ACA Foreside Releases White Paper Covering ETF Creation and Distribution

In a recently published white paper, ACA Foreside discusses the process of launching and distributing an exchange traded fund (ETF) in a paper titled, “Building and Distributing an Exchange-Traded Fund from Start to Finish.” The paper initially discusses the history of the ETF market, fund flows, differences between ETFs and other product offerings, taxation issues, and key legal and compliance issues. The paper notes potential benefits of using the ETF wrapper including trading flexibility, lower costs, and tax benefits. The paper then transitions into an in-depth explanation on how to start an ETF which includes necessary service providers, costs, and mutual fund to ETF conversions. This section includes a discussion of using a series trust versus stand-alone sponsor model to launch an ETF, including the benefit and downside of each. The paper also discusses the importance of distribution for ETFs, and highlights questions to ask including how will investors discover the fund and who the target market should be. The paper concludes by noting “[a]s products continue to evolve, staying on top of market trends, regulatory and compliance updates, and innovative product structures will be crucial.”

Click here to download a copy of the ACA Foreside paper “Building and Distributing an Exchange-Traded Fund from Start to Finish.”