ETF FTD library [article]

Mr. E. T. Fund
2021 Zenodo  
Why is the issue of delayed settlement of ETF transactions generating such heated debate? [This article previously appeared on our sister site,] The words "ETF" and "settlement fail" have been mentioned in the same sentence with increasing regularity in recent months. Is there anything to worry about? And-since the debate has so far focused primarily on the ETF market in the US-to what extent should European investors be concerned? We'll address questions of European ETF
more » ... g, clearing and settlement in a separate article next week. But why are ETFs being singled out as an example of market inefficiencies? In a report released in March this year, Harold Bradley and Robert Fawls of the Kauffman foundation and Robert Litan and Fred Sommers of Basis Point Group, a consultancy, pointed out a broad-based trend towards rising settlement "fails" in US capital markets (a "fail" is defined as a trade that is not settled on the date agreed upon by the buyer and seller). According to the four authors of the report, ETFs (and mortgage-backed securities) are two types of financial instrument in which such fails are currently concentrated. In 2010, according to the Kauffman foundation, settlement fails in US ETFs accounted Delayed ETF Settlements-What's The Problem? |
doi:10.5281/zenodo.4701551 fatcat:aobgem6mo5detn5gadi3vwdcka