The Johannesburg Stock Exchange (JSE) intends to amend rules to enable listing of actively managed exchange-traded funds (ETFs).
To make listing actively managed ETFs possible, the JSE intends to expand the current Section 19 (Specialist Securities) to include specific provisions.
The marked-up amendments and an explanatory memorandum are available on the JSE’s website.
In the case of actively managed ETFs, fund managers pick the shares, trade and then generate returns for their clients.
According to Valdene Reddy, JSE Director of Capital Markets said the change will enable institutional and retail investors to craft different investing strategies.
JSE has invited market players to comment on the proposed changes to the law before Monday, 2nd, 2022.
Available data shows a strong appetite for actively managed ETFs, with demand expected to surpass the current $ 300 billion in assets under management in the coming years.
The Actively Managed ETF listing regulations amendment is expected to increase the offering and number of ETF listings on the JSE.
Most importantly, both passive and active ETFs offer investors an opportunity to diversify their portfolios cost-effectively.
There is a significant trend internationally, especially in the USA and Canada, to list actively managed ETFs.
The first actively managed ETF in the US market was listed in 2008, and to date, there are more than 1000 actively managed products listed across the globe.
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