NYSE Pushes to List Nontransparent ETFs

ETF Trends

NYSE Euronext, the parent company of the New York Stock Exchange, has asked the Securities and Exchange Commission for permission to list nontransparent ETFs.

The ETFs would be listed on the Arca trading platform of the NYSE Euronext, which is now owned by InterContinentalExchange Group (ICE), writes Murray Coleman for the Wall Street Journal. The Journal broke the news of the NYSE filing with the SEC earlier Thursday.

Earlier this week, Precidian Investments has filed plans  for a nontransparent active ETF. The filing shows a two-tiered process that shield trades in which a custodian acts as a middleman dealing through a blind trust on behalf of large investors redeeming shares in-kind – currently, institutional investors directly trade with fund providers. Additionally, the net asset values of each ETF would be revealed every 15 seconds, but the NAV would not include actual components. Instead, individual component weights will be disclosed on a quarterly basis. [Precidian Plans Actively Managed ETF]

On Thursday, Eaton Vance’s (EV) Eaton Vance Asset Management said it has filed  a second amended application seeking exemptive relief to permit the offering of exchange-traded managed funds.

ETMFs are new concept that looks to marry the liquidity and tax efficiencies that have attracted investors to ETFs with active investment strategies, while maintaining the confidentiality of current portfolio trading information, according to the statement. [Eaton Vance Moves Closer ETMFs Reality]

Nasdaq OMX Group (NDAQ) has also been working with other fund sponsors interested in bringing to market nontransparent ETFs, according to the Journal.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

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