Initiates pilot program for issuers, market makers, and authorized participants to road test new functionality
Intercontinental Exchange, a leading operator of global exchanges and clearing houses and providers of data and listings services, announced that ICE ETF Hub has launched new automated functionality for exchange-traded fund (ETF), primary market participants, to assemble custom basket proposals. The passage of the Securities and Exchange Commission’s Rule 6c-11 last September will now expand the use of custom baskets to all ETFs in-scope of the Rule. The result of this change offers the potential for offering greater tax efficiency, better liquidity and tighter bid-ask spreads for investors.
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“With this new functionality, we are introducing an innovative solution that enables market participants to deploy custom basket workflow in a more efficient and expeditious way.”
ICE ETF Hub is an industry-wide, open architecture, primary market technology solution for primary market ETF activity which enables a more standardized and simplified process for ETF creation and redemption. It currently supports both US-listed domestic equity and fixed income ETFs.
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The new functionality allows market participants to screen, communicate and assemble custom baskets with issuers electronically, via Financial Information eXchange (or FIX)-enabled APIs and ICE ETF Hub’s front-end user interfaces. The platform gives users a straight-through process, allowing them to seamlessly send approved baskets to authorized participants for order placement. This functionality is designed to help fixed-income market participants transition away from the many manual, bespoke processes in use today, thereby increasing scale and reducing operational risk through standardization and automation.
“Assembling and placing custom creation and redemption baskets — all in a systematic way — has been our vision for the platform since we started exploring ways to automate the ETF primary market,” said Peter Borstelmann, Head of ICE ETF Hub. “With this new functionality, we are introducing an innovative solution that enables market participants to deploy custom basket workflow in a more efficient and expeditious way.”
