Barclays Capital joins ETF Exchange
01 February 2010 | 2523 views | 0
Source: ETF Exchange
ETF Securities Ltd (ETFS), the global pioneers in Exchange Traded Commodities (ETCs) and independent provider of Exchange Traded Funds (ETFs), is pleased to announce that Barclays Capital has joined ETF Exchange (Europe) (ETFX), the world's first third generation ETF platform, as an authorised participant and swap provider. ETF Securities is initially working with BofA Merrill Lynch, Citi, Rabobank International, and Barclays Capital who are participants on the platform, with scope to add additional participants in the future.
The vision for 3rd generation ETFs was pioneered by ETF Securities. The idea was inspired by investor demands for increased levels of transparency, liquidity and counterparty risk management. ETF Securities identified that the current ETF issuance model by single financial institutions could be strengthened by diversifying index replication across a consortium of the strongest financial players and concentrating liquidity within a single platform issued by an independent ETF issuer - hence the 3rd generation ETF platform was born.
ETFX offers a total of 21 equity ETFs comprising Europe's first ETF platform concentrating on resource-equity ETFs and double leveraged (2x) and double short (-2x) ETFs. These ETFs are listed across 5 European exchanges (the London Stock Exchange, Deutsche Borse, NYSE-Euronext Amsterdam, the Borsa Italiana and the Irish Stock Exchange) and traded in up to 3 currencies (USD, EUR and GBP). They are part of the ETF Exchange initiative driven by client demand for increased liquidity, innovative products and reduced credit risks and counter-party exposure. The ETFs are all swap-backed ETFs using multiple counterparties, allowing more efficient tracking, with collateral being held in excess of UCITS guidelines. This issuance model is arguably amongst the most efficient and risk averse available today.
The ETFX equity ETF platform has seen strong trading growth since the introduction of thematic ETFs in the fourth quarter of 2008, and 2x short and 2x leveraged equity ETFs at the end of the second quarter 2009.
Dixit A. Joshi, Head of Equities, EMEA and Asia Pacific Barclays Capital commented:
"ETFs are an increasingly important part of an investor's portfolio and we look forward to working with ETF Securities to offer our clients liquidity across the full range of ETF products as part of our European Equities platform."
Commenting on Barclays Capital joining ETF Exchange (Europe), Mark Weeks, the CEO of ETF Exchange, said:
"This is an important milestone in the development of ETF Exchange. Working with Barclays Capital and the other three banks will provide investors with an unparalleled quality of service, across an innovative range of products. The ETFX platform is truly market-changing. We believe the evolution of ETFX will make redundant the current single bank issuance models."