Title
These Guidelines may be cited as the Securities (Exchange Traded Funds) Guidelines, 2024.
Application
These Guidelines shall, unless exempted by the Commission, apply to Exchange Traded Funds and issuers of physically backed Exchange Traded Funds and excludes synthetic Exchange Traded Funds.
2.2 The Commission shall impose administrative sanctions provided in the Securities Act on a person who fails to comply with the provisions of these guidelines.
2.3 In case of any doubt on the application of these Guidelines to a particular Exchange Traded Fund, it is advised that direction or clarification be sought from the Securities and Exchange Commission.
Interpretation
In these Guidelines, unless the context otherwise requires –
- “Act” means the Securities Act, No. 41 of 2016 and any subsequent amendments;
- “Actively managed ETF” means an ETF which does not represent any selective index”
- “Arbitrage” means the practice of the Authorized Participants to cause the creation of more ETF units or shares for sale in the secondary market, or to purchase ETF units or shares in the secondary market for redemption, in order to take advantage of the price differential of the ETF’s Net Asset Value and the ETF’s market price;
- “Authorized Participant” (AP) means a licensed dealer that has entered into a participating agreement or any similar arrangement with an ETF and participating in the creation and redemption of shares or units in the ETF in accordance with the terms provided under the agreement or arrangement between the Authorized Participant and the ETF;
- “Authorized Participant Agreement (APA)” means an agreement entered into by a registered Authorized Participant with an ETF, for its participation in the creation and redemption of units or shares;
- “Basket of Securities” means the index constituent (i.e. securities) based on which an ETF share or unit is issued or redeemed;
- “Commission” has the same meaning as assigned in the Act;