UK concerns to intervene in exchange trade

LONDON: Britain's markets watchdog said on Tuesday it had concerns about exchange traded funds and may intervene in the sector.

"We are looking very closely at these products and have been working with our colleagues elsewhere in Europe for a while on the subject," Financial Services Authority director of conduct policy Sheila Nicoll said.

The ETF sector is a rapidly growing part of the European financial services market."We do share many of the concerns that have been highlighted,"

Nicoll told a Chartered Institute for Securities and Investment conference, adding she was concerned whether marketing and promotional material adequately explained differences between various types of ETFs.

"In line with our strategy announced a year ago We are committed to intervening early where we identify potential risk and won't wait until after the risks have crystallised. This will be the approach we take for ETFs," Nicoll said.

Copyright Reuters, 2011