The European Securities and Markets Authority (ESMA) has proposed wide ranging reforms and a tightening of the rules around how exchange traded funds (ETFs) operate in Europe.
In particular the regulator is probing how synthetic ETFs are marketed to retail investors. Potential reforms include the use of warnings and limitations on the distribution of certain ‘complex' exchange traded products (ETPs). "ESMA has reviewed the current regulatory regime applicable to UCITS ETFs and structured UCITS and considered that the existing requirements are not sufficient to take account of the specific features and risks associated with these types of funds," the paper states. Synthetic ETFs are the focus of particular concern, but ESMA puts all aspects of ETPs under ...
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