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State Street and Bloomberg enhance processing and settlement for fixed income ETFs

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State Street Corporation and Bloomberg have launched an enhancement for the fixed income exchange traded fund (ETF) market that helps clients process and settle ETF orders in a more efficient, scalable and automated manner.

As institutional adoption of ETFs continues to increase, this new link between State Street and Bloomberg marks an evolution in how fixed income ETFs trade and settle in the primary market. The enhancement integrates Bloomberg’s Fixed Income ETF Basket service (BSKT<GO>) with TotalETF, State Street’s automated, global ETF servicing solution, and Fund Connect, State Street’s online order management system.
 
Bloomberg’s service allows authorised participants to submit orders directly from BSKT<GO> to State Street and generates in-kind settlement instructions based on transaction messages received from Bloomberg. It will also be available to all ETF sponsors currently serviced by State Street Global Services.
 
“The proliferation of ETFs across fixed income has led to increased complexity,” says Frank Koudelka, senior vice president at State Street Global Services. “The enhancement will be the first, true end-to-end solution for the processing and settlement of fixed income ETF baskets, integrating the state-of-the-art capabilities of TotalETF with a global, industry-standard interface in Bloomberg’s Professional service.”
 
"As institutional participation in the fixed income ETF market grows, the need for workflow efficiency in the creation and redemption process will be critical," says Ben Macdonald, Bloomberg's global head of product. "The integration of BSKT and TotalETF ensures that ETF sponsors using Bloomberg and Fund Connect will experience efficient processing of their transactions."
 
BSKT <GO> provides market participants an efficient and systematic way to access the primary market of ETFs. The tool automates the process of gaining access to liquidity necessary to create and redeem fixed income ETFs, and integrates functionality from across the Bloomberg Terminal, including Bloomberg’s fixed income electronic trading, order execution and portfolio analytics solutions.

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