SEC seeks public opinions on novel ETF funds as industry races to innovate

The SEC dropped a 60-day comment window on June 30 asking the public, and more pointedly the fund industry, how it should think about a new generation of exchange-traded funds that don’t fit neatly into existing regulatory boxes. The request, filed as Release No. 33-11426, covers ETFs tied to crypto assets, event contracts, leveraged strategies, and private investments. Comments are due by August 31. US ETF assets have ballooned from $4 trillion in 2019 to $15.7 trillion by the end of May 2026, a nearly fourfold increase in about seven years. What the SEC actually wants to know At the core of the request is a deceptively simple question: can these novel funds operate under Rule 6c-11, the 2019 regulation that streamlined how most ETFs come to market? The SEC is also probing whether the Investment Company Act of 1940 even applies to some of these new structures. Beyond classification, the SEC flagged potential changes to the registration process itself, as novel ETF sponsors have been navigating a patchwork of exemptive relief applications and informal guidance. One telling detail: the SEC noted that fund sponsors had voluntarily delayed launching certain novel ETFs as of May 20, 20...