RBC growing ETF servicing business with fourth custody mandate of the year

RBC follows up on recent Coin Capital and Bristol Gate Capital Partners deals with ETF custody mandate from First Block Capital.

By Jonathan Watkins

RBC Investor & Treasury Services (RBC) has been appointed custodian by First Block Capital for its new actively managed FBC Distributed Ledger Technology Adopters exchange-traded fund (ETF).

The mandate win represents RBC’s fourth ETF deal of the year, following agreements with the likes of Coin Capital and Bristol Gate Capital Partners.

“As newcomers to ETFs, it was essential for First Block Capital to partner with a team whose collaborative, professional culture and strong technology platform complemented our ETF ambitions,” said Bill Stormont, chief operating officer, First Block Capital. “RBC IT&S’ client-centric approach was a key success factor for our launch and we look forward to working with them in the future as we grow our presence in this space.”

The surge in uptake of passive investing has resulted in ETFs becoming one of the dominant asset classes for the buy-side, and has subsequently become a new battleground for custodians.

From 2008 when the first active ETF was issued, the market capitalisation was $500 billion, but according to research from EY, the market could eventually reach $7.6 trillion by the end of 2020.

“Our new mandate with First Block demonstrates that RBC Investor & Treasury Services possesses the skills, technology and client service capabilities to benefit the ETF sector,” said David Linds, head of asset servicing in Canada, RBC Investor & Treasury Services. “We are pleased to assist First Block with its custody, fund valuation, ETF administration and tax reporting services and remain confident we can continue to respond to First Block’s, and the ETF market’s, evolving needs.”