The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2020 Euromoney, a part of the Euromoney Institutional Investor PLC.

MFA Calls For Wider ETF Access

The Managed Funds Association has asked the Securities and Exchange Commission to extend a proposed exemption, which would allow investment companies to invest in exchange-traded funds beyond current limits, to private funds.

In a comment letter to the agency this past Tuesday, the MFA said the proposal does not provide exemptive relief to private funds, such as hedge funds, that rely on Section 3(c)(1) or 3(c)(7) of the Investment Company Act. The proposal "is silent as to whether private funds were intentionally excluded from the proposed rule and fails to provide rationale for their exclusion," the group wrote.

The MFA added that it believes "private funds should be treated like other investment companies under the proposed rule and allowed to invest in ETFs without regard to the 3% limit." According to the group, extending the exemption would "facilitate funds' ability to engage in hedging transactions and to use ETFs as a risk management tool in a manner consistent with protection of investors."

A spokesman for the SEC declined comment. 


Take out a complimentary trial

Take out a 7 day trial to gain unlimited access to and analysis and receive expertly-curated updates direct to your inbox.


Already a user?

Login now


We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree