The regulatory body for the European Union has proposed stricter disclosure requirements on providers of exchange traded funds (ETFs), but has backed away from imposing more radical reforms on the sector.
A consultation paper published today by the European Securities and Markets Authority (ESMA) set out draft rules governing the sale and promotion of ETFs. It proposes ETFs must disclose whether they lend out securities and give greater detail on the collateral they hold. Investors must be informed via products' prospectus, key facts documents and marketing literature how they will meet their stated investment policies, including any intention to outperform an index, ESMA proposes. Some stakeholders had expected tougher proposals, including to divide ETFs into 'complex' and 'non-com...
To continue reading this article...
Join Professional Adviser for free
Signup and gain exclusive members-only insights
- Unlimited access to real-time news, industry insights and market intelligence
- Stay ahead of the curve with spotlights on emerging trends and technologies
- Receive breaking news stories straight to your inbox in the daily newsletters
- Make smart business decisions with the latest developments in regulation, investing retirement and protection
- Members-only access to the editor’s weekly Friday commentary
- Be the first to hear about our events and awards programmes
