Continued SEC/FINRA “Complex” Product Concerns: Will Good Regulatory Harvest Arrive?

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Like farmers uncertain about what crop to plant, the SEC and FINRA continue to cast about for ways to enhance their regulatory framework for “complex” products, particularly with regard to retail investor understanding. The regulators have been hampered by, among other things, the lack of any clear and consistent definition of what products should be regarded as “complex” for purposes of any such regulatory initiative.

In October 2021, the SEC approved rule changes by Cboe BZX Exchange Inc. to list and trade two complex exchange-traded products (ETPs). The next week, SEC Chair Gary Gensler issued a statement on complex ETPs in which he called for additional rulemaking to strengthen the investor protections around those products.

Mark Opila

Mark Opila

Accomplished executive leader adept at revitalizing underperforming operations, securing and managing key account relationships, and driving business growth goals. CEO of Patrina, responsible for corporate financial activities, all legal compliance, and shareholder communication.

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