IOSCO has published its final high-level principles designed to assist regulators in governing exchange traded funds (ETFs) regardless of their distribution model. The nine principles here largely track those put forth in IOSCO’s consultation, and place significant emphasis on disclosure standards designed to protect retail investors. Several other recommendations are generally unchanged, particularly for rules addressing counterparty exposure and collateral, and regarding recommendations concerning securities lending. However, proposals designed to address systemic risk, including liquidity shocks, were not finalized, nor were principles to establish suitability standards for intermediaries, with IOSCO encouraging regulators here to defer to its broader suitability standards.

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