ETPs good but could improve, says ASIC

ASIC regulator ETFs ETPs

image
image
expand image

The Australian Securities and Investments Commission (ASIC) has determined that while the exchange-traded products (ETP) market, which included exchange-traded funds (ETFs), is performing well, there’s still room to improve.

A review by ASIC found ETPs were meeting the relatively low cost and liquidity expectations of investors but there were a range of risks that required monitoring by issuers and oversight by market operators.

The review, which followed the growing investment in ETPs in Australia by retail and self-managed superannuation fund (SMSF) investors, identified the potential for the bid/offer spread to temporarily widen, leading to investors paying a spread that would be considered too high.

ASIC considered this a concern given the nature of ETPs, and recommended market operators and issuers play a more proactive role in monitoring the performance of ETPs and publish the indicative net asset value more frequently to enable advisers to make better informed decisions.

The corporate regulator identified market maker concentration as another area of risk and expects issuers and market operators to be aware of the risk and incorporate a means of managing it into their risk management framework.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

Interesting. Would be good to know the details of the StrategyOne deal....

3 days 23 hours ago

It’s astonishing to see the FAAA now pushing for more advisers by courting "career changers" and international recruits,...

3 weeks 2 days ago

increased professionalism within the industry - shouldn't that say, FAR register almost halving in the last 24 months he...

4 weeks 1 day ago

Insignia Financial has made four appointments, including three who have joined from TAL, to lead strategy and innovation in its retirement solutions for the MLC brand....

2 weeks 3 days ago

A former Brisbane financial adviser has been charged with 26 counts of dishonest conduct regarding a failure to disclose he would receive substantial commission payments ...

2 days 21 hours ago

Pinnacle Investment Management has announced it will acquire strategic interests in two international fund managers for $142 million....

2 days ago