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Beverly Chandler

BNY Mellon predicts actively managed ETF numbers to increase

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BNY Mellon’s ETF Services group predicts that the number of actively managed ETFs is likely to increase significantly, once the US Securities & Exchange Commission rules on proposals designed to discourage high-frequency traders from stepping ahead of active managers. 

The firm writes that while traditional ETFs are highly transparent, this characteristic has been a detriment to some active managers who do not want every move studied by high-frequency traders seeking to front-run their transactions. “The various proposals being considered by regulators would limit the transparency required for managers of active ETFs. However, many in the industry believe that investors are willing to give up a measure of transparency to access active management in a cost-effective vehicle.”
 
Commenting on the eve of BNY Mellon’s fourth annual ETF Symposium, Steve Cook, business executive, structured product services at BNY Mellon, says: “Uncertainty around which proposal will be adopted has slowed the launch of actively managed ETFs this year.  However, once we have regulatory clarity, we expect a rebound in launches of actively managed ETFs. It will result in more options for investors, which is what everyone wants.”  

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