Regulators and ETP providers should more clearly differentiate between traditional ETFs and those using complex strategies that "add unexpected risk", according to Evercore Pan-Asset (EPA).
EPA chief executive Christopher Aldous distinguished between low-cost ETFs tracking well-established indices and those which leverage, sell short, track illiquid assets and use active management. He said: "EPA wants this second group of products to be clearly labelled to inform investors of the difference in structure." The firm already marks products in this way throughout its internal processes. EPA's comments come in response to reports from a number of international regulators, including the Financial Stability Board (FSB) and the International Monetary Fund (IMF), examining the d...
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