It is an unwritten rule of financial markets that any security experiencing breakneck growth will attract a proportional increase in regulatory attention. The market for exchange-traded funds, or ETFs, has proved no exception.
Of particular concern is the tracking error that can occur in ETFs covering less liquid underlying markets. Another concern, also liquidity related, centres on the creation and redemption of ETF shares, particularly in stressed market conditions.
Both areas of scrutiny
- Bank risk manager of the year: UBS
- People moves: Asia hires at Credit Suisse, new UBS data role, NatWest takes UBS's Duclos, and more
- Asia moves: BlackRock picks new Asia head, Credit Suisse boosts regional solutions, and more
- We need a different approach to supervisory stress-testing
- Risk solutions house of the year: HSBC