State Street Introduces New Exchange Traded Fund Servicing Capability to Help ETF Providers Streamline ETF Orders
October 18 2010 - 10:00AM
Business Wire
State Street Corporation (NYSE: STT), one of the world’s leading
providers of financial services to institutional investors,
announced today that it has launched a new service for the Exchange
Traded Fund (ETF) market to help clients process ETF orders more
efficiently and in an automated and streamlined fashion. As ETFs
have continued to grow in popularity and in number, the complexity
involved in servicing ETFs has increased significantly.
ETFs currently account for more than $1 trillion in global
assets under management and remain an efficient, low-cost,
transparent and tax-friendly investment tool. With State Street’s
Assisted Trading service, authorized participants, typically market
makers or specialists who obtain the underlying assets to create
ETFs, can simultaneously enter the ETFs they want to trade and
identify any restricted shares via State Street’s FundConnect
platform. Restricted shares are securities that are not eligible
for proprietary trading and change daily based on underwriting,
mergers, investments and other activities. Previously, the method
for identifying restricted shares within ETFs was manual and
intensive. Using this capability, the restricted shares are
segregated and sent to State Street Global Markets, the company’s
investment research and trading arm, to be traded. This process
ensures that the authorized participant is completely in compliance
with all regulatory and exchange requirements when trading
ETFs.
“Since 1993, State Street has differentiated itself among other
ETF service providers through its leading-edge technology,
consultative client approach and flexible servicing model to
service ETFs,” said Frank Koudelka, senior vice president at State
Street Global Services. “Our new offering automates the way in
which clients handle restricted securities, making it a seamless
process with a clear audit trail that facilitates compliance with
regulatory requirements.”
The Assisted Trading service is accessed through FundConnect,
State Street’s online trading platform for ETFs, which is
integrated with State Street’s transfer agency recordkeeping
platform. The transfer agent releases the approved orders to the
ETF accounting platform and the depository via DTCC Fast.
About State Street
State Street Corporation (NYSE: STT) is one of the world's
leading providers of financial services to institutional investors
including investment servicing, investment management and
investment research and trading. With $19 trillion in assets under
custody and $1.8 trillion in assets under management at June 30,
2010, State Street operates in 27 countries and more than 100
geographic markets worldwide. For more information, visit State
Street’s web site at www.statestreet.com.
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