ETF Securities is to launch ETF Exchange, the first multi-sponsor exchange-traded fund issuance consortium consisting of the world’s leading financial institutions.
ETF Securities is to launch ETF Exchange, the first multi-sponsor exchange-traded fund issuance consortium consisting of the world’s leading financial institutions.
The company says it has seen an overwhelming response from over 15 global banks and financial institutions to join the ETF consortium.
The objective of ETF Exchange is to provide investors with the most liquid and creditworthy exchange-traded products worldwide
It involves a global consortium of banks and asset managers. Until now, all ETF issuers have been owned and run by single financial institutions.
Over 15 banks and financial institutions have registered a strong desire to join the consortium which includes major players across the key financial centres of Europe (including Germany, France, UK, Italy, Southern Europe and Scandinavia), the US and Asia.
The idea was inspired by investor demands for increased levels of transparency, liquidity and counterparty risk management within the ETF industry.
ETF Securities says it identified that the current ETF issuance model by single financial institutions could be strengthened by diversifying index replication across a consortium of the strongest financial players and concentrating liquidity within a single platform.
Under the current ETF issuance model, if the sponsoring/issuing financial institution fails, it is highly likely that their respective ETFs would be greatly disrupted and potentially liquidated. ETF Exchange is backed by a consortium of financial institutions providing a more liquid, stable and creditworthy offering for investors.
It is anticipated that ETF Exchange will shortly launch its first tranche of ETFs into the market. Member banks will be able to issue selected white label products.
Hector McNeil, managing partner at ETF Securities (pictured), says: “We are continually striving to be the most innovative player in the ETF industry and the launch of ETF Exchange further outlines our credentials in this field. It’s important we react to investor concerns and provide them with the best products in the market, so we are delighted with the benefits the platform will provide.
“Furthermore, we are delighted that such a number of top financial organisations have shown their support for our ideas and we look forward to continually building the best platform of ETFs in the world. The interest has been tremendous and the results should be very exciting.”
