SEC advisory panel calls for riskier ETPs to be identified in approval-streamlining plan

8 November 2018 7:34am
A US Securities and Exchange Commission advisory panel recommended that a proposal to streamline approvals for exchange-traded funds identify riskier products for investors, such as those that use derivatives.

These risky exchange-traded products, or ETPs, include some securities linked to the CBOE Volatility Index that lost billions during stock market gyrations last February, the SEC’s Fixed Income Market Structure Advisory Committee said.

The private-sector panel “has concerns regarding the use of the term 'ETF' by products that have materially different risks embedded in their structures than traditional ETFs,” its recent letter to the SEC said.