ESMA analyses use of derivatives by UCITS equity funds

30 September 2019

Metadata
Provider: 
ESMAESMA
URL: 
https://www.esma.europa.eu/press-news/esma-news/esma-analyses-use-derivatives-ucits-equity-fundshttps://www.esma.europa.eu/press-news/esma-news/esma-analyses-use-derivatives-ucits-equity-funds
Retrieved on: 
Tuesday, October 1, 2019
Information
Tags: 
Finance, Money, Economy, European Union law, Investment, Undertakings for Collective Investment in Transferable Securities Directive, Derivative, Futures contract, Financial market, Exchange-traded fund, Exchange-traded product
Summary
Key Points: 
  • 30 September 2019

    The European Securities and Markets Authority (ESMA), the EUs securities market regulator, has conducted a study on the use of derivatives by UCITS equity funds in collaboration with researchers from the Technical University of Munich (TUM).

  • After the financial crisis in 2008, global regulators started to shed more light on derivatives markets, including the use of derivatives by market participants.
  • The analysis included in this study provides new insight into the type of derivatives that are traded by UCITS equity funds, why some of them trade derivatives whilst others do not, what makes some more active traders and to what extend the trading in derivatives is a reaction to daily changes in the market.
  • UCITS equity funds mainly use forward contracts on currencies (80% of trades) and futures or options on equities (26%).
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