The Securities and Exchange Commission’s two new pieces of rule-making proposals aimed at trimming risks in exchange-traded funds (ETFs) could have an “unintended consequence” of driving investors into less well-regulated products like exchange-traded notes (ETNs). Eric Balchunas, an exchange-traded fund analyst at Bloomberg, cautions that ETNs involve investors taking on significant credit risk to the ETN’s issuers. SEC’s first proposal aims to address ETFs’ liquidity concerns The securities watchdog’s first proposal published last September aims to address liquidity concerns by mandating that no more than 15% of a fund’s holdings take longer than seven days to liquidate without moving the market. The…
SEC's New ETFs Proposal Could Spark Migration To Risky ETNs
Mani
Mani is a Senior Financial Consultant. He has worked in Senior Management role in large banking, financial and information technology organizations. He has provided solutions for major banking and securities firms across the globe in the area of retail, corporate and investment banking. He holds MBA (Finance) and Professional Management Accounting Qualifications. His hobbies are tracking global financial developments and watching sports