Exchange traded notes


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Exchange Traded Notes (ETN)

Unsecured, unsubordinated debt securities that are traded on an exchange and offer returns based on the performance of a market index upon maturity. As they are issued by an underwriting bank, their value also depends on the credit rating of the issuer.

Exchange Traded Note

A debt security issued by a financial institution with no coupon and no principal protection. That is, unlike other bonds, the issuer of an exchange traded note is not required to repay the principal at maturity. Rather, the return on an exchange traded note is determined by the performance of some stated market index. Exchange traded notes are negotiable securities traded on an exchange. They often have maturities as long as 30 years.

Exchange traded notes.

Exchange traded notes (ETNs) are debt securities issued by a financial institution, listed on a stock exchange, and traded in the secondary market.

Unlike regular bonds, there are no periodic interest payments, and your principal isn't protected. So you could lose some of or all the amount you invest.

You can sell your ETN in the secondary market at its current price or hold it until maturity, though that may be 30 years in the future.

The price in the secondary market is determined by supply and demand, the current performance of the index, and the credit rating of the ETN issuer. At maturity, the issuer pays a return linked to the performance of the market index, such as a commodity index, to which the ETN is linked, minus the issuer's annual fee.

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It is therefore clear to us that these derivatives and exchange traded notes are unsuitable investments for retail consumers.'
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BANKING AND CREDIT NEWS-October 12, 2018-Bank of Montreal rebrands BMO select index exchange traded notes as Dorsey Wright MLP Index ETNs
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The SEC quoted an example of the said confusion wherein the broker-dealer application materials were submitted to enable the offer and sale of these financial products (CXBTF and CETHF) in the United States, as well as certain trading websites which characterized them as "Exchange Traded Funds (ETF)." Other public sources characterized the instruments as "Exchange Traded Notes (ETN)."
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