Demand for Exchange Traded Funds (ETF) is steadily growing. The market now has a value of more than 450 billion Euros with over 2,200 products in at least 20 countries. However, the boom is curtailed by settlement and realignment challenges within the fragmented European market, notes Jeffrey Tessler, Chairman of Clearstream and member of the Executive Board of Deutsche Börse. “In Europe, ETFs are listed on multiple exchanges in different regions. As a result, trading desks have to hold multiple accounts with all Central Securities Depositories (CSDs) with differing post-trade practices”, he stated. The necessary realignments of positions between CSDs on the post-trade side when ETFs are traded across borders can create extra cost and complexity.
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