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Investors argue against novel ETF label in letters to US SEC
Asset managers and exchanges say the SEC’s broad label could disrupt ETF launches and risk growth in the $12 trillion market, letters show.
- Market participants filed letters with the SEC opposing a proposal to label various funds as 'novel ETFs,' warning the broad classification lacks a precise definition and could hinder future product innovation.
- The SEC launched a broad-based review to label a wide range of exchange-traded funds as 'novel ETFs' after several asset managers attempted to roll out funds tied to prediction markets.
- Rafferty Asset Management COO Angela Brickl argued 'Novel ETFs' cannot be effectively defined, while Nasdaq senior vice president Jeffrey Davis acknowledged some recent filings have 'tested the boundaries' of current rules.
- Industry groups warned that changing the process allowing new ETFs to launch automatically 75 days after filing could jeopardize growth in the $12 trillion U.S. ETF market.
- Better Markets securities policy director Ben Schiffrin suggested regulators focus on structural characteristics affecting investor protection rather than asset-class labels, a view echoed by Adjacent Markets COO Douglas Crescenzi.
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Investors argue against novel ETF label in letters to US SEC
Market participants raised concerns over the U.S. Securities and Exchange Commission's proposal to label a broad swathe of exchange-traded funds as "novel ETFs," according to a Reuters review of letters filed with the Wall Street regulator by asset managers, exchanges, brokerage firms, clearing houses and others.
·London, United Kingdom
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Total News Sources7
Leaning Left0Leaning Right3Center4Last UpdatedBias Distribution57% Center
Bias Distribution
- 57% of the sources are Center
57% Center
C 57%
R 43%
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