SEC Division of Trading and Markets Discusses Issues with Exchange-Traded Products

more+
less-

In a February 22 speech at The SEC Speaks in 2013, Associate Director of the Division of Trading and Markets of the Securities and Exchange Commission Heather Seidel discussed the evolution of exchange-traded products (ETPs) as seen from the perspective of her office’s review of stock exchange applications for ETP listing rules under Rule 19b-4 of the Securities Exchange Act of 1934. Ms. Seidel has seen an increase in ETP listing rule applications over the last year with significant growth in rules sought for actively managed exchange-traded funds (ETFs), including such ETFs utilizing fixed income securities. She also noted an increased level of complexity of ETPs that seek inverse and leveraged performance of various asset classes as well as of exchange-traded notes (ETNs).

In ETP listing rule applications, Ms. Seidel stated that the Division staff were seeking clarity as to what the ETP is, its structure, investment objective and compliance with listing standards. For ETPs that are not investment companies registered under the Investment Company Act of 1940, Ms. Seidel noted that the staff is particularly concerned with the transparency of what the ETP is tracking, the transparency of its investment objective and how the arbitrage mechanism, which reduces premiums or discounts of ETP share trading prices against the ETP’s net asset value, will work for the ETP.

 

Written by:

Published In:

SEC

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Katten Muchin Rosenman LLP | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »

All the intelligence you need, in one easy email:

Great! Your first step to building an email digest of JD Supra authors and topics. Log in with LinkedIn so we can start sending your digest...

Sign up for your custom alerts now, using LinkedIn ›

* With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name.
×
Loading...
×