BlackRock issued its first ETF with an international security structure in 2013, and since March this year is has launched all of its new funds on this platform. The migration marks the first time that pre-existing funds will be transferred to the new model.
The 20 iShare UCITS ETFs account for $2.9 billion in assets under administration as of October 2015, and are denominated in US dollars, British pounds and euros.
In the centralised post-trade structure, issuance and settlement of ETFs is carried out by an international central securities depository (ICSD) in a single location, simplifying post-trade processing and allowing market makers to offer more competitive trading spreads to investors.
Leland Clemons, global head of iShares capital markets at BlackRock, said: “As the global demand for European-domiciled ETFs continues to grow at pace, the ecosystem supporting the industry has never been more important.”
“Our partnership with Euroclear and Clearstream to create a multi-national central settlement and clearing venue for European securities is testament to our commitment to making ETF trading more efficient. We hope to build an industry consensus around this simpler model.”
Stephan Pouyat, global head of capital markets at Euroclear, added: “What we are doing is effectively simplifying the European issuance and settlement process for this much sought-after investment product. The huge growth in European ETFs shows no sign of abating, and it is critical that the infrastructure providers like Euroclear have the right platforms and processes in place to manage the increasing volumes.”
Bernard Tancré, head of business solutions for investment fund services at Clearstream, said: “A significant advantage of this ICSD issuance model is that it utilises the well proven and efficient settlement infrastructure for Eurobonds that market participants from around the world have been accustomed for more than 40 years.”
He added: “Seamless connectivity is crucial to the user experience, and we are proud to provide this system alongside our domestic issuance model.”