By Justin Grant
The U.S. Securities and Exchange Commission is expanding its probe of exchange-traded funds in a bid to figure out what role they may be playing in an increasingly volatile marketplace, according to a report by Reuters.
The SEC decided to expand its investigation after a sizable trade in a large, liquid ETF failed to settle within four days, Reuters said. The news agency added that regulators in the U.S. and UK are looking into whether so-called settlement fails – when ETF transactions are not completed on time – are making the marketplace more volatile.
The investigation is also an attempt by regulators to pin down what role high-frequency trading may play in such situations. ETFs are securities that trade like stocks on an exchange, but are designed to track indexes, commodities or even baskets of assets like index funds.
u.s. securities and exchange commission, united kingdom, united states, reuters, finance, financial economics, investment, funds, financial services, index fund, futures exchange, etf securities, spdr, thomson reuters group ltd
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