M&A - Franklin Templeton ETF Trust

Form Type: CORRESP

Filing Date: 2024-10-11

Corporate Action: Merger

Type: Update

Accession Number: 000168035924000346

Filing Summary: On October 11, 2024, Franklin Templeton ETF Trust filed a correspondence in response to comments from the SEC regarding its registration statement for the Reorganization of the Western Asset Total Return ETF (Target Fund) into the Western Asset Bond ETF (Acquiring Fund). The Reorganization is primarily driven by the similarities in investment objectives and risks between the two funds. The estimated cost of this Reorganization is approximately $233,000, allocated 75% to Fund management and 25% to the Target Fund. The unitary management fee for the Acquiring Fund is lower than that of the Target Fund, aiming to enhance the economic efficiency of the funds involved. Furthermore, it was noted that the Target Fund registered as a commodity pool operator, which is a significant reason for the risks outlined in its prospectus. Key responses to SEC comments include clarifications on fees, the management of both funds, projected costs, and the expected minor impact on the investment portfolios of the funds due to this Reorganization. Management estimates that up to 8% of the Target Fund’s assets may be repositioned as part of the Reorganization process.

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Form Type: N-14

Filing Date: 2024-09-12

Corporate Action: Merger

Type: New

Accession Number: 000168035924000315

Filing Summary: Franklin Templeton ETF Trust is filing a registration statement for a proposed merger with the Western Asset Total Return ETF, which involves the acquisition of substantially all assets of the Target Fund by the Acquiring Fund. This merger is set to be voted on by shareholders in a special meeting scheduled for December 13, 2024, where shareholders will consider the Agreement and Plan of Reorganization. If approved, the merger would allow Target Fund shareholders to receive shares of the Acquiring Fund and cash equivalent to their shareholdings in the Target Fund. The Target Fund is expected to liquidate and dissolve following the merger. The Board of Trustees has recommended that shareholders vote in favor of the merger, highlighting that the Acquiring Fund will have a lower expense ratio. The Reorganization is anticipated to be effective on or about January 10, 2025, and the Proxy materials are set to be sent out to shareholders around October 2024. Additionally, there are important tax implications associated with the merger, intended to be tax-free for federal income tax purposes, with specific procedures established for voting and potential changes in management fees if the merger goes through.

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