Tradeweb partners with EuroCCP to provide ETF clearing
05 September 2019 London
Image: Shutterstock
Tradeweb is set to collaborate with equities clearinghouse EuroCCP to facilitate central counterparty clearing (CCP) for European exchange-traded fund (ETF) trades executed on its platform.
Tradeweb is a global operator of electronic marketplaces for rates, credit, equities and money markets. Its ETF marketplaces aim to offer an alternative method for investment firms to compare prices for over-the-counter transactions.
The partnership with EuroCCP comes in response to the new regulatory demands of the EU’s Central Securities Depositories Regulation (CSDR), which, as of Q3 2020, make market participants 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 said it will help clients navigate new regulatory rules and mitigate counterparty risk for clearing participants, Tradeweb noted.
According to Tradeweb, the partnership will help streamline its European clients’ settlement process and minimise costs, by facilitating pre-settle margin and netting of exposures.
The ETF CCP service is expected to be available by Q4 2019.
Meanwhile, pan-European ETF investors will still be able to gain the transparency and benefits afforded by the request for quote (RFQ) process, Tradeweb confirmed.
Tradeweb launched its European ETF trading platform in 2012 and its US. ETF trading platform in 2016.
In July, Tradeweb’s monthly trade volumes in European ETFs had risen by 55 percent year-over-year to reach a record figure of $1.5 billion per day.
According to Tradeweb, over 60 percent of European ETF transactions were processed via Tradeweb's Automated Intelligent Execution Tool as of June.
Cécile Nagel, CEO of EuroCCP, commented: “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.”
Jason Warr, head of Global Markets at BlackRock iShares and one of the beneficiaries of the new service, added: “Introducing CCPs to ETF trading on Tradeweb’s RFQ platforms is an important market structure enhancement, improving the clearing, settlement and utility of ETFs.”
Tradeweb is a global operator of electronic marketplaces for rates, credit, equities and money markets. Its ETF marketplaces aim to offer an alternative method for investment firms to compare prices for over-the-counter transactions.
The partnership with EuroCCP comes in response to the new regulatory demands of the EU’s Central Securities Depositories Regulation (CSDR), which, as of Q3 2020, make market participants 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 said it will help clients navigate new regulatory rules and mitigate counterparty risk for clearing participants, Tradeweb noted.
According to Tradeweb, the partnership will help streamline its European clients’ settlement process and minimise costs, by facilitating pre-settle margin and netting of exposures.
The ETF CCP service is expected to be available by Q4 2019.
Meanwhile, pan-European ETF investors will still be able to gain the transparency and benefits afforded by the request for quote (RFQ) process, Tradeweb confirmed.
Tradeweb launched its European ETF trading platform in 2012 and its US. ETF trading platform in 2016.
In July, Tradeweb’s monthly trade volumes in European ETFs had risen by 55 percent year-over-year to reach a record figure of $1.5 billion per day.
According to Tradeweb, over 60 percent of European ETF transactions were processed via Tradeweb's Automated Intelligent Execution Tool as of June.
Cécile Nagel, CEO of EuroCCP, commented: “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.”
Jason Warr, head of Global Markets at BlackRock iShares and one of the beneficiaries of the new service, added: “Introducing CCPs to ETF trading on Tradeweb’s RFQ platforms is an important market structure enhancement, improving the clearing, settlement and utility of ETFs.”
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