SIFMA Opposes More SEC Novel-ETF Scrutiny

SIFMA argued in a letter to the SEC that existing rules already protect investors in recommended and advised novel-ETF transactions. The association also asked for a new naming convention for all ETFs.

The letter was in response to an SEC request for comment on funds using innovative asset classes or novel strategies (see prior coverage).

SIFMA's letter asserted that (i) the existing regulatory regime for broker-dealer-recommended or adviser-advised transactions already protects investors; (ii) all ETFs should face the same regulatory review, focused on a fund's complexity and risk rather than its novelty; and (iii) a transparent naming convention would improve retail investors' understanding of ETF features. SIFMA recommended that SEC staff continue reviewing new ETFs case-by-case, using existing tools to take extra time where material legal questions arise.