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By Sarah N. Lynch and Trevor Hunnicutt
WASHINGTON/NEW YORK, May 16 (Reuters) - The U.S. Securities and Exchange Commission is putting on hold a recent decision to approve an exchange-traded fund that promises four times the daily price moves of S&P 500 futures contracts, according to people familiar with the matter.
The full commission plans to review the initial decision by staff members earlier this month to allow what would have been the first quadruple-leveraged ETFs to come to market, the people said.
In most circumstances, a decision by the SEC staff stands as final, but in some cases the commission chooses to review the decision.
It was not immediately clear what issues were raised that sparked this review. Leveraged ETFs, which are risky investments, have been the subject of regulatory scrutiny before.
The SEC and the exchange declined to comment and the product's distributor could not immediately be reached.
This decision concerns two potential products: ForceShares Daily 4X US Market Futures Long Fund, which would have listed under the ticker UP, and ForceShares Daily 4X US Market Futures Short Fund, with the ticker DOWN.
One of the products aims to deliver 400 percent of the daily performance of S&P 500 stock index futures, while another fund targets 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.
The request to list was filed by Intercontinental Exchange Inc's NYSE Arca exchange.
The commissioners could reverse or uphold the initial staff decision pending a more complete review, people familiar with the matter said. The Wall Street Journal earlier reported the SEC's decision to reconsider its approval of the product.
Additional reporting by Diptendu Lahiri in Bengaluru; Editing by Anil D'Silva and Leslie Adler