Brussels/Hong Kong/London – 7 May 2019
HKEX selects Euroclear’s international ETF structure
Euroclear Bank, the Brussels based international central securities depository (ICSD), and Hong Kong Exchanges and Clearing Limited (HKEX) have collaborated to enhance the distribution of European ETFs in Asia. HKEX has become the first stock exchange in Asia to adopt the ICSD ETF settlement model in Euroclear Bank.
European ETF issuers will now be able to expand their distribution network to Asia and grow ETF liquidity. Investors will benefit from improved settlement efficiencies and a reduction of costs and risks.
Brian Roberts, Head of Exchange Traded Products, HKEX said: “We are excited to introduce the ICSD settlement model for the ETF industry in Hong Kong. The ICSD link, which is proven effective in narrowing spreads and driving liquidity, will reinforce Hong Kong’s position as Asia’s ETF marketplace. This aligns with our vision to bring best execution and timely settlement to ETF investors, all in a convenient timezone.”
Mohamed M'Rabti, Deputy Head of FundsPlace, Euroclear added: “We welcome this collaboration with Hong Kong Exchanges and Clearing and are extremely pleased to be the first ICSD to extend an efficient global distribution of international ETFs. This partnership further underpins Euroclear’s wider Asia strategy which spans nearly 30 years in the region.”
Launched in 2013, Euroclear’s international structure for ETFs brings increased efficiency to a process that had previously only been supported by fragmented domestic market practices across Europe. Euroclear provides one place of settlement - an ICSD, thereby significantly reducing the complexity, cost and risk involved in ETF issuance. ETFs with a value of EUR 230 billion (USD 271 billion) are currently issued in the international structure.
About Euroclear Bank
Euroclear Bank provides settlement and related securities services for cross-border transactions involving domestic and international bonds, equities, derivatives and investment funds. Serving major financial institutions located in more than 90 countries, Euroclear Bank, based in Brussels, is part of the Euroclear group. Euroclear Bank is rated AA+ by Fitch Ratings and AA by Standard & Poor’s.
As well as Euroclear Bank, the Euroclear group includes Euroclear Belgium, Euroclear Finland, Euroclear France, Euroclear Nederland, Euroclear Sweden and Euroclear UK & Ireland. The Euroclear group settled the equivalent of EUR 791 trillion in securities transactions in 2018, representing 230 million domestic and cross-border transactions and held EUR 28.8 trillion in assets for clients.