Recent Wave Of Actively Managed ETF's Overcomes Lengthy Approval Process

Lengthy Approval Process

Ten new actively managed exchange-traded funds ("ETFs") were approved in February for listing on NYSE Arca ("Arca"). Among them is the eagerly awaited PIMCO Total Return Exchange-Traded Fund, an ETF managed by Bill Gross, manager of the prominent PIMCO Total Return Fund. Meanwhile, the first actively managed ETF to be listed on NASDAQ was also approved in February. The number of actively managed ETFs has grown rapidly since the first such ETF was listed in 2008. McKinsey now predicts that actively managed ETFs could exceed $1 trillion in assets under management before the end of this decade.¹

Advisers looking to join this budding market must be ready to navigate the complex regulatory regime. Launching an actively managed ETF not only requires exemptive relief from the SEC's Division of Investment Management,² but also requires approval of the SEC's Division of Trading and Markets. Unlike most index-based ETFs, actively managed ETFs must go