Leveraged and inverse ETFs are feeling the heat of increased regulatory and media scrutiny after several brokers were fined for unsuitable sales of the complex products.
Senator Jack Reed, chairman of the Senate Banking Subcommittee on Securities, Insurance and Investment, has called for a second hearing about ETFs and related issues, InvestmentNews reports.
In the article, Reed said the Securities and Exchange Commission is closely monitoring ETFs.
“My hearing last fall shined a light on these products, which may be affecting market structure, volatility and price discovery, and have the potential to harm investors,” Reed said. “I think this market deserves more attention from both domestic and foreign regulators.”
Last year, a Senate subcommittee held a hearing on ETFs and their impact on market structure. [Subcommittee Hearing on ETFs]