The nature of the custody system makes part of a proposal from the Securities and Exchange Commission on exchange-traded fund redemptions thorny, according to a group of global broker/dealers. Morgan Stanley, JPMorgan Chase, Merrill Lynch and Goldman Sachs last month wrote a joint letter to the regulator expressing concern over the proposal that would require brokers to confirm that a redemption from an ETF by an institutional investor does not make up more than 3% of the ETF’s shares.
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