Finra Turns its Ever-Watchful Eye on Frontier Funds

Posted on January 16th, 2014 at 11:45 AM

 

The Financial Industry Regulatory Authority (“Finra”)  plans to pay special attention to frontier markets mutual funds and exchange-traded funds in examinations of broker-dealers this year after concerns were raised that the risks of such funds are not being adequately disclosed to retail investors.

Heightened risks associated with investing in foreign or emerging markets generally are magnified in frontier markets which operate in politically unstable regions of the world and are subject to potentially serious geopolitical risks.

In many cases, these markets have relatively few companies and investment opportunities, and the local securities market may not be fully developed. This could mean less liquidity and lower investor protection standards.

Indeed, the biggest concern with frontier market stocks is investors' access to their capital. Since most of the local stock markets are in the early stages of development, none of the issues are particularly liquid.

Especially, frontier mutual funds invest in countries that are less developed than emerging markets, typically those in Africa or the Middle East. Therefore, frontier markets are a relatively small niche among mutual funds and ETFs.

The attorneys of Eccleston Law Offices represent investors and advisers nationwide in securities and employment matters. Our attorneys draw on a combined experience of nearly 50 years in delivering the highest quality legal services. 

Related Attorneys: James J. Eccleston

Tags:

Return to Archive

TESTIMONIALS

Previous
Next

I am so blessed to have you and your dynamic team defending me. Your ethics, forward thinking and strategies are amazing.  You guys are the best group of attorneys in the country that I could hire to handle this complicated case.

Cindy C.

LATEST NEWS AND ARTICLES

January 21, 2022
CFP Board Establishes New Appeals Commission

The Certified Financial Planner (CFP) Board of Standards has established a new Appeals Commission. As the name suggests, the Appeals Commission possesses the sole authority to adjudicate appeal hearings.

January 20, 2022
Edward Jones Fails To Convince Supreme Court To Review Federal Preemption of Account Fee Suit

Edward Jones & Co. failed to convince the U.S. Supreme Court to analyze how a federal securities law impacts a client dispute pertaining to fee-based accounts.

January 19, 2022
SEC Charges Texas Entities Over Oil and Gas Fraud

The Securities and Exchange Commission (SEC) has charged The Heartland Group Ventures, Heartland Production and Recovery, six other Heartland-affiliated entities, four Heartland-affiliated individuals as well as several oil and gas operators.