Ryan Clements

Date of Award


Document Type

Dissertation - Open Access

Degree Name

Doctor of Juridical Science (S.J.D.)


Duke University School of Law


This dissertation examines emerging risks and regulatory concerns in exchange traded funds (ETFs). It makes four core arguments through four published or accepted (and forthcoming) law review articles, alongside two published blog posts, all of which were written and previously submitted to the SJD Committee during the author’s dissertation research period. These articles are organized herein as dissertation chapters together with a contextual introduction and a summary conclusion which frames the dissertation within the scholarly literature on economic “financialization,” and emerging challenges associated with the growth of large interconnected asset managers.

The four core arguments in this dissertation are as follows. First, ETFs are operationally reliant on the discretionary behaviors of independent financial market intermediaries with instabilities that resemble prior financial products including auction rate securities, portfolio insurance and money market mutual funds. Second, there is growing support that index products (including ETFs, other exchange traded products, and index mutual funds) are contributing to market inefficiency and the formation of collective investor behaviors. Third, ETFs, and their sponsors, are creating deep and complex interconnections between numerous market participants and service providers, down to retail and institutional investors, affecting corporate behaviors and decision making. These connections generate new direct and indirect systemic risk transmission pathways, with unique factors not found in other managed asset products. Fourth, ETFs are incredibly difficult, and in some cases impossible, to accurately compare side-by-side. Product and performance comparisons would be materially improved with standardized website formats and layouts, uniform calculation methodologies, the imposition of an ETF naming convention, standards for sustainable investment products, and a systematized and structured electronic reporting system of key variables to a centrally-hosted data repository.

The dissertation provides extensive support, and a diverse variety of applied case studies, in favor of each of the four core arguments. It also includes a unique (and timely) contextual analysis of the events of March 2020 and the resulting impact on ETFs due to the coronavirus pandemic - including the historically unprecedented intervention in the credit ETF market by the Federal Reserve. Given these four core emerging risks and regulatory concerns, the dissertation provides three recommendations. First, greater regulatory scrutiny and safeguards for giant interconnected asset managers. Second, enhanced controls over credit ETF origination, liquidity transformation, and “cash-like” tradeable investment products. Third, additional investor-focused disclosure reforms to ease ETF product comparisons.

Library of Congress Subject Headings

Exchange traded funds, Financial risk management