IDC Paper Assists Boards in Oversight of ETFs

By Annette Capretta

October 19, 2012

The Independent Directors Council (IDC) has issued a new paper, Board Oversight of Exchange-Traded Funds in order to assist directors of exchange-traded funds (ETFs) in performing their oversight responsibilities. The demand for ETFs has grown markedly as investors—both institutional and retail—increasingly turn to ETFs as investment options in their portfolios. With the increase in demand, sponsors have offered more ETFs with a greater variety of investment objectives. Our paper also may be useful for directors who do not currently oversee ETFs but wish to be more familiar with a board’s oversight role, including those whose fund groups may currently invest in ETFs or intend to launch ETFs in the future.

As we point out, ETF directors—like all fund directors—have a fiduciary duty to the fund and serve to protect the interests of fund shareholders. An ETF director’s responsibilities are substantially similar to those of mutual fund directors, although there are some differences and different areas of focus. For example, directors will want to understand the creation and redemption process for ETFs, the trading of ETF shares on the secondary market, and how well processes are working for the benefit of ETF investors.

More information: ICI’s Resources on Exchange-Traded Funds.

Annette Capretta is deputy managing director of IDC.

TOPICS: Fund Governance Exchange-Traded Funds

Key Data Undercut Critics’ Arguments on ETFs and Intraday Volatility

By Rochelle Antoniewicz

April 19, 2012

Over the past year, several news stories have focused on stock market volatility, particularly the price swings that occur in the hour prior to the U.S. market’s 4:00 p.m. close. “What’s Behind That Wild Final Hour of Trading?” asked CNNMoney last November.

The (Dis)Connection Between ETFs and Market Volatility

By Rochelle Antoniewicz

February 23, 2012

In the past year, many commentators have charged that exchange-traded funds (ETFs) are responsible for driving stock market volatility to unprecedented extremes.

Proposal to Implement the Volcker Rule Raises Deep Concerns for U.S. Registered Funds

By Paul Schott Stevens

February 14, 2012

Congress enacted the provision of the Dodd-Frank Act known as the Volcker Rule to restrict banks from using their own resources to trade for purposes unrelated to serving clients—something known as “proprietary trading.”

ETF Basics: The Creation and Redemption Process and Why It Matters

By Mara Shreck and Shelly Antoniewicz

January 19, 2012

One benefit of exchange-traded funds (ETFs) is that they give investors access to a range of strategies and indexes, with the flexibility of transacting throughout the trading day at prices that typically approximate the value of the fund’s underlying portfolio. To see how ETFs accomplish this, one must understand how ETF shares are created and redeemed.

Read more…

TOPICS: Exchange-Traded Funds

ICI Adds to Educational Resources on Exchange-Traded Funds

By Mike McNamee

December 16, 2011

ICI Adds to Educational Resources on Exchange-Traded Funds.

Read more…

TOPICS: Exchange-Traded Funds

ICI Responds to Hearing on Excessive Speculation

By Stephanie Ortbals-Tibbs

November 3, 2011

ICI issued the following statement in response to today’s hearing, “Excessive Speculation and Compliance with the Dodd-Frank Act,” before the Senate’s Permanent Subcommittee on Investigations.

ICI Responds to Hearing on Exchange-Traded Funds

By Stephanie Ortbals-Tibbs

October 19, 2011

ICI issued the following statement in response to today’s hearing in the Senate Banking Subcommittee on Securities, Insurance, and Investment, “Market Microstructure: Examination of Exchange-Traded Funds.”

Pages 1 2 3