SEC Steps Up Enforcement for Unsuitable Sales of Complex ETPs
Authors
Over the past decade, exchange traded funds (ETF) have grown in popularity, with investors putting literally trillions of dollars into such funds. This growth has given rise to a new SEC rule to modernize ETF regulation—Rule 6c-11 of the Investment Company Act of 1940. In addition, the industry has undertaken self-regulatory efforts to ensure a fair and transparent market. Finally, as emphasized by an enforcement action announced on Friday, Nov. 13, 2020, the Securities and Exchange Commission’s Division of Enforcement’s Complex Financial Instruments Unit continues to pursue its Exchange Traded Products Initiative, which seeks to ensure that the risks of such investments are understood by investment advisers and investors alike.
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