ASIC seeks to revise ETP naming conventions

The Australian Securities and Investments Commission (ASIC) has released a consultation paper today seeking feedback from advisers and other stakeholders regarding its intention to amend the naming conventions around exchange traded products (ETPs).

Consultation Paper 356 ETP Naming Conventions: Updates to INFO 230 (CP356) proposes to update the guidance in Information Sheet 230 Exchange-traded products: Admission guidelines (INFO 230), as ASIC originally developed ETP naming conventions after the Australian Securities Exchange (ASX) launched their AQUA rules in Australia in 2008.

The AQUA rules, a different rule framework, govern the design and quotation of ETPs on the ASX, as they possess different structures, features, strategies and risks than those of ordinary listed securities.

CP 356 will focus on updating the naming conventions and dividing them into two levels of labelling, primary labels based on product type and secondary labels for certain risks and strategies, and will also clarify the role of licensed exchanges permitted to admit ETPs to quotation.

“CP 356 will assist ASIC to gather feedback and better understand stakeholders’ experiences to date with ETP naming conventions in INFO 230,” ASIC wrote in a media release.

“We intend to revise our guidance in a way that simplifies the naming conventions and promotes flexibility for the next phase of ETP market development.”

ASIC will close submissions on CP 356 from all parties on 3 March 2022 and publish a final update regarding INFO 230 soon after.