May 16 The U.S. Securities and Exchange
Commission put on hold its initial approval of a risky
exchange-traded fund that promises four times the daily price
moves of S&P 500 futures contracts, the Wall Street Journal
reported, citing people familiar with the matter.
The earlier approval, given by the SEC's staff, has been
reconsidered due to which the ForceShares Daily 4X US Market
Futures Long Fund and Short Fund will not to begin trading, the
The commission could ultimately reverse or uphold the
staff's decision, the WSJ said.
The SEC had approved a request to trade quadruple-leveraged
exchange-traded funds earlier this month, marking a first for
the growing market for such products in the United States.
The request to list the leveraged ETFs was filed by
Intercontinental Exchange Inc's NYSE Arca exchange.
One of the funds is designed to deliver 400 percent of the
daily performance of S&P 500 stock index futures, while
another fund will aim to deliver four times the inverse of that
benchmark. That means a fund could go up 8 percent on a day the
index it tracks falls by 2 percent.
An SEC spokesperson could not be immediately reached for
ETFs offering three times leverage already trade in the
United States, but more reactive products have been limited to
listing in Europe.
(Reporting by Diptendu Lahiri in Bengaluru; Editing by Anil