On April 20th 2009 "Source" launched its initial range of Exchange Traded Products (ETPs).
Source is a specialist provider of ETPs with a unique approach and deep roots in the trading community. Source is designed to deliver enhanced liquidity, increased transparency, reduced fragmentation, diminished counterparty risk and improved market performance.
Commenting on the launch of Source, CEO Ted Hood, said "At Source we're very excited about the growth prospects of the European market for exchange-traded products. We're convinced we can bring about even greater growth by offering investors improved products and providing an enhanced trading environment. We'll achieve this by creating common product standards based on increased liquidity, reduced credit risk, greater transparency and more efficient competition."
David Field, Managing Director of Rule Financial's Wholesale and Investment Banking division explained "I'm very pleased that the combination of Rule's in-depth knowledge of the ETF market alongside our experience of building time-critical, high performance internet-based applications gave Source and its founders the confidence that their goals and their timescales could be achieved."
ETFs , which represent the largest segment of the ETP market, combine the valuation features of a mutual fund or unit investment trust, which can be purchased or redeemed at the end of each trading day for its net asset value, with the 'tradability' feature of a closed-end fund, which trades throughout the day at prices that may be more or less than its net asset value.
This is a market poised for growth: in the USA demand for ETFs and similar products continues to grow with net European inflows of over €47 billion in 2008. Daily on-exchange trading volumes exceed US$90 billion (17 per cent of ETF assets under management) while in Europe that figure is approximately US$2 billion (less than 2 per cent of ETF assets under management). Source intends to close that gap by focusing all trading on a single stock exchange, Deutsche Börse, offering very efficient total return products and allowing multiple brokers to participate on an equal footing. These are significant improvements over existing products.
Rule Financial was chosen for the crucial role of designing, building and testing Source's marketing and execution platform on the basis of the consultancy's long and distinguished track record in the wholesale and investment banking sector.
Now in its 12th year of trading, Rule's specialist knowledge and experience in creating trading platforms and website GUIs for both buy side and sell side organisations contributed to the creation of the complex execution model Source demanded. Using Agile methodology and an iterative approach, Rule has been able to offer its clients a highly flexible, rapid-response service, bringing new ventures such as Source to market in the shortest possible, most cost-effective way.
As well as the construction aspect of Source, Rule Financial has also secured an ongoing contract for providing maintenance and technical support to the system, with initial bedding-in from the UK and afterwards via Rule's new facility at Łódź in Poland. This has meant a forecast of lower running costs, another distinct benefit for the partners in this historic joint venture.