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Commentary: Congress Not Serious About ETF Reform

A recent commentary states that Congress is not seriously interested in addressing public concerns about ETFs, including that ETF trading adds to market volatility and that certain ETF products are dangerous for investors.  In support of this theory, MarketWatch columnist Chuck Jaffe points out that only one senator showed up for a Senate Banking Subcommittee hearing on ETFs last week.  Further, he contends that if Congress and regulators are truly worried about ETF use of derivatives, they could close all ETFs that are using derivatives rather than just holding up the registration of new ETF products.

Mr. Jaffe's commentary also refutes the notion that ETFs add a lot of volatility to the market and that ETFs curtail the IPO trade.  On Blackrock's proposal for ETF labeling standards, he claims a new naming convention is unlikely to make any difference to the investing public.