Several of Europe’s leading ETF issuers have joined forces for the launch of a consolidated trading data feed amid the success of the Markets in Financial Instruments Directive II (MiFID II).
The MiFID II was introduced earlier this year and has meant improved transparency and liquidity for the ETF market. This is due to the necessity of declaring ETF trades both on and off-exchanges.
Bloomberg has released an ETF Aggregate Volume feed which incorporates over-the-counter (OTC) trades – also known as off-exchange trades – as well as trades through exchanges such as the London Stock Exchange. Whilst the introduction of MiFID II has improved transparency of the ETF market, there is still a demand to make the data more accessible for investors which Bloomberg’s data feed hopes to resolve.
The service covers all European listed ETPs over the last 90-days, providing data from across exchanges and OTC venues. Updating daily, it is led by the ETF issuer and trading community, consisting of ETF giants Invesco, iShares, SPDR and DWS.
Jim Goldie, EMEA Head of ETF Capital Markets at Invesco, said in a statement: “The obligation to report OTC trades in ETFs post-MiFID II has presented us, the industry, with an opportunity to demonstrate the true liquidity of ETFs to our clients. This has previously been a challenge as even though trades were being reported post MiFID II, there was no consolidated tape, which allowed clients an aggregated view of trading volumes in one place.”
Europe’s ETF and ETP market has continued to grow throughout 2018. Fixed income ETFs and ETPs alone have seen inflows of nearly $950m in October, contributing to 2018’s net inflows of $12.24bn, according to Invesco. Total assets in ETFs and ETPs listed in Europe was roughly $783bn in October, however this is still considerably behind the US market which is worth upwards of $3tn.
An estimated 70 per cent of ETF trades were unreported due to being traded off-exchange, says Invesco. The firm believes that the introduction of MiFID II has increased the transparency of the ETF market and enables European institutional investors better access to the market.