An ETF That Hides Its Secret Sauce Is Poised for Regulator's Nod

Precidian gets go-ahead for active non-transparent funds
The structure seeks to mitigate the risk of front running

The U.S. Securities and Exchange Commission (SEC) seal is displayed outside headquarters in Washington, D.C., U.S.
Photographer: Andrew Harrer/Bloomberg

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By Rachel Evans and Annie Massa

April 8, 2019 at 8:18 PM UTC

This article is for subscribers only.

An exchange-traded fund that doesn’t have to reveal its assets is poised to get the regulator’s blessing after a more than four-year wait.

The U.S. Securities and Exchange Commission plans to issue an order granting Precidian Funds permission for the new type of ETF, the watchdog said in a notice Monday. Market participants can still request a hearing through May 3, the regulator said; if granted, that could potentially delay or derail the final approval. The funds also need permission to start trading from another division of the SEC.