ETF share classes may have come to the fore with recent developments from HSBC Asset Management capturing the imagination of the industry, however, large funds may be put off from using the mechanism by regulatory conventions which cause confusion, Stephen Carson, partner at A&L Goodbody, has warned.
Speaking at a recent webinar titled ETF Investigations: The rise of white-label ETF issuers in Europe, Carson highlighted the fact that asset managers adding an ETF share class to an Irish-domiciled product must rename an entire product umbrella.
“Under the ESMA guidelines and the central bank’s interpretation of that – once you have one ETF share class in issue – you have to change the sub-fund to include ‘UCITS ETF’ identifier.
“Clearly that was not an issue for HSBC AM and there are lots of managers where that would not be an issue. But you can imagine there are some larger, established passive products that might be reluctant to have an ETF share class because of that implication.
“I know that ESMA are to look at that again in future. You would like to see that changed so that it would be an identifier at the share class level as opposed to the product level.”
Speakers in the webinar include:
Stephen Carson, partner at A&L Goodbody
Jason Griffin, director of capital markets and business development at HANetf
Peter Capper, senior advisor for international fund regulation at the Investment Association
To watch a full replay of this webinar, click here.
