Our lawyers have extensive experience advising clients on exchange-traded fund (ETF) formation and the development of new products. We counsel a variety of financial firms on entering the ETF business, including those creating their own ETF trusts, those launching ETFs using third-party platforms and those becoming sub-advisers to ETFs offered by existing fund complexes. We guide ETF sponsors through complex and evolving legal issues and help facilitate the efficient and timely launch of their ETFs. Once a new fund is launched, we advise on a broad range of issues including regulatory filings and compliance and board matters. We have developed close relationships with leading ETF service providers necessary to operate an ETF, including administrators, Authorized Participants (APs), custodian banks, exchanges, index providers and market makers. Our experience with these service providers helps ensure a coordinated and effective approach to the legal and other services necessary to offer ETFs. We also work with boards of directors on all aspects of establishing and overseeing ETFs.
In addition to providing the legal counsel necessary to organize an ETF, we assist clients with planning and structuring their businesses. We help them evaluate their options and provide guidance on the business decision to create a stand-alone ETF trust or offer an ETF on a third-party platform. We have extensive experience drafting and negotiating the full range of documents for new ETFs including prospectuses, exemptive and 19b-4 applications, initial board materials and vendor agreements. We advise financial firms on navigating “first-of-its-kind” ETFs through the approval process at the SEC, other regulatory agencies and the exchanges. In counseling our ETF clients on new products, we collaborate with other Thompson Hine attorneys who focus on securities market, taxation, intellectual property and licensing issues. We also reach out to key industry participants, including market makers and authorized participants, who help vet the product and trading issues relating to the purchase and sale of ETF shares.
After the launch of an ETF, we provide an array of compliance and regulatory support services to our investment management clients. We advise on reporting, disclosure obligations, trading and brokerage practices, valuation matters, anti-money-laundering rules, Regulation S-P (privacy policies), proxy voting, distribution practices, advertising limitations, website compliance, and relevant tax and ERISA matters.
Investment Management Group
Our ETF practice is part of the firm’s Investment Management group, which services all types of investment funds (both registered and unregistered) and the investment advisers, banks, brokerage firms and other financial institutions that offer these funds and other products. Our deep understanding of the investment strategies related to different types of investment vehicles enables us to provide clients with comprehensive guidance on how to adapt strategies to an ETF and the product’s numerous regulatory restrictions and limits.
Thompson Hine is recognized nationally and internationally for its work with private and registered investment funds, including U.S. and offshore funds. We counsel a wide range of investment advisory firms and investment companies on regulatory and compliance matters, trading issues, trademark protection, and tax, bankruptcy and ERISA issues. In addition, we are particularly active in advising our clients on numerous types of investment opportunities, including private equity, private debt and other business transactions; structured finance deals; distressed debt transactions; and activist investor plays.
This episode features Bibb Strench, a partner in Thompson Hine’s Investment Management practice group, discussing the SEC’s regulation of ETFs.