Would you rather be in a Vanguard index fund or an exchange-traded fund (ETF) duirng a major market sell-off?

If many investors redeem/sell their shares at the same time, Vanguard will be forced to sell the stocks quickly, which can be detrimental to the fund itself. Fortunately, people are not allowed to short a open-ended mutual fund.

The concern on ETFs is different. No one is forced to sell the underlying stocks. However, people may short the ETF hoping that it go down further to grab a quick huge profit. Worse, the SEC hasn't established an "up-tick rule" for ETFs. Therefore, people can short an ETF even on a down tick, which can tremendously accelerate a collapse of the market. How can the arbitrage keeps the price in line with the NAV during a major sell-off given that a big in-kind exchange is a slow complicated process?

If you work with the Security Exchange Commission (SEC), what are you doing about it in terms of improving the regulations on ETFs to lower the chance of the next major market crash?

I don't work with the SEC. I would rather be in the ETF myself. At least if the market is collapsing al la 89 fashion I can unload with the click of a mouse, assuming my on line brokerage web site is not over whelmed at the time. With the mutual fund, can not do C R A P. Just sit and watch it fall.

I would rather be in the ETF, lower expenses even compared to Vanguard. And I can get in and out of the ETF during the day as opposed to getting the end of the day price on Vanguard.
Also even though the Vanguard is no load all brokerages have to charge a fee for trading Vanguard funds which is higher than stock commissions.

The size of the ETF compared to all the stock in the index it represents is minuscule. In other words if there is a wholesale sell off in progress the affect of short sellers hammering the ETF would be insignificant. It would be like tossing a lit match into a completely burning house.