SEC decision on leveraged ETFs sparks concern for retail investors
- Date: 29-Oct-2020
- Source: Financial Times
- Sector:Financial Markets
- Country:GCC
SEC decision on leveraged ETFs sparks concern for retail investors
New rules covering the use of derivatives by investment managers have triggered sharp disagreements among top US regulators after the Securities and Exchange Commission unexpectedly abandoned proposals for controls on the sale of leveraged exchange traded funds to retail investors.
The SEC said it would review the effectiveness of its existing investor protection rules but declined to impose any new controls on sales of leveraged and inverse ETFs in a ruling on Wednesday that provided a green light for new competitors to enter the market.
"Consumer protection advocates will argue that the SEC has 'put the cart before the horse' by allowing more leveraged ETFs to be launched without first ensuring that the appropriate protections for retail investors are in place,“ said an analyst that declined to be named.
US regulators have previously
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