Regulatory Outlook | 05.03.22
Wall Street Regulators Consider "Staggering" Curbs on Complex ETFs
Wall Street watchdogs and issuers of “complex” exchange-traded products (ETPs) are headed for a showdown as regulators weigh tough, far-reaching rules to curb retail investor access. The Financial Industry Regulatory Authority (FINRA) called for comments last month on whether strict measures should be introduced to raise the barriers to such products. Depending how FINRA chooses to define the term, the crackdown could hit everything from leveraged and inverse vehicles to cryptocurrency-linked funds and defined-outcome strategies. “The restrictions on individual investors that FINRA is considering are staggering and unprecedented,” ProShares Advisors said. Meanwhile, the U.S. Securities and Exchange Commission in October said it is considering tightening the rules around leveraged and inverse ETPs, while the International Organization of Securities Commissions kicked off a consultation last month on updating the ETP principles and good practices it published in 2013.
Read the full article on Bloomberg