Q2, 2020

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ICE ETF Hub Q2 Report

Throughout Q2 and the heightened market volatility, we continued to see an increase in adoption of the ICE ETF Hub. The Hub saw new records, including total number of orders placed, total notional processed via the Hub, record notional value of equities processed by Authorized Participants (APs) and a record $62bn in FI creation activity.  

A key driver behind the increased activity was the use of our multi-order functionality, which was released in Q1. This enables APs to seamlessly and efficiently manage the booking of multiple orders.

In a continuation of our efforts to bring efficiencies to the ETF creation and redemption process, we successfully soft launched the custom basket facilitation in Q2. With this new feature, you can assemble custom baskets in a more automated way via APIs and ICE ETF Hub’s user interface. In the coming quarter, Hub users will see expanded functionality with ICE Chat and connectivity to ICE Bonds newly-launched platform ICE Fixed Income Select, to further enhance the way ETF baskets are negotiated between traders and issuers.

Wells Fargo has become an authorized participant on Hub and has joined the platform’s advisory committee. “As a foundational platform component, ETF Hub promises to enhance the standardization, efficiency and stability across all phases of the ETF liquidity cycle,” said John Leone, Managing Director, Head of Quantitative Strategy at Wells Fargo Corporate and Investment Banking.
Credit Suisse has also recently joined the ICE ETF Hub advisory committee and become an authorized participant on the platform. “As the ETF market continues to grow in both size and complexity, it’s critical that more electronification and standardization be applied to the ETF primary market,” said Jim McKeever, Head of Program Trading Americas and ETF Create Redeem at Credit Suisse.
Looking ahead, ICE ETF Hub will soon be connected to ICE FI Select, ICE Bonds newly-launched platform that aggregates its various liquidity protocols. This connectivity means traders will be able to trade lists via the Hub. Orders will then be sent to ICE Bonds liquidity pools in ICE FI Select to source inventory in the secondary market.
In Q3, we plan to launch additional efficiency features to custom basket facilitation, including pre-screening of investible lists; phase I of Issuer Basket Tool – a workflow solution that enables issuers to manage custom basket submissions from traders; expanded features with ICE Chat and the ability to send trade lists from the ETF Hub to ICE FI Select. Our custom basket workflow provides Issuers with a quick and efficient solution to establish their offering in negotiated baskets as a result of rule 6c-11.
In addition to the above releases, we will be launching a new pilot program which will allow market makers and issuers to test the custom negotiation workflow in a controlled manner. To learn more about this initiative please contact the ICE ETF Hub team.
Research, insights and more from the ICE ETF Hub community.
Exchange traded funds in volatile markets 
Understanding the disconnect between price and net asset value
By Mark Heckert, Chief Product Officer, ICE Data Services

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By J.P. Morgan Asset Management

NYSE Active ETF Newsletter 
Interested in more ETF insights? Sign up for the New York Stock Exchange newsletter dedicated to providing updates and analysis on the developments fueling the rise of active management in ETFs.
ETF Halftime Report 
CFRA Research shares their latest findings on fund flows and trends shaping the ETF landscape in 2020. By CFRA Research
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