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SEC Clamps Down on Leveraged ETF Proposals Exceeding 200% VAR Limit

SEC Clamps Down on Leveraged ETF Proposals Exceeding 200% VAR Limit

Author:

Global Cryptocurrency

Published:

2025-12-03 11:41:01

20

3

BTCCSquare news:

The SEC has issued a formal warning to Direxion Shares ETF Trust and other applicants seeking to launch 3x and 5x Leveraged ETFs, citing violations of federal leverage restrictions. The regulator’s Division of Investment Management explicitly rejected attempts to exploit loopholes in Form N-1A filings, emphasizing compliance with Rule 18f-4.

Analysts note the MOVE signals heightened scrutiny of high-risk products. "They’re drawing a line at 2x leverage—anything beyond that gets treated like financial nitroglycerin," observed one structured products attorney who declined to be named given ongoing filings.

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