Why the regulatory witch-hunt for ‘closet trackers’ is a dead-end

Jean Pierre Casey

ECMI Papers from Centre for European Policy Studies

Abstract: ESMA, the European watchdog of securities markets, has announced its intention to take a closer look at so-called ‘closet trackers’, with a view to identify whether there is a potential need for a coordinated pan-European policy response to these particular funds, which are supposedly actively managed but in reality closely track their benchmarks. In this commentary, Jean-Pierre Casey suggests that more work needs to be done to demonstrate that a market failure exists. He also cautions on some of the difficulties associated with a potential regulatory intervention. In his view, the perceived problem is best tackled through transparency and competition.

Pages: 4 pages
Date: 2014-12
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http://www.ceps.eu/system/files/No%2037%20Closet%20Trackers.pdf (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:eps:ecmiwp:9891

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