BALTIMORE, Nov. 14, 2019 /PRNewswire/ --
NEWS
- On November 14, 2019, the
Securities and Exchange Commission (SEC) granted preliminary
exemptive relief to T. Rowe Price to
offer semi-transparent exchange-traded funds (ETFs). The
relief paves the way for T. Rowe
Price to bring to market ETFs that employ the firm's
successful, longstanding actively managed investment approach.
- T. Rowe Price has been engaged
in constructive dialogue with the SEC about the potential launch of
semi-transparent active ETFs for several years and first filed for
exemptive relief in 2013.
- While the preliminary SEC approval clears an important hurdle
toward T. Rowe Price offering ETFs,
additional regulatory steps must take place before the firm can
launch any ETFs.
- T. Rowe Price is still
determining which investment strategies may be available as
semi-transparent ETFs, though it will begin by offering certain
U.S. equity strategies.
- The semi-transparent structure, which is an alternative to the
daily portfolio disclosure structure used by conventional
transparent ETFs, would allow T. Rowe
Price to deliver its active strategies in an ETF wrapper
without disclosing information that could be harmful to the
interests of fund shareholders.
- ETFs have become popular with individual investors and their
financial advisors in recent years because of their tax efficiency,
low-cost structure, and convenience. Due to regulatory
requirements for daily portfolio transparency, most current ETFs
are based on passively managed strategies. By contrast, T.
Rowe Price's active ETFs will give
investors the opportunity to pursue alpha beyond a passive
index. They will do this by leveraging the firm's strategic
investing process, which is characterized by rigorous fundamental
research and active decisions executed by skilled, experienced
portfolio managers.
QUOTES
Tim Coyne, Head of
Exchange-Traded Funds
"Passively managed, index-based strategies have fueled the growth
of ETFs thus far. But we believe that semi-transparent,
actively managed ETFs from a trusted brand like T. Rowe Price have the potential to gain traction
with investors and advisors who are already interested in active
management but who might prefer the ETF structure. We believe this
is a significant milestone that will lead to opening a new avenue
for our business."
George Riedel, Head of U.S.
Intermediaries
"T. Rowe Price's semi-transparent,
active ETFs will be a new way for investors to access our
longstanding investment capabilities. As marketplace preferences
evolve, we want to be able to deliver our investment capabilities
in formats investors prefer, whether that is an open-end mutual
fund, an ETF, or something else, like a separately managed account
or a collective investment trust."
Scott Livingston, Head of Global
ETF Product
"We are grateful to the SEC for their expertise and guidance as we
worked collaboratively toward securing this preliminary exemptive
relief for T. Rowe Price ETFs. It's important to meet investors
where they are, and we believe that our ETFs will effectively
complement our existing product structures."
ABOUT T. ROWE PRICE
Founded in 1937, Baltimore-based
T. Rowe Price Group, Inc. (NASDAQ-GS: TROW), is a global investment
management organization with $1.15
trillion in assets under management as of October 31, 2019. The organization provides a
broad array of mutual funds, subadvisory services, and separate
account management for individual and institutional investors,
retirement plans, and financial intermediaries. The organization
also offers a variety of sophisticated investment planning and
guidance tools. T. Rowe Price's
disciplined, risk-aware investment approach focuses on
diversification, style consistency, and fundamental research. For
more information, visit troweprice.com, Twitter,
YouTube, LinkedIn, Instagram, or
Facebook.
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SOURCE T. Rowe Price Group, Inc.