Tradeweb Taps into US-ETF Growth With Trading Platform Launch

Tradeweb's launch of a new ETF platform will offer clients access to a deep liquidity pool over a total of

Tradeweb Markets, a global provider of fixed-income, derivatives, and exchange-traded-funds (ETF) marketplaces, has launched a new electronic over-the-counter (OTC) marketplace for US-listed ETFs, helping streamline liquidity choices for users, according to a Tradeweb statement.

The launch comes amidst a period of heightened OTC trading, with ETFs already having shown strong growth over the past year, and now into the new year across a number of institutional venues. Tradeweb’s new OTC marketplace will also allow clients to trade via eleven liquidity providers, affording several utilities for users.

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This includes direct access to all US and European-listed ETFs, as well as diverse fixed-income options. Moreover, clients will garner access to exchange pricing with National Best Bid and Offer (NBBO) and an automated workflow to third-party and proprietary systems.

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In contrast to Europe, where the majority of ETF trading is OTC, bringing electronic request for quote (RFQ) trading to the US will also help allow investors to use this protocol for those larger or relatively illiquid ETF trades, whilst leveraging their relationships with market makers that makes them more competitive.

ETF assets have already managed to climb to an all time high of $2.2 trillion during the 2015 year, having already experienced an uptick in H2 2015, driven in large part by retail channels, as calculated by Broadridge’s Fund Distribution Intelligence.

According to Enrico Bruni, Managing Director and Head of Europe and Asia Business at Tradeweb Markets, in a recent statement on the launch: “We have introduced a very efficient way of trading U.S.-listed ETFs electronically, leveraging our technology and network to support a competitive and liquid over-the-counter marketplace.”

“The Tradeweb ETF platform offers a new channel for liquidity and enhances our suite of execution capabilities. The platform represents a novel approach to improving price discovery as well as an innovative way to execute larger-size trades, while reducing the risk of materially impacting pricing,” added Chris Hempstead, Head of ETF sales for KCG, in an accompanying statement.

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