Credit Suisse and Nomura are in danger of facing mis-selling claims after the closure and suspension of a suite of short volatility exchange-traded note (ETN) products in this week's market sell-off, according to legal advisory firm RPC.
ETNs, which are designed to allow investors to profit from periods of low volatility, saw crippling losses during the market volatility and issuers were forced to close or suspend the products as a result. 'Periods such as this offer opportunity': Managers to increase market exposure amid long-awaited sell-off Where an investor who buys an ETF owns shares of a fund, representing fractional ownership in the underlying securities held in the fund, the holder of an ETN holds a debt security. The performance of an ETN and its capacity to refund investors is linked to the credit worthiness...
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