The race to launch the next generation of ultra-leveraged ETFs has slammed into a regulatory wall, jolting one of the fastest-moving corners of the $8 trillion ETF industry. The SEC’s warning letters to nine issuers, including ProShares, Direxion, and GraniteShares, effectively put the brakes on plans for products promising as much as five times the daily return of individual stocks, sectors, and even cryptocurrencies.
Painful timing for an industry where half the game is speed-to-market. ProShares had been gearing up for 3× tech-focused products tied to Meta Platforms, Inc (NASDAQ:META) and Broadcom Inc (NASDAQ:AVGO), but withdrew the filings after regulators demanded clearer disclosures and questioned legal compliance. Others, such as Tidal Financial and Volatility Shares, now see their full leveraged ETF pipelines in limbo amid the SEC’s pause in reviews for the product class.
