Bank of America has become the first authorised participant to implement the new FIX API for the ETF ecosystem from US exchange group ICE.
ICE launched its FIX API for the ICE ETF Hub in February this year, allowing authorised participants to connect to the ETF platform for managing create/redeem orders in a more automated way.
The adoption of the API provides Bank of America with an electronic workflow between its order management system and platforms of ETF issuers in a first for the ETF industry, according to Kevin McCarthy, head of Bank of America securities financing and clearing.
“Creations and redemptions for ETFs have traditionally been very complicated and required market participants to use a variety of tools to agree to baskets,” McCarthy added.
The addition of the FIX API to ICE ETF Hub preceded various new functionality for authorised participants using the ecosystem. Basket negotiation technology for participants to screen communicate and assemble custom baskets with issuers electronically was launched in July.
More recently in October, ICE kicked-off a pilot scheme to test the new basket negotiation technology with various market makers including Flow Traders, Jane Street, Old Mission, and others.
“The FIX API provides the infrastructure to modernise and scale the creation and redemption process by connecting ETF authorised participants, market makers, and custodians in a seamless, automated workflow,” Samara Cohen, co-head of ETF and index investing at BlackRock, commented on the FIX API.
“We are excited to see further progress and adoption by the industry, including the inception of a dedicated ETF working group at the FIX trading organisation to help accelerate standardisation across the ETF ecosystem.”