SEC wants input on ETPs

JUN 21, 2015
By  MFXFeeder
The SEC wants to hear from you — this time on an investment vehicle most financial advisers hold near and dear: exchange-traded products. The agency solicited input earlier this month on the way it approves new, novel or complex ETPs. As reporter Mark Schoeff Jr. reports in this issue, the request for comment included 53 sets of questions touching on market pricing, legal exemptions and listing standards. Perhaps more importantly, the request delved into how brokers sell ETPs to clients — and to what extent investors really understand what they're buying. The SEC has been awash in fund company applications to create all variety of exchange-traded funds, notes and pooled investments. Mr. Schoeff reports that from 2006 to 2013, the number of ETPs listed and traded has risen by an average of 160 annually. The agency is humbly seeking feedback on this enormous undertaking from those who know best how these funds work — you — as well as from the public, whose money is increasingly going into them. The funds' growing popularity has attracted much regulator attention. Securities and Exchange Commission member Kara Stein spoke last week about concerns with alternative ETFs and mutual funds, particularly those that are less liquid and employ complex strategies, and suggested the agency should scrutinize whether they are skirting rules and endangering investors.

INVESTOR PROTECTION

The SEC request for comments on ETFs sounded a similar investor-protection bell. It included this question: “Should broker-dealers have additional responsibility to make available or provide information to investors about the risks of investing in ETPs with complex strategies prior to making a recommendation or accepting a customer order for such securities?” These products are important to you and your clients — be sure they are regulated in a way that makes sense. Email your comments by August 17 to [email protected], with File Number S7-11-15 in the subject line.

Latest News

Osaic hit with class action over cash sweep payments
Osaic hit with class action over cash sweep payments

The hybrid RIA is the latest firm to face allegations that it enriched itself at customers' expense by paying unfairly low interest rates in its cash sweep programs.

LPL's Rich Steinmeier turns the page on CEO firing with eye on firm's growth
LPL's Rich Steinmeier turns the page on CEO firing with eye on firm's growth

Installed after Dan Arnold's abrupt termination, the new leader at LPL Financial is highlighting the firm's refocusing on the individual advisor.

LPL, Raymond James boost advisor ranks anew
LPL, Raymond James boost advisor ranks anew

LPL Financial welcomes a $345 million investment and planning team from Ameriprise as RayJay's employee advisor arm adds a seasoned Well Fargo breakaway.

CFP Board CEO Keller retiring
CFP Board CEO Keller retiring

The CFP Board will be searching for a replacement for CEO Kevin Keller who will be stepping down in April 2026.

$3000 gold record in sight on Trump 2.0 fears, says Citi
$3000 gold record in sight on Trump 2.0 fears, says Citi

Citi analysts project a historic high in three months as tariff and trade war threats fuel a rush for the haven metal.

SPONSORED Taylor Matthews on what's behind Farther's rapid growth

From 'no clients' to reshaping wealth management, Farther blends tech and trust to deliver family-office experience at scale.

SPONSORED Why wealth advisors should care about the future of federal tax policy

Blue Vault features expert strategies to harness for maximum client advantage.