On September 28, 2026, the U.S. Department of the Treasury (the “Treasury”) and the Internal Revenue Service (“IRS”) released Notice 2026-62 (the “Notice”) and Revenue Ruling 2026-20 (the “Ruling”).

In the Ruling, an investor contributes securities to a newly created exchange traded fund (an “ETF”), which uses them, as part of a plan, to redeem an authorized participant shortly afterward. The Ruling treats the investor as engaging in a taxable exchange under Section 1001 with the authorized participant with respect to the contributed securities used in the redemption.

The Notice identifies additional ETF, regulated investment company, partnership, and tax-aware fund strategies that the Treasury and the IRS view as…