ETF Exemption Granted for PowerShares

PowerShares Capital Management, provider of fundamentally-weighted exchange traded funds (ETFs), has been granted exemption from the SEC on investment constraints. This allows other investment companies to invest in PowerShares’ ETFs above the restrictions laid out in Section 12(d)-1 of the Investment Company Act of 1940, reports Kevin Burke for Ignites. The exemption applies to all future ETF products brought to the market by PowerShares and requires that investment companies agree to certain terms before investing. Most important, they must enter into a participation agreement to not use any unnecessary influence. The next launch of PowerShares ETFs are set for October, with a municipal-bond ETF series.