UK Regulator Declares ETF Concerns

By
Devon Layne
April 02, 2012
Share:

 

The Financial Service Authority, addressing potential problems with surrounding exchange-traded funds, expressed among other factors concerns about what these days is actually called an ETF, according to an article on the Financial Times.

Indeed, a majority of ETF issues stem from many products being labeled as an ETF, when many are actually securities that don’t offer the investor protections required by UCITS, Europe’s regulatory framework governing ETFs, FT said, citing a conference held last week in London by the FSA.

Stock-lending also looms as an example of conflicting interests in the ETF market, according to FT, which cited the FSA’s asset management sector team manager, Tony Hanlon. The ETF manager and lending agent may benefit from associate fees, all the while leaving investors in a fund exposed to all the downside risks, said the article.

Also mentioned was the concern about settlement delays building up on ETF trades—especially during times of high market stress, according to FT.

For the full story, go to FT.com.

ETF DAILY DATA

The consumer discretionary fund 'XLY' garnered a $1 billion-plus blast of creation on Tuesday, March 3. Still, a falling market offset net inflows and pulled total U.S.-listed ETF assets down to $2.092 trillion.

'VCR,' the consumer discretionary fund, paced Vanguard's issuer-leading inflows on Tuesday, March 3, as total U.S.-listed ETF assets ended the day at $2.092 trillion.

ETF.COM ANALYST BLOGS

By Olivier Ludwig

The world of ETFs is full of wonderful money-saving surprises.

By Howard Lee

An inside look at iShares’ new $75 million ‘smart beta’ bond ETF.

By Dave Nadig

With trillions of dollars of bonds yielding worse than nothing, should you be worried about your ETF?

By Elisabeth Kashner

Virtu’s mind-bending way to play oil market volatility is a fascinating glimpse into the world of ultra-sophisticated investors.