EFAMA: ETF liquidity fears are 'misplaced'

Trade body flags mitigating factors

David Brenchley
clock
The ECB had warned on ETF liquidity risks
Image:

The ECB had warned on ETF liquidity risks

Regulators should implement a "classification system" to distinguish between exchange-traded funds (ETFs) and other exchange-traded products (ETPs) rather than focusing on "misplaced" fears over liquidity and counterparty risks, an industry body has claimed.

The European Fund and Asset Management Association (EFAMA) said investors require "a clearer distinction" between ETFs - which, in Europe, it says, are "essentially UCITS-licensed products" - and other ETPs in order to assess the risks inherent in each vehicle. The body suggested introducing a classification system, which would "help investors more readily assess the risks inherent to each type of ETP, as well as aid regulators to better focus their efforts at protecting investors and guarding financial stability". Currently, regulators and the European Central Bank (ECB) are assessin...

To continue reading this article...

Join Investment Week

  • 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

Invests in companies with strong biodiversity credentials.
ESG

HSBC launches biodiversity screened ETF

SFDR Article 8

clock 11 August 2022 • 1 min read
European-focused investment grade and high yield credit have highest inflows since April 2020.

Fixed income dominates ETF flows in July

Accounted for $32.5bn

clock 08 August 2022 • 2 min read
Total funds under management have fallen on the previous year, down to £1.4trn from June 2021’s £1.5trn.

Every asset class suffers outflows in second worst month on record

Responsible investment holds up

James Baxter-Derrington
clock 04 August 2022 • 2 min read
Trustpilot