SEC demanded to remove the word “blockchain” from the names of two ETFs
Two exchange-traded investment funds (ETFs) were forced to remove references to the blockchain from their descriptions, reports Bloomberg. To this they were forced by the US Securities and Exchange Commission (SEC).
So, initially the word “blockchain” appeared in the name of the ETF Amplify and Reality Shares. However, the SEC refused to approve their launch until the mention of the distributed registry technology was not excluded.
Such a requirement in the Commission was explained by the Investment Companies Act of 1940, according to which issuers cannot use “deceptive or misleading” names. In addition, in 2011, the SEC also clarified that the funds can use in names the names of assets that constitute at least 80% of the capital of the relevant financial product.
“The names must match the ones offered by the funds,” said SEC Commissioner Hester Pierce.
As a result, Amplify had to change the name of its investment product to “a qualitatively new ETF in data dissemination”, and Reality Shares now offers the “Nasdaq NexGen economy ETF”.