That dynamic can be especially difficult for a heavily traded and liquid commodities pool. Consider with UNG, net assets hit an all-time high after Monday’s close of just over $4.5 billion. At the end of March, UNG had total net assets of $700 million. At the end of May, it was up to $2.2 billion. So in less than two weeks, assets have more than doubled.

UNG’s average daily volume has also increased significantly in the past several weeks. It hit 96 million shares on Friday and is averaging about 19 million shares per day since opening in April 2007. In the past two weeks, volume has jumped to the 50-70 million shares a day range.

So what happens if the SEC doesn’t move quickly on what appears to be a rather routine request?

The last time UNG activity jumped tremendously in March, the product’s managers went through the same drill. As with the most recent filing, they requested a green light to offer new creation units before shares peaked. Still, the SEC dragged its feet and had to file again two months later.

The government finally got around to granting the trust’s requests, but not before a delay of some 48 hours in which the fund wasn’t able to offer new creation units.

Hot Topic

It’s a topic that Ian Salisbury first raised in the Wall Street Journal. But it’s also something ETP-types who run portfolios that are based on futures contracts and volatile commodities have been grousing about for years.

It’s a paper chase that gives investors an idea as to why such funds cost more to run—and can cause more agony for advisers and their clients to track.

Of course, there are those who think that products like UNG need increased regulatory scrutiny, not a more streamlined process. (See related items here and here.)

But still, even those within the industry who are supportive of regulators agree that whatever they are or whatever form they take, the SEC's rules and guidelines should be designed to help investors.

It seems clear that with another potential stall in activity of a popular fund such as UNG, more investors are going to find themselves at the center of such a debate.

And undoubtedly, many of those individuals and their advisers will come to the conclusion that, at least at this point, the current regulatory process for ETP products seem like a pointless bump in the road.

Stay tuned …

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