Leveraged, Inverse ETFs Would Face Easier Approval in SEC Plan

U.S. regulators are considering making it easier for Wall Street to issue exchange-traded funds that rely on derivatives to juice returns, as the finance industry continues to benefit from the rule-cutting of the Trump era.

Under a Monday proposal, firms would be allowed to sell some leveraged and inverse ETFs without seeking special approval from the Securities and Exchange Commission. Leveraged ETFs use derivatives to boost gains, but can also amplify losses. An inverse ETF moves in the opposite direction of the benchmark it’s based on, so theoretically the price falls when an index rises.

The SEC’s plan would ...