FILE PHOTO: The U.S. Securities and Exchange Commission emblem adorns an workplace door on the SEC headquarters in Washington, June 24, 2011. REUTERS/Jonathan Ernst/File Photo
NEW YORK (Reuters) – The Securities and Exchange Commission on Thursday mentioned it could undertake a new rule to modernize how exchange-traded funds (ETFs) are dropped at the market and their regulation.
The long-awaited Rule 6c-11 – or the ETF rule as it’s extra generally known as – is geared toward simplifying rules governing ETFs and seeks to hurry up the method of launching new ETFs whereas lowering related prices.
Notably, the new rule does away with the exemptive-relief requirement by which would-be ETF issuers needed to file with the regulator to get particular permission to go round rules outlined within the Investment Company Act of 1940, which didn’t permit for ETFs.
“As the ETF industry continues to grow in size and importance, particularly to Main Street investors, it is important to have a consistent, transparent and efficient regulatory framework that eliminates regulatory hurdles while maintaining appropriate investor protections,” SEC Chairman Jay Clayton mentioned in a press release.
Since 1992, the SEC has issued over 300 exemptive orders that allowed greater than 2,000 ETFs to exist with greater than $3.Three trillion in complete web property, in accordance with information from the fee.
The new ETF rule will substitute lots of of these particular person exemptive orders with a single rule.
“The ETF rule will level the playing field for ETF providers, allowing new participants to enter via a streamlined process,” mentioned Elisabeth Kashner, FactSet’s director of ETF analysis.
Reporting by Saqib Iqbal Ahmed; Editing by Cynthia Osterman