SUB-INVESTMENT ADVISORY AGREEMENT BNY MELLON ETF INVESTMENT ADVISER, LLC 201 Washington Street Boston, Massachusetts 02108
SUB-INVESTMENT ADVISORY AGREEMENT
BNY MELLON ETF INVESTMENT ADVISER, LLC
000 Xxxxxxxxxx Xxxxxx
Boston, Massachusetts 02108
DATE
Xxxxx Xxxxxxx & Co., LLC
Two Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Ladies and Gentlemen:
BNY Mellon Concentrated Growth ETF (the “Fund”), a series of BNY Mellon ETF Trust II (the “Trust”), a Massachusetts business trust“”, desires to employ its capital by investing and reinvesting the same in investments of the type and in accordance with the limitations specified in the Fund’s Prospectus and Statement of Additional Information as from time to time in effect, copies of which have been or will be submitted to you, and in such manner and to such extent as from time to time may be approved by the Trust’s Board of Trustees. The Trust employs BNY Mellon ETF Investment Adviser, LLC (the “Adviser”) to act as the Fund’s investment adviser pursuant to a written agreement with the Trust (the “Management Agreement”), a copy of which has been furnished to you. The Adviser is authorized to and desires to retain you, and you hereby agree to accept such retention, to act as the Fund’s sub-investment adviser as of the date set forth above (the “Effective Date”).
In connection with your serving as sub-investment adviser to the Fund, it is understood that from time to time you will employ or associate with yourself such person or persons as you may believe to be particularly fitted to assist you in the performance of this sub-investment advisory agreement (the “Agreement”). The compensation of such person or persons shall be paid by you and no obligation may be incurred on the Trust’s behalf in any such respect.
Subject to the supervision and approval of the Adviser and the Trust’s Board of Trustees, you will provide investment management of the Fund’s portfolio in accordance with (i) the Fund’s investment objectives, policies and limitations as stated in the Fund’s Prospectus and Statement of Additional Information, or in any supplements thereto, as from time to time in effect and provided to you by the Adviser; (ii) any applicable procedures or policies adopted or approved by the Adviser or the Trust’s Board with respect to the Fund as from time to time in effect and furnished in writing to you; (iii) the requirements applicable to registered investment companies under applicable laws, including without limitation the Investment Company Act of 1940, as amended (the “Investment Company Act”), and the rules and regulations thereunder, and the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), and the rules and regulations thereunder applicable to qualification as a “regulated investment company”; (iv) any order or no-action letter governing the operation of the Trust or the Fund; and (v) any written instructions which the Adviser or the Trust’s Board may issue to you from time to time; provided, however, that you shall not be bound by any update, modification or amendment of such documents or other procedures or policies of the Fund or the Adviser unless and until you have been given notice thereof in accordance with this Agreement and have been provided with a copy of such update, modification or amendment. With respect to the foregoing, the Adviser will seek to provide you with prior notice of any update, modification or amendment of such documents or other procedures or policies of the Fund or the Adviser that is reasonably sufficient to provide you with the time necessary to make any changes to the Fund’s portfolio that are required to comply with such procedures or policies in an orderly manner. In
connection with your duties hereunder, you (a) will obtain and provide investment research and supervise the Fund’s investments and (b) will conduct a continuous program of investment, evaluation and, if appropriate, sale and reinvestment of the Fund’s assets, including the placing of portfolio transactions for execution either directly with the issuer or with any broker or dealer, foreign currency dealer, futures commission merchant, counterparty or others. You agree that, in placing any orders with selected brokers and dealers, you will attempt to obtain the best net result in terms of price and execution. Consistent with this obligation and in accordance with applicable securities laws, you, in your discretion, may purchase and sell portfolio securities from and to brokers and dealers who provide the Fund, the Adviser’s other clients, or your other clients with research, analysis, advice and similar services. You may cause the Fund to pay to brokers and dealers, in return for such research and analysis, a higher commission than may be charged by other brokers and dealers, subject to your good faith determination that such commission is reasonable in terms either of the particular transaction or of your overall responsibility to the Trust, the Fund and your other clients and that the total commissions paid by the Fund will be reasonable in relation to the benefits to the Fund over the long term and, if applicable, subject to compliance with Section 28(e) of the Securities Exchange Act of 1934, as amended. Such authorization is subject to termination at any time by the Trust’s Board for any reason. In addition, you are authorized to allocate purchase and sale orders for portfolio securities to brokers and dealers that are affiliated with you, the Adviser, the Fund’s principal underwriter or any other sub-investment adviser to the Fund if you believe that the quality of the transaction and the commission are comparable to what they would be with other qualified firms, and provided that the transactions are consistent with the Trust’s Rule 17e-1 procedures as they may be provided to you by the Adviser from time to time. In no instance may portfolio securities be purchased from or sold to you, the Adviser, the Fund’s principal underwriter, any other sub-investment adviser to the Fund or any person affiliated with you, the Adviser, the Fund’s principal underwriter, any other sub-investment adviser to the Fund or the Fund, except in accordance with the applicable securities laws and the rules and regulations thereunder, including Rules 17a-7 and 17a-10 under the Investment Company Act, and any exemptive order then currently in effect. The Adviser will periodically provide you with a list of the affiliates of the Adviser, the Fund’s principal underwriter or the Fund to which investment or trading restrictions apply, and will specifically identify in writing (a) all publicly traded companies in which the Fund may not invest, together with ticker symbols for all such companies, and (b) any affiliated brokers and any restrictions that apply to the use of those brokers by the Fund.
Proxies of companies whose shares are held by the Fund shall be voted as described in the Fund’s Prospectus and Statement of Additional Information, and you shall assume responsibility for the voting of such proxies pursuant to proxy voting procedures approved by the Adviser. You are authorized and agree to act on behalf of the Fund with respect to any reorganizations, exchange offers and other voluntary corporate actions in connection with securities held by the Fund in such manner as you deem advisable, unless the Trust or the Adviser otherwise specifically directs in writing. You shall have no responsibility with respect to the collection of income, physical acquisition or the safekeeping or custody of the Fund’s assets. The Adviser shall furnish you with copies of the Fund’s Prospectus, Statement of Additional Information and shareholder reports. You will be provided the opportunity to review and approve any description of you and your investment process set forth in the Fund’s Prospectus, Statement of Additional Information and shareholder reports. The Adviser also will furnish you with copies of Prospectus or Statement of Additional Information supplements that disclose any changes to the Fund’s investment objective, policies, strategies or restrictions.
You will furnish to the Adviser or the Trust such information, with respect to the investments which the Fund may hold or contemplate purchasing, as the Adviser or the Trust may reasonably request. The Trust and the Adviser wish to be informed of important developments materially affecting the Fund’s portfolio and shall expect you, on your own initiative, to furnish to the Trust or the Adviser from time to time such information as you may believe appropriate for this purpose. In connection therewith, you will notify the Adviser if you become aware of any bankruptcy proceedings, securities litigation class actions
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or settlements affecting the investments which the Fund holds or, at a time relevant to such proceeding, class action or settlement, has held. Upon reasonable request, you will make available your officers and employees, including the portfolio managers named in the Fund’s Prospectus and/or Statement of Additional Information, to meet with the Trust’s Board and/or the Adviser to review the Fund’s assets.
You will maintain all required books and records with respect to the securities transactions of the Fund in accordance with all applicable laws, and in compliance with the requirements of the rules under Section 31 of the Investment Company Act, and will furnish the Trust’s Board and the Adviser with such periodic and special reports as the Trust’s Board or the Adviser reasonably may request. You hereby agree that all records which you maintain for the Trust or the Adviser are the property of the Trust or the Adviser, and agree to preserve for the periods prescribed by applicable law any records which you maintain for the Trust or the Adviser and which are required to be maintained, and further agree to surrender promptly to the Trust or the Adviser any records which you maintain for the Trust or the Adviser upon request by the Trust or the Adviser, provided that you shall have reasonable opportunity to create and maintain copies of applicable records.
The Adviser and you each agree to comply with applicable laws, rules and regulations, including the Investment Advisers Act of 1940, as amended (the “Investment Advisers Act”), and the Investment Company Act. You will promptly notify the Trust’s Chief Compliance Officer (a) in the event the Securities and Exchange Commission or other governmental authority has censured you, placed limitations upon your activities, functions or operations, suspended or revoked your registration, as an investment adviser, or has commenced proceedings or an investigation that may result in any of these actions; or (b) upon becoming aware of any material fact relating to you that is not contained in the Fund’s Prospectus or Statement of Additional Information, and is required to be stated therein or necessary to make the statements therein not misleading, or of any statement contained therein that becomes untrue in any material respect. Upon request, and in accordance with the scope of your obligations and responsibilities contained in this Agreement, you will provide reasonable assistance to the Trust in connection with the Fund’s compliance with applicable provisions of the Xxxxxxxx-Xxxxx Act of 2002 and the rules and regulations thereunder, and Rule 38a-1 under the Investment Company Act. Such assistance shall include, but not be limited to, (i) providing the Trust’s Chief Compliance Officer upon request with copies of your compliance policies and procedures; (ii) certifying periodically, upon the request of the Trust’s Chief Compliance Officer, that you are in compliance with all applicable “federal securities laws,” as required by Rule 38a-1 under the Investment Company Act and Rule 206(4)-7 under the Investment Advisers Act; (iii) facilitating and cooperating with the Trust’s Chief Compliance Officer to evaluate the effectiveness of your compliance controls; (iv) providing the Trust’s Chief Compliance Officer with direct access to your compliance personnel; (v) providing the Trust’s Chief Compliance Officer with periodic reports; and (vi) promptly providing the Trust’s Chief Compliance Officer with special reports in the event of material compliance violations. Upon request, you will provide certifications to the Trust, in a form satisfactory to the Trust, to be relied upon by the Trust’s officers certifying the Trust’s periodic reports on Form N-CSR pursuant to Rule 30a-2 under the Investment Company Act.
In consideration of services rendered pursuant to this Agreement, the Adviser will pay you on the first business day of each month, out of the management fee it receives and only to the extent thereof, a fee at the annual rate of XXX of 1% of the value of the Fund’s average daily net assets, calculated daily and paid monthly. The fee for the period from the Effective Date to the end of the month thereof shall be pro-rated according to the proportion which such period bears to the full monthly period, and upon any termination of this Agreement before the end of any month, the fee for such part of a month shall be pro-rated according to the proportion which such period bears to the full monthly period and shall be payable within 10 business days of the date of termination of this Agreement. For the purpose of calculating the fee payable to you, the value of the Fund’s net assets shall be computed in the manner specified in the
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Fund’s then-current Prospectus and Statement of Additional Information for the computation of the value of the Fund’s net assets.
Net asset value shall be computed on such days and at such time or times as described in the Fund’s then-current Prospectus and Statement of Additional Information. You agree to monitor the Fund’s assets and to notify the Adviser on any day that you determine that a significant event has occurred with respect to one or more securities held in the Fund’s assets that would materially affect the value of such securities (provided that you shall not be responsible for providing information based on valuations provided by third party services which value securities based upon changes in one or more broad-based indices). At the request of the Adviser or the Trust’s Valuation Committee (if any), you agree to provide additional reasonable assistance to the Adviser, the Trust’s Valuation Committee (if any) and the Fund’s pricing agents in valuing the Fund’s assets, including in connection with fair value pricing of the Fund’s assets.
You will bear all expenses in connection with your performance of your services under this Agreement, and you will not be obligated to bear, directly or indirectly, any expenses incurred by others, including the Adviser. All other expenses to be incurred in the operation of the Fund (other than those borne by the Adviser pursuant to the Management Agreement) will be borne by the Fund, except to the extent specifically assumed by you. The Management Agreement provides that the Adviser will pay substantially all expenses of the Fund, except for the management fees, payments under the Fund’s 12b-1 plan (if any), interest expenses, taxes, acquired fund fees and expenses, brokerage commissions, costs of holding shareholder meetings, fees and expenses associated with any securities lending program to be adopted by the Fund, and litigation and potential litigation and other extraordinary expenses not incurred in the ordinary course of the Fund’s business.
The Adviser understands that in entering into this Agreement you have relied upon the inducements made by the Trust to you under the Management Agreement. The Adviser also understands that you now act, and that from time to time hereafter you may act, as investment adviser or sub-investment adviser to one or more other investment companies, private funds or other pooled investment vehicles and fiduciary or other managed accounts (collectively, the “accounts”), and the Adviser has no objection to your so acting, provided that when the purchase or sale of securities of the same issuer is suitable for the investment objectives of two or more accounts managed by you and which have available funds for investment in the case of a purchase, the available securities will be allocated in a manner believed by you to be equitable to each account. It is recognized that in some cases this procedure may adversely affect the price paid or received by the Fund or the size of the position obtainable for or disposed of by the Fund.
In addition, it is understood that the persons employed by you to assist in the performance of your duties hereunder will not devote their full time to such services and nothing contained herein shall be deemed to limit or restrict your right or the right of any of your affiliates to engage in and devote time and attention to other businesses or to render services of whatever kind or nature.
You shall exercise your best judgment in rendering the services to be provided hereunder, and the Adviser agrees as an inducement to your undertaking the same that you shall not be liable hereunder for any error of judgment or mistake of law or for any loss suffered by the Trust, the Fund or the Adviser, provided that nothing herein shall be deemed to protect or purport to protect you against any liability to the Adviser, the Trust, the Fund or the Fund’s shareholders to which you would otherwise be subject by reason of willful misfeasance, bad faith or gross negligence in the performance of your duties hereunder, or by reason of your reckless disregard of your obligations and duties hereunder. In no event will you have any responsibility for any other series of the Trust, for any portion of the Fund’s assets not managed by you or for the acts or omissions of the Adviser or any other sub-investment adviser to the Trust or the Fund. In particular, in the event that you manage only a segment of the Fund’s assets, you shall have no responsibility for the Fund being in violation of any applicable law or regulation or investment policy or restriction
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applicable to the Fund as a whole, or for the Fund failing to qualify as a regulated investment company under the Internal Revenue Code, if the securities and other holdings of the segment of the Fund’s assets managed by you are such that your segment would not be in such violation or fail to so qualify if such segment were deemed a separate series of the Trust or a separate regulated investment company under the Internal Revenue Code, unless such violation was due to your failure to comply with written guidelines adopted by the Trust or the Adviser and provided to you.
You shall indemnify and hold harmless the Adviser, the Trust and the Fund against any and all losses, claims, damages, liabilities or litigation (including legal and other expenses) (“Losses”) to which the Adviser, the Trust or the Fund become subject arising out of or based on any untrue statement of a material fact contained in the Prospectus and/or Statement of Additional Information, proxy materials, reports, advertisements, sales literature, or other materials pertaining to the Fund or the omission to state therein a material fact known to you that was required to be stated therein or necessary to make the statements therein not misleading, if such statement or omission was made in reliance upon information furnished by you to the Adviser, the Trust or the Fund for use therein. The Adviser shall indemnify you and hold you harmless against any and all Losses to which you may become subject arising out of or based on any untrue statement of a material fact contained in the Prospectus and/or Statement of Additional Information, proxy materials, reports, advertisements, sales literature, or other materials pertaining to the Fund or the omission to state therein a material fact known to the Adviser that was required to be stated therein or necessary to make the statements therein not misleading, unless such statement or omission was made in reliance upon information furnished by you to the Adviser, the Trust or the Fund for use therein.
This Agreement shall continue until May 31, 2026, and thereafter shall continue automatically for successive annual periods ending on May 31st of each year, provided such continuance is specifically approved at least annually by (i) the Trust’s Trustees or (ii) vote of a majority (as defined in the Investment Company Act) of the Fund’s outstanding voting securities, provided that in either event the continuance also is approved by a majority of the Trust’s Trustees who are not “interested persons” (as defined in the Investment Company Act) of any party to this Agreement, by vote cast in person at a meeting called for the purpose of voting on such approval or made at a non-in person meeting if consistent with guidance provided by the Securities and Exchange Commission or its staff. This Agreement is terminable without penalty (i) by the Adviser on not more than 60 days’ notice to you, (ii) by the Trust’s Trustees or by vote of the holders of a majority of the Fund’s outstanding voting securities on not more than 60 days’ notice to you, or (iii) by you upon not less than 90 days’ notice to the Trust and the Adviser. This Agreement also will terminate automatically in the event of its assignment (as defined in the Investment Company Act or the Investment Advisers Act) and you shall be notified by the Trust and the Adviser, or you shall notify the Trust and the Adviser, as applicable, as soon as reasonably practicable and as permissible under applicable law or agreement. In addition, notwithstanding anything herein to the contrary, if the Management Agreement terminates for any reason, this Agreement shall terminate effective upon the date the Management Agreement terminates.
The Adviser acknowledges that it has received and has had an opportunity to read a copy of your Form ADV Part 2A (the “Brochure”) and a copy of the Form ADV Part 2B with respect to your personnel with the most significant responsibility for providing advisory services to the Fund (the “Brochure Supplement”). The Adviser agrees that the Brochure and Brochure Supplement, as well as other client communications, may be transmitted to the Adviser electronically.
It is understood that the Adviser has claimed an exclusion from the definition of "commodity pool operator" ("CPO") with respect to the Fund pursuant to, and in accordance with, Rule 4.5 under the Commodity Exchange Act of 1974, as amended (the "CEA"). The Adviser represents and warrants that it is not subject to regulation as a CPO by the Commodity Futures Trading Commission or the National Futures Association with respect to the Fund and agrees to furnish a copy of the Rule 4.5 filing with respect
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to the Fund to you upon request. You agree to manage the sub-advised assets in a manner that will permit the Adviser to continue to rely on the exclusion from the definition of CPO with respect to the Fund pursuant to, and in accordance with, Rule 4.5 under the CEA, unless otherwise agreed to in writing by the Adviser. The Adviser agrees to notify you in the event that the Adviser is no longer eligible to rely on the exclusion from the definition of CPO under Rule 4.5 with respect to the Fund or the Adviser’s Rule 4.5 filing with respect to the Fund is withdrawn.
No party to this Agreement will disclose or use any records or information obtained pursuant to this Agreement in any manner whatsoever, except as expressly authorized in this Agreement or, with respect to you, as may reasonably be required to execute transactions on behalf of the Fund or, with respect to the Adviser, as may reasonably be required to provide its services to the Fund. The parties will keep confidential any non-public information obtained directly as a result of this service relationship; provided that the Adviser may make any disclosure to its affiliates, the Fund, or the Trust’s Board, legal counsel or auditors or other service providers to the Fund, as the Adviser may reasonably determine necessary in its sole discretion; provided that no such information may be used for any trading or investment purposes unrelated to management of the Fund. Notwithstanding the foregoing, any party may disclose such non-public information if (a) such information is or hereafter otherwise is known by the receiving party or has been disclosed, directly or indirectly, to others or becomes ascertainable from public or published information or trade sources, (b) if such disclosure is required by applicable federal, state or other law or regulation, (c) if such disclosure is required or requested by regulatory authorities or judicial process, (d) such disclosure is reasonably required by legal counsel or auditors of the party (or of the Fund, the Trust’s Board or affiliates of the Adviser) in connection with the performance of their professional services, or (e) as may otherwise be contemplated by this Agreement. You shall not disclose information regarding characteristics of the Fund’s assets, trading history, portfolio holdings, performance information or any other related information to any third party, except in compliance with the Fund’s policies on disclosure of portfolio holdings or as required by applicable law or regulation.
No provision of this Agreement may be changed, waived or discharged unless signed in writing by the parties hereto. This Agreement shall be governed by the laws of the State of New York, without regard to the conflict of law principles thereof, provided that nothing herein shall be construed in a manner inconsistent with the Investment Company Act or the Investment Advisers Act. This Agreement may be executed in several counterparts, each of which shall be deemed an original for all purposes, including judicial proof of the terms hereof, and all of which together shall constitute and be deemed one and the same agreement. Nothing in this Agreement shall be deemed a limitation or waiver of any obligation or duty that may not by law be limited or waived. If any one or more of the provisions of this Agreement shall be held contrary to express law or against public policy, or shall for any reason whatsoever be held invalid, then such provisions shall be deemed severable from the remainder of this Agreement and shall in no way affect the validity or enforceability of the other provisions of this Agreement. The rights of indemnification herein shall not be exclusive of or affect any other rights to which any person may be entitled by contract or otherwise by law and shall survive termination of this Agreement.
The Trust is expressly made a third party beneficiary of this Agreement with rights as respect to the Fund to the same extent as if it had been a party hereto.
Unless otherwise provided herein or agreed to in writing by the parties, all notices or instructions permitted or required under this Agreement shall be deemed to have been properly given if sent by regular first-class mail, registered mail, private courier, facsimile or electronically and addressed to (or delivered to) the respective party at the address set forth above or at such other address or addresses as shall be specified, in each case, in a notice similarly given. Each party may rely upon any notice from the other party or other communication reasonably believed by the receiving party to be genuine.
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Notice is hereby given that the obligations of this Agreement are not binding upon any of the Trustees, officers or shareholders of the Trust or the Fund.
This Agreement contains all of the terms agreed upon or made by the parties relating to the subject matter of this Agreement, and supersedes all prior and contemporaneous agreements, negotiations, correspondence, undertakings and communications of the parties, oral or written, respecting such subject matter.
If the foregoing is in accordance with your understanding, will you kindly so indicate by signing and returning to us the enclosed copy hereof.
| Very truly yours, | |
| BNY MELLON ETF INVESTMENT ADVISER, LLC | |
| By: ___________________________________ Name: Xxxxx X. Xxxxxxxx Title: Chief Legal Officer, Vice President and Assistant Secretary | |
| Accepted: | |
| XXXXX XXXXXXX & CO. | |
|
By: _______________________ |
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