Foreign regulators up scrutiny of next Boeing jet
Unusual moves reflect extent of 737 crisis’s impact on established industry principles
European and Middle Eastern regulators will conduct independent certification reviews of Boeing Co.’s next new aircraft, according to people familiar with the matter, breaking from longstanding practice to apply what they say are lessons learned from the 737 MAX crisis.
The unusual moves punctuate eroding international confidence in the plane maker and the Federal Aviation Administration in the wake of the 737 MAX grounding in March. They are also the latest measure of how significantly the MAX’s woes have shaken up long-established principles of international cooperation in approving new jetliner designs. Historically, certification of U.S.built planes received less foreign scrutiny than is now envisioned by European and Emirati regulators.
The European Union Aviation Safety Agency said in a statement it is performing a “concurrent validation” of the FAA’s certification of Boeing’s 777X, a new variant of the company’s popular wide-body jet.
The plane is expected to be the first new airliner design from either Boeing or rival Airbus SE to come to market since the MAX crisis began. Two recent crashes of that jet exposed problems with its flight-control systems and FAA certification procedures. Regulators around the world grounded the entire fleet, creating turmoil for airlines and passengers world-wide.
The national regulator in the United Arab Emirates, meanwhile, also plans to separately scrutinize the certification process of the 777X, according to people
BMO Global Asset Management is closing its exchangetraded funds business in Europe after a four-year struggle for market share in an industry dominated by large firms and low-fee offerings.
The Montreal-based manager, which oversees $669 million (U.S.) across 13 funds, plans to shut the ETFs on or around Jan. 21, according to a regulatory notice. The move was prompted in part by “the current level of assets under management and projected asset growth in the current market environment,” it said in the notice.
A spokesperson for BMO said the closures will have “no material impact on BMO GAM’s wider investment proposition.”
Since listing its first regional products in 2015, the firm’s market share has flatlined at 0.1 per cent, compared with 45 per cent for BlackRock Inc. and 10.5 per cent for DWS Group, according to data compiled by Bloomberg Intelligence.
New competitors are knocking on the door. Goldman Sachs Asset Management entered the
European market this year, while WisdomTree purchased a specialist ETF business last year.
“It’s just a natural part of competition and firms rationalizing their lineups,” said Athanasios Psarofagis, a European ETF analyst at Bloomberg Intelligence in London. “But it’s much harder for the little firms.”
Fee pressure is also ramping up, with the likes of Vanguard Group recently slashing costs on its passive products in the region. Paris-based Amundi SA rolled out nine products charging just five basis points earlier this year.
“This has been a big year for fee cuts, so I think they just saw the difficulty in competing there and scaling up,” Psarofagis said.
The largest fund affected is the BMO Bloomberg Barclays 1-3 Year Global Corporate Bond GBP Hedged ETF with about 142 million pounds ($243 million) in assets.