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Brian Daly

Brian Daly

Director, SEC Division of Investment Management

Appears in 1 story

Notable Quotes

“It is unclear whether these ETFs would comply with the Derivatives Rule (Rule 18f‑4), which generally limits leverage to 2x.”

Stories

SEC draws a hard line on ultra–leveraged stock and crypto ETFs

Rule Changes

Key policy voice on derivatives and ETF leverage compliance

In late 2025, SEC staff sent warning letters to nine ETF issuers, including Direxion and ProShares. The letters froze applications for 3x–5x leveraged ETFs tied to single stocks, sectors, and crypto assets including Bitcoin and Ethereum. The SEC staff cited Rule 18f‑4's value‑at‑risk cap and the requirement that the unleveraged underlying asset be the designated reference portfolio, which established that new ETFs cannot legally target more than 200% exposure.

Updated 6 days ago