The new product will have characteristics of both mutual
funds and exchange-traded funds.
On November 6, the U.S. Securities and Exchange Commission (SEC)
issued a notice indicating that it intends to grant exemptive
relief that would permit the launch and operation of a new type of
pooled investment vehicle known as an "exchange-traded managed
fund" (ETMF).1 The following day, the SEC also
indicated that it will grant a proposed rule change filed by the
NASDAQ Stock Market (NASDAQ) that will permit the exchange to list
and trade ETMF shares.2
The ETMF will be the first of its kind, with features of both
exchange-traded funds (ETFs) and mutual funds. As described in the
ETMF Notice and the Listing Notice, this hybrid structure is
intended to provide many of the benefits of the traditional ETF
structure, but it does not feature the daily transparency currently
required for actively managed ETFs. For example, ETMFs are intended
to appeal to retail investors who
