Deutsche Bank has launched two new currency exchange-traded funds (ETFs) on their ETF platform db x-trackers, just days after the Committee of European Securities Regulators (CESR) proposed new regulation for ETF trading.
The new ETFs are linked to the DB Currency Return Index and will be listed on the London Stock Exchange, allowing currency to be traded as an asset class, either in USD or GDP hedged share class formats.
CESR is recommending that all ETF trading should be recorded, bringing the EU in line with the US, where all asset classes traded on exchanges must be recorded. According to a report by the FT, only 30% of ETF trading is recorded, with the rest traded over the counter, directly with banks and hedge funds.
As a member of the London Stock Exchange, Deutsche Bank are currently recommended to report their ETF trades, but not obliged to.
Manooj Mistry, head of db x-trackers ETFs, says: “We have taken a major step today towards giving UK investors the tools they need to harness the potential of the currency markets.
“The db x-trackers currency returns ETF is ideal for investors who are increasingly recognising the benefits of allocating assets to investment classes that show low or negative performance correlation with equity and bond markets, as well as investors looking for an additional way to achieve alpha in a low growth environment.”