BlackRock Urges More Regulation After Inverse Notes Collapse
- Money manager calls for classification system to flag risks
- Two products linked to Cboe Volatility Index have collapsed
Are ETNs Highly Dangerous Products?
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BlackRock Inc., the world’s biggest asset manager, called for regulation that would clearly spell out the risks associated with inverse and leveraged exchange-traded products after the collapse of two notes linked to volatility.
Inverse and leveraged exchange-traded products don’t perform like exchange-traded funds under stress and regulators should acknowledge the difference, BlackRock said in a statement on Tuesday. BlackRock “strongly supports” a classification system that would label these ETPs differently than “plain vanilla” ETFs, the firm said.