SEC Eases Regulatory Burden For Listing Actively Managed ETFs

The Securities and Exchange Commission took a step toward streamlining the approval process for actively managed ETFs last week by approving rule proposals from two securities exchanges.

The order issued to BATS Exchange, Inc. (BATS) allows BATS to adopt "generic listing standards" for actively managed ETFs.  Up until now, generic listing standards applied only to passively managed ETFs that track an index.

The SEC issued a similar order to NYSE Arca, Inc.

This regulatory relief, originally proposed by the exchanges in November 2015, effectively removes a hurdle that actively managed ETFs faced when applying for a listing on the exchange.

Although actively managed ETFs that meet the new generic listing standards may list and trade their shares on the exchange without first obtaining separate approval from the SEC, the new rules do not eliminate or change the requirement for actively managed ETFs to obtain an order from the SEC exempting them from