Euronext has officially introduced Euronext ETF Europe, an innovative marketplace tailored for exchange-traded funds (ETFs) and exchange-traded products (ETPs). This new platform promises to streamline listings, trading, clearing, and settlements within a coherent framework, aimed at enhancing functionality and transparency throughout the investment value chain.
By leveraging this integrated environment, various stakeholders—including issuers, market makers, distributors, custodians, and end investors—are expected to experience significant efficiency gains. Retail investors, in particular, will benefit from improved access to a diverse portfolio of ETFs across Europe, characterized by enhanced liquidity, increased price transparency, and a competitive range of offerings.
A notable advantage of Euronext ETF Europe is the facility it provides for ETF issuers to list a product once and gain exposure to all Euronext markets. This initiative simplifies administrative tasks while decreasing regulatory redundancy, allowing for quicker time-to-market and broader market penetration. Issuers can also showcase a wide array of products that encompass various asset classes and underlying benchmarks, with the added ability to offer identical products in multiple currencies, thus catering to varying investor preferences across different regions.
The platform’s design also enhances connectivity for brokers and trading members, enabling them to access the complete range of ETFs available on Euronext through a standardized membership model and unified infrastructure. A centralized order book, incorporating Euronext’s Optiq trading platform, consolidates liquidity across various jurisdictions, promoting effective price discovery and improving execution quality with tighter spreads. Participants will benefit from an integrated market data feed and a singular connection point.
Additionally, post-trade services have been significantly upgraded, featuring streamlined clearing and settlement processes that alleviate operational pressures and mitigate capital constraints. Euronext Clearing will handle all transactions, facilitating optimal netting, while settlement of Euro-denominated ETFs will occur through Euronext Securities, capitalizing on Europe’s common settlement structure, Target2-Securities. This setup includes a straight-through processing (STP) workflow and a new post-trade confirmation system to enhance operational efficiency.
To provide a smooth transition for existing trading members, they will have the option to maintain their current settlement arrangements until September 2026.
In summary, the launch of Euronext ETF Europe represents a crucial advancement in the creation of a cohesive and competitive European capital market. By establishing an all-encompassing ETF ecosystem, it addresses longstanding inefficiencies and sets a new benchmark for accessibility, transparency, and scalability within the European investment landscape. The initiative underlines a commitment to fostering leadership in the development of a unified Savings and Investments Union across Europe, paving the way for enhanced market dynamics that benefit all participants involved.