Content and data provided by various third parties and Fidelity − Terms of Use | Help/Glossary
Research > ETFs > ETF / ETP Commentary > 

ETF Prime: SEC’s Brian Daly on the Path for Novel ETFs

BY | ETF Database
8:03 am ET 10/14/26 | 3 VIEWS
Novel ETFs are headed toward a clearer review process, according to Brian Daly, who directs the Division of Investment Management at the Securities and Exchange Commission (SEC).Key Takeaways: Daly says the SEC is reasonably close to a proposal for reviewing novel ETFs after industry feedback. About 85 comment letters stressed a predictable process, staff time, and neutrality toward asset types. xETFs’ Johnny Wu favors AI bottleneck stocks over the largest hyperscalers for exposure to the build-out. Daly joined ETF Prime host Nate Geraci to discuss the agency’s request for comment on the prediction market and crypto ETFs. Geraci also spoke with Johnny Wu, founder and CEO of xETFs, and Paul Baiocchi of SS&C ALPS Advisors. Speaking in his personal capacity, Daly credited the 2019 ETF rule for much of the industry’s growth. ETFs grew from around 2,000 to just under 6,000, and about 125 now become effective each month. Copycat filings often appear within hours of a new idea hitting the SEC’s public database, Daly said. In the “ETF Terrordome,” as Geraci calls it, the first fund to gather assets wins, and “there is no second place.” The request for comment aimed to build an orderly process that still leaves room for talks with sponsors. See more: Novel ETFs: New Strategies Push BoundariesIndustry Feedback Shapes SEC’s Next MoveThe industry sent about 85 letters and inbound conversations, Daly said. Two-thirds had a lot of detail, and one-third came from fund sponsors. “Everyone hated the term ‘novel ETF,’” while sponsors backed a transparent, predictable process, he added. Commenters also worried that the “spaghetti cannon” of rapid-fire fund launches takes staff time from complex products, a concern Daly said the agency shares. They also want the SEC to remain neutral toward different asset types. According to Daly, the staff is reasonably close to a proposal for the commission. Wu, a former Barclays structured products executive, launched xETFs in May. His xETFs AI Bottlenecks ETF (NECK) holds about 20 stocks tied to AI supply constraints. Wu likened the AI build-out to the internet boom, when nine of the 10 biggest companies trailed the S&P 500 over 25 years. Wu’s xETFs Nvidia Daily Income ETF (NYYY) and xETFs Tesla Daily Income ETF (TYYY) sell one-day call options on up to 25% of each portfolio. The funds close those options before the market closes and pay distributions weekly. Baiocchi said inflation remains a concern, and that many investors are underexposed to commodities and real assets. He also highlighted the long-term electrification of the economy.For more ETF Prime podcast episodes, visit our ETF Prime Channel.

More Commentary

QQQI Hits 15 Billion Mark Aided by Tax-Efficient Approach
BY | ETF Database
5:23 am ET 10/14/26 | 25 VIEWS
This Duo Livens Up the Long/Short ETF Proposition
BY | ETF Database
6:06 am ET 10/14/26 | 15 VIEWS
Combining Growth Optimism With Fundamental Discipline
BY | ETF Database
6:47 am ET 10/14/26 | 12 VIEWS
View more Commentary

Search Commentary

Enter Keyword(s)
Filter Results

Performance data shown is past performance and is no guarantee of future results. Current performance may be higher or lower than the performance data quoted. Yield and return will vary, therefore you have a gain or loss when you sell your shares. For standard quarterly performance, go to the fund's Snapshot page by clicking on the ETF/ETP's symbol.

ETFs may trade at a premium or discount to their NAV and are subject to the market fluctuations of their underlying investments.

For iShares ETFs, Fidelity receives compensation from the ETF sponsor and/or its affiliates in connection with an exclusive long-term marketing program that includes promotion of iShares ETFs and inclusion of iShares funds in certain FBS platforms and investment programs. Please note, this security will not be marginable for 30 days from the settlement date, at which time it will automatically become eligible for margin collateral. Additional information about the sources, amounts, and terms of compensation can be found in the ETF's prospectus and related documents. Fidelity may add or waive commissions on ETFs without prior notice. BlackRock and iShares are registered trademarks of BlackRock, Inc. and its affiliates.

FBS receives compensation from the fund's advisor or its affiliates in connection with a marketing program that includes the promotion of this security and other ETFs to customers ("Marketing Program"). The Marketing Program creates incentives for FBS to encourage the purchase of certain ETFs. Additional information about the sources, amounts, and terms of compensation is in the ETF's prospectus and related documents. Please note that this security will not be marginable for 30 days from the settlement date, at which time it will automatically become eligible for margin collateral.

News, commentary (including "Related Symbols") and events are from third-party sources unaffiliated with Fidelity. Fidelity does not endorse or adopt their content. Fidelity makes no guarantees that information supplied is accurate, complete, or timely, and does not provide any warranties regarding results obtained from their use.

Any data, charts and other information provided on this page are intended to help self-directed investors evaluate exchange traded products (ETPs), including, but limited to exchange traded funds (ETFs) and exchange traded notes (ETNs). Criteria and inputs entered, including the choice to make ETP comparisons, are at the sole discretion of the user and are solely for the convenience of the user. Analyst opinions, ratings and reports are provided by third-parties unaffiliated with Fidelity. All information supplied or obtained from this page is for informational purposes only and should not be considered investment advice or guidance, an offer of or a solicitation of an offer to buy or sell a particular security, or a recommendation or endorsement by Fidelity of any security or investment strategy. Fidelity does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating ETPs. Fidelity makes no guarantees that information supplied is accurate, complete, or timely, and does not provide any warranties regarding results obtained from their use. Determine which securities are right for you based on your investment objectives, risk tolerance, financial situation and other individual factors and re-evaluate them on a periodic basis.

Before investing in any exchange traded product, you should consider its investment objective, risks, charges and expenses. Contact Fidelity for a prospectus, offering circular or, if available, a summary prospectus containing this information. Read it carefully.