iShares, the exchange-traded fund provider, and data vendor Bloomberg have joined forces to offer a consolidated tape for ETFs in a bid to increase post-trade transparency and limit the effects of market fragmentation in Europe.
As part of the joint venture, the first of its kind in the European ETF market, Bloomberg will utilize its European Composite tickers, which aggregate volume and trading data for reported over-the-counter and exchange-traded iShares ETFs, to allow investors to see the best prices and liquidity. This includes data from 22 venues in Europe where ETFs are traded. Under upcoming European financial regulation in the form of the Markets in Financial Instruments Directive (MiFID II), it is expected that consolidated tapes will become mandatory for both equities and ETFs.
“Industry players have long called for the creation of a consolidated tape,” said Jean-Paul Zammitt, Bloomberg’s global head of core product. “We’re pleased to work with iShares to create the first composite view of the European ETF marketplace.”
For example, the iShares FTSE 100 is currently traded in sterling on five European exchanges and in euros on another four. To determine the overall volumes traded, an investor would have had to look at nine different tickers in two currencies but now this total volume can be viewed on just two tickers, one for sterling and one for euros. Over iShares’ entire ETF product range this means it will only need 517 tickers to view information that was previously spread over 1,385 tickers. The tape will only cover ETFs from iShares, the largest issuer of ETFs globally and which is owned by asset manager BlackRock.
“This unique view of ETF volumes will bring added transparency to investors across Europe,” said Leland Clemons, head of iShares’ capital markets in EMEA. “iShares is committed to working with our partners to improve the investor experience in this marketplace and initiating these types of advances for the benefit of our clients.”
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