It is a landmark moment for the ETF industry.

For the first time, global distribution of UCITS ETFs – permitting 24-hour trading spanning Asia, Europe and Latin America – has been made possible through the introduction of an efficient settlement process involving the same ICSD model already used for Eurobonds, depositary receipts and a substantial number of ETFs in Europe.

Working with the ETF industry, stock exchanges and CSDs in Asia and Latin America, Euroclear has established the first global distribution channel for UCITS ETFs. This allows trading in the same ETF to follow the sun in an efficient manner through cross-listings on different continents.

By issuing ETFs within an ICSD such as Euroclear Bank, the international structure with a common depositary removes the major operational and settlement issues that have often deterred issuers from cross-listing their ETF products around the world and imposed additional costs on market-makers – costs that have ultimately been borne by end-investors.

This development builds on the international structure pioneered by Euroclear in 2013 to facilitate ease of trading and settlement of UCITS ETFs between different European exchanges, and which is now used by issuers representing around 40% of Europe’s ETF market.

In this article, industry players – including Commerzbank, HKEX, Indeval, Invesco, Jane Street Capital and SPDR – tell us why they can now look to the future with renewed confidence.

"Settlement efficiency is key to winning acceptance in Latin America and Asia."

MOHAMED M'RABTI, DIRECTOR AND DEPUTY HEAD OF FUNDSPLACE, EUROCLEAR


more related news & insights