An article published by Compliance Reporter on Dec. 12 titled “In ETF boom's wake, SEC targets new and small funds for exams” discusses how the SEC is targeting new and small funds for exams following the surge of assets into ETFs to ensure that fund advisers' compliance programs are keeping pace. Insights from investment management counsel Ed Baer are included in the piece.
A lot of custom index ETFs with low trading volumes have been launched by newer entrants who are trying to catch lightning in a bottle, and there's worry from both the SEC and the ETF industry broadly that some of these products will not perform as expected, which may have a negative impact on the ETF industry," Mr. Baer states in the article, adding that “the SEC appears to be concerned with what boards and sponsors are doing to minimize the impact on shareholders from an ETF liquidation."
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