December 16, 2019 / 4:39 PM / a month ago

Nasdaq resumes trading of certain ETF options

FILE PHOTO: A woman's umbrella turns inside out as she walks past the Nasdaq MarketSite during a snow storm in Times Square, New York, March 20, 2015. REUTERS/Adrees Latif/File Photo

NEW YORK (Reuters) - Trading in the options on certain exchange traded funds, including the iShares MSCI Emerging Markets ETF (EEM.P) and the iShares Core S&P 500 ETF (IVV.P), was resumed on Nasdaq’s exchanges after a brief halt, Nasdaq said on Monday.

Nasdaq had halted trading in options on some ETFs on Monday due to late notification of capital gains distributions, the exchange said in a system status message.

While ETFs help minimize tax liabilities, they do incur capital gains throughout the year. ETF issuers typically make distributions to all shareholders of a fund that incurred capital gains in order to cover the costs to individual investor.

Options prices typically have to be adjusted following such a distribution.

For instance, the iShares MSCI Emerging Markets ETF announced a special cash dividend of $0.266326 per share, according to a notification on Monday on the website for equity derivatives clearing organization OCC.

The iShares MSCI South Africa ETF (EZA.P), iShares U.S. Energy ETF (IYE.P), iShares S&P 500 Growth ETF (IVW.P), iShares Russell 1000 Value ETF (IWD.P) and iShares Core MSCI Emerging Markets ETF (IEMG.P), were the other issues on which options trading has resumed, Nasdaq said.

Nasdaq did not immediately respond to a request for comment on why there had been a delay in the notification of capital gains distributions for the concerned ETFs.

Reporting by Saqib Iqbal Ahmed; Editing by Chizu Nomiyama and Nick Zieminski

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