HSBC has chosen ETF and index data provider Ultumus to be its portfolio composition file (PCF) solution provider.
Ultumus will be responsible for performing PCF creation and distribution for HSBC’s ETF clients globally.
The move comes 18 months after HSBC made the decision to look for an external partner to perform its PCF calculations. Previously, the calculations had been done in-house.
The first existing clients will be switched to the Ultumus platform in Q4 with the rest being completed in early 2021.
PCF calculation is a crucial part of the ETF ecosystem as it enables market makers to accurately price ETFs and provide liquidity to investors.
HSBC said it selected Ultumus due to the firm’s ability to produce accurate PCFs while also having the global coverage to support its European and Asian clients.
Steven DiVito, senior product manager, asset owners and managers, securities services at HSBC, commented: “We started looking for an external partner in order to further enhance the product offering by working with a specialised vendor with specific ETF expertise.
“Working with Ultumus allows us to further enhance our ETF offering to our clients.”
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Giles Sarton, head of business development at Ultumus, added: “Supporting HSBC’s growing ETF business is a huge opportunity and denotes Ultumus’ ongoing involvement and development as a part of the global ETF ecosystem.
“Furthermore, it highlights our proficiency to engage in supporting both synthetic and physical structures and making ETFs more transparent and efficient to trade.”
In June, Ultumus was also selected to be the PCF solutions provider for crypto ETP issuer 21Shares.