State Street has unveiled plans to extend its Fund Connect ETF portal globally, in light of escalating demand, particularly from Authorized Participants (APs) in Europe and the Asia-Pacific (APAC) region. Previously, the portal's Application Programming Interface (API), which accounts for almost half of North American order volumes, had been confined to clients within the US and Canada.
The Fund Connect ETF portal is an online platform that enables the creation and redemption of ETFs and acts as a single access point to various issuers. This automated order routing solution offers access to ETFs in multiple currencies, establishing a direct link between APs, order takers, sub-advisors, and sponsors. By broadening its API, it enables global market players to increase their operations and take advantage of efficiency enhancements and risk reduction through the API's automated technology.
Lori Coakley, the global business head of Fund Connect ETF at State Street, remarked, "This expansion is in response to the growing demand from our valued APs, particularly those in Europe and APAC, who have expressed a strong interest in leveraging State Street’s best-in-class connectivity. Not only does this cater to that increasing demand for streamlined and automated ETF creation and redemption processes, but it also further solidifies our position as a leader in in the ETF industry."
The ETF market has experienced an uncontested expansion in recent years, propelling a spike in demand for augmented automation within the creation and redemption framework. Recognising this trend, State Street has adjusted to the developing needs of APs by enhancing one of the most critical segments of State Street’s GlobalLink product suite. With this upgraded API integration, clients worldwide can now seamlessly place orders directly with funds via their own Order Management Systems (OMS).
Frank Koudelka, global head of ETF Product at State Street, stated, "The global API connectivity is the next logical step in the continued digitization of our ETF servicing business. Close to 100 authorized participants are communicating their create/redeem orders globally on behalf of our ETF clients to State Street via Fund Connect. The continued theme we have heard from them is a desire to communicate system-to-system as opposed to web portals, and Fund Connect is now the first create/redeem portal fully enabled via APIs across Asia-Pacific, Canada, Europe and the United States."
Meanwhile, the ASX released figures indicating that Exchange Traded Products increased by 10.6% in January - from $172.98 billion to $181.44 billion. This continued demand for global ETF trading platforms reflects increased interest in systemic growth and risk diversification strategies amongst investors and financial institutions.
As part of the ongoing digital shift within the financial industry, the expansion of State Street's API reconfirms the continual evolution of global ETF services in response to client needs and market fluctuations. Through this latest initiative, State Street maintains its leading position within the ETF industry while offering clients enhanced automation and efficiency.