The SEC has exempted all of State Street Global Advisor’s exchange traded funds (ETFs) from investment limits imposed by the Investment Company Act of 1940. This relief permits investment by investment companies in excess of previous limits. According to MarketWatch, a section of the 1940 act prohibits an investment company from acquiring more than 3% of the total outstanding voting stock of another investment company, investing more than 5% of total assets in a single investment company, and investing more than 10% of its total assets in two or more investment companies.
As the SEC reduces investment limits for ETFs, one might ask if the growing ETF providers will do their job in voting proxies for ETF shareholders.
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