Bank of Ireland Securities Services (BoISS) has unveiled a pan-European settlement platform for ETF issuers.
The BoISS ETP Direct platform allows ETFs to settle delivery against payment directly in multiple jurisdictions across the European Union (EU).
BoISS director of business development Fearghal Woods says the platform is expected to streamline the trading activities of ETF market makers through reducing costs, risks and improving the timeliness of settlement.
He explains market makers get deal flow on the secondary market, and then fill these orders on their books. In order to replenish inventory or restock, they trade in the primary market.
However, he says this has historically been inefficient because a lot of settlement was pre-payment, entailing counterparty risk issues, cross-border timing delays among other inefficiencies. He adds: "Through this platform, we allow direct access for our clients to each of these markets and consequently streamline trading activities for market markers in the primary market."
BOI business development manager Paul Heffernan says the listing and trading of European ETFs beyond the EU boundaries, as with Ucits products, is starting to occur.
He explains the actual bridges between European products and frontier markets in most cases do not exist and by going directly into each local market, BOI facilitates settlement into these frontier regions.
National Bank of Abu Dhabi CIO Alan Durrant says: "We are excited about the potential for the growth of an ETF market in the Gulf region. Local investors are seeking a cost effective way to take instant and diversified exposure to markets and an ETF provides as ideal solution."
BOI says the catalyst for launching the platform derived from both market need and demand from product issuers, such as exchange-traded product provider Source.
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