The U.S. Securities and Exchange Commission has launched a broad, agency-wide review of exchange-traded funds to ensure they are adequately transparent and not fueling market volatility, a top agency official told lawmakers on Wednesday, according to CNBC
In recent years, however, certain kinds of ETFs and major market events such as the May 6, 2010, "flash crash" have raised concerns by regulators that they may be contributing to market volatility or pose risks to less savvy investors.
During the flash crash, for instance, ETFs experienced massive intraday price swings and made up 70 percent of all canceled trades. The event led the SEC and the exchanges to implement circuit breakers to help prevent another major market drop….
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