On March 3, the Securities and Exchange Commission’s Division of Examinations announced its examination priorities for 2021. These priorities include a greater focus on climate-related risks, conflicts of interests for brokers and investment advisers, and attendant risks related to FinTech.
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Exchange-Traded Funds
FINRA Proposes to Increase Positions Limits on Certain Options
On July 14, the Financial Industry Regulatory Authority (FINRA) filed a proposed rule change to amend Rule 2360 (Options) to increase position limits on options on certain exchange-traded funds. FINRA has indicated that increasing the position limits for conventional options subject to the proposed rule change could lead to a more liquid and competitive market for these options, which will benefit customers interested in these products.
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CFTC Issues COVID-19 Customer Advisory on Commodity ETPs and Funds
On May 22, the Commodity Futures Trading Commission issued a Customer Advisory addressing the unique risks associated with certain trading vehicles that use futures contracts or other commodity interests. The CFTC noted that recent market volatility arising from the COVID-19 pandemic has led many investors to purchase shares of trading vehicles that use futures contracts…
Commissioner Peirce Dissents from SEC’s Rejection of Bitcoin-Based ETF
On February 26, Commissioner Hester Peirce of the Securities and Exchange Commission filed a dissent to the SEC’s decision to reject a proposed rule change from NYSE Arca that would have allowed it to list shares of an exchange-traded fund backed by bitcoin and US Treasury bills. In her dissent, Commissioner Peirce argued that the…
SEC Proposes New Approval Process for Certain ETFs
On June 28, the Securities and Exchange Commission voted to propose a new rule and set of form amendments related to the approval process for certain exchange-traded funds (ETFs) that operate as open-ended funds (Proposal). Among other things, the Proposal calls for the creation of a new rule 6c-11 of the Investment Company Act of…
SEC Denies Two Proposed Applications for Non-Transparent Active ETFs
The Division of Investment Management (Division) of the Securities and Exchange Commission took an unprecedented action on Wednesday in issuing a preliminary denial to two exemptive relief applications under the Investment Company Act of 1940 for the operation of a non-transparent active exchange-traded fund (ETF). The exemptive relief applications, filed by Precidian Investments (Precidian) for …