SEC Seeks Public Comment on Novel ETFs

The Securities and Exchange Commission issued a request for public comment on exchange-traded funds (ETFs) seeking to invest in innovative asset classes or engage in novel investment strategies. The request focuses on ways to facilitate innovation in the ETF space while protecting investors, maintaining fair, orderly, and efficient markets, and facilitating capital formation.

“Innovation in exchange-traded funds depends on a consistent, transparent, and efficient regulatory framework,” said SEC Chairman Paul S. Atkins.  “The Commission’s request for comment seeks input from the public on how the U.S. ETF market can continue to grow and innovate while serving investors effectively, and I look forward to reviewing feedback from market participants as we evaluate how to best respond to recent market changes.”

“Exchange-traded funds are a tremendous success story, growing from $4 trillion in 2019 to over $12 trillion at the end of 2025. As ETFs continue to grow and novel strategies emerge, public engagement is essential to answering key questions to make the next years of development a success,” said Brian Daly, Director of the SEC’s Division of Investment Management.

The Commission encourages feedback on the important questions raised in the release. The Commission requests comment with respect to the status of certain novel ETFs as investment companies, the regulation of novel ETFs, and how the registration process for novel ETFs can continue to operate effectively.

The public comment period will remain open for 60 days following publication of the request for comment in the Federal Register.

Source: SEC