Suppose an ETF is structured to track an index

and that that index is maintained by some financial institution

and that financial institution goes bankrupt and is no longer around to maintain that tracked index

What happens to the ETF?

  • To be clear, you are talking about the firm that constructs the index, not the fund manager? The latter is a financial institution, the former is a research group.
    – Ben Voigt
    Mar 20, 2020 at 15:13
  • @BenVoigt Example, asking: "What happens to SPY if S&P Dow Jones Indices LLC goes bankrupt or UUP if Deutsche Bank AG goes bankrupt?" I may be confused here. Could you explain a bit more the distinction you're asking about? Mar 20, 2020 at 20:40
  • I was just making sure that in the case of UUP you meant Deutsche Bank not Invesco.
    – Ben Voigt
    Mar 20, 2020 at 21:02

2 Answers 2


Read the prospectus. It will give information about this scenario. For example, in the prospectus for VOO it says

The Fund reserves the right to substitute a different index for the index it currently tracks if the current index is discontinued, if the Fund‘s agreement with the sponsor of its target index is terminated, or for any other reason determined in good faith by the Fund’s board of trustees. In any such instance, the substitute index would represent the same market segment as the current index.


First, nothing. The index content doesn't change so much every day, so the ETF still represents about the correct mix, for weeks if not months to come. Any further action depends on the company that offers it:

  • If the IP of the index is free, they could just grab it, and run it from now on.
  • they can offer all owners of shares to transfer the shares to a similar index, and define a default if they don't chose. After the time is up, they will simply exchange the ETF shares for those others.
  • they can cash out all participants. TYpically, they wouldn't want to do that, because that money might walk away.

Either way, the actual impact is minimal to the investors.

  • Interesting. What would happen to options holders? Mar 20, 2020 at 20:42
  • 1
    @lampShadesDrifter: In the first case, business as usual. In the second, there could potentially be some weird split so that the old shares are exchange for equal value (but not necessarily equal quantity) of new ones, and options would be treated as with any other split. In the third case, the (forced) buyout offer will be made at a specific price and options will become worth their intrinsic value according to that price, with basically no time premium (at least, none for the time after the cash out date)
    – Ben Voigt
    Mar 20, 2020 at 21:06

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