Well, that was easy: the Securities and Exchange Commission (SEC) unanimously approved a plan to make it easier to bring exchange traded funds (ETFs) to the market.

Under the proposal, reports Judith Burns for the Wall Street Journal, most ETFs could be brought to the market directly. This would save the providers time and money spent getting the okay from the SEC. Currently, ETFs are often held up in the approval process as they await review by SEC staff on a case-by-case basis. The need for specific relief would be eliminated under the plan.

Mutual funds would also be free to make larger investments in ETFs. As it stands, they’re restricted from holding more than 3% of another fund’s shares. This change also includes restrictions on any excessive layering of fees on investors.

The only ETFs that have been excluded from this plan are those that aren’t fully transparent, including actively managed ETFs that don’t provide daily holdings information. The SEC is waiting to make a decision on that.

When we spoke last week with John McGuire, partner at Morgan, Lewis & Bockius LLP, he said there are still a few other steps in this process. Now that the SEC has ruled, a period for public comment begins. After that, the regulatory body will make its final review and issue a decision. If the rule goes into effect, the ETF industry likely won’t notice the changes until 2009.