The U.S. Securities and Exchange Commission asked leveraged-ETF issuers not to move forward with a new wave of planned funds, using a rare group call Monday to renew its push against increasingly aggressive fund structures.
The agency's Division of Investment Management made the ask during a brief call with independent trustees and fund counsel, according to six people familiar with the matter. The call lasted only a few minutes with no question-and-answer session, participants said.
The message, they said, was to relay to issuers that they shouldn't go effective — the step that activates a fund's registration and clears it to launch — with their proposed products.
At stake is whether a new generation of ETFs — some designed to deliver as much as five times the daily return of an underlying index, for instance — comply with regulatory limits governing fund risk relative to assets.
Issuers' proposed products would need to meet the requirements of Rule 18f-4, the SEC's derivatives risk-management rule. Regulators, for now, remain unconvinced.
Leveraged ETFs use derivatives to multiply the daily return of an underlying asset, meaning gains and losses are amplified equally — and because the leverage resets daily, returns over longer periods can diverge sharply from the multiple implied by the fund's name.
Once a niche tool for professional traders, the products have become increasingly popular with retail investors, who are drawn by the prospect of outsized gains in volatile markets.
The SEC declined to comment.
Copyright 2026 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
© Touchpoint Markets, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.