ProShares, Rydex suspend sale of ETFs

The move followed the emergency action announced yesterday by the Securities and Exchange Commission temporarily prohibiting short sales of shares of certain financial companies.
SEP 19, 2008
By  Bloomberg
The ProShares UltraShort Financials (SKF) and ProShares Short Financials (SEF) exchange traded funds are not accepting orders for new shares, according to a statement today from ProShare Advisors LLC of Bethesda, Md. The move followed the emergency action announced yesterday by the Securities and Exchange Commission temporarily prohibiting short sales of shares of certain financial companies, the statement said. Unless notified otherwise, shares will be available for redemption as normal, according to the statement. Shares of the ProShare ETFs are expected to continue to trade today but may trade at prices that are not in line with their intraday indicative values, the company warned. The fact that ProShare had stopped sales of its two ETFs did not mean there is a problem with the ETF structure, said Michael Sapir, chief executive of ProShare and its sister company, ProFund Advisors LLC, also of Bethesda. “This unprecedented action by the SEC has limited the ways that investors can get short exposure to financials, so we were concerned we would be inundated with requests to create new shares,” he said. It would have been difficult for ProShare to keep up with such demand with fewer options for obtaining short exposure, Mr. Sapir said. Just hours after ProShare made its announcement, Rydex Investments of Rockville, Md., also announced it was halting the sale of new shares in its Rydex Inverse 2x S&P Select Sector Financial ETF (RFN). As with the two ProShare ETFs, shares of the Rydex ETF will be available for redemption. It is expected to continue to trade in the financial markets today but may trade at prices that are not in line with their intraday indicative values.

Latest News

No succession plan? No worries. Just practice in place
No succession plan? No worries. Just practice in place

While industry statistics pointing to a succession crisis can cause alarm, advisor-owners should be free to consider a middle path between staying solo and catching the surging wave of M&A.

Research highlights growing need for personalized retirement solutions as investors age
Research highlights growing need for personalized retirement solutions as investors age

New joint research by T. Rowe Price, MIT, and Stanford University finds more diverse asset allocations among older participants.

Advisor moves: RIA Farther hails Q2 recruiting record, Raymond James nabs $300M team from Edward Jones
Advisor moves: RIA Farther hails Q2 recruiting record, Raymond James nabs $300M team from Edward Jones

With its asset pipeline bursting past $13 billion, Farther is looking to build more momentum with three new managing directors.

Insured Retirement Institute urges Labor Department to retain annuity safe harbor
Insured Retirement Institute urges Labor Department to retain annuity safe harbor

A Department of Labor proposal to scrap a regulatory provision under ERISA could create uncertainty for fiduciaries, the trade association argues.

LPL Financial sticking to its guns with retaining 90% of Commonwealth's financial advisors
LPL Financial sticking to its guns with retaining 90% of Commonwealth's financial advisors

"We continue to feel confident about our ability to capture 90%," LPL CEO Rich Steinmeier told analysts during the firm's 2nd quarter earnings call.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.