An ETF could violate the rules if it tracks an index holding stocks falling below a certain trading volume, even if the ETF does not hold that stock, ETF managers and an industry group argued. They said it is not clear how the proposals address concerns about market manipulation.
"This would introduce monitoring and oversight for something that we don't control," the funds' indexes, said Chuck Thomas, head of U.S. ETF capital markets at Vanguard Group. He said the impact on Vanguard funds would be minimal.
BlackRock and Invesco declined interview requests.
This article was provided by Reuters.