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Lehman Acquisition May Cause Regulatory Issues for iShares in US
Stephen Harris
22 September 2008
Barclays Global Investors exchange traded funds division iShares may need a special exemption from US regulators to continue to run indices provided by Lehman Brothers after its parent, UK-listed Barclays Bank, acquires the stricken Wall Street bank. According to media reports, iShares runs $40 billion of ETFs based on Lehman indices. Under current US regulations, an ETF provider is barred from tracking an index owned by a group member. US legal experts commented that iShares may have to suspend the ETFs based upon Lehman indices or to get an exemption which may require a set of Chinese walls to be erected between the operations.