Keri Riemer & Hazel Doyle

Keri Riemer and Hazel Doyle are attorneys at K&L Gates, a full-service global law firm. Keri started in general corporate law, then moved into Investment Company Act of 1940 work and never looked back. She spent time in-house at JP Morgan Asset Management and at the SEC in the Division of Investment Management's chief counsel office before joining K&L Gates. Hazel is Irish, based in K&L Gates' Dublin office, and entered the ETF world working at Bank of Ireland Securities Services, which was later acquired by Northern Trust. Her first ETF was Source, which was subsequently acquired by Invesco in 2017.

On this episode, the first live in-person interview on Behind the Ticker, Keri and Hazel talk with Brad about the legal process of getting an ETF to market in the US and Europe, the timeline and costs involved, and how the regulatory frameworks differ on each side of the Atlantic.

Getting an ETF to Market in the US

Keri walks through the legal process step by step. The first decision: are you forming your own complex (your own trust with your own board) or joining an existing series trust (white-label platform)? If you're forming your own complex, you need to set up everything from scratch: trust formation, board appointment, all the governing documents. Then you file a registration statement with the SEC. For a plain-vanilla, fully transparent ETF that doesn't need exemptive relief (which is the case for most ETFs since the SEC's ETF Rule in 2019), the process takes roughly two to three months if you're joining an existing trust, or three to five months if you're forming your own.

If the ETF uses a non-transparent or semi-transparent structure, you'll need to apply for exemptive relief from the SEC, which adds time and complexity. The same applies for certain exotic strategies that don't fit neatly within the Investment Company Act framework.

Beyond registration, the law firm helps negotiate every service provider agreement: the authorized participant agreements, index licensing agreements (if applicable), custody, transfer agency, and all the operational contracts that keep an ETF running. Keri notes that the law firm should be a "trusted advisor" throughout the ETF's lifecycle, not just at launch. They help with day-to-day compliance questions, SEC exam preparation, product development for new funds, and even M&A if the issuer wants to acquire another fund or convert a mutual fund into an ETF.

The European ETF Market

Hazel provides a window into the European side, which operates under an entirely different regulatory framework. European ETFs are typically structured as UCITS (Undertakings for Collective Investment in Transferable Securities), regulated primarily out of Ireland or Luxembourg. Dublin has become the dominant domicile for European ETFs because of its favorable tax treaties, regulatory expertise, and English-speaking legal infrastructure.

The Irish regulatory environment for ETFs has grown dramatically. Hazel notes that when she started, the Irish ETF industry was small. Now Ireland is the largest domicile for European UCITS ETFs by assets. The regulatory process involves filing a prospectus with the Central Bank of Ireland, which reviews the document and the proposed investment strategy. Timing depends on the complexity of the strategy, but straightforward UCITS ETFs can be approved in a matter of weeks once the documentation is in order.

One of the biggest differences from the US: UCITS funds can be "passported" across all EU member states, meaning a single fund domiciled in Ireland can be sold to investors in Germany, France, Italy, and every other EU country without needing separate registrations. This makes Dublin a natural base for issuers looking to access the entire European market with a single product.

US Issuers Expanding into Europe

Both Keri and Hazel highlight a growing trend: US ETF issuers are looking to expand into Europe, and vice versa. The collaboration between K&L Gates' US and Dublin offices reflects this convergence. For a US issuer, launching a UCITS ETF in Ireland opens access to all of Europe plus significant markets in Asia and Latin America that accept UCITS funds. The process involves setting up a new legal entity in Ireland (or adding a sub-fund to an existing UCITS umbrella), appointing local directors and service providers, and navigating the Central Bank approval process.

Keri notes that the mutual fund-to-ETF conversion trend in the US is also driving some issuers to consider ETF structures for the first time, and once they've gone through the ETF launch process domestically, expanding internationally becomes a natural next step. The current ETF industry globally sits at roughly $11 trillion, with about $8 trillion in the US and the remainder split across Europe, Asia, and other markets. The growth rate outside the US has been accelerating.

Key Takeaways

• Launching a plain-vanilla US ETF takes 2-3 months on an existing series trust, or 3-5 months for a new complex. Non-transparent structures require additional SEC exemptive relief.
• European ETFs are typically UCITS structures domiciled in Ireland, which has become the dominant European ETF domicile due to favorable tax treaties and English-speaking legal infrastructure.
• UCITS passporting allows a single Ireland-domiciled fund to be sold across all EU member states without separate country-by-country registrations.
• Keri's career included time at the SEC's Division of Investment Management, giving her direct insight into how the regulator evaluates ETF applications and conducts exams.
• Global ETF assets reached roughly $11 trillion at the end of 2023, with about $8 trillion in the US and accelerating growth in European and Asian markets.

Listen to the full conversation on Spotify, Apple Podcasts, or YouTube.