The Securities and Exchange Commission is proposing to simplify and modernize the regulatory framework governing exchange-traded funds and enhance information to investors about the costs of purchasing ETF shares. If adopted, the proposal would, among other things:
- Allow most ETFs to operate without first obtaining exemptive relief, by relying on a proposed new rule;
- Provide greater flexibility with respect to aspects of ETF operations than exists under exemptive relief issued in recent years, including the use of “custom baskets” for creation and redemption transactions; and
- Require additional disclosures regarding ETFs’ trading costs, including certain bid-ask spread information.
The SEC’s proposal also would rescind existing exemptive relief for those ETFs that are eligible to rely on the proposed rule.
Please see full publication below for more information.