Regulators should implement a "classification system" to distinguish between ETFs and other 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 exchange-traded funds (ETFs) - which, in Europe, it said, are "essentially UCITS-licensed products" - and other exchange-traded products (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, regulato...
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