In an article published yesterday in the Financial Times Guillaume Prache of BETTER FINANCE and Carl Rosén of the Swedish Shareholders’ Association were quoted on the topic of closet tracking funds. BETTER FINANCE highlighted the fact that it had already reported its concern to ESMA (the European Securities and Markets Authority) that “closet trackers” overcharged a significant proportion of European retail investors last year. Despite this, Better Finance is not aware of any action so far. Mr Prache noted “that [regulators] are uncomfortable about [pursuing closet trackers] proactively as it may [demonstrate] a potential lack of supervisory vigilance from their part, and their own country’s fund industry shortfalls”, while Mr. Rosén added that “the industry has so far been successful in confusing the regulators. This is a billion-euro question for the industry, which means that they can lose considerable amounts if this is regulated”.
Full article: “Regulators drag their feet over closet-tracking crisis” by Madison Marriage.