French regulator, Autorité des Marchés Financiers (AMF), has come out in support of the European Commission’s intention to strengthen risk management rules for Ucits to l
French regulator, Autorité des Marchés Financiers (AMF), has come out in support of the European Commission’s intention to strengthen risk management rules for Ucits to limit the potential risks associated with ‘complex’ ETFs reported the Financial Times this week. The AMF believes that ESMA needs to go beyond just looking at transparency standards. Edouard Viellefond (pivctured), deputy secretary-general of the AMF said that transparency was the “strict minimum” and that whilst they weren’t against the idea of the commission looking into eligible asset rules “it is highly likely that there will be new rules about the management of collateral”. Collateral is used by Ucits funds to reduce their counterparty exposure, helping create a boom in swap-based (synthetic) ETFs: one of the largest managers being Societe Generale subsidiary, Lyxor Asset Management. Viellefond was quoted as saying: “Synthetic and physical ETF providers quarrel but we always come back to the issue of collateral management. There should be further guarantees."
