A Legal Analysis of Exchange-traded Products

In the financial markets, an increasing attention is being paid to the exchange-traded products (ETPs). An ETP is a derivatively priced security which trades during the day on a national stock exchange. ETPs are typically benchmarked to indices, stocks, commodities, or may be actively managed. There are several different types of ETPs: most common are ETFs (exchange-traded funds); ETCs (exchange-traded commodities); ETNs (exchange-traded notes). First, this work aims to analyze the differences between ETFs and traditional investment funds. An ETF is an investment fund traded on stock exchanges like stocks. Then, specific attention is drawn on the strict connection between some types of ETPs (i.e., ETCs and ETNs), derivatives and asset-backed securities. ETCs and ETNs are debt securities issued by the financial practice of securitization by a special purpose vehicle. Finally, this paper focuses about problems relating to securities derivatives in Italian law.