ASIC updates ETFs regulations amid strong market growth
ASIC has released a new regulatory guide for exchange-traded products (ETPs), including ETFs, on the back of significant growth in the market.
Investments in Australian ETFs reached $200 billion in funds under management (FUM) last year, which ASIC said marks a 20-fold increase in market size over the last decade, with this strong growth expected to continue.
Due to this, the regulator has released RG 282 with consolidated information about the treatment of ETP and ETF investment solutions following a period of targeted consultation with industry stakeholders, during which the industry expressed support for a consolidated guide and provided feedback on various policy issues.
The new guide consolidates INFO 230 Exchange traded products: Admission guidelines, which has now been withdrawn, as well as Report 583 Review of exchange traded products and Report 282 Regulation of exchange traded funds and reflects up-to-date information about ETPs and market practices.
According to the regulator, RG 282 also draws on prior ASIC reports and industry expertise to explain key legislative instruments, regulatory relief, and other relevant information, including the general obligations that apply to ETP issuers, such as responsible entities of registered managed investment schemes, which also capture AFS licensing requirements and modified design and distribution obligations.
On top of this, the guide outlines specific obligations under market operator rules that govern the admission and quotation of ETPs, such as portfolio disclosure requirements, product naming considerations, and liquidity and market-making arrangements, as well as the general obligations that apply to market operators that admit ETPs, such as approving ETP issuers, portfolio disclosures, liquidity provisions and market-making matters.
ASIC said: “Given the expansion of the ETP market and its complex regulatory environment, it is important that ASIC’s guidance assists regulated entities with meeting their legal obligations and ultimately supports ASIC’s market integrity and consumer protection objectives.”
AUTHOR
Shy-Ann Arkinstall
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