The U.S. Securities and Exchange Commission (SEC) is seeking public comment to help inform its review of the listing and trading of new, novel, or complex exchange-traded products (ETPs), the Washington, D.C.-based regulator announced on Friday.
The SEC’s request for comment deals with key issues that arise when exemptions are sought to trade a new ETP, or when a securities exchange seeks to establish standards for listing new ETPs.
Among other things, it seeks feedback on arbitrage mechanisms and market pricing for ETPs, legal exemptions and other issues. It also asks for insight into how ETPs are sold, particularly to retail investors.
ETP investment strategies have expanded in recent years, the SEC notes, generating a significant increase in the number and complexity of exemption requests.
“Exchange-traded products have become an increasingly important investment vehicle to market participants ranging from individuals to large institutional investors,” said Mary Jo White, chairwoman of the SEC.
“As new products are developed and their complexity grows, it is critical that we have broad public input to inform our evaluation of how they should be listed, traded, and marketed to investors, especially retail investors.”
The public comment period will run for 60 days following publication of the comment request in the Federal Register.