by the SEC. Please clarify that the Trust also operates as an ETF pursuant to such exemptive relief granted by the SEC.
Response: We have revised the disclosure to include the additional text requested by the Staff.
17)
Comment: Provide more detail in the disclosure referring to the Exemptive Order, to the extent that any of the relief granted by the Exemptive Order relates to the Proxy Statement.
Response: The Exemptive Order, in general, governs the operations of the Trust as a UIT and provides certain exemptive relief to Invesco Capital Management LLC that is inapplicable to the Trust’s operation as an open-end management investment company. We confirm that the relief granted under the Exemptive Order, and the related conditions thereunder, are unrelated to the Proposals set forth in the Proxy Statement. Further, if the Proposals are approved and the related changes implemented, we confirm that the Fund will no longer rely on the Exemptive Order and will, instead, comply with Rule 6c-11 under the 1940 Act.
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CORRESP
1
filename1.htm
2000 K Street, N.W.
Suite 700
Washington, DC 20006
T: 202.822.9611
Eric S. Purple
epurple@stradley.com
202.507.5154
August 11, 2025
VIA EDGAR TRANSMISSION
U.S. Securities and Exchange Commission
100 F Street, N.E.
Washington, DC 20549
Filing Desk
Attn: Sonny Oh
Re:
Invesco QQQ TrustSM, Series 1 (File no. 811-08947)
Comments on Preliminary Proxy Materials for Special Shareholder Meeting
Dear Mr. Oh:
On behalf of the above-named registrant (the “Trust” or the “Fund”), the following are the Trust’s responses to the comments of the staff (the “Staff”) of the U.S. Securities and Exchange Commission (the “SEC”), which
were communicated telephonically on July 29, 2025 with respect to the Trust’s preliminary proxy statement and related materials that were filed on July 17, 2025 (the “Proxy Statement”). Each Staff comment as we understand them is summarized below,
followed by the Trust’s response to the comment. Any capitalized terms used herein that are not defined have the same meaning as in the Proxy Statement. We confirm that where changes are made to one section of the Proxy Statement, we will make
conforming changes to similar disclosures throughout the Proxy Statement, as applicable.
1)
Comment: Consider clarifying in the letter to shareholders and the Notice of Special Meeting of Beneficial Owners (“Notice”) that the proposed conversion of the Fund from a UIT to an Open-End Fund will not occur unless all three Proposals
are approved by shareholders.
Response: We have added language to the letter to shareholders and the Notice to state that the conversion will not occur unless all three Proposals are approved by shareholders.
2)
Comment: The first paragraph under the heading “Voting at the Meeting” on page 2 of the Proxy Statement states that beneficial owners of the Trust on the Record Date are entitled to one vote per share. Although the Record Date is set
forth in the Notice, specify the actual Record Date in the Proxy Statement.
Response: We have revised the language in the Proxy Statement to state that the Record Date is August 15, 2025.
August 11, 2025
Page 2
3)
Comment: In the same paragraph on page 2 noted in Comment no. 2, pursuant to Item 6 of Schedule 14A, please also disclose the total number of outstanding shares.
Response: We have disclosed the number of outstanding shares in the cited paragraph.
4)
Comment: On page 5, the disclosure in the section “Questions and Answers about the Proposals” states: “If Shareholders approve the changes outlined in Proposal 1, and either of Proposal 2 or Proposal 3 receives an unfavorable vote, the
changes set forth in Proposal 1 will not take effect.” Please revise the disclosure to state that all three Proposals will not take effect if any Proposal receives an unfavorable vote.
Response: We have revised the disclosure to state that all three Proposals will not take effect if any Proposal is not approved by shareholders.
5)
Comment: On page 5, the disclosure in the section “Questions and Answers about the Proposals” states: “If the Proposals are approved, Invesco will, and the Trustee may, gain certain enhanced benefits, establishing potential conflicts for
QQQ…”. Consider rephrasing the word “establishing” in this sentence.
Response: We have revised the disclosure to state that “Invesco will, and the Trustee may, gain certain enhanced benefits, resulting in establishing potential conflicts for QQQ…”.
6)
Comment: On page 5, under the heading “Benefits to Invesco and Risks Associated with the Advisory Agreement,” the disclosure notes that “under the Advisory Agreement any marketing of the Trust would be paid out of Invesco’s unitary fee,
inherently lowering Invesco’s revenue (and potential profits).” The Staff notes that the disclosure in this section and other sections of the Proxy Statement state that Marketing Expenses would be paid out of Invesco’s unitary fee. We also
note that Section 6 of the Form of Advisory Agreement in Appendix G proposes to exclude any payments under the Trust’s 12b-1 plan. Further, on page 35 of the Proxy Statement in the discussion of Proposal 3, footnote 11 to the fee table
comparing the Trust’s operating expenses before and after the conversion states that Invesco will pay for all Marketing Expenses from its profits earned from the management fee. Clarify the specific source of payments for such expenses and
make conforming changes to this section and other similar disclosures in the Proxy Statement.
Response: Under the Trust’s present operating model as a UIT, as disclosed in the Proxy Statement, Invesco, as Sponsor, currently is entitled to receive reimbursement out of fund assets for Marketing Expenses of the Trust. Under the new
proposed structure, the Trust (operating as an Open-End Fund) would no longer reimburse Invesco for any Marketing Expenses of the Trust out of its own assets. Instead, all Marketing Expenses of the Trust would be borne entirely by Invesco
from its own resources, including any profits it made pursuant to the unitary fee authorized by the Advisory Agreement. As the SEC has noted, distribution related expenses may be “made out of the adviser's own resources (including, but not
limited to, the profits under the advisory contract)” without implicating Rule 12b-1. See Payment of Asset-Based Sales Loads by Registered Open-End Management Investment Companies, SEC Rel. No. IC-16431 (June 13, 1988). The
disclosure identified by the Staff was intended to make this point and to note that marketing would no longer be a expense of the Trust, but rather would be paid out of Invesco’s own resources, including any profits it might realize under the
unitary fee,
August 11, 2025
Page 3
and to note that as a consequence there is no guarantee that Invesco will pay for the same amount of marketing for the Trust when it is an Open-End Fund as it spends currently for the Trust operating as a UIT. We have revised the
disclosure to clarify this point and to make clear that any such payments are not elements of the unitary fee itself, but rather will come from Invesco’s own resources (including any potential profits derived from the unitary fee),
consistent with SEC guidance.
We also confirm that Section 6 of the proposed Advisory Agreement excludes distribution related payments from the scope of the unitary fee by making clear that all such payments (which must necessarily be made pursuant to a 12b-1 plan
approved by shareholders) are excluded from the scope of the unitary fee. We confirm that the Trust currently does not utilize a 12b-1 fee and has no present intention of seeking to implement such a fee. If a Rule 12b-1 Plan were to be
implemented for the Trust in the future, any such plan would first require the vote of approval of at least a majority of the outstanding voting securities of the Trust.
7)
Comment: On page 6, under the heading “Benefits to Invesco and Risks Associated with Utilizing Invesco’s Affiliated Broker for Portfolio Transactions,” the disclosure states that “Invesco has established a commission schedule under the
oversight of the board of trustees for the Invesco ETFs to ensure that Invesco discharges its best execution duties when placing transactions with an affiliate.” Please confirm supplementally, and consider clarifying in the disclosure, that
the Fund and its Board will also be subject to certain regulatory requirements (see, for example, Rule 17e-1).
Response: We supplementally confirm that the Fund, in its operation as an Open-End Fund, would be subject to the regulatory requirements with respect to brokerage applicable to ETFs generally, including Section 17(e) and Rule 17e-1
thereunder. We also have added disclosure to this effect following the sentence cited by the Staff on page 6.
8)
Comment: On page 6, under the heading “Potential Risks of Changing QQQ’s Governance and Oversight Model,” please consider clarifying that the change in governance model also involves risks associated with the Fund being managed by an
external adviser.
Response: We have added additional disclosure to the paragraph cited by the Staff explaining that the conversion also involves certain risks associated with management by an external adviser.
9)
Comment: On page 7, in the second paragraph under the heading “How do I provide my vote?”, the disclosure states: “Proxies marked ‘WITHHOLD’ (with respect to Proposal 1) or ‘ABSTAIN’ will not be voted ‘FOR’ a Proposal…”. Please clarify the
distinction between “withhold” and “abstain.”
Response: We have revised the disclosure to change references from “WITHHOLD” in Proposal 1 to “ABSTAIN”, consistent with the language used for Proposal 3. As a result, both Proposals use the same language. We also will amend the draft
Proxy Card to reflect this change.
10)
Comment: On page 7, in the second paragraph under the heading “How do I provide my vote?”, the disclosure states: “An unfavorable vote on Proposal 1 will result in the failure of Proposal 2 and Proposal 3. An unfavorable vote on either of
Proposal 2 or Proposal 3 will not affect the
August 11, 2025
Page 4
Trust’s ability to implement Proposal 1, should it receive a favorable vote. However, the Trustee and the Sponsor do not intend to implement Proposal 1 unless all three Proposals (Proposal 1, Proposal 2 and Proposal 3) are approved.”
Please clarify that the Fund’s proposed conversion from a UIT to an open-end ETF will not occur unless all three Proposals are approved by shareholders.
Response: We have revised the disclosure to clarify that the conversion will not occur unless all three Proposals are approved by shareholders.
11)
Comment: On page 7, under the heading “What is the deadline to submit my proxy by mail, telephone or the internet?”, the disclosure states that Invesco “must receive your proxy in time to be voted at the Meeting or any adjournments or
postponements thereof, which means the proxy must be received prior to the closing of the polls of the Meeting or any adjournment or postponements thereof.” Clarify how far in advance of the Meeting it would be necessary to vote for the proxy
to be received.
Response: There is no specific amount of time required for shareholders to provide their proxy in advance of the Meeting; rather, it must simply be received prior to the closing of the polls. If shareholders vote their shares by means
other than in person, they must allow for sufficient time for their proxy to be received, relative to the nature of how they are submitting their proxy (e.g., via by mail, or by the internet). However, for purposes of clarity, we have
revised the disclosure to provide shareholders notice of this fact.
12)
Comment: On page 8, the first paragraph under the heading “What is the vote necessary to approve the Proposals?” states that Proposal 3 requires “ the lesser of (a) the affirmative vote of 67% or more of the voting securities present or
represented by proxy, if the holders of more than 50% of the outstanding voting securities of the Trust are present or represented by proxy, or (b) the affirmative vote of more than 50% of the outstanding voting securities of the Trust.”
Please delete the first use of the phrase “or represented by proxy” from the disclosure in order to more closely align to the provisions of Section 2(a)(42) of the Investment Company Act of 1940 (the “1940 Act”).
Response: We have deleted the first use of the phrase “or represented by proxy” to more closely align the disclosure with the provisions of Section 2(a)(42) of the 1940 Act.
13)
Comment: On page 8, the second paragraph under the heading “What is the vote necessary to approve the Proposals?” states that abstentions and broker non-votes have the same effect as a vote “AGAINST” Proposal 2 and Proposal 3. The
reference to Proposal 2 in this disclosure should be changed to Proposal 1.
Response: We have revised the disclosure to refer to Proposal 1.
14)
Comment: On page 8, the third paragraph under the heading “What is the vote necessary to approve the Proposals?” states that an unfavorable vote on either of Proposal 2 or Proposal 3 will not affect the Trust’s ability to implement
Proposal 1. Please clarify this disclosure to indicate that all three Proposals will not take effect if any Proposal is not approved by shareholders. Please also reconcile this language with the language on page 7 of the Proxy Statement, in
second paragraph under the heading “How do I provide my vote?”.
August 11, 2025
Page 5
Response: We have revised the disclosure to make clear that all three Proposals will not take effect if any Proposal is not approved by shareholders. In addition, we have included the information from the language cited on page 7.
15)
Comment: On page 10, in Proposal 1 under the heading “Background of the Proposal: Existing Structure and Proposed Conversion,” clarify that the Fund, as an open-end ETF, will adopt the registration statement of the UIT as its own
registration statement for purposes of the Securities Act of 1933 (the “1933 Act”) and the Securities Exchange Act of 1934, and consistent with provisions of Rule 414(d) under the 1933 Act.
Response: We have included in the disclosure the statement required by Rule 414(d) with respect to the adoption of the registration statement.
16)
Comment: On page 10, under the heading “Background of the Proposal: Existing Structure and Proposed Conversion,” the disclosure states that the Trust also operates pursuant to exemptive relief granted by the SEC. Please clarify that the
Trust also operates as an ETF pursuant to such exemptive relief granted by the SEC.
Response: We have revised the disclosure to include the additional text requested by the Staff.
17)
Comment: Provide more detail in the disclosure referring to the Exemptive Order, to the extent that any of the relief granted by the Exemptive Order relates to the Proxy Statement.
Response: The Exemptive Order, in general, governs the operations of the Trust as a UIT and provides certain exemptive relief to Invesco Capital Management LLC that is inapplicable to the Trust’s operation as an open-end management
investment company. We confirm that the relief granted under the Exemptive Order, and the related conditions thereunder, are unrelated to the Proposals set forth in the Proxy Statement. Further, if the Proposals are approved and the
related changes implemented, we confirm that the Fund will no longer rely on the Exemptive Order and will, instead, comply with Rule 6c-11 under the 1940 Act.