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Bernardus Roelofs, DRW
Bernardus Roelofs, DRW

Collaboration is key for strong growth

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DRW | Best Market Maker/Authorised Participant – Cryptocurrencies

What is the size and scale of your business at the moment?

For 2023, DRW was ranked 4th on BBG RFQe across all ETF asset classes by notional traded volume. We have maintained this rank in to 2024, ranking 4th and 3rd respectively in equity and fixed income in February. Our journey over the past four years in Europe has been remarkable, evolving from a nascent presence to securing the 4th position in Europe on RFQe by notional traded volume. Our extensive network now comprises over 260 active ETF counterparties, spanning from major global asset managers to boutique family offices and retail platforms. Our commitment is to servicing this growing diverse spectrum of counterparties, ensuring liquidity and accessibility across all tiers of the market.

We offer pricing across an expanding range of products, covering all DM equity ETFs, EM equity (excluding China A), and demonstrating strong competitiveness in the rates space, while simultaneously venturing into pricing credit ETFs. For crypto ETPs we are extremely competitive in both European and US listed products. Our automation prowess underscores our efficiency, with pricing fully automated up to USD15-20 million, delivering returns within an impressive timeframe of 300/400 milliseconds. We continuously review and enhance these limits to drive consistent progress and meet evolving market demands.

What trends have you seen over the past year?

The past year has witnessed a significant shift towards the acceptance and adoption of active ETFs in Europe, following the successful trajectory observed in the US. This trend is poised for further growth, driven by increasing investor allocations towards active ETFs and the proliferation of offerings by mutual fund and ETF managers. Of particular note is the burgeoning retail market in Germany, fuelled by the popularity of ETF saving plans, reflecting a broader European trend of heightened ETF usage facilitated by platforms like Nutmeg, Scalable, and Trade Republic.

Additionally, the emergence of digital assets, illustrated by the rapid uptake of Bitcoin ETFs in the US, signals a transformative wave in investment preferences. Notably, the recent approval by the FCA in the UK for crypto-backed ETNs signifies a growing appetite for digital assets across European markets, with expectations of more products and issuers entering the fray.

What plans do you have for growing your business over the coming year?

Our growth strategy is twofold. Firstly, we aim to expand our global network of institutional counterparties, offering them our cutting-edge pricing capabilities to enhance execution and mitigate risk. Secondly, we are committed to broadening our pricing coverage across a diverse array of ETFs, including high yield and emerging market debt (EMD), to address evolving market needs and opportunities.

Where do you see the ETF industry going in terms of products over the coming year? How will your firm be able to support them?

We anticipate a dynamic landscape of new product offerings in the ETF industry, with a pronounced focus on active ETFs and fixed income instruments targeting specific segments such as convertibles, and green bonds. Additionally, we foresee an uptick in crypto ETNs and ESG-focused funds, alongside anticipated closures and mergers.

To support this evolving landscape, we are committed to expanding our product coverage and onboarding new ETF providers, ensuring ample liquidity and accessibility for market participants.

Why do you think you won this award?

Our success is a testament to the collaborative efforts of our experienced ETF team comprising traders, quants, sales, and operations professionals. However, beyond our internal expertise, our success is rooted in our unwavering commitment to price quality and continuous interaction with our institutional counterparties and issuers. By fostering a culture of trust and mutual respect, we have cultivated enduring relationships that drive collective growth and industry recognition. Winning this award reaffirms our dedication to excellence and innovation in the ETF market. 

To read the rest of the report please click here.

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