MTF to provide NAV-based trading of ETFs
A new multilateral trading facility (MTF) has been launched by Nomura and global interdealer broker Tradition, affording electronic trading of exchange traded funds (ETFs),
referencing net asset value (NAV).
The London-based joint venture, called Navesis-ETF, lets institutional traders, sell-side
banks and market makers trade intraday and at auction using NAV prices in the
ETF primary market, with cross asset class coverage.
industry has enjoyed a rapid ascent over the past 10 years but structural
inefficiencies have meant that the market has not reached its true potential,”
said Lee Burrows, head of Delta One,
EMEA at Nomura. “As leaders in liquidity management, and as a large
player in the ETF market, we know from first-hand experience that Navesis-ETF
fulfills the desires of participants and regulators.”
Nomura, which is an ETF market maker, said
the MTF was designed using existing Tradition proprietary technology to increase
transparency and efficiency, boost market liquidity and reduce costs. The bank
was hoping to change the current creation and redemption process, letting
market participants trade NAV-based ETF orders in real-time.
represents an important step-change in the future of ETF trading. It has been
developed in conjunction with Nomura to specifically tackle market
inefficiencies and we believe it will help to grow liquidity, increase
transparency, and be seen as a positive industry initiative ahead of regulatory
reform on both sides of the Atlantic,” said Rupert Hodges, managing director – TFS Derivatives, at Tradition.