SEC Clears Path for Riskier ETFs, But Warns of Tougher Rules (1)

For a risky corner of the exchange-traded fund market, U.S. regulators are giving the industry an easier pathway to getting new products approved while warning that tougher rules may be on the horizon.

The Securities and Exchange Commission on Wednesday cleared the way for an uptick in exchange-traded funds that use derivatives to juice investment returns, provided that firms comply with a new set of restrictions. Meanwhile, SEC Chairman Jay Clayton and his top deputies said they’ve also commenced a review of those products -- and others such as exchange traded notes -- that have exploded in popularity among retail ...