Capita Asset Services is aiming to improve the transaction process for cross-border exchange-traded funds (ETFs) in the German market through a tie-up with Clearstream.
As a registrar and asset servicer, Capita will be able to open an account with Clearstream and directly mark balances up or down in Clearstream's books.
The new model is aimed at Irish ETFs in the German market and set to launch in the first quarter this year.
The partnership may help to increase ETF trading volumes in Europe, which lag far behind those in the US. Between January and September 2013, the volume of ETF trades in the US was more than $8 trillion (€6 trillion), while in Europe it was $532 billion, according to data from the World Federation of Exchanges provided by Clearstream.
The more fragmented exchange and settlement landscape in Europe is sometimes given as a reason for ETF volumes lagging behind those of the US.
Clearstream is the post-trade services provider of Deutsche Börse, the German exchange, while Capita Asset Services is a financial outsourcing firm headquartered in London.
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