US exchange group ICE has confirmed that Wells Fargo has become the latest major institution to become an authorised participant within its exchange traded funds (ETF) ecosystem.
Wells Fargo joins other major banks already operating as authorised participants on the ICE ETF Hub, including Goldman Sachs, JP Morgan, Bank of America, Citadel Securities and Virtu Financial.
As an authorised participant, Wells Fargo will facilitate creation and redemptions of ETF shares for traders using the primary market platform. ICE founded its open architecture ETF ecosystem last year amid huge growth in ETF instruments for clients to assemble and place creation/redemption baskets in a more standardised and automated fashion.
“Wells Fargo is excited to partner with ICE ETF Hub in our efforts to facilitate liquidity provision across all constituents of the ETF community,” said John Leone, MD and head of quantitative strategy at Wells Fargo Corporate and Investment Banking. “Through our collaboration with ICE, ETF Hub has emerged as the provider of a modernised, transactional messaging platform. As a foundational platform component, ETF Hub promises to enhance the standardisation, efficiency and stability across all phases of the ETF liquidity cycle.”
ICE recently confirmed the addition of a FIX API to allow authorised participants to connect to the ETF Hub to manage create and redeem orders. Multi-order functionality was also rolled out so that multiple transactions to be submitted as one order.
The ecosystem supports US-listed domestic equity and fixed income ETFs, but ICE plans to expand this later in the year to support US-listed international equity ETFs. It will also add connectivity to its execution platforms through the recently formed ICE Select division during the third quarter this year to provide secondary market cash bond trading.
“We’re excited to have an opportunity to work with a leading firm like Wells Fargo as they continue growing their presence in the ETF primary market,” said Peter Borstelmann, head of ICE ETF Hub. “The growing community of market participants on ICE ETF Hub provides valuable insights as we work to bring more efficiencies to the creation and redemption process.”
ICE said in April that it had seen a record notional volumes on the ETF Hub during the first quarter this year. A record $87 billion was processed on the platform in March from authorised participants alone, ICE revealed. The processed notional value was up a significant 220% from February’s record of $27 billion.