Also, ETFs’ involvement in recent trading scandals and a media backlash may put some active fund plans on hold. [BlackRock Calls for More Disclosure, Transparency in ETFs]
Noah Hamman, chief executive of AdvisorShares, told Reuters that a result of the increased scrutiny is that fewer firms may launch actively managed ETFs because it may take even longer for the SEC to grant these firms exemptive relief.
The average wait time is already close to two years, he said. “Anytime a story comes up with ETFs, the regulators get nervous,” Hamman said in the Reuters report.
Most of the assets in actively managed ETFs are concentrated in only a few funds. [Surveying Actively Managed ETFs]
Earlier this year, BlackRock CEO Larry Fink said the business will have a difficult time turning a profit on actively managed ETFs until they gain more traction. [BlackRock CEO Says Industry to Lose Money on Active ETFs]