PTG Responds to SEC Request for Comment on Novel ETFs
Aug 31, 2026
In a letter filed with the Securities and Exchange Commission (SEC) today, PTG argues that the SEC’s existing regulatory framework for ETFs, particularly Rule 6c-11, is generally working as intended and should continue to govern so-called “Novel ETFs” without imposing broad new restrictions. PTG emphasizes that ETFs have successfully expanded investor access to innovative and previously difficult-to-access asset classes while fostering competition, efficiency, and innovation. PTG contends that the regulatory focus should remain on whether ETF structures function effectively rather than on whether a product is labeled “novel.”
The letter maintains that a well-functioning primary market is the foundation of an efficient ETF ecosystem. According to PTG, the key determinants of ETF success are adequate and equal disclosure, reliable creation and redemption processes, and flexibility in the use of cash, in-kind, and custom baskets. PTG argues that concerns sometimes associated with Novel ETFs stem from the liquidity, transparency, and price discovery characteristics of their underlying assets, not from their novelty. As a result, the organization recommends evaluating funds based on these operational principles rather than creating asset-class-specific regulations or additional portfolio requirements.
Finally, PTG opposes measures that would broadly slow the approval of Novel ETFs, such as extended effectiveness periods or categorical delays. The letter states that existing SEC review processes already provide sufficient oversight and that any concerns regarding incomplete or problematic filings can be addressed through targeted staff review tools. PTG concludes by encouraging the Commission to apply longstanding ETF regulatory principles consistently across all products, allowing innovation to continue while preserving investor protections and market integrity.