The European Systemic Risk Board (ESRB) has proposed removing the Ucits label from complex and opaque exchange-traded funds (ETFs), Citywire reports. The proposal comes in reply to the European Securities and Market Association’s (ESMA) discussion paper on policy guidelines for Ucits ETFs and structured Ucits. ESRB has raised concerns that previous extensive policies of disclosure did not address the risks that built up and materialized in collateralized debt obligations and other structured products. The body recommended formal cooperation between securities markets and banking sector regulators. It also suggested that the Guidelines of Risk Measurement be applied to collateral received as part of securities lending.
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