Nasdaq ETF Launch Rule & Sirios' Fee-Driven ETFs!

Nasdaq ETF Launch Rule & Sirios’ Fee-Driven ETFs!

This week brought two developments that could reshape how investors experience ETFs at two different levels: a market-structure proposal from Nasdaq designed to smooth ETF debuts, and a product innovation from Sirios that introduces performance fees into a UCITS ETF. Both moves reflect the industry’s push toward refined trading mechanics and more sophisticated product design.

Nasdaq’s Launch-Timing Rule: Smoothing ETF Debuts

Nasdaq has filed a rule change to broaden the definition of Exchange-Traded Products to include a Class ETF Shares structure and allow certain new ETFs to begin trading at the regular 9:30 a.m. session rather than during the 4:00 a.m. pre-market window. The practical aim: reduce the thinly traded, volatile opening prints that can accompany new ETF listings and improve price discovery on day one.

Why timing matters

When ETFs debut in pre-market or extended-hours sessions, order books are typically thinner and market-making activity can be limited. That combination often produces wide spreads and sharp price moves that don’t reflect broader market consensus. Moving launches to the regular session concentrates liquidity, increases participation from a larger set of market makers and investment desks, and generally produces more orderly opening prices.

Industry implications

• Issuers: Smoother debuts reduce reputational risk from messy openings and may cut early-day tracking error that discourages institutional buyers.
• Market makers: Consolidated activity during regular hours can improve quoting confidence and reduce inventory risk around launches.
• Investors: Better price discovery at launch helps ensure creation/redemption mechanics and secondary-market pricing align more closely.

While the change targets operational mechanics rather than fees or product design, it can materially improve the investor experience for every new ETF listing by limiting extreme first-day price swings and improving informational efficiency.

Sirios’ Performance-Fee UCITS ETF: A New Fee Model in Europe

On April 7, 2026, Sirios Capital Management, together with iM Global Partner, launched the iMGP Sirios Absolute Return Fund R EUR HP PR UCITS ETF — a long/short equity ETF that pairs a standard management fee with a 20% performance fee on outperformance. This is notable because UCITS ETFs historically avoided hedge-fund-style performance fees, making this product a clear step toward blending liquid ETF wrappers with active-manager compensation structures.

What this product brings

By implementing a performance fee, Sirios aligns manager incentives more directly with investor outcomes: if the strategy generates alpha, the manager shares in gains; if not, investors primarily bear the base fee. The ETF uses a long/short approach aimed at absolute returns and potential downside mitigation, attracting investors seeking hedge-like exposures but within an ETF format that offers transparency and daily liquidity.

Potential ripple effects

• Product innovation: Successful uptake could encourage other European issuers to experiment with fee structures long common in hedge funds but rare in ETFs.
• Investor segmentation: Performance-fee ETFs may appeal to performance-oriented investors while raising due-diligence needs around high-water marks, fee calculations and redemption mechanics.
• Regulatory and operational scrutiny: Exchanges, custodians and regulators will monitor how performance fees are disclosed and implemented within the UCITS ruleset.

Fast Takeaways

Both items—Nasdaq’s launch-timing proposal and Sirios’ performance-fee UCITS ETF—reflect maturation in ETF infrastructure and product strategy. Nasdaq’s move targets market-structure frictions that affect all ETFs at listing, promising calmer, more transparent debuts. Sirios’ product pushes the boundary of what an ETF can charge and how managers are compensated, signaling a future where ETFs may incorporate more active, hedge-like features.

Conclusion

The ETF ecosystem is evolving along two complementary axes: the plumbing that governs how ETFs trade, and the product design choices that determine what ETF investors can access. Nasdaq’s proposed rule change addresses the former by improving day-one trading dynamics; Sirios’ launch tackles the latter by testing a performance-fee model inside a UCITS ETF. Together, these developments highlight continued innovation—operational and structural—that will influence issuer strategy and investor choices over the coming months.

Investors and advisors should monitor the regulatory path for Nasdaq’s proposal and observe initial flows and performance reporting from Sirios’ ETF to assess whether these changes deliver the intended benefits.