id	author	title	date	pages	extension	mime	words	sentence	flesch	summary	cache	txt
cblr-11902	White, Maddie	An Empirical Analysis of SEC Rule 6C-11's Impact on the Usage of Heartbeat Trades by Exchange-Traded Funds	2023	56	.pdf	application/pdf	17752	676	59	Heartbeat Trade Definition To identify heartbeat trades, I follow the methodology used by Moussawi, Shen and Velthuis in their forthcoming paper on ETF heartbeat trades and tax efficiency.145 This method uses fund flow, a measure of the net assets that flow in or out of an ETF each day through the creation and redemption process.146 Flow data can be used to identify heartbeat trades since a heartbeat trade is characterized by a large inflow of capital followed by a large matching outflow in the following days.147 In applying this method, I calculate the flow of a fund on a given day, t, as: 𝑓𝑙𝑜𝑤 = (𝑠ℎ𝑎𝑟𝑒𝑠 𝑜𝑢𝑡𝑠𝑡𝑎𝑛𝑑𝑖𝑛𝑔! Heartbeat trades differ from day-to-day creation and redemption activity because they are not driven by APs seeking to redeem shares to engage in the arbitrage mechanism used to keep ETF prices aligned with their NAVs.234 Instead, heartbeat trades are used to facilitate portfolio rebalances without triggering taxes.235 Unlike 229 See supra note 196. 230 INV.	cache/cblr-11902.pdf	txt/cblr-11902.txt