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Tradeweb teams with EuroCCP to offer central counterparty clearing for European ETFs

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Tradeweb Markets, a global operator of electronic marketplaces for rates, credit, equities and money markets, and equities clearing house EuroCCP are partnering to facilitate central counterparty clearing for European Exchange Traded Funds (ETFs).

This collaboration will aim to streamline European clients’ settlement process and minimise costs, by facilitating pre-settle margin and netting of exposures, while still offering pan-European ETF investors the transparency and benefits afforded by the RFQ process.
 
“By offering our clients the ability to centrally clear European ETF trades, we are enhancing the RFQ workflow by introducing a new post-trade process to help investors minimise settlement fails and improve efficiency,” says Enrico Bruni, head of Europe and Asia business at Tradeweb. “As a leader in the ETF marketplace, we remain fully committed to innovative client solutions, and we are excited about this new initiative.”  
 
With regulators aiming to harmonise rules under the European Central Securities Depositories Regulation (CSDR), market participants will soon be subject to new Settlement Discipline procedures, including cash penalties for settlement fails and mandatory buy-ins. By offering access to central clearing and settlement services via EuroCCP within the trading workflow, Tradeweb will help clients navigate these new rules and mitigate counterparty risk for clearing participants.
 
Cécile Nagel, CEO, EuroCCP, says: “Our partnership with Tradeweb allows us to expand our ETF clearing business, delivering a new and innovative service to clients which helps them to better manage the cost and risk of trading this asset class.”
  
“Introducing CCPs to ETF trading on Tradeweb’s RFQ platforms is an important market structure enhancement, improving the clearing, settlement and utility of ETFs,” says Jason Warr, Head of Global Markets at BlackRock iShares.
  
Tradeweb launched its European ETF trading platform in 2012 and its US ETF trading platform in 2016.  In August 2019, Tradeweb announced July trade volumes in European ETFs had risen by 55.2 per cent Y-O-Y to reach a record figure of USD1.5 billion per day.  As of 30 June, 2019, over 60 per cent of European ETF transactions were processed via Tradeweb’s Automated Intelligent Execution Tool (AiEX).
 
Tradeweb’s global ETF marketplaces deliver an alternative method for investment firms to access competitive OTC prices with greater efficiency and transparency. The platforms offer a number of tools that reduce errors and improve performance, while streamlining post-trade processing and providing reports that help institutional investors meet their best execution requirements. Tradeweb’s ETF CCP service is expected to be available by the fourth quarter of 2019, subject to regulatory approvals.

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