Global ETF leaders push for reform

The world’s largest exchange traded product issuers have partnered to petition for classification reform, in a move which BlackRock head of iShares Australasia Christian Obrist said would help to improve transparency for investors.

In a proposal to US stock exchanges in mid-May, BlackRock, Vanguard, State Street Global Advisors, Invesco, Charles Schwab and Fidelity Investments, pushed for a new taxonomy for ETPs.

The “industry coalition” proposed ETPs be separated into four categories; exchange-traded funds (ETFs), exchange-traded notes (ETNs), exchange-traded commodities (ETCs) and exchange-traded instruments (ETIs).

In a virtual media roundtable on June 4, Obrist argued Australia’s large retail investor market would benefit from clearer categorisation instead of using the term ETF as a “catch-all”.

“We just want people to understand what they are investing in,” Obrist said.

“The danger is that everything gets canvassed as an exchange traded fund, an ETF, when in fact, there are many different expressions.”

Source: Global ETF leaders push for reform | Financial Standard