By Sarah N. Lynch
WASHINGTON (Reuters) - A unit of asset manager BlackRock Inc (N:BLK) will pay $1.5 million to settle a complaint that it launched a Russian exchange-traded fund without proper regulatory approval, according to U.S. regulators.
The April 25 settlement between the Securities and Exchange Commission and BlackRock Fund Advisors comes after the SEC said that from December 2010 through January 2015, the company operated iShares MSCI Russia Capped ETF (P:ERUS) in violation of SEC rules.
Exchange-traded funds are an investment vehicle that own an array of stocks and bonds and trade in real time on public exchanges.
Legal requirements governing mutual funds require that they seek a special exemption from the SEC before launching new ETFs.
In this case, however, the SEC complaint said BlackRock Fund Advisors did not seek an exemption because it erroneously believed that the Russian fund was covered by a prior SEC agreement covering its iShares Inc and iShares Trust.
BlackRock spokeswoman Tara McDonnell said the company did not admit to any wrongdoing as part of the settlement.
"The firm corrected and disclosed the issue in 2015 and no clients suffered any harm as a result of this issue," she said.