The Securities and Exchange Commission denied Precidian Investments’ second request to launch non-transparent actively managed exchange traded funds, strengthening Eaton Vance’s exchange traded managed funds, or ETMFs, as a leader in the space.
Back in October 2014, the SEC rejected the proposed BlackRock and Precidian Funds, citing that it “believes that Applicants’ proposed ETFs do not meet the standard for exemptive relief under section 6c of the Investment Advisers Act of 1940.” [SEC Deals a Blow to Issuers’ Non-Transparent Active ETF Ambitions]
The money manager refiled with the regulator in December after updating the filing, but its so-called ActiveShares funds were rejected in a letter dated April 17 that just became widely public, reports Daisy Maxey for the Wall Street Journal.
Daniel McCabe, chief executive at Precidian, said the company is still working on resolving issues and plans to refile to launch the funds.
“This is a normal part of the ETF application process. They ask questions, you answer, and they ask more questions,” McCabe said in a Reuters article.
The dated denial letter was made public by competitor Eaton Vance Corp after acquiring the information from the SEC through a Freedom of Information Act request. Eaton Vance has been keeping a watchful eye on other proposals in the space as the company has already received SEC approval for its own product line.
”The reason we’re releasing it [the letter]is that NextShares is material to our company,” as is the size of the potential competitive market, Tom Faust, chief executive of Eaton Vance, said in the WSJ article.