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Market observers blamed the disconnect between ETFs and their NAV to Rule 48 on the New York Stock Exchange. The NYSE invoked Rule 48 multiple times to prevent panic trading during market open last week. The relatively new rule allows stocks to open without price quotes ahead of time to allow a more orderly stock market open when there is expected to be large price gaps. However, with many securities stuck in a holding pattern on August 24, the diminished transparency into pricing may have affected market makers’ ability to calculate at what price to step in. Consequently, ETF prices plunged lower as orders failed to get filled.

Related: SEC Aims To Secure ETF Trading

Additionally, the SEC is also reviewing ways to improve the “form, content and delivery” of mutual fund disclosures, which would make it easier for investors to understand how fees eat into their returns, White said.

“A fund’s disclosure of fees and expenses plays a pivotal role in informing investors about their fund investments,” White added.

The greater transparency into mutual fund fee disclosures could also cause more investors to shift away from high-cost mutual funds that have consistently underperformed their benchmarks for low-cost, passive index-based ETFs. In the ETF space, we are already seeing increased asset inflows into low-cost options.

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