Marking a culmination of sorts of recent work carried out by the Central Bank of Ireland (Bank) on exchange traded funds (ETFs), including its October 2016 survey of Irish authorised ETFs, the Bank has now published a discussion paper (DP) on ETFs. The introductory sections of the DP set out the various aims and purposes of the paper including that:

  • The Bank is publishing the DP to seek the views of interested stakeholders (including those participants which interact with ETFs from the markets perspective) on matters which the Central Bank is considering as part of its ETF work.
  • The DP also underpins an invitation to all stakeholders to help inform the Bank's participation in any international or European regulatory discussions on the topic and its supervisory work. It is therefore designed to 'galvanise a deepened exchange of views on ETFs'. The Bank anticipates that feedback received to the DP will assist it in contributing effectively and influentially to international discussions on ETFs.
  • The purpose of the DP is to raise questions around the existence of risks and to determine whether, if there are such risks, they are well understood by regulators.
  • The purpose also includes consideration of a number of overarching themes that have arisen during the course of the Bank's ETF work. Broadly speaking these relate to investor expectation, liquidity and the increasing popularity of ETFs.

The DP comprises the following five areas:

    1. ETF dealing
    2. Distinctive ETF Risk Factors
    3. Particular types and features of ETFs
    4. ETFs and market liquidity
    5. Other considerations

Responses to the questions as well as any observations on any topics within the DP are invited by 11 August, 2017.