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SEC: Exchange-Traded Products Need to be Controlled

SEC: Exchange-Traded Products Need to be Controlled

Activist group Occupy the SEC urged the Securities & Exchange Commission to more closely regulate exchange-traded products (ETP).  The group argued that failing to properly regulated the ETPs could spark credit and market volatility on par with what occurred during the 2008-early 2009 financial crisis.

ETPs are derivatives usually tied to indices, stocks or commodities, and can take a wide range of forms. They include closed-end funds, exchange-traded funds and exchange-traded notes as well as a variety of other instruments.
Noting the skyrocketing popularity of these products as well as their complexity, the SEC issued a request for comments earlier this summer as to how future ETPs should be listed and traded.

The activist group, in its comment letter, stated the current underwriting system for ETPs unfairly favors large financial institutions while squeezing out retail investors. Not only is this practice unfair but it also provides the opportunity for volatility because the current market is controlled by a few large institutions. 

The experienced securities litigation attorneys at Colling Gilbert Wright have litigated and resolved hundreds of FINRA arbitration claims. If you believe you lost money due to negligence or fraud on the part of your FINRA registered broker dealer, please contact us for a free case evaluation.