Correspondence 0001829126-22-020362 from Simplify Exchange Traded Funds (CIK 0001810747)
Simplify Exchange Traded Funds (CIK 0001810747)
Date: Dec. 19, 2022 · CIK: 0001810747 · Accession: 0001829126-22-020362
AI Filing Summary & Sentiment
File numbers found in text: 333-238475, 811-23570
Letter
Division of Investment Management Disclosure Review and Accounting Office F Street NE Washington, DC 20549 Re: Simplify Exchange Traded Funds (the “Trust” or the “Registrant”) File Nos. 811-23570, 333-238475
Dear Mr. Lee:
On October 7, 2022, Simplify Exchange Traded Funds (the “Trust” or the “Registrant”), on behalf of its series, Simplify Conservative Allocation ETF (“Conservative”), Simplify Moderate Allocation ETF (“Moderate”), Simplify Growth Allocation ETF (“Growth”), and Simplify Income Allocation ETF (“Income”) (each a “Fund” and together the “Funds”), filed post-effective amendment number 50 to the Trust’s registration statement (the “Amendment”). The Amendment was filed pursuant to Rule 485(a)(2) under the Securities Act of 1933, as amended, to register shares of the Funds. On November 21, 2022, you provided comments by phone to Parker Bridgeport.
Set forth below are your comments, as we understand them, followed by responses to those comments, which the Funds have authorized Thompson Hine LLP to make on their behalf. Where applicable, revisions indicated in responses to your comments will be reflected in an amendment to the registration statement to be filed subsequently to or concurrently with this letter. All capitalized terms not defined herein have the meaning given to them in the registration statement. A marked copy of the prospectus or relevant sections of the prospectus is attached to aid in your review.
General Comments
Comment 1.
(a) Please respond to all comments with a letter filed as correspondence on EDGAR five business days before the effective date of the Amendment and provide a copy of the letter and a marked prospectus by email.
(b) Where a change is made to a disclosure in response to a comment, please make corresponding changes throughout the Amendment.
Page 2
(c) We remind you that the Fund and its management are responsible for the accuracy and adequacy of the disclosure notwithstanding any review, comment, action, or absence of action by the SEC staff.
Response.
The Registrant undertakes to make the EDGAR filing and transmit a courtesy copy within the time limits described in (a) above. The Registrant undertakes to make corresponding changes throughout the Amendment as described in (b) above. The Registrant acknowledges the responsibility described in (c) above.
Summary Prospectus
Comment 2.
Please review document for instances where “with” should replace “within.”
Response.
The Registrant has reviewed and corrected such instances.
Comment 3.
Please consider changing Affiliated ETF Risk to Conflict of Interest Risk.
Response.
Upon review, the Registrant has revised the Affiliated ETF Risk disclosure to give more prominence to conflict of interest risk as Affiliated ETF Conflict of Interest Risk, but believes that a complete renaming of the risk would be less informative to prospective shareholders and would not fully capture the aspects of this risk.
Comment 4.
Under market and geopolitical risk, please consider adding Ukraine war risk disclosures and risks related to Chinese companies delisting from US exchanges as a result of the Holding China Accountable Act.
Response.
Upon review, the Registrant does not believe these are principal risks for the Funds.
Page
Comment 5.
Please include swaps as an element of the principal investment strategy of Funds that include swap risk as a principal investment risk, or otherwise revise accordingly.
Response.
The Registrant has revised principal investment strategy disclosures for Conservative and Income to include reference to swaps.
Comment 6.
Please include a principal investment strategy disclosure of the put/spread collar strategy to align strategy with risk disclosures for Conservative.
Response.
Upon further review, the Registrant has determined that the put/spread collar strategy is not a principal strategy and has removed related disclosures.
Comment 7.
Under Foreign Investing Related Risks, please include Emerging Markets Risk for Conservative, Moderate, and Income or revise principal investment strategy disclosures accordingly.
Response.
The Registrant has revised principal investment strategy disclosures to qualify references to emerging markets.
Comment 8.
Since principal investment risks include Reverse Repurchase Agreement Risk, please revise principal investment strategy disclosures to include a reference to reverse repurchase agreements.
Response.
Upon further review, the Registrant has determined that the reverse repurchase agreements are not a principal strategy and has removed related disclosures.
Page
Comment 9.
Supplementally, please provide each Fund’s intended performance benchmark (broad based securities market index).
Response.
The Registrant expects to use the following:
Income Bloomberg US EQ:FI 20:80 Index ** BMA2080 Index
Conservative Bloomberg US EQ:FI 40:60 Index ** BMA4060 Index
Moderate Bloomberg US EQ:FI 60:40 Index ** BMA6040 Index
Growth Bloomberg US EQ:FI 80:20 Index ** BMA8020 Index
Comment 10.
Please consider adding month to year when describing when a portfolio manager began providing services to the Fund.
Response.
The Registrant has made the requested addition.
Comment 11.
If VIX Futures Risk is a principal risk for a Fund, please include a corresponding principal strategy disclosure for a Fund.
Response.
The Registrant has qualified principal investment strategy disclosures for Conservative. Moderate, and Growth to align with principal investment risks.
Comment 12.
Please revise principal investment strategy disclosures in the summary and statutory portions of the prospectus so that they are not identical.
Response.
The Registrant has made the requested revisions.
Page
Comment 13.
Supplementally, confirm that principal investment risks are accurate for each Fund.
Response.
The Registrant has reviewed realigned risk disclosures and believes they capture each principal risk.
Comment 14.
Supplementally, confirm that each Fund is diversified.
Response.
The Registrant so confirms.
If you have any questions or additional comments, please call the undersigned at (614) 469-3265.
Very
truly yours,
Parker
Bridgeport
Show Raw Text
CORRESP
1
filename1.htm
December
19, 2022
Scott
W. Lee
Senior
Counsel
U.S.
Securities and Exchange Commission
Division
of Investment Management
Disclosure
Review and Accounting Office
100
F Street NE
Washington,
DC 20549
Re: Simplify
Exchange Traded Funds (the “Trust” or the “Registrant”) File Nos. 811-23570,
333-238475
Dear
Mr. Lee:
On
October 7, 2022, Simplify Exchange Traded Funds (the “Trust” or the “Registrant”), on behalf of its series, Simplify
Conservative Allocation ETF (“Conservative”), Simplify Moderate Allocation ETF (“Moderate”), Simplify Growth Allocation
ETF (“Growth”), and Simplify Income Allocation ETF (“Income”) (each a “Fund” and together the “Funds”),
filed post-effective amendment number 50 to the Trust’s registration statement (the “Amendment”). The Amendment was filed pursuant
to Rule 485(a)(2) under the Securities Act of 1933, as amended, to register shares of the Funds. On November 21, 2022, you provided comments
by phone to Parker Bridgeport.
Set
forth below are your comments, as we understand them, followed by responses to those comments, which the Funds have authorized Thompson
Hine LLP to make on their behalf. Where applicable, revisions indicated in responses to your comments will be reflected in an amendment
to the registration statement to be filed subsequently to or concurrently with this letter. All capitalized terms not defined herein
have the meaning given to them in the registration statement. A marked copy of the prospectus or relevant sections of the prospectus
is attached to aid in your review.
General
Comments
Comment
1.
(a) Please
respond to all comments with a letter filed as correspondence on EDGAR five business days
before the effective date of the Amendment and provide a copy of the letter and a marked
prospectus by email.
(b) Where
a change is made to a disclosure in response to a comment, please make corresponding changes
throughout the Amendment.
Page 2
(c) We
remind you that the Fund and its management are responsible for the accuracy and adequacy
of the disclosure notwithstanding any review, comment, action, or absence of action by the
SEC staff.
Response.
The
Registrant undertakes to make the EDGAR filing and transmit a courtesy copy within the time limits described in (a) above. The Registrant
undertakes to make corresponding changes throughout the Amendment as described in (b) above. The Registrant acknowledges the responsibility
described in (c) above.
Summary
Prospectus
Comment
2.
Please
review document for instances where “with” should replace “within.”
Response.
The
Registrant has reviewed and corrected such instances.
Comment
3.
Please
consider changing Affiliated ETF Risk to Conflict of Interest Risk.
Response.
Upon
review, the Registrant has revised the Affiliated ETF Risk disclosure to give more prominence to conflict of interest risk as Affiliated
ETF Conflict of Interest Risk, but believes that a complete renaming of the risk would be less informative to prospective shareholders
and would not fully capture the aspects of this risk.
Comment
4.
Under
market and geopolitical risk, please consider adding Ukraine war risk disclosures and risks related to Chinese companies delisting from
US exchanges as a result of the Holding China Accountable Act.
Response.
Upon
review, the Registrant does not believe these are principal risks for the Funds.
Page
3
Comment
5.
Please
include swaps as an element of the principal investment strategy of Funds that include swap risk as a principal investment risk, or otherwise
revise accordingly.
Response.
The
Registrant has revised principal investment strategy disclosures for Conservative and Income to include reference to swaps.
Comment
6.
Please
include a principal investment strategy disclosure of the put/spread collar strategy to align strategy with risk disclosures for Conservative.
Response.
Upon
further review, the Registrant has determined that the put/spread collar strategy is not a principal strategy and has removed related
disclosures.
Comment
7.
Under
Foreign Investing Related Risks, please include Emerging Markets Risk for Conservative, Moderate, and Income or revise principal investment
strategy disclosures accordingly.
Response.
The
Registrant has revised principal investment strategy disclosures to qualify references to emerging markets.
Comment
8.
Since
principal investment risks include Reverse Repurchase Agreement Risk, please revise principal investment strategy disclosures to include
a reference to reverse repurchase agreements.
Response.
Upon
further review, the Registrant has determined that the reverse repurchase agreements are not a principal strategy and has removed related
disclosures.
Page
4
Comment
9.
Supplementally,
please provide each Fund’s intended performance benchmark (broad based securities market index).
Response.
The
Registrant expects to use the following:
Income
Bloomberg
US EQ:FI 20:80 Index **
BMA2080
Index
Conservative
Bloomberg
US EQ:FI 40:60 Index **
BMA4060
Index
Moderate
Bloomberg
US EQ:FI 60:40 Index **
BMA6040
Index
Growth
Bloomberg
US EQ:FI 80:20 Index **
BMA8020
Index
Comment
10.
Please
consider adding month to year when describing when a portfolio manager began providing services to the Fund.
Response.
The
Registrant has made the requested addition.
Comment
11.
If
VIX Futures Risk is a principal risk for a Fund, please include a corresponding principal strategy disclosure for a Fund.
Response.
The
Registrant has qualified principal investment strategy disclosures for Conservative. Moderate, and Growth to align with principal investment
risks.
Comment
12.
Please
revise principal investment strategy disclosures in the summary and statutory portions of the prospectus so that they are not identical.
Response.
The
Registrant has made the requested revisions.
Page
5
Comment
13.
Supplementally,
confirm that principal investment risks are accurate for each Fund.
Response.
The
Registrant has reviewed realigned risk disclosures and believes they capture each principal risk.
Comment
14.
Supplementally,
confirm that each Fund is diversified.
Response.
The
Registrant so confirms.
If
you have any questions or additional comments, please call the undersigned at (614) 469-3265.
Very
truly yours,
Parker
Bridgeport
Senior
Counsel, Thompson Hine LLP
Attachment