Several new regulatory requirements and developments should be evaluated by certain ETF sponsors and advisers regarding changes to the stock-exchange listing standards and Regulation M. This article summarizes these developments and their potential compliance program implications.
Insights and guidance from ACA's team of experienced compliance and technology professionals.
On November 8, 2018, the Securities and Exchange Commission’s Office of Compliance Inspections and Examinations (“OCIE”) issued a National Exam Program Risk Alert announcing its 2019 examination initiatives focused on matters relevant to mutual funds and exchange-traded funds (“ETFs”). These initiatives illustrate OCIE’s continued commitment to examining matters important to retail investors, as mutual funds and ETFs are their primary investment vehicles. Here we focus on the ETF initiatives.
In early 2017, the SEC approved rule-change proposals establishing continued listing standards for passively and actively managed exchange-traded products. More specifically, the rules require ETP issuers and managers to adopt new monitoring and oversight protocols to ensure continued compliance with the applicable listing standards. In the event an ETP falls out of compliance with the standards, the Manager must promptly notify the appropriate Exchange.