On October 19th, Eileen Rominger, SEC Director, Division of Investment Management, testified before a Senate subcommittee concerning exchange-traded products ("ETPs") and exchange-traded funds ("ETFs"). SEC staff members from across multiple Divisions and Offices are currently engaged in a general review of ETPs, which includes gathering and analyzing detailed information about specific products. For example, SEC staff members are currently reviewing ETPs' investor disclosure, liquidity levels and transparency, fair valuations, efficiency in the arbitrage process and the relationship between market volatility and ETPs. SEC staff members also have deferred consideration of exemptive requests for ETFs seeking to register under the Investment Company Act of 1940 (the "Company Act") who make significant investments in derivatives. This action was taken in light of concerns raised generally about the use of derivatives by all registered investment companies, including ETFs. Further, the SEC recently instituted its first insider trading case involving ETFs. The SEC alleges that non-public information concerning Goldman Sachs' ETF trading strategy was used by a former Goldman Sachs employee and his father to trade in the underlying securities. Rominger Testimony.