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iShares lists first international ETF
11 February 2014
International security settlement structure expected to lower costs and risks
BlackRock’s iShares has listed the first international exchange traded fund (ETF) in continental Europe.
The iShares Euro Stoxx 50 ex-Financials UCITS ETF (EXFN) is the first in the region to have an international securities structure, which means it is the first to be issued and settled at an international central securities depository (ICSD).
It is listed on Euronext’s Amsterdam market and transactions are settled at Euroclear Bank.
Market participants hope it will lead to growth in the European ETF market.
“Adapting the market infrastructure to reflect the pan-European profile of ETFs should provide further operational efficiencies to issuers and liquidity providers, but more importantly improve on-exchange spreads and market depth available to end-investors,” said Pedro Fernandes, head of European ETPs at Euronext.
Historically, cross-border transactions in ETFs have been settled in several national central securities depositories (CSDs) with associated costs and risks. It is expected that the international structure will reduce the operational and trading costs of investing in ETFs.
"We anticipate that this new structure will enable investors to gain easier access to one of the most dynamic markets while benefitting from reduced costs. This will help us in our ambitions to not only grow the market but also to increase market efficiency for our clients," said Gert-Jan Verhagen, head of iShares Netherlands.