, one of the pioneers of the ETF industry and a key player in a new ETF-like alternative, is calling for more regulatory oversight of ETFs.
| Gary Gastineau|
ETF Consultants LLC
Trevor Hunnicutt of Reuters offers
a sneak preview of Gastineau's concerns, which will be detailed in a Journal of Portfolio Management
article coming out this weekend. "Many ETFs just don't work very well," Gastineau tells the wire service.
Gastineau "now says he wants the [SEC] to police data published by fund companies to ensure it is not misleading and he is also asking the SEC to deny applications for some new ETFs," Reuters
Gastineau, 76, is an industry consultant and "helped invent" Eaton Vance's
] new active-ETF-like NextShares
product structure (which combines' ETFs real-time trading with mutual funds' less frequent disclosures). He worked at the AMEX in the early 1990s, promoting ETFs when they were first starting out. Later he worked
on Nuveen's first ETF push, joined ETF Advisors and fought
iShares (then part of Barclays Global Investors) over bond ETFs, took his own stab at active ETFs
, and then sold
that business, Managed ETFs
, to Eaton Vance.
He also still seems to have the SEC's ear. Reuters
points out that the regulatory agency "cited Gastineau's research or corresponded six times when, in 2014, it tabled a proposal to launch a new kind of ETF that would compete directly with NextShares." The wire service may be referring to Precidian Investments attempts
to gain SEC approval for a non-transparent, actively managed product that, unlike NextShares, would still be in ETF form.
, professor at the University of Mississippi School of Law and founder of Fund Democracy
, wonders if Gastineau's ties with NextShares might "make the SEC look at anything he says with a skeptical eye."
Gastineau's new remarks might find a receptive audience in SEC commissioner Kara Stein
, who has been outspoken
among her colleagues in questioning what she sees as "particularly risky and complex products" in the ETF world.
Neil Anderson, Managing Editor
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