Also, one investment manager said leveraged and inverse funds that hold derivatives shouldn’t be labeled as ETFs. [ProShares Blasts BlackRock’s ETF Classification System]
Last year, the SEC put on hold new ETFs designed to make significant investments in derivatives.
“This action was taken in light of concerns raised generally about the use of derivatives by all registered investment companies, including ETFs,” Rominger said Wednesday. “While staff recognized that the use of derivatives is not a new phenomenon, the staff determined that the increasing complexity of derivatives and their growing use by funds made it the right time to reevaluate the Commission’s regulatory protections.”
This summer, the SEC issued a concept release seeking public comment on funds’ use of derivatives, which ends on Nov. 7.