Looking ahead, under the new ETF rule, there will no longer be a need for new sellers of plain-vanilla ETFs to seek out the SEC for exemptive relief from the Investment Company Act of 1940, which will further reduce the time and money needed to kick start an ETF.
Nevertheless, white label firms still believe they have a place in this changing market.
“Exemptive relief aside, it will take you a year to set up the infrastructure to launch an ETF on your own,” Garrett Stevens, chief executive of Exchange Traded Concepts, told Bloomberg. “We’ve made it look easier than it is.”
The infrastructure behind the ETFs includes establishing an investment trust to house the fund, setting up a board of directors and getting essential service providers, such as a custodian, lead market maker and the authorized participants that create and redeem ETF shares. White label ETF providers will rely on their expertise and background to help get potential ETF clients to market in an efficient manner.
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