ETF Industry Braces Itself For Transparency Push

By Lionel Laurent

PARIS (Reuters) - Top heavyweights from the $1.3 trillion exchange-traded fund (ETF) industry are bracing themselves for a shift in how their fast-growing but relatively opaque products are marketed, distributed and regulated.

During a three-hour hearing in Paris on Monday, executives from ETF providers like BlackRock , Societe Generale unit Lyxor and Natixis unit Ossiam picked apart the European Securities and Markets Authority's (ESMA) recent proposals to make ETFs more transparent and ultimately less risky for investors.

But despite some pushback on details such as how ETFs should be labeled, what information should be disclosed and how their risk levels might be controlled, some executives acknowledged the broad push toward more transparency was inevitable.

"Everybody is reasonably okay with the proposals," BlackRock Director Stefan Kaiser told Reuters on the sidelines of the hearing. "People realize that something will happen, if anything because clients are demanding it."

(Read on...)