Citi Enhances ETF Servicing Capabilities with FIX API Connectivity on its Global Online ETF Portal

Rhea-AI Summary

Citi Securities Services launches FIX API connectivity on ACES, the bank's online ETF portal, to streamline order management and onboarding for authorized participants. The integration aims to unlock scalability and efficiency for clients and all ETF market participants, with the ETF industry experiencing significant growth. The new enhancement comes at an opportune time as the industry moves towards T+1 settlement and digitization, covering 12 markets globally and close to $555 billion in assets under administration since 2014.

Insights

Market Research Analyst

The introduction of the Financial Information eXchange (FIX) API connectivity by Citi Securities Services represents a significant technological advancement in the ETF industry. The integration with ACES, the bank's ETF portal, is likely to streamline the process of ETF share creation and redemptions for authorized participants, which could lead to increased operational efficiency and reduced costs. Given that the ETF market has been experiencing substantial growth, with Citi's ETF Services business expanding to manage a considerable amount of assets globally, this enhancement could further solidify Citi's competitive position in the market.

The transition to a T+1 settlement cycle, which reduces the settlement time for securities transactions, underscores the need for such technological improvements. The FIX API connectivity could potentially minimize settlement risk and enhance market liquidity, which may be beneficial for the overall stability and functioning of the financial markets. As such, this development is likely to be closely monitored by market participants and could influence investment decisions and strategies, particularly for those involved in high-frequency trading or with a focus on ETFs.

Financial Technology Expert

From a financial technology perspective, the adoption of FIX API by Citi Securities Services is a notable step towards increased digitization and automation within the financial services industry. FIX is a well-established protocol that enables real-time exchange of transaction information and its integration with ACES could set a new industry standard for the handling of ETF transactions. This move may prompt other financial institutions to adopt similar technologies to remain competitive, potentially leading to broader industry-wide improvements in efficiency and transparency.

Moreover, the API connectivity facilitates direct interaction with the ACES platform, which could attract new authorized participants by simplifying the onboarding process. This ease of access, combined with the potential for improved market timing and operational risk reduction, may encourage further growth in the ETF market, which has already seen a significant increase in assets under administration. The technological edge provided by such enhancements could be a differentiating factor for Citi in attracting and retaining clients, thus impacting its market share and profitability.

Risk Management Specialist

From a risk management perspective, the integration of the FIX API into Citi's ETF platform is likely to have a positive impact on the mitigation of operational risks associated with ETF share creation and redemption. By automating and streamlining these processes, the likelihood of manual errors is reduced, which in turn can decrease the risk of failed trades and the associated costs. Furthermore, in a T+1 settlement environment, the ability to manage settlement and subscription cycles more effectively is crucial to maintaining market integrity and reducing systemic risk.

Additionally, the enhanced speed and efficiency that the FIX API connectivity brings to the table are essential in an industry where timing discrepancies can lead to significant financial consequences. By improving the precision of market timing, Citi is not only providing a value-added service to its clients but also contributing to the overall reduction of settlement risk in the ETF market. This proactive approach to risk management is likely to be well-received by stakeholders and could influence the bank's reputation for operational excellence.

The bank’s latest enhancement helps clients and authorized participants gain efficiencies in an industry that continues to see significant growth

NEW YORK--(BUSINESS WIRE)-- Citi Securities Services announces the launch of Financial Information eXchange (FIX) API connectivity on ACES¹ – the bank’s online, global ETF portal that fully automates the entire ETF process.

Borne out of a successful client pilot, the new integration offers more simplified order management and onboarding. Authorized participants are now able to connect directly to the ACES platform and manage ETF share creation and redemptions in a more seamless manner.

FIX refers to a communications protocol for the international real-time exchange of securities transaction information. The protocol is used by the FIX community, which includes close to 300 member firms.

Paul Spyropoulos, ETF Product Manager at Citi Securities Services, comments, “with the ETF industry’s move to T+1 looming around the corner and the push for digitization, this enhancement comes at an opportune time. By integrating ACES with the FIX protocol, we are unlocking scalability and efficiency not only for our clients, but all ETF market participants.”

The launch of FIX API connectivity comes as the ETF industry continues to see significant growth. Since 2014, Citi’s ETF Services business has grown exponentially in scale, covering 12 markets globally, and close to $555 billion in assets under administration. The bank supports close to 50 global ETF issuers and close to 600 funds².

In a T+1 settlement environment, managing differences between settlement and subscription cycles will be a priority. The FIX API connectivity will help to improve market timing and reduce operational risks, while enabling further automation within ACES ETF processing.

Peggy Vena, Head of ETF Services for Citi Securities Services, comments, “as the ETF sector continues to see tremendous growth, enhanced speed and efficiency will be of critical importance and FIX helps to enable that.”

Citi’s ETF servicing model leverages the bank’s global footprint and expertise delivered through modern and scalable technology to provide custody and fund services. The bank continues to regularly expand its ETF platform with innovative solutions that exceed market expectations and deliver excellence to clients.

With close to US$29.2 trillion of assets under custody, administration and trust³, and an industry-leading network spanning over 60 markets, Citi Securities Services provides cross-border support for clients, with local market expertise, innovative technologies, customized data solutions and a wide range of securities services tailored to meet our clients’ growth ambitions.

About Citi:

Citi is a preeminent banking partner for institutions with cross-border needs, a global leader in wealth management and a valued personal bank in its home market of the United States. Citi does business in nearly 160 countries and jurisdictions, providing corporations, governments, investors, institutions and individuals with a broad range of financial products and services.

Additional information may be found at www.citigroup.com | Twitter: @Citi | LinkedIn: www.linkedin.com/company/citi | YouTube: www.youtube.com/citi | Facebook: www.facebook.com/citi

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¹ ACES refers to Advanced Citi ETF System

² As of December 31, 2023

³ As of December 31, 2023

View source version on businesswire.com: https://www.businesswire.com/news/home/20240207352292/en/

Media:

Harsha Jethnani

harsha.jethnani@citi.com

+65 93830872

Stephanie Hyon

stephanie.hyon@citi.com

+1 212-816-3397

Source: Citi

FAQ

What is the latest enhancement announced by Citi Securities Services?

Citi Securities Services has announced the launch of FIX API connectivity on ACES, the bank's online, global ETF portal.

What is the purpose of the new integration?

The new integration aims to offer more simplified order management and onboarding for authorized participants, unlocking scalability and efficiency for clients and all ETF market participants.

How many markets does Citi's ETF Services business cover globally?

Citi's ETF Services business covers 12 markets globally.

What is the total assets under administration by Citi's ETF Services business since 2014?

Citi's ETF Services business covers close to $555 billion in assets under administration since 2014.

What is the significance of the launch of FIX API connectivity in the context of the ETF industry?

The launch of FIX API connectivity comes at an opportune time as the ETF industry continues to see significant growth, aiming to improve market timing and reduce operational risks while enabling further automation within ACES ETF processing.

How does Citi Securities Services aim to deliver excellence to clients through its ETF servicing model?

Citi Securities Services leverages the bank's global footprint and expertise delivered through modern and scalable technology to provide custody and fund services, regularly expanding its ETF platform with innovative solutions that exceed market expectations.

What is the total assets under custody, administration, and trust by Citi Securities Services?

Citi Securities Services has close to US$29.2 trillion of assets under custody, administration, and trust, with an industry-leading network spanning over 60 markets.