In response to the publication of guidelines on ETFs and other UCITS issues from ESMA, Joe Linhares (pictured), head of iShares EMEA, comments…
“Today’s guidelines represent a positive step towards ensuring investors better understand the risks and attributes associated with exchange-traded products (ETPs). BlackRock and iShares have long campaigned for greater disclosure and transparency within the ETP industry and we are committed to working with ESMA, and its individual national regulators, to continually raise the standard of practices in place across the European ETP industry.
“We have always believed that clearer labelling of ETPs helps investors and that product labelling should not simply be confined to ETFs per se, but to other ETPs such as exchange-traded notes and exchange-traded commodities. We also believe investors benefit from knowing whether their ETP is physically replicating or derivatives replicating, which can be achieved with clear labelling.
“Investor protection has been at the heart of ESMA’s guidelines and whilst we concur that investors should have a clear understanding of the risks associated with ETPs, including counterparty and market risk, we also believe that investors should be made aware of the potential benefits that activities such as securities lending can bring to them. As the ETP industry continues to grow at a significant rate, recently posting the strongest H1 inflows in history, we will continue to campaign for the importance of due diligence in order to help investors make better informed decisions.”
