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By Trevor Hunnicutt
NEW YORK, May 2 (Reuters) - The Securities and Exchange Commission on Tuesday approved a request to trade quadruple-leveraged exchange-traded funds, marking a first for the growing market for such products in the United States.
The request to list ForceShares Daily 4X US Market Futures Long Fund, under the ticker UP, and ForceShares Daily 4X US Market Futures Short Fund, under the ticker DOWN, was filed by Intercontinental Exchange Inc's NYSE Arca exchange.
One of the funds is designed to deliver 400 percent of the daily performance of S&P 500 stock index futures, while another fund will aim to deliver four times the inverse of that benchmark. That means a fund could go up 8 percent on a day the index it tracks falls by 2 percent.
ETFs offering three times leverage already trade in the United States, but more reactive products have been limited to listing in Europe.
"We're excited about it," said Sam Masucci, chief executive officer at Exchange Traded Managers Group LLC, which is distributing the product, though he said the product is "not going to be for everybody.
"But for those people that are looking for the leveraged exposure to the S&P and they're not looking to do it by way of a futures product here you have a publicly listed security," Masucci said.
Regulators' move to approve the products comes after a difficult time for sponsors of more exotic ETFs.
Last year, the SEC presented draft rules that would restrict the use of derivatives, which was seen crimping some fund managers' ability to keep highly leveraged products on the market.
In March, the agency ruled against an application by investors Cameron and Tyler Winklevoss to bring the first Bitcoin ETF to market, although the SEC recently said it would review that decision.
The U.S. Senate voted on Tuesday to confirm attorney Jay Clayton to head the SEC, a change in leadership that could prompt a change in tack by the agency through which investment products come to market.
Douglas Yones, a top NYSE ETF official, said in an emailed statement that he hopes the approval "paves the way for us to work with other leveraged product issuers over the rest of the year."
The product sponsor could not immediately be reached for comment. (Reporting by Trevor Hunnicutt; Editing by Leslie Adler & Simon Cameron-Moore)