Clearstream has developed a new issuance model for ETFs, aimed at Irish ETFs on the German market, with the goal of streamlining the ETF issuance process in Europe.
In Clearstream’s first partnership for the new model, Capita Asset Services, an Irish registrar and asset managing services business, will be able to open an issuance account with Clearstream and directly mark balances up or down in Clearstream’s books, rather than have a third party perform this service. Clearstream Banking, the German CSD, has also improved reconciliation procedures which can be applied to Capita, as fund registrar, to enable more secure and efficient cross-border transactions and intraday settlement.
Clearstream says that its new model, set to go live in Q1 2014, will help improve the ETF landscape in Europe. According to data from the World Federation of Exchanges, the volume of ETF trades in the Americas reached $8.17 trillion through the first nine months of 2013, whereas the volume of ETF trades in Europe only reached $532.4 billion during that time. Part of the reason for the dramatic difference could be the lack of efficiency due to fragmentation in the exchange and settlement landscape in Europe.
“Contributing to the ETF efficiency agenda, Clearstream is delighted to accommodate Capita Asset Services’ request for an issuance account at Clearstream so that they can directly process issuances with us on behalf of their customers, making the ETF process in Europe less convoluted. This is in line with Clearstream’s longstanding aim of improving the efficiency of investment fund processing including through its Vestima platform,” says Marc Kieffer, head of Issuance and Distribution Services at Clearstream.
“Capita welcomes the chance to proactively demonstrate our commitment and desire to add value to the ETF processes. This new development will allow us to be progressive in the ETF cross-market settlements efficiency without compromising the service or adding risk,” says Justin Cooper, chief executive at Capita Asset Services Shareholder solutions.
Clearstream is also opening up this model to all other registrars and transfer agents and any other relevant third parties, upon request.
Clearstream Aims to Improve ETF Efficiency with New Issuance Model
Clearstream has developed a new issuance model for ETFs, aimed at Irish ETFs on the German market, with the goal of streamlining the ETF issuance process in Europe.