More than a month after the Flash Crash (the May 6th event in which stocks across the board plunged to new lows in intraday trading), the case is nearly settled. Analysts suggest that the crash had much to do with a mass exodus by market makers, who typically help keep ETF prices in line with their NAV.

Exchange-traded funds were the hardest hit of all equities on May 6, with 70% of all canceled orders involving an ETF, according to MarketWatch. New reports suggest the event was caused by an exodus of high-frequency traders and arbitragers from the markets, who usually work to keep prices close to ETF NAVs during times of high volatility.

Usually, arbitragers and high-frequency traders will work to buy or sell an ETF when it diverges too far from its NAV and take an opposite position in the products that make up the fund. In doing so, the market works to self correct; however, in the absence of these fast acting traders, ordinary stock traders sell into a void of buyers, creating a downward spiral.

Despite increased commodity ETF regulation, the United Natural Gas Fund continues to shine, attracting the most inflows of any ETF in July. The fund even outpaced the SPDR S&P 500 (SPY: Quote, Profile, Advanced Chart, News), which has long been the most active fund.

It has not yet been made public how the CTFC intends to limit the United Natural Gas Fund (UNG: Quote, Profile, Advanced Chart, News). However, on July 7, UNG was ordered to stop issuing new shares - essentially turning the ETF into a closed-end fund. TheStreet reports that despite the slight roadblock, United Natural Gas still attracted more than $1 billion in July.

Based upon upcoming regulatory decisions, the fund will be reportedly switching its future positions into derivatives, making agreements with banks and other investors to keep a steady attraction to the price of natural gas.

As the battle over leveraged exchange-traded products grows larger, another broker has decided to cease the sale of leveraged products immediately. UBS, with more than 8,760 brokers in the United States, will no longer sell the products to its clients.

In a statement released today, UBS announced that leveraged products do not fit into the long term goals of its clients and dismissed leveraged products as a short term product only, Bloomberg reports. UBS follows the lead of Edward Jones, which itself ended the sale of leveraged products less than one week ago.

While the exodus of major brokers has yet to affect the assets of leveraged investments, the short term tracking ability of leveraged products could be diminished as a lesser number of investors have access to the products and a greater number of shareholders could be forced to sell their holdings.

Hoping to capitalize on growing international interest in small cap ETFs, Claymore Securities will be modifying one of its international large cap exchange-traded funds into a small cap international fund. As of July 27, the Claymore/Great Companies Large-Cap Growth Index ETF (XGC: Quote, Profile, Advanced Chart, News) will be known as the Claymore/BNY Mellon International Small Cap LDRs ETF.

The new fund will seek to perform to the benchmark index, The Bank of New York Mellon Small Cap Select ADR Index, which provides broad exposure to small cap stocks in the international marketplace. To be entered into the exchange-traded fund, stocks must have a market cap between $250 million to $2 billion, according to the press release.

The five largest countries represented in the index are as follows: Brazil 23.55%, China 22.93%, United Kingdom 6.00%, Chile 5.82% and Australia 5.73%. The fund will also drop its annual expense ratio from .65% to .45%.

Edward Jones has completely ceased its sales of leveraged ETFs, taking sides with FINRA in the latest battle over the dangers of leveraged exchange-traded funds.

Edward Jones goes one step further than merely mirroring the words of FINRA; the firm released a report identifying the various problems it encountered with leveraged products. Above all else, the Edward Jones report stated “investors also need to recognize that leveraged ETFs have an increased potential for capital gains distributions and significantly higher expense ratios than the traditionally broadly based stock market ETFs, negating some of the benefits of purchasing an ETF,” according to the Wall Street Journal. Simply put, Edward Jones believes the benefits of leveraged products do not exceed the drawbacks.

Edward Jones’ bold move will likely be replicated in the financial services community. The firm decided in June, prior to FINRA’s issued warning, that it would suspend the sale of leveraged funds.