State Street Global Services is the administrator for over 60 per cent of the European ETF market. It is undeniable that State Street’s stature and reputation, not to mention its deep expertise in servicing ETFs, is an important consideration for ETF sponsors. But as Robert Rushe (pictured), Head of ETF Servicing at State Street Global Services in Ireland explains, the primary focus for the firm has always been on accuracy.
“When it comes to administrating ETFs, it is essential to be accurate in everything you do in respect to calculating NAV, portfolio composition file (PCF) production etc, so that the market is confident in the accuracy of the data when making good prices and spreads. This is key for us but it also comes down to flexibility,” says Rushe.
“Once the APs are confident that what they are getting from State Street is accurate, they know that when they make a price on the exchange they don’t have to add any kind of risk premium. It gives them confidence and they know that if they need to change something, if they need to customise something, we can support them. This always them to be flexible on prices when interacting with investors in the marketplace.”
Indeed, this is another area within Europe that the firm excels in thanks to the different dealing models it offers on its clients’ products. State Street Global Services can support real-time changes and a high level of interaction between its clients’ capital markets and the authorised participants. State Street works with a network of close to 50 authorised participants.
“The true value-add for us is the relationship management in respect of the authorised participant market. We have a specialised ETF servicing team here in Dublin. That group seeks to partner with the capital markets team of a client, providing an extra layer of relationship management with the APs. This means the ETF sponsors can focus on selling. We take care of all the middle/back office operations,” explains Rushe. As well as having a large hub in Dublin, State Street has significant presence in Luxembourg, Germany and France to service ETF clients locally.
Last year was an “exceptional” year for the firm from a growth perspective says Rushe, with new clients coming on board over consecutive months. 2014 looks to continue in the same vein with more ETF issuers from the US and Asia showing interest in the European market.
“What drives our success is how we engage with ETF sponsors and authorised participants,” says Rushe. “We’re always trying to create the best product on behalf of our sponsors and we bring that collective knowledge to them. We ensure that the products they bring to market are optimally designed. It’s about creating the best ETF possible for a particular segment ETF sponsors are looking to target.
On winning the award, Rushe comments: “We are delighted to have won the etfexpress award. It’s always gratifying to receive peer recognition on the great work our employees are doing.”