U.S. regulators said they plan to deny proposals for a new breed of actively managed exchange-traded funds that would be allowed to keep their holdings under wraps for months at a time, the latest setback to a push for a rule change that many in the industry see as a game changer for the ETF market.

The U.S. Securities and Exchange Commission late on Tuesday issued a notice on two of the proposals, noting for each that it "preliminarily intends to deny the application" for permission to create such actively managed ETFs that would not be required to disclose their holdings on a daily basis, commonly referred to as "non-transparent" or "less transparent" active ETFs.

Currently, all active ETFs are required to disclose their holdings on a daily basis. But for actively managed funds, which often gain a reputation based on a manager's winning investment philosophy, daily transparency could allow others to "front-run" the active manager.

Firms say these so-called "non-transparent" ETFs will allow them to use sophisticated investment strategies without having to reveal the fund manager's tactics.

"Absent a request for a hearing that is granted by the Commission, the Commission intends to issue an order under the Act denying the application," the notice said.