SEC forces ETFs to delete “blockchain” from their names
|- The US regulator fights with misleading names for financial products.
- One third of all ETFs had to tweak their titles before they went online.
The U.S. Securities and Exchange Commission forced two thematic exchange-traded funds to take “blockchain” out of their names, Bloomberg reports citing sources familiar with the mater.
The regulator wants to make sure that the names of the themed products are not misleading and pays more attention to the titles of the exchange-traded funds. According to the report, more than a third of them had to tweak their names during the regulatory approval process, even before they went online.
“We get questions more than we used to where we have to be able to defend our name. “Now almost all names, they’ll come back and say ‘Can you justify, give us your explanation on why this name is OK?” Garrett Stevens, chief executive officer of Exchange-Traded Concepts, commented.
The SEC says that the names should reflect what the funds actually do or offer. Moreover, the regulator is entitled to issue a stop order to prevent the fund from selling shares if it fails to deal with the concerns regarding the names of its products.
Thus, last year, two funds had to remove “blockchain” from their names. The Amplify- and Reality Shares-branded ETFs first contained a reference to the distributed ledgers technology but in the end had to come up with a different name.
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