IOSCO has published the final report on Principles for the Regulation of Exchange Traded Funds (ETFs). These principles cover the disclosure of ETFs':
- classification, to help investors distinguish them from exchange-traded products and to differentiate between index and non index-based ETFs;
- portfolio composition or the reference index and the way it is tracked. Complex investment strategies, such as those involving leverage, should also be clearly disclosed; and
- costs and securities lending.
The principles also require the management of conflicts of interest arising from physical and synthetic replication, and of risks arising from counterparty exposures and collateral management. (Source: Principles for the Regulation of ETFs)