Compliance Reporter Features Article Authored by Investment Management Attorneys on Recently Approved Listing Rule Amendments for Actively Managed ETFs

Compliance Reporter recently featured an article authored by investment management attorneys, partner Brian McCabe, counsel Ed Baer and senior attorney David Geffen, on the SEC’s recently approved generic listing standards for actively managed ETFs. The authors detail that these standards, which are effective immediately, should simplify the ETF design process by permitting qualifying actively managed ETFs to bypass the time-consuming Rule 19b-4 approval process administered by the SEC’s Division of Trading and Markets. However, unlike an index ETF, an actively managed ETF will have to be monitored continuously for compliance with portfolio requirements and limitations under both the Investment Company Act of 1940 and the standards. Moreover, actively managed ETFs will need additional compliance procedures, including corresponding written policies and procedures, to assure time-of-trade compliance with the standards’ portfolio requirements and limitations.