SEC Commissioner Encourages Dialogue On Exchange-Traded Products

SEC Commissioner Michael Piwowar opened an SEC-NYU conference by describing different types of ETPs: exchange-traded funds ("ETFs"), exchange-traded notes ("ETNs"), and exchange-traded commodity funds ("commodity ETFs") and by distinguishing between ETPs and other financial products. ETPs "allow investors to invest in a portfolio of assets or in the performance of a benchmark." Unlike mutual funds, he said, investors can trade ETP shares throughout the day which "allows investors, both retail and institutional, to tailor their portfolios to take advantage of changing market conditions that occur throughout the day."

The conference, co-sponsored by the SEC Division of Economic and Risk Analysis and the New York University Salomon Center for the Study of Financial Institutions, addressed (i) the effect of ETPs on the efficiency and quality of the financial markets, (ii) implications for investors in a developing market, and (iii) the future of the ETP market, including