SEC Greenlights SSGA Private Credit ETF, Then Flags Concerns
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A day after a new private-credit-focused exchange-traded fund from?State Street Global Advisors?began trading, the regulator also?sounded the alarm?with a list of concerns.
State Street Global Advisors' private credit ETF, which draws on?Apollo Global Management?as a key private credit partner, began trading Thursday, a day after getting the nod of approval from the SEC. But the regulator's investment management division?rained on?the product-launch parade with?a letter?outlining a list of detailed concerns.
In the letter, the SEC took issue with the ETF's use of Apollo in its name, prompting SSGA to?quickly rebrand?the product, Ignites, a sister publication of FA-IQ?reported. However, the name wasn't the only worry raised by the regulator.
The SEC also?raised doubts?about the ETF's liquidity risk management program, particularly the plan to rely on bids from Apollo to determine illiquidity of particular assets. In addition, the letter questioned a lack of transparency in State Street's filings about how Apollo will provide bids and purchase illiquid assets from the ETF.?Read more?from FundFire Alts Associate Managing Editor?Tom Stabile?here.
The letter didn't, however, contain any orders for SSGA to stop trading or marketing the fund. The move could signal a?new approach?for the SEC under the second?Donald Trump?administration,?Brian Ponte?and?Daniel Gil?of Ignites?reported.
Dropping the Apollo name may also?make it harder?for State Street to market the new private credit ETF.?Read more here.
Back in October, a survey of Ignites readers found widespread skepticism that the ETF wrapper was a good fit for private credit.