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FSA could step in over ETP risks

The FSA says it is concerned the risks of exchange traded products are not being explained to investors and will intervene to prevent consumer detriment.

At the Chartered Institute for Securities & Investment annual conference in London this week, FSA director of conduct policy Sheila Nicoll said the regulator is looking closely at ETPs.

She said: “We share many of the concerns already highlighted by others, such as whether the marketing and promotional material adequately explains the different types of fund strategies and the risks that are involved, for example, products that rely on swap counterparties. In line with the new conduct strategy we launched a year ago, we are committed to intervening early where we identify potential risks and will not wait until those risks have already crystallised.”

Nicoll added that the FSA is working closely with European and international colleagues to tackle the risks.


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