Exchange-traded funds share many governance oversight characteristics with traditional mutual funds. While some ETFs have been structured as unit investment trusts that lack a board structure, most ETFs are classi¬ ed as open-end investment companies governed by a board under the Investment Company Act of 1940 and subject to U.S. Securities and Exchange Commission jurisdiction. Nevertheless, ETFs have unique operational and regulatory characteristics that raise additional issues on which ETF board members must focus in discharging their oversight duties.
Originally published in Learning Curve - July 2017.
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