ETF advisors will have to make a trek to the Hill to testify before the Senate Banking Subcommittee on Securities, Insurance and Investment, reports InvestmentNews.

The publication quotes from an email it received from Senator Jack Reed (Dem-RI) who expects a hearing in the coming weeks.

"The [Securities and Exchange Commission] is closely monitoring this issue, and so am I," the Senator wrote.

"My hearing last fall shined a light on these products, which may be affecting market structure, volatility and price discovery and has the potential to harm investors," Reed wrote. "I think this market deserves more attention from both domestic and foreign regulators, and I plan to hold another hearing on ETFs and related issues in the near future."

The Financial Industry Regulatory Authority Inc. penalized Citigroup Global Markets Inc., Morgan Stanley & Co. LLC, UBS Financial Services and Wells Fargo Advisors LLC by $9.1 million afters they sold complex ETFs to clients whose portfolios did not need to include the risky investments. 

Edited by: HFD


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