The SEC has issued a warning letter to ETF issuers targeting high-leverage products

BlockBeats News, December 4th, according to Cointelegraph's report, the U.S. Securities and Exchange Commission (SEC) has issued a warning letter to multiple exchange-traded fund (ETF) providers, halting ETF applications that were approved with leverage exceeding 200%.

ETF issuers Direxion, ProShares, and Tidal received the SEC's letter, citing relevant legal provisions in the Investment Company Act of 1940.

This law sets a limit on the investment fund's risk exposure, specifically that it should not exceed 200% of the value at risk of its "reference portfolio" (composed of unleveraged underlying assets or benchmark indices).