NYSE wants ETFs exempt from short sale rules

Share This Article
April 14, 2009 8:27am ETF BASIC NEWS

shortsaleNEW YORK (Reuters) – The New York Stock Exchange will ask U.S. regulators to exempt exchange-traded funds from any new rules curbing short selling, an executive at the exchange operator said Monday.

The Securities and Exchange Commission proposed five short sale restrictions last week and is now seeking public comment. It is under pressure to crack down on the trading strategy that profits from falling stocks, and has indicated it is considering including ETFs in any new rules.

“We’ll be including in our comment letter that we believe an exemption for ETF products is appropriate,” Joseph Mecane, NYSE Euronext’s executive vice president of U.S. cash markets, told Reuters in an interview.

ETFs — which have exploded in the last few years along with the growth in high-frequency trading firms — are publicly traded products that track an index, commodity or some other underlying asset.

Leveraged inverse ETFs, such as UltraShort ProShares, yield a compounded profit when the underlying asset falls. They have been blamed by some for exacerbating the sharp market drop that began last summer.

“They seem to be functioning as intended,” Mecane said of ETFs, which exchanges have come to rely on for continued growth in trading volumes. “We don’t think they actually cause distortive behavior, and that’s the main area where they’ve been villainized.”

Full Story: http://money.cnn.com/news/newsfeeds/articles/reuters/MTFH30679_2009-04-13_16-09-43_N13271703.htm



7 "SAFE HAVEN" Dividend Stocks for Turbulent Times

Read Next



Get Free Updates

Join over 50,000 investors who get the latest news from ETFDailyNews.com!

Most Popular



Explore More from ETFDailyNews.com

Free Daily Newsletter

Get daily ETF insights from our market experts. Never miss another important market development again!

ETFDailyNews.com respects your privacy.

Best ETFs

We've rated and ranked nearly 2,000 ETFs and ETNs using our proprietary SMART Grade system.

View Top Rated ETFs

Best Categories

We've ranked dozens of ETF categories based on relative performance.

Best ETF Categories