Euroclear UK & Ireland welcomes Deutsche Bank’s db X-trackers suite of ETFs

Clients of Euroclear UK & Ireland (EUI) can now route orders in any of 180 Deutsche Bank db X-trackers Exchange Traded Funds (ETFs) through Euroclear’s EMX Message System. The development enables direct access for IFAs and other users of the Message System to official net asset value (NAV) based pricing for ETFs for the first time via EUI when routing their orders for settlement.

By routing orders through the EMX Message System and settling the transactions at EUI, automated end-to-end transaction processing is achieved for Deutsche Bank’s family of ETFs.

db X-trackers was launched in January 2007 and is among the five largest ETF companies in the world. With approximately USD 50 billion (GBP 33 billion) of assets under management, db X-trackers currently commands second place in the European ETF landscape, with 15% of the entire segment, according to BlackRock.

By utilising the EMX Message System, owned and operated by Euroclear, UK fund distributors and intermediaries are able to route ETF subscription and redemption orders using the same infrastructure they currently use for mutual fund order flows. Over 300 UK distributors and IFAs can benefit from automated order placement through to electronic book-entry settlement of trades in more than 1,600 ETFs at EUI, without making any technical changes. Furthermore, order routing is free of charge to distributors and intermediaries.

Yannic Weber, Chief Executive Officer of Euroclear UK & Ireland, said: “We expect to see other large asset management houses embracing full end-to-end processing automation for ETFs with Euroclear UK & Ireland in 2012, as the product continues to attract investor inflows. We are delighted to be working with Deutsche Bank, one of the world’s premier providers of ETFs, to provide a secure and efficient processing environment. A major service feature is that our clients and their intermediaries can buy ETFs directly from the product provider, cutting out the need and cost of separate relationships.”

Manooj Mistry, UK Head of db X-trackers, said: “ETFs are already known for their low total expense ratios. By enabling users in the UK to trade directly using NAV-based pricing, costs can potentially be driven down even more.”