Exchange traded fund providers want to make sure their products are differentiated from exchange traded notes, or ETNs.
“We are concerned that end-investors may not be clear about the types of products that they are investing in,” Jennifer Grancio, managing director of iShares, the ETF franchise of BlackRock, told the Financial Times. “We’re working with some of the other established issuers to encourage self-regulation . . . We’re also discussing with regulators how best to take this forward.” [TVIX Washout Raises Questions Over ETNs]
Last month, odd price movements in a Credit Suisse security, VelocityShares Daily 2x VIX Short-Term ETN (NYSEArca: TVIX), raised eyebrows, and providers are worried that such instances could deter investors away from their products. A clear definition of each providers product along with cause and effect of a particular fund, security or note has been called for, reports Ajay Makan for Financial Times. [SEC Reviewing TVIX Flop: Reports]
Investment banks are at the focus of this request and most of the inquiry has to do with exchange traded notes and a call for more product segmentation.