Esma to step up smart beta scrutiny
Esma has followed the Financial Industry Regulatory Authority in signalling its intention to scrutinise backtesting and replication of smart beta index products more closely in 2015
The European Securities and Markets Authority (Esma) is preparing to intensify its scrutiny of smart beta index products this year, a senior official at the watchdog has indicated, with a particular focus on the replicability behind the methodologies of products targeted at end-investors.
In an interview with Risk.net, Patrick Armstrong, Paris-based senior officer for financial innovation at Esma, says the regulator will focus on the methodologies firms use when constructing alternative indexes
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