Bank of Ireland Securities Services (BoISS) has launched an innovative pan-European exchange traded fund (ETF) settlement ..…
platform for ETF issuers, called “BoISS ETP Direct”. The new product is designed to permit ETFs to settle delivery against payment directly in multiple jurisdictions across the EU.
The “BoISS ETP Direct”platform will have significant benefits for Product Providers, Asset Managers and Market Makers alike, particularly when traded through the primary market.
The product is designed to provide a more transparent, cost effective and efficient ETF settlement mechanism using the existing European depositary network. It addresses many of the inefficiencies that currently exist with the traditional ETFsettlement model which will bring significant benefits to our client products.
Core Benefits of BoISS ETP Direct
Efficiency: All transactions are STP which improves the timeliness of trade communications
- Time savings: Greater efficiency in the markets as trades can settle on T+1 basis
- Risk mitigation: Removal of counterparty risk through the use of central clearers.
Trades can settle DVP which eliminates the necessity for free cash movements.
Cost savings: Transaction costs are substantially reduced which lowers market maker trading costs.
Benefits to Asset Manager / Product Promoters
- Enhanced product transparency and liquidity
- Reduced costs
- Streamlined trading platform at primary market
Benefits to Market Makers
- Reduced counterparty risk
- Ability to create and settle orders in 1 day
- Ability to cover short positions on a T+1 basis
- Greater inventory control
- Improved resolution management processes
Substantial reduction in costs associated with settling ETF trades though the cross border platform currently in place. Trades can now settle through BoISS in the local CDS without the requirement of cross border bridges.
Source: ETFWorld / BoISS