FTAdviser.com

Advertising

Barclays Global Investors is still waiting for special permission to continue Lehman index-tracking iShare ETFs listed in the US.

Under US investment rules, an exchange-traded fund cannot track an index owned by the same parent company.

For US iShares investors in credit index trackers previously calculated by Lehman Brothers, an exemption to the rules is required from the US Securities and Exchange Commission for Barclays to take over the calculation of the indices, important tools in the US fixed interest market.

Failure to secure an exemption could lead to the iShares being suspended.

A total of 34 ETFs currently track Lehman’s indices in the US market, with a value of $41.8bn (£22.5bn) at the end of August, according to a report by Citigroup.

Barclays is the market’s biggest issuer, with $37bn spread across its 14 funds.

iShares listed in the UK that track US Treasury, inflation-linked TIPS and government bond indices are already calculated by Barclays itself.

Rob Corrigan, global head of corporate communications at BGI, said: “Subject to the approval of the US Bankruptcy Court and applicable regulators, and the closing of the transaction, as part of the proposed Barclays acquisition of Lehman Brothers North American investment banking and capital markets operations, Lehman indices would be expected to become part of Barclays.

“Recognising the industry significance of these indices, Barclays is committed to maintaining the family of Lehman indices and the associated index calculation, publication and analytical infrastructure and tools."

Other US ETF providers WisdomTree and VanEck Global have special exemption status for ETFs that track their own indices.