U.S. securities regulators are looking into whether turbocharged exchange-traded funds amplified August’s topsy-turvy swings in the stock market.
Securities and Exchange Commission officials have had discussions with firms that trade ETFs, asking questions about whether they added to the market’s volatility, according to people familiar with the talks.
ETFs, which typically track market indexes, trade on exchanges like stocks. Exchange-traded funds have surged in popularity and now generate 35% to 40% of exchange trading volume, according to Morningstar Inc. Such funds sometimes are used by high-frequency traders, who buy and sell stocks and other assets at a rapid clip, making money on small moves.
The Wall Street Journal
