Australian exchange-traded fund (ETF) provider BetaShares is working alongside ASIC to develop the next generation of ETFs in order to ensure best practice and transparency.
"It's just a constant ongoing dialogue with ASIC when we're developing the products," BetaShares head of product strategy and distribution Drew Corbett said.
"We're talking to them about what we can do that is best practice within this structure to protect investors and [ensure] we can make this the most secure, transparent, effective product to deliver that asset class or that return, and make it low cost."
BetaShares will list its agriculture ETF on the Australian Securities Exchange at the end of the week, following its launch of Australia's first crude oil ETF last Monday.
Additions to the suite will include a broad commodities basket in December and a copper ETF by February 2012.
Corbett said many of the issues with synthetic ETFs listed overseas had been removed due to tighter regulation and holding 100 per cent of the funds' assets in cash against the possibility of a default.
"We had the luxury of seeing what the issues were and what's best practice as [Australia] is a little behind in delivering the products to this market," he said.
He said he expected the BetaShares ETFs to be reviewed and rated by third-party research houses so that dealer groups and planners could get a better sense of the products and also generate their own reviews.
"We'll be working quite hard to go around the advisory groups to explain and educate them on the products," he said.
Planners needed to comprehend three core factors with this ETF structure, he said.
"The index is based on futures, not the spot price; they're 100 per cent cash-backed, securing investors against counter-party risk; and understanding the three sources of [total] return - the spot, roll and collateral returns."
