According to an investmentnews.com article, ETF industry leader Black Rock Inc. recently issued a report in which they made some suggestions for ETF regulatory reforms.
The investmentnews.com reported that, “BlackRock has placed a particular emphasis on a reduction in the use of synthetic strategies that don’t hold the underlying investments.” While acknowledging that synthetic strategies are almost a necessity in today’s massive ETF market, BlackRock executive Jennifer Granciano stated her belief that synthetic strategies may cause risks related to “mis-tracking as well as counter-party risks” and that “…holding the physical securities is preferred.”
Robert Goldsborough, a Morningstar Inc. ETF industry analyst, was featured in the investmentnews.com article praising BlackRock for, “showing some leadership in the ETF space,” while noting that these recommendations would have to be accepted by everyone in the industry to be implemented.
Goldsboro feels BlackRock’s recommendations related to more transparent fee disclosure may be particularly beneficial for investors. He said, “For a long time we’ve felt that investors should have a better understanding of the costs, and uniform global stands is a great idea and long overdue.” BlackRock’s fee transparency recommendations would help “investors determine which additional fees and expenses are included or excluded.”
The BlackRock recommendations mentioned above and the remaining ones that can be found in their report are all steps that would make ETF investments, costs and risks easier for clients to fully understand.
ETF’s have been the basis for a significant amount of FINRA investor complaints in recent years and the attorneys at the White Law Group have worked on many cases involving ETF’s on behalf of clients attempting to recover investment losses.
If you are concerned about an investment you have made in an ETF and would like to speak to a securities attorney please call our Chicago office at 312-238-9650.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Boca Raton, Florida.
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