Regulation

As exchange-traded funds continue to grow in scope and popularity, investment experts warn that some products, such as leveraged and inverse ETFs, may be too dangerous for all but the most experienced hands.

In an open letter to investors on its website, ProFunds says that investors “should fully understand how they work before investing.”

NEW YORK - Regulatory officials are pondering significant changes to the way the U.S. oversees financial markets in the wake of last year's credit crisis and the failure to prevent Bernard Madoff's massive Ponzi scheme, but lawmakers will have to make some hard choices before any real changes can happen.

At the Securities and Exchange Commission's roundtable last week on how to regulate the multi-trillion-dollar securities lending industry to avoid a repeat of the billions of dollars lost in the credit crisis, the focus was on conservative investment of cash collateral and a clearinghouse to create transparency, reduce spreads and keep stock pricing efficient.

NEW YORK - Despite their sinister-sounding name, dark pools of liquidity can be very beneficial to average investors by offering mutual funds and large institutional investors an efficient way to make large trades without impacting the market.

Noting that 15% of 401(k) participants have engaged in some form of “leakage,” that is, hardship withdrawals from their plans or failure to roll the money over when changing jobs, between 1998 and 2006, the Government Accountability Office is recommending that Congress eliminate the ban on additional contributions for six months by those who make such withdrawals.

When the Roman Empire was first expanding, regulators noticed an annoying problem: Due to increasing traffic, chariots were leaving grooves in the stone roads, but the gauge - the distance between the wheels - varied according to region. Different sized chariots didn't fit in the grooves. Julius Caesar had a solution: international standardization.

The Treasury Department has proposed several improvements for Section 529 college savings plans, including the use of age-based index funds and the elimination of home-state biases.

LAKE BUENA VISTA, Florida - Mutual fund boards are grappling with their increasingly expanding roles as risk overseers, management coaches and shareholder advocates as the Securities and Exchange Commission continues to add new rules and raise its expectations, including the creation last week of the Division of Risk, Strategy and Financial Innovation.

LAKE BUENA VISTA, Florida - With the one-year anniversary of the collapse of Lehman Brothers finally in the rearview mirror and the economy on the way to recovery, many participants in the financial services industry are questioning whether the industry still needs to undergo substantial regulatory change, and what changes, if any, could be beneficial at this point.