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RandySF

(70,156 posts)
Sun Sep 18, 2022, 03:32 AM Sep 2022

Wall Street Rush Into Single-Stock ETFs Takes Risky Foreign Turn

Wall Street watchdogs already concerned about the risks of single-stock ETFs won’t like what’s coming next: funds offering exposure to individual foreign shares unbound by US listing standards.

Issuers have filed plans for at least 129 ETFs targeting non-US companies in the past month, most of which don’t have depository receipts trading on American exchanges. That generally means the underlying firms don’t have to meet the same financial reporting standards as a US-listed business.

It raises the prospect of American investors gaining easy access to foreign companies whose finances may not be fully transparent -- putting people at risk of making ill-informed trades.

“It seems problematic to allow exchange trading on products that contain nothing but unvarnished exposure to companies that can’t normally be traded on those exchanges,” said Steve Sosnick, chief strategist at Interactive Brokers. The US tends to have more stringent rules than other countries, and those standards “are designed to ensure that companies offer adequate disclosure of a company’s profits, losses and risks,” he said.

The proposed funds are still under review, meaning the US Securities and Exchange Commission could yet block them. However, it’s unclear whether that will happen. Regulators were vocally unhappy with the very idea of single-stock exchange-traded funds, but didn’t prevent the launch of the first products in July. Since then, about two-dozen have debuted.





https://www.bloomberg.com/news/articles/2022-09-17/wall-street-rush-into-single-stock-etfs-takes-risky-foreign-turn?srnd=premium&leadSource=uverify%20wall

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Wall Street Rush Into Single-Stock ETFs Takes Risky Foreign Turn (Original Post) RandySF Sep 2022 OP
Not to worry. If Goldman Sachs wants it, 3Hotdogs Sep 2022 #1
An exchange-traded fund (ETF) is a basket of securities TheRickles Sep 2022 #2

TheRickles

(2,350 posts)
2. An exchange-traded fund (ETF) is a basket of securities
Sun Sep 18, 2022, 06:30 AM
Sep 2022

that you buy or sell through a brokerage firm on a stock exchange (from the Fidelity website). I can't say that this clears up the issue for me (a non-financier-type person), but at least it's a start.

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