Citi, State Street enhance ETF automation for global growth

Firms are bolstering their platforms ahead of faster settlements.

Citi Securities Services and State Street Corp. have both announced enhancements to the automation capabilities for their global ETF offerings.

With interest in the funds growing worldwide and with faster T+1 settlements incoming for US equities, corporate debt and unit investment trusts in May, firms are keen to ensure they have the most streamlined offering and grow their market share.

Following a successful pilot, Citi is adding Financial Information eXchange API connectivity on ACES, its online global ETF portal that fully automates the entire ETF process and allows authorized participants in the 12 markets the firm’s ETF services business operates in to create and redeem shares more easily.

“With the ETF industry’s move to T+1 looming around the corner and the push for digitization, this enhancement comes at an opportune time,” said Paul Spyropoulos, ETF product manager at Citi Securities Services. “By integrating ACES with the FIX protocol, we are unlocking scalability and efficiency not only for our clients, but all ETF market participants.”

FIX is used by around 300 members and is a communications protocol for the international real-time exchange of securities transaction information.

“As the ETF sector continues to see tremendous growth, enhanced speed and efficiency will be of critical importance and FIX helps to enable that,” added Peggy Vena, head of ETF services for Citi Securities Services.

STATE STREET

Meanwhile, at State Street, there has been an upgrade to the API for its Fund Connect ETF portal.

While the capability has been available in the U.S. and Canada for several years and accounts for around half of North American order volumes, the upgrade rolls this out to clients globally.

“This expansion is in response to the growing demand from our valued APs, particularly those in Europe and APAC, who have expressed a strong interest in leveraging State Street’s best-in-class connectivity,” said Lori Coakley, global business head of Fund Connect ETF at State Street. “Not only does this cater to that increasing demand for streamlined and automated ETF creation and redemption processes, but it also further solidifies our position as a leader in in the ETF industry.”

State Street has around 100 authorized participants currently using the Fund Connect portal to create and redeem orders and Frank Koudelka, global head of ETF Product, says demand is growing.

“The continued theme we have heard from them is a desire to communicate system-to-system as opposed to web portals, and Fund Connect is now the first create/redeem portal with fully enabled via APIs across Asia-Pacific, Canada, Europe and the United States. This further demonstrates the innovations that State Street has brought to the marketplace as the largest global ETF service provider.”