BlackRock Calls for More Disclosure, Transparency in ETFs | Page 2 of 2 | ETF Trends

In Europe, regulators are examining complex “synthetic” ETFs that hold derivatives to determine if the products are fully understood by investors. [European ETFs Face Scrutiny]

ETFs have also been in the spotlight amid claims they boost market volatility, while recent rogue trading scandals have involved ETF trading desks. [ETFs Under Fire]

The industry has defended itself by saying the improper trades were due to compliance failures, not a problem specific to ETFs. [ETFs and Rogue Traders]

BlackRock recommended five specific reforms for ETFs:

  • Clear labeling of product structure and investment objectives
  • Frequent and timely disclosure for all holdings and financial exposures
  • Clear standards for diversifying counterparties and quality of collateral
  • Disclosure of all fees and costs paid, including those to counterparties
  • Universal trade reporting for all equity trades, including ETFs