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SEC Probes ETFs' Revenue-Sharing Agreements, Ignites

April 14, 2022

The US Securities and Exchange Commission (SEC) is investigating the exchange-traded fund (ETF) revenue-sharing agreements that managers make with broker-dealers and other financial intermediaries, reports Ignites.

Noting that the SEC could be looking for conflicts of interest, Morgan Lewis partner John McGuire said that “the commission may consider a broker-dealer’s recommendation to be a conflict of interest if the entity received a kickback by selling that product.” He added, “Mutual fund revenue-sharing agreements risk the same conflict of interest. The commission is likely looking at the broker-dealers, not the ETFs.”

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