ETF Product Proliferation

In Which I Prepare to Whine at the SEC

I was honored (and I’ll admit, slightly confused) to be invited to participate in the SEC’s Conference on Emerging Trends in Asset Management this week. The SEC (and most regulators) conducts these kinds of “mini-events” with and about the industries they regulate on a pretty regular basis, and that’s awesome. Consider the alternative: no public meetings between regulators and industry, just lobbying!

I was asked to participate alongside Samara Cohen (CIO of ETF and Index Investments at Blackrock), who’s one of the best and brightest human beings I know, and Gerard O’Reily (Co-CEO/CIO of Dimensional Fund Advisors), who I know from the conference circuit and find intellectually impressive and intimidating. I suspect I was included precisely because of my (ahem) current status not representing any firm. I’m representing, if anyone, you all: advisors and investors trying to make sense of a chaotic market. And I don’t much care who gets mad at me anymore.

The topic was “Product Proliferation.” Here’s my quote:

The current regulatory environment can best be described as “I dare regulators to stop me.” With the launch of $PRIV, the U.S. markets crossed a Rubicon, where an actual, live, trading product is launched against the concerns and objections of regulators. Recent filings by Rex-Osprey similarly drew SEC ire, causing Commissioner Crenshaw to comment last week that “Even our staff can’t reconcile these inconsistencies, though their concerns seem to matter less to certain industry participants these days.”

The current filing-and-launch environment creates enormous risk for investors looking at new products in 2025. While “buyer beware” has always been good advice, in today’s market, it’s beyond insufficient. For new hot-sauce products coming to market on 75-day (or shorter) approval clocks, the new mantra should be “Assume toxicity until proven otherwise.”

So looking at the recent rash of filings, let’s dig into last 8 days of ETF filings, focusing on the ones that should be euthanized on their way to launch.

With apologies to Allie Bosch

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