International ETF lists on BATS Chi-X Europe

BATS Chi-X Europe has listed its first international exchange-traded fund (ETF), BlackRock’s iShares MSCI USA Dividend IQ UCITS ETF, which will use Euroclear Bank for international settlement.

The ETF invests in U.S. companies that target higher-than-average dividend yields. As opposed to ETFs trading on a national stock exchange and settling at the corresponding national CSD, BATS and Euroclear say that the international structure can improve liquidity and cross-border processing by removing the need for realignment of positions between CSDs for settlement, thus lowering overall costs and risks for investors. 

“BATS Chi-X Europe obtained its Registered Investment Exchange (RIE) status a year ago with the express purpose of bringing market efficiencies to European ETF listings. This latest listing can be counted as proof of concept that listing on BATS brings material benefits to pan-European investors looking to access deep and liquid markets, and we are very much looking forward to working with Euroclear Bank to extend use of their services in the near future,” says Mark Hemsley, CEO, BATS Chi-X Europe.

“We are ensuring that intermediaries purchasing this ETF will benefit from the safety of electronic delivery-versus-payment settlement, as well as delivering tangible benefits such as harmonized processing rules across trading venues and much improved asset servicing. And as the market knows, expedient reconciliation as well as the timely and accurate payment of dividends is vital to the attractiveness of ETFs—and the optimal functioning of the market,” says Stephan Pouyat, global head of international markets, Euroclear.

“Market infrastructure improvements are imperative to support the rapid growth of the ETF industry and we hope to see this structure adopted by providers across Europe to continue to drive the ETF market evolution,” says Leland Clemons, head of iShares Capital Markets in EMEA.