A SEC spokeswoman declined to comment.
Rules answering the SEC's concerns drafted by CBOE Holdings and the Bats exchange were approved in the notice posted on Wednesday, and a verdict could come soon on a proposal by the Intercontinental Exchange’s NYSE Arca exchange, the largest listing venue for ETFs. Nasdaq revised listing standards have already been approved.
ETFs already have to meet requirements to be listed. But the latest changes specify the funds must meet those standards not just when they launch but as long as they are trading.
The rules also bolster restrictions on trading firms or fund managers for setting the rules determining what stocks are in an index and calculating what the index is worth.
But even one of the exchanges has reservations about the new standards.
"The continuing listing standards in their current proposed form may cause undue costs for fund managers as well as a negative impact for investors, without offering additional protections for the shareholders of the ETF," said Doug Yones, NYSE's head of exchange-traded products, in a statement to Reuters.
Nasdaq and Bats declined to comment.
In its notice, the SEC dismissed industry concerns, writing that the absence of ongoing standards is a "gap" in regulation. The agency, which in 1992 first approved exceptions to U.S. law that allowed ETFs to trade, has been conducting a broad review of the industry.
The rules are aimed at achieving the same goals as the requirements applied before funds start trading, including ensuring the products "are not susceptible to manipulation and maintaining fair and orderly markets," the SEC wrote.
An ETF could violate the rules if it tracks an index holding stocks falling below a certain trading volume, even if the ETF does not hold that stock, ETF managers and an industry group argued. They said it is not clear how the proposals address concerns about market manipulation.
"This would introduce monitoring and oversight for something that we don't control,"—the funds' indexes—said Chuck Thomas, head of U.S. ETF capital markets at Vanguard Group. He said the impact on Vanguard funds would be minimal.
BlackRock and Invesco declined interview requests.