Tradeweb Launches US ETF Trading Platform
Fixed income market operator Tradeweb has launched an electronic over-the-counter (OTC) marketplace for US-listed exchange traded funds (ETFs).
The firm says the platform tackles some of the challenges inherent in institutional OTC trading such as pre-trade price transparency, operational efficiency and access to institutional-size liquidity. Tradeweb clients will be able to use the platform to trade with 11 liquidity providers, access to all US-listed exchange traded funds, including fixed income ETFs, and also European-listed ETFs.
“The Tradeweb ETF platform offers a new channel for liquidity and enhances our suite of execution capabilities.” said Chris Hempstead, head of ETF sales for electronic market maker, KCG. “The platform represents a novel approach to improving price discovery as well as an innovative way to execute larger-size trades, while reducing the risk of materially impacting pricing.”
The system will offer aggregated pre-trade price transparency from liquidity providers, and exchange pricing with National Best Bid and Offer (NBBO), request for ruote (RFQ) trading with up to five dealers for one- and two-way price quotes and an automated workflow that connects with third-party and proprietary systems.
Transparency will be supported by electronic audit trails for compliance and best execution reports.
“Leveraging electronic solutions to streamline over-the-counter trade workflows is an important step forward for the ETF industry,” said Leland Clemons, managing director at buy-side firm BlackRock iShares. “The combination of a robust exchange traded marketplace with an electronic, transparent OTC market delivers institutional investors choice in how they access liquidity.”
Reported by Dan Barnes
