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Index regulation is tricky but necessary

Financial Times LogoFinancial Times1w ago

Index regulation is tricky but necessary

Quick Summary

Using the type of index as a deciding factor can lead to an uneven playing field, with some index providers falling under the regulatory scheme while others will not.

But taking a leaf out of Europe’s approach and aligning with its BMR will ensure index providers continue to serve the capital markets in the best possible way.

There are many variations of this theme, such as index trades being ‘informationless’ and thus impacting price formation; indexed portfolios being trend-followers that just buy more of the winners regardless of company fundamentals; and that there is an ‘index effect’ which results from a stock being added to major indices such as the S&P 500 or Nasdaq 100.


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Article Details

Author / Journalist: Alex Matturri

Category: MarketsFinanceInvesting

Topics: Financial Regulation Index Regulatory Products Approach Information Regulated Investment Providers Indices

Source Website Secure: Yes (HTTPS)

News Sentiment: Neutral

Fact Checked: Legitimate

Article Type: News Report

Published On: 2022-06-22, 09:24:15

News Timezone: GMT -5:00

News Source URL: ft.com

Language: English

Reading Time: 8 minutes read

Article Length: 1267 words

Coverage Area: United States

Availability: Desktop Web, Mobile Web

News ID: 3351

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About Financial Times

Financial Times Logo

Main Topics: MarketsFinanceInvesting

Official Website: ft.com

Update Frequency: 11 posts per day

Year Established: 1888

Headquarters: United States

News Last Updated: 19h ago

Coverage Areas: United States

Ownership: Independent Company

Publication Timezone: GMT -5:00

News Language: English

RSS Feed: Available (XML)

Website Security: Secure (HTTPS)

Publisher ID: #3

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