Euroclear, State Street create international ETF

Euroclear, State Street create international ETF

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Euroclear Bank and State Street Global Advisors (SSGA) plan to merge a proposed thirteen SPDR ETFs to an international ETF structure under Irish law.

This is an industry first as the first conversion from a domestic structure to an international structure that would remove the inefficiencies and reduce the costs associated with the current market practice.

“We applaud SSGA’s recent announcement to rationalise their offering. By simplifying the issuance and post-trade processing in the European ETF market, liquidity providers will be able to significantly improve service levels towards end investor clients and ultimately lower the cost of owning ETFs,” said Stephan Pouyat, global head of capital markets at Euroclear.

The SPDR ETFs will be issued and settle for the first time in an ICSD. It is intended that these funds will migrate to the Euroclear-designed international structure towards the end of the year.

In addition to the primary market issuance process taking place in the ICSD, settlement of transactions occurs within the ICSD structure. 

“We anticipate that the new international structure will alleviate many of the operational complexities, costs and risks when settling ETF units and realigning them in the incumbent CSD structure. This is an exciting development and further demonstrates our commitment to enhancing the service we offer clients,” Paul Young, head of capital markets group at SPDR ETFs Emea.

Local CSDs can also provide post-trade services for internationally-structured ETFs via their links with the ICSD, achieving the best of both worlds. Currently, the thirteen ETFs are listed on Euronext Paris, Euronext Amsterdam, Euronext Brussels, Borsa Italiana, SIX Swiss Exchange and will also list on the London Stock Exchange for the first time. 


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