June 2, 2020

CFTC Issues Customer Advisory Regarding Commodity ETPs and Funds

Recently, the CFTC issued a customer advisory (Advisory) in response to increased investor interest in exchange-traded products (ETPs) and funds that invest in futures or other types of commodity interests (collectively, Pools). The Advisory highlights the distinctions between ETPs and funds that invest in securities and Pools, which include the…

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May 22, 2020

FINRA Issues Notice Reminding Firms of Sales Practice Obligations for Certain Exchange-Traded Products

On May 15, 2020, FINRA issued Regulatory Notice 20-14 (Notice) in response to recent “extraordinary conditions” that have caused significant volatility in complex oil-linked exchange-traded products (ETPs). The Notice reminds broker-dealers that are members of FINRA (firms) of their sales practice obligations in connection with these ETPs and, similar to…

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May 15, 2020

ETF Sponsors Submit Letters to Major Exchanges Regarding ETP Categorization

On May 13, 2020, a group of six ETF sponsors submitted letters to Cboe Global Markets, Inc., NASDAQ, and Intercontinental Exchange Inc. (the parent of NYSE Arca) urging that each exchange adopt exchange listing rules or other means to categorize exchange-traded products (ETPs) differently (ETP Letter).  The ETP Letter proposes…

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May 4, 2020

Major Exchanges for ETFs Receive Approval for Generic Listing Standards for ETFs that Can Rely on Rule 6c-11

Cboe BZX Exchange, Inc. (Cboe), The Nasdaq Stock Market LLC (NASDAQ) and NYSE Arca, Inc. (NYSE) received approval from the SEC’s Division of Trading and Markets (Division) to adopt rules that establish generic listing standards to permit the listing and trading of ETFs that can rely on Rule 6c-11 under…

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March 12, 2020

Broker-Dealer Entities Fined $35 Million for Violations Relating to Inverse ETF Recommendations to Retail Investors

The SEC recently fined two dual registrant broker-dealers $35 million for violations involving inadequate compliance policies and procedures, unsuitable recommendations and failure to supervise arising out of recommendations to certain retail investors that invested in single-inverse ETFs. Single-inverse ETFs are ETFs that seek returns that are the opposite of the…

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February 24, 2020

Non-Transparent ETFs Receive Approvals to List on an Exchange

Earlier this month, certain non-transparent ETFs (NT ETFs) received approval to be able to list on an exchange. On February 12 and 20, 2020, the SEC approved Cboe BZX Exchange, Inc.’s (Cboe) proposals to list and trade shares of American Century Focused Dynamic Growth ETF, American Century Focused Large Cap…

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January 16, 2020

Major Exchanges for ETFs Have Filed Proposed Rule Changes to Establish Generic Listing Standards for ETF Shares Permitted to Rely on Rule 6c-11

NYSE Arca, Inc., the Nasdaq Stock Market LLC (NASDAQ), and Cboe BZX Exchange have filed proposed rule changes with the SEC to establish generic listing standards for exchange-traded funds (ETFs) that are permitted to operate in reliance on Rule 6c-11 under the 1940 Act. The proposed changes would largely simplify…

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January 8, 2020

Non-Transparent ETF Sponsors Request Additional Relief

Since the SEC issued orders to grant exemptive relief requested in applications filed by Blue Tractor Group, LLC, Fidelity Management & Research Company, Natixis Advisors, L.P., and T. Rowe Price Associates, Inc. to launch a type of non-transparent exchange-traded fund (NT ETF) that follows a proxy portfolio model on December…

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December 23, 2019

SEC Grants Exemptive Applications of Additional Non-Transparent ETF Sponsors

On December 10, 2019, the SEC issued orders to grant exemptive relief requested in applications filed by Blue Tractor Group, LLC, Fidelity Management & Research Company, Natixis Advisors, L.P., and T. Rowe Price Associates, Inc. to launch a type of non-transparent exchange-traded fund (NT ETF) that follows a proxy portfolio…

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October 24, 2019

Compliance and Effective Dates Set for New Exchange-Traded Funds Rule

On October 24, 2019, the SEC’s adopting release (Release) for Rule 6c-11 (Rule) under the Investment Company Act of 1940, as amended (1940 Act), to modernize the regulatory framework for most exchange-traded funds (ETFs) was published in the Federal Register, which means that the various compliance and effective dates for…

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