SEC Thinking About Removing ETF's Intraday NAV Updates

Investors can trade ETFs throughout the day, and now, a number of Wall Street industry groups are backing a Securities and Exchange Commission plan to remove a feature of the ETF trade.

The SEC wants to remove the practice of ETFs updating their net asset value in 15 second intervals, which some industry observers argue is cumbersome and often inaccurate, CNBC reports.

Alternatively, regulators are proposing ETFs should report their value once a day at the close of trading.

The intra-day NAV has been seen as a way for investors to compare an ETF’s price compared to the value of its underlying securities. The frequently updated NAV would allow investors to determine if the price they are getting at for an ETF is trading at a discount or premium to underlying assets, which is especially notable during volatile market conditions.

However, some critics argued that the figure is not precise.