There is increasing interest in ETFs worldwide as evidenced by the significant amount of money invested in these types of products. The dynamic growth of ETFs has also drawn the attention of regulators around the world who are concerned about the potential impact of ETFs on investors and the marketplace.
The IOSCO Committee on Investment Management (C5), in the course of 2008-2009, decided to carry out preliminary work into the ETF industry. Responses to a questionnaire sent to member jurisdictions and subsequent hearings with industry representatives confirmed the value of further policy work to assist national regulators in addressing potential issues. In 2010, C5 sought the endorsement of the former IOSCO Technical Committee (TC) – now the IOSCO Board – for a policy initiative to establish a common set of principles of value for regulators, industry participants, and investors alike. The C5 proposal was adopted by the TC in June 2010 and outlined a three-fold mandate:
1. Highlight the experience and key regulatory aspects regarding ETFs and related issues across C5 members;
2. Identify the common issues of concern; and
3. If appropriate, develop a set of principles or best practices on ETF regulation.
The full report is here.