London-headquartered HSBC has launched ETF Platform Solutions, an end-to-end offering providing global ETF issuers with all their asset servicing needs in one place.
“ETF Platform Solutions is bringing together, under one brand, all the custom products and services that we have created within our markets and securities business to service the ETF ecosystem,” Robert Rushe, global head of product for ETF servicing at HSBC, told FinanceAsia.
In addition to capabilities such as portfolio composition file (PCF) production and custom ETF net asset value (NAV) attribution analysis, the new offering features the latest addition of an order management system powered by cloud-based distributed market infrastructure (DMI) from Calastone.
“The primary goal of the ETF order management system is to provide real-time transparency to participating dealers (PDs) and ETF issuers on the status of an ETF order,” Rushe noted.
“We believe this platform will provide real value to underlying investors in terms of better on-exchange pricing of our clients’ ETFs,” he added.
Through application programming interfaces (APIs), the system is able to deliver real-time processing and monitoring capabilities, including the construction of the order value and drivers for any NAV slippage.
Once order executions are completed, live analytics will also be available for issuers and authorised participants through HSBC’s digital data integration interfaces.
“Every party in the DMI ecosystem is interoperable and can elect to integrate standardised processes. This results in more expedient access to data across the entire ecosystem, and enables ETF issuers to have clear line-of-sight into the status of their funds,” Brian Godins, chief commercial officer at Calastone told FA.
The firm already had a long history working with HSBC’s global mutual funds operations, before engaging the bank’s ETF team.
The technology provided by Calastone covers the full servicing of ETF trading, from the receipt of the trade to settlement and tracking of underlying basket trades, plus all connectivity to the various parts of the ecosystem, including fund accountants, custodians and common depositories, he added.
Authorised participants, for example, will be able to obtain real-time insights into primary market trading and incurred costs, thus narrowing spreads in the secondary market.
“The connectivity and integration with partners and intermediaries, as well as eradication of end-user computing tools, furthers the automation of manual tasks and reduces risk and cost, enabling the industry to scale,” Godins said.
The order management system will be deployed across HSBC’s global client base, including issuers domiciled in Ireland, Hong Kong, Singapore and Australia.
Looking ahead, instant settlement and tokenised investments are two areas the Calastone team is focusing on.
Access to real-time market developments, which is offered by DMI, has leveraged all parties’ dealmaking experience amid the gradual move towards a world of T+1 and even further, Godins explained.
In his view, such developments will not only benefit the ETF ecosystem, but also unlisted mutual funds and other asset classes, including tokenised assets.
“All of this ultimately brings greater value to the end investor, which is what we should all be aiming towards,” he added.
