John McGuire of Morgan Lewis and Bockius LLP is sure investors in exchange traded funds (ETFs) will continue to see controversy over the definition of an index. This was brought up at the ETF Evolutions Conference in New York during a heated roundtable discussion.  The idea was brought up that the SEC does a better job at regulating index construction.  Some said that many of the new indexes used for ETFs are too close to management.  While it was also stated that it is not the SECs job to regulate "investment objectives."

David Hoffman of Investment News writes this is an important issue especially since the SEC has become more proactive when it comes to granting exemptive relief for ETFs needing approval.

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