The European market for exchange traded funds is moving toward greater transparency that will help investors evaluate the liquidity of individual products, the Financial Times reported this week.
“Unlike in the U.S., where a ‘consolidated tape’ provides a complete record of all ETF transactions, most ETF trading in Europe goes unreported,” according to the story. “The majority of ETF trading in Europe is done in bilateral over-the-counter deals between two parties rather than on screen, but more transparency will be soon become a regulatory requirement.”
Many investors like the transparency of ETFs that allows them to monitor portfolio holdings, volume and liquidity. [What are ETFs? — The Benefits of Transparency]
Daily transparency of the securities in an ETF has been one the “unique selling points” of ETFs, Deborah Fuhr, an independent strategist, in a recent report.
European regulators are requiring more disclosure for ETFs following concerns that investors may not fully understand certain risks. [European Regulator Proposes ETF Rules]
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