Global news – United States – SEC shelters move to protect investors in leveraged ETFs

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WASHINGTON – The Securities and Exchange Commission on Wednesday suspended a measure intended to protect investors who trade shares of a class of publicly traded funds it considers risky, saying it would review the question later

In November, the SEC proposed requiring brokers and investment advisers to review individual investors before allowing them to trade in the products, known as leveraged and reverse exchange-traded funds. These funds use debt to double or triple the gains – and losses – of an underlying index and are often misunderstood by investors

Leveraged and inverse ETFs are only a small portion of the fund universe, with $ 33.4 billion in assets, compared to $ 19.53 trillion held by mutual funds, excluding money market funds. two companies offering them, Direxion Investments and Bethesda, Mdbased on ProShares, saw the provision of sales practices as a threat to their business model

« ProShares strongly opposes unprecedented, unnecessary and detrimental restrictions on investor choice that would result from the Commission’s proposed ‘sell practice’ rules for transactions in leveraged and reverse exchange traded funds Company chief executive and co-founder Michael Sapir wrote in a March 24 letter to the SEC

Sir Sapir’s letter included a nearly 300-page legal memo arguing against the proposal ProShares and Direxion representatives and lobbyists met or had teleconferences with SEC officials or commissioners at nine times between March and July, according to SEC files

US Securities and Exchange Commission, Investment funds, Exchange traded funds, Derivatives, Leverage, Finance, Mutual funds

World news – US – SEC Shelves Measure to Protect Investors in Leveraged ETF

Source: https://www.wsj.com/articles/sec-shelves-measure-to-protect-investors-in-leveraged-etfs-11603916523

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