Exchange-Traded Funds and Investment Company Liquidity Disclosures Addressed in Recent SEC Actions
- Monday, July 16, 2018
Author: Marcy Kempf
A busy day for the Securities and Exchange Commission (SEC). The open meeting held on June 28, 2018, resulted in votes on several final rules and rule proposals that had been noted as priorities and publicly discussed in recent speeches from SEC staff. Among other things, two significant items — exchange-traded fund (ETF) exemptive orders and amendments to Rule 22e-4, better known as the Liquidity Rule — were both impacted by the day’s work.
Potential Relief from Exemptive Order Process
The conditions noted within the proposed rule would require ETFs to provide daily portfolio transparency on their websites, as well as other information such as historical data regarding premiums, discount and bid-ask spreads. In addition, for those ETFs utilizing a custom basket, the ETF would be required to adopt written policies and procedures outlining specific parameters for their use. Other disclosures and recordkeeping requirements are also outlined in the release, including potential revisions to Form N-1A to further promote consistency between the current requirements for open-end funds and ETFs relying on the proposed rule.