Nomura and Tradition, the global interdealer broker, have jointly launched an electronic trading platform for exchange-traded funds.
The multilateral trading facility is designed to increase transparency and efficiency, boost market liquidity, reduce costs and be fully regulatory-compliant, the firms said in a joint statement.
The platform will allow market participants, including institutional traders, sell-side banks and market makers, to engage in intraday and auction trading while referencing net asset value (NAV) prices in the ETF primary market, with cross-asset class coverage, for the first time.
Navesis-ETF represents an important step-change in the future of ETF trading, says Rupert Hodges, Managing Director – TFS Derivatives Ltd, London, at Tradition. It has been developed in conjunction with Nomura to specifically tackle market inefficiencies and we believe it will help to grow liquidity, increase transparency, and be seen as a positive industry initiative ahead of regulatory reform on both sides of the Atlantic. This initiative is completely in line with the Traditions global strategy of developing platforms and solutions with our core client base, designed to enhance liquidity, transparency and efficiency. Navesis-ETF demonstrates great technical innovation in a climate of regulatory change.
The firms say the platform offers competitive pricing, efficient trading, broad access, real-time execution and regulatory future-proofing.
Market participants will be able to fulfill NAV-based ETF orders in real time. The MTF is now live.
The ETF industry has enjoyed a rapid ascent over the past 10 years, but structural inefficiencies have meant that the market has not reached its true potential, says Lee Burrows, head of Delta One, EMEA, at Nomura. As leaders in liquidity management, and as a large player in the ETF market, we know from first-hand experience that Navesis-ETF fulfills the desires of participants and regulators. This is the first of its kind to market and will be a leading provider in the space. We expect this to become the primary market place for ETF trading.
(CG)