MFDF - Mutual Fund Directors Forum - Will the New SEC Proposals Drive Investors to Riskier Products? test

Member Login

Request an account

Sample Banner 2

Will the New SEC Proposals Drive Investors to Riskier Products?

A recent article from Bloomberg suggests that the SEC’s recent liquidity and derivatives proposals could cause investor assets to flow into riskier products. According to Dave Nadig, Director of ETFs at FactSet Research Systems, the proposals “will have one significant unintended consequence: they will drive investors into less well-regulated products like ETNs.” The article notes that the use of ETNs introduces credit risk that is not present with ETFs, making them riskier for investors. Additionally, ETNs are not registered investment companies.

Nadig suggests that new requirements imposed by the liquidity proposal would mean that “every broad corporate and high-yield bond fund and every broad emerging markets fund would be in trouble.” By his calculations, funds holding nearly $225 billion in assets would run afoul of the rules as proposed.   He also estimates that the derivatives proposal would potentially affect $25 billion in assets.  

  • All
  • Accounting and Audit
  • Advisory Contracts
  • Board Governance
  • Board Governance: Board Leadership
  • Board Governance: Compensation
  • Board Governance: Oversight of CCO
  • Board Governance: D&O Insurance
  • Board Governance: Self-Evaluation
  • Closed-end Funds
  • ETFs
  • Other Oversight
  • Other Oversight: Alternative Investments and Derivatives
  • Other Oversight: Custody
  • Other Oversight: Fixed Income funds
  • Other Oversight: Distribution
  • Other Oversight: Portfolio Trading
  • Other Oversight: Proxy Voting
  • Other Oversight: Securities Lending
  • Legislative News
  • Money Market Funds
  • Reference
  • Regulatory News
  • Risk
  • Shareholder Disclosure
  • Valuation
  • Webinars
  • Aaron New Tag