Warning Credit Suisse and Nomura could face mis-selling claims on short volatility funds

Access to non-sophisticated investors

Mike Sheen
clock • 2 min read

Credit Suisse and Nomura are in danger of facing mis-selling claims after the closure and suspension of a suite of short volatility exchange-traded note (ETN) products in this week's market sell-off, according to legal advisory firm RPC.

ETNs, which are designed to allow investors to profit from periods of low volatility, saw crippling losses during the market volatility and issuers were forced to close or suspend the products as a result. 'Periods such as this offer opportunity': Managers to increase market exposure amid long-awaited sell-off Where an investor who buys an ETF owns shares of a fund, representing fractional ownership in the underlying securities held in the fund, the holder of an ETN holds a debt security. The performance of an ETN and its capacity to refund investors is linked to the credit worthiness...

To continue reading this article...

Join Investment Week for free

  • Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
  • Get ahead of regulatory and technological changes affecting fund management
  • Important and breaking news stories selected by the editors delivered straight to your inbox each day
  • Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
  • Be the first to hear about our extensive events schedule and awards programmes

Join now

 

Already an Investment Week
member?

Login

More on ETFs

Cathie Wood's ARK Invest debuts first European ETFs

Cathie Wood's ARK Invest debuts first European ETFs

First funds since Rize ETF takeover

clock 18 April 2024 • 2 min read
LGIM adds Energy Transition Commodities ETF to fund range

LGIM adds Energy Transition Commodities ETF to fund range

18 commodities

Cristian Angeloni
clock 17 April 2024 • 1 min read
SSGA delists five ETFs from European exchanges to concentrate liquidity

SSGA delists five ETFs from European exchanges to concentrate liquidity

Borsa Italiana, Euronext Paris and LSE

clock 10 April 2024 • 1 min read
Trustpilot