ICE to Create New Industry Platform for Exchange-Traded Funds

Intercontinental Exchange, Inc. (ICE) announced its intention to launch a new open-architecture, centralized industry platform to facilitate creation and redemption orders for exchange-traded funds (ETFs). This new platform, expected to begin operations in 2019, subject to regulatory approval, will employ innovative functionality and establish standards to simplify the primary market trading process, which will bring more efficiency and transparency to the process. BlackRock will be one of ICE’s development partners and has executed a memorandum of understanding with ICE to support the new platform. The U.S. ETF market has seen tremendous growth. According to the Investment Company Institute, net assets grew six-fold over the last decade to $3.4 trillion. Fixed income ETFs have been one of the fast-growing segments within ETFs, with compounded annual growth of over 30% during the last ten years. With the new platform, ICE is developing industry standard protocols to simplify the current create and redeem process. Market participants will be able to place orders for creation and redemption baskets in a central venue, designed in an open platform to support participants from ETF sponsors to market makers, and other authorized participants. The platform will provide analytics, data and content, and instant messaging, as well as connections to trading venues and execution services. As part of this initiative, the platform will be connected to BondPoint, TMC Bonds and ICE Credit Trade, which provide fixed income execution protocols for asset classes including Municipals, Corporates, Treasuries, Agencies and Certificates of Deposit. In addition, ICE Data Services will provide analytics and reference data to the platform.