European regulators are pushing to make exchange traded funds more transparent and less risky for investors. While some fund providers have shown resistance to the idea, industry leaders recognize the push toward greater transparency, according to reports.

At a hearing on Monday in Paris, ETF providers BlackRock, Societe Generale unit Lyxor and Natixis unit Ossiam addressed the European Securities and Markets Authority’s proposals for greater transparency in ETFs, reports Lionel Laurent for the Chicago Tribune.

“Everybody is reasonably okay with the proposals,” BlackRock Director Stefan Kaiser remarked. “People realize that something will happen, if anything because clients are demanding it.”

The ESMA are particularly worried about the potential systemic risks from “synthetic” or leveraged ETFs that are based on derivatives such as futures and options. The regulatory body is suggesting greater disclosure and transparency for the average retail investor. These complex ETFs make up more than half the market in Europe, but they make up a lesser amount in the U.S. markets. [ETFs Draw Increased Scrutiny as Assets Migrate]

“If the investor is not able to understand they need an advisor to buy the product,” ESMA’s Nicoletta Giusto remarked. “They have to be able to understand what they buy.”

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