ETF investors are suffering significant trading costs when executing on request-for-quote (RFQ) due to pre-hedging, a process where market makers front run orders to capture the performance on known trades.
The European Securities and Markets Authority (ESMA) issued a ‘call for evidence’ last July on the practice of pre-hedging, highlighting concerns the regulator has over the practice.
This webinar will explore the impact pre-hedging is having on end investors and the wider ETF ecosystem when trading on RFQ platforms and whether regulatory intervention is needed to address this issue.
• Is pre-hedging on RFQ platforms a form of frontrunning?
• Is there anything that can be done to protect ETF investors?
• Are there any unintended consequences if regulators step in?
ETF Investigations is a new webinar series from ETF Stream which examines the key issues facing ETF investors in Europe.