The Securities and Exchange Commission (SEC) has granted exemptive relief to Exchange Traded Concepts (ETC) to allow the white-label exchange-traded fund sponsor to bring actively managed ETF products to market.
The application for exemptive relief was filed 18 months ago and comes at a time when the marketplace demand for actively managed ETF offerings is on the rise.
The active relief will apply to all three of ETC’s existing trusts created through partnerships with SEI, US Bancorp Fund Services and Citigroup/Foreside Fund Services respectively.
“As we continue to broaden the flexibility and mandates of our multiple series trust platform, the addition of active relief coincides with increased interest from hedge funds, mutual funds and separate account managers in bringing their strategies to market in ETF form,” says J Garrett Stevens, chief executive of ETC. “Our growth from one fund last March to five funds today with an additional five new funds slated for launch in the first half of the year is evidence of the strong demand for our platform.”
ETC’s first white label ETF product began trading in March 2012 under the Yorkville High Income MLP ETF moniker (YMLP). The launch of YMLP has stimulated interest from other potential sub-advisers in taking advantage of the accelerated path to market available through ETC’s platform.
“The traditional path to market for actively-managed ETFs is at least 18 months long given the SEC approval process. Beyond the exemptive relief process, sponsors need to keep in mind the 19b-4 process for each product, which will lengthen time to market. We are excited to help those looking to accelerate the process with our exemptive relief and operational support to navigate the regulatory complexities of launching and running an ETF,” says Stevens.
ETC expects to continue to broaden the exemptive relief available to sub-advisers on its platform to allow for continued innovation and flexibility for managers to complement the operational, compliance, trading, marketing and public relations service capabilities available to sub-advisers on the platform.