European Exchange Traded Products: Momentum Builds for the ICSD Model
A report by BNY Mellon with contributions from Clearsteam, Euroclear and HANetf
European Exchange Traded Products: Momentum Builds for the ICSD Model
A report by BNY Mellon with contributions from Clearsteam, Euroclear and HANetf
June 2020
The European exchange traded products (ETP) market is seeing a widespread shift to the International Central Securities Depositary (ICSD) model. Brexit prompted the migration of Irish-domiciled ETFs to Euroclear Bank in Belgium and Clearstream Banking Luxembourg. Now, the market has taken note.
Migration to ICSDs has gone smoothly. Market participants have recognised the benefits of the ICSD model for cross-exchange listed ETPs in Europe, especially the lowered operational overhead and reduced trading and settlement risk.
The ETP market continues to evolve, with innovations such as ETNs, ETCs, and ‘green’ ETFs, and a greater desire to expand global distribution.
As a result, as much as 90% of the market may use international settlement within a few years.
- How will it get there?
- What will happen along the way?
- What are the benefits?
BNY Mellon has collated insights from Corporate Trust experts as well as the ICSDs and HANetf to explore this trend and its impact on Europe’s ETP market.
Request the full paper to learn more about the ICSD model and how the cost-efficient, error-reducing features of this issuance and settlement structure are transforming Europe’s ETP market.
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