NEW YORK (Reuters) – Market regulators are poised to approve trading of a new kind of product that could bring more stockpickers to U.S. exchange-traded funds, according to a filing on Monday.
The U.S. Securities and Exchange Commission’s conditional approval would allow Precidian Investments to license a new type of actively managed exchange-traded fund (ETF) that, like traditional active mutual funds, will not be required to disclose what it owns on a daily basis as most current active ETFs must.
The Precidian funds will disclose daily holdings only to a new subset of professional trader called the “authorized participant representative” in order to facilitate the process of creation and redemption of ETF shares, the filing said.
The SEC, which had twice before declined to give a green light to Precidian’s non-transparent active ETFs due to concerns about whether the funds’ prices would track their holdings, said it would approve the proposal unless its commissioners decide to order a hearing.
Bedford, New Jersey-based Precidian’s ActiveShares technology – which has been licensed by fund companies including ETF giant BlackRock Inc – is designed for money managers who actively pick stocks and bonds instead of following a market index.
The new products couldRead the rest of this post here