SEC Officials Blast Leveraged ETFs, Other Funds Get Easier Path
- Any rule on leveraged funds needs Chairman Clayton’s support
- Concern that investors don’t know how ‘dangerous’ products are
Photographer: Andrew Harrer/Bloomberg
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Two top officials at the Securities and Exchange Commission are sounding the alarm over leveraged exchange-traded funds -- even as the agency looks to streamline sales of simpler ETFs.
Robert Jackson Jr., who holds a Democratic seat on the SEC, criticized a failure to address these “dangerous” funds in a proposed rule that would make it easier to bring plain-vanilla ETFs to market. Meanwhile, Kara Stein, a Democrat, posed a series of questions about who these products are appropriate for, and what their impact is on underlying markets. The regulatory body’s five commissioners voted unanimously to advance the planned rule to public comment.