BNY Mellon Unveils New Basket Construction Platform for ETF Services
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Insights
BNY Mellon's launch of an advanced ETF basket construction platform is a strategic move in an industry where efficiency and digital integration are increasingly important. The platform's ability to streamline the creation and publishing of ETF basket information using start-of-day NAV data is likely to enhance the operational capabilities of asset managers. This development could potentially lead to an increased adoption rate of ETFs by providing a more user-friendly and transparent process for market participants.
The integration of API access and external client gateway views into the platform not only simplifies the user experience but also indicates BNY Mellon's commitment to leveraging technology to improve the asset management workflow. Such advancements are expected to attract more clients seeking sophisticated digital solutions, which could, in turn, bolster BNY Mellon's competitive position in the financial services industry.
From a financial perspective, the investment BNY Mellon has made in its ETF technology signifies a forward-thinking approach to capturing market share in the burgeoning ETF sector. Considering the company's oversight of nearly $50 trillion in assets, the deployment of this platform may result in operational cost savings through improved efficiency and reduced complexity. These savings could potentially enhance profit margins and be reflected in future financial statements.
Additionally, by offering a comprehensive global solution for fund providers, BNY Mellon is positioning itself as a key service provider in not only the US but also in Europe, Canada and APAC regions. This geographical diversification of services might contribute to a more stable revenue stream and hedge against market volatility in specific regions.
Regulatory compliance is a significant aspect of the asset management industry. BNY Mellon's new ETF platform, with its emphasis on transparency and digital workflow, is likely designed to align with current regulatory standards and anticipate future requirements. The ability for asset managers to efficiently manage ETF strategies and comply with regulations could reduce legal and operational risks associated with manual processes and potential human error.
Furthermore, the platform's transparent user portal and the provision of vital market-making information to liquidity providers may help ensure adherence to best practice standards. This could mitigate the risk of regulatory penalties and enhance the firm's reputation as a reliable and compliant service provider within the ETF market.
New capabilities will help increase scale for ETF users across the Asset Management industry
"Through evolving our technology platform, this ultra-transparent user portal connects market participants to ETFs at any point in the lifecycle and strengthens the broader ETF ecosystem," said Christine Waldron, Global Head of Fund Services, BNY Mellon.
BNY Mellon collaborated with its clients to design and develop the new platform to address the evolving challenges of an ETF manager. Asset manager users of the platform will be able to customize and retrieve ETF baskets via API, as well as access the platform externally through the client gateway to view the workflow and status of outstanding processing exceptions. This latest release builds on recent investments to improve ETF workflow, including delivery of the Intelligent Basket Builder custom negotiation tool and Asset Flow Analytics dashboard in 2022 and financial information exchange (FIX) protocol connectivity in 2023.
"This breakthrough in ETF technology can help greatly reduces complexity in the front-office ETF process," said Bob Humbert, Global Head of ETF Product, BNY Mellon. "The result is a workflow which enables portfolio managers and support staff to fully focus on key objectives—to manage existing strategies more efficiently, generate ideas for new best-in-class ETF products and better serve liquidity providers and end investors."
BNY Mellon's ETF platform supports comprehensive technology across nearly 2,000 ETFs, presenting an all-in-one global solution for fund providers across the US,
About BNY Mellon
Established in 1784, BNY Mellon is America's oldest bank and the first company listed on the New York Stock Exchange (NYSE: BK). Today, BNY Mellon powers capital markets around the world through comprehensive solutions that help clients manage and service their financial assets throughout the investment life cycle. BNY Mellon had
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ryanw@bnymellon.com
Ben Glaser
+1 845 558 2511
Benjamin.glaser@bnymellon.com
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SOURCE BNY Mellon
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