Fund managers pull nearly 130 single-stock ETF applications

Fund managers pull nearly 130 single-stock ETF applications

Three fund managers have withdrawn applications for almost 130 single-stock exchange traded funds prompting suggestions that US regulators had privately told them the ETFs would not be approved.

Kelly Intelligence, Roundhill Investments and Tema Global had filed with the Securities and Exchange Commission to create ETFs linked to the share price of a slate of non-US companies, such as Saudi Aramco, Volkswagen and Tencent.

However all three issuers have now abandoned their filings with minimal public comment.

“I am completely unsurprised that they’ve been pulled and would not be surprised if it was in direct response to SEC staff comments,” said Dave Nadig, financial futurist at VettaFi.

The SEC declined to comment, as did Kelly, Roundhill and Tema.

Kelly’s amended filing said it “has elected not to proceed with the registration process”, while Roundhill’s update said it “has determined not to proceed with the offerings of these series at this time”.

More cryptically still, Tema simply updated its filing by crossing out references to its proposed ETFs.

The apparent pushback comes despite the SEC having approved leveraged and inverse single-stock ETFs, even as it expressed concerns over their suitability for retail investors, in July. Those products were based on US-listed companies.

In contrast, the proposed new products would