The Securities and Exchange Commission is partly lifting its nearly three-year freeze on accepting filings for active ETFs that invest in derivatives, Reuters reported Thursday afternoon.

“The agency will continue to hold off on approving applications for leveraged and inverse ETFs,” according to the report, which cited comments by Norm Champ, director of the SEC’s investment management division, at a conference in New York.

“The SEC started a review in March 2010 of certain ETFs that used derivatives, particularly leveraged and inverse ETFs, were taking on too much risk,” report Jessica Toonkel and Suzanne Barlyn for Reuters.

“As part of the review, the SEC stopped approving exemptive requests by ETFs seeking to invest heavily in derivatives, until the review could be completed. Most ETFs that use derivatives are actively managed,” the article said.

PIMCO Total Return ETF (NYSEArca: BOND), an active fund managed by Bill Gross, has received a warm reception following its March 2012 launch. It holds nearly $4 billion in assets but is not allowed to invest in derivatives — complex securities that helped trigger the financial crisis — due to SEC rules for ETFs. [Why We Bought BOND]

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