SIX Becomes First Exchange Operator to Offer Pan-European On-Exchange RFQ Trading for ETFs

20^th December 2023: On December 4th 2023, SIX introduced a novel service extension to its Exchange Traded Funds (ETF) franchise, called Quote-on-Demand Europe (QOD Europe). In addition to over 1,700 tradable products listed at SIX Swiss Exchange, clients are now able to trade ETFs listed on other primary exchanges like the London Stock Exchange, Deutsche Boerse, Euronext, Nasdaq OMX and Wiener Boerse and more via ETF QOD Europe. This innovative trading service offers efficient straight-through processing using the interoperable Central Counterparty (CCP) model with settlement into domestic Central Security Depositories (CSDs). Complementary to the established multilateral open order-book, the range of tradable ETFs reaches to almost 6,000 products tradable at SIX Swiss Exchange.

For over two decades, SIX Swiss Exchange has been at the forefront of the ETF industry, continuously delivering innovative and future-proof services. The launch of ETF QOD Europe reinforces SIX Swiss Exchange’s commitment to providing a one-stop-shop experience, allowing users to trade instruments from different European markets, in particular those of the London Stock Exchange, Euronext Amsterdam, Euronext Brussels, Euronext Paris, Deutsche Börse XETRA, Borsa Italiana, Wiener Börse AG or Nasdaq Stockholm AB. This service-extension positions SIX as leading primary regulated exchange operator offering the biggest ETF product universe: approx. 6,000 ETFs and ETPs are tradable on its on-exchange Request for Quote (RFQ)-platform QOD.

Higher Liquidity, Better Prices, More Listings

Trading participants can now use ETF QOD Europe to achieve best execution across European ETFs: over 95% of trades in QOD are executed at the European Best Bid Offer (EBBO) or better, leading to significantly improved liquidity and higher execution quality. Through existing trading interfaces, users now gain access to ETFs listed on the biggest and most important European primary venues. SIX Swiss Exchange’s straight-through-processing accelerates processing of transactions through automation, lowers execution fees and costs, and thus enables a more efficient cross-EU trading in ETFs. For ETF issuers, this increases the attractiveness of an ETF listing at SIX Swiss Exchange, as with one single listing all corresponding EU-cross listings will be admitted to trading on ETF QOD Europe. In addition, high quality reference data powering QOD Europe is sourced from Ultumus, the leading provider of ETF and index data.

Close cooperation in clearing and settlement

As the first pan-European exchange-traded RFQ platform and thanks to its open access concept, ETF QOD Europe enables trading participants to benefit from on-exchange straight-through processing, including central counterparty (CCP) clearing into the various European central securities depositories (CSDs). By eliminating counterparty risk and increasing settlement efficiency in RFQ trading, costs can be optimized as trading participants can take advantage of their established CCP. This can be done without establishing additional links to third parties. To this end, SIX Swiss Exchange is working together with the Group’s internal CCP SIX x-clear as well as with Cboe Clear Europe and LCH Ltd. These three CCPs work closely together to clear all trades in ETF QOD Europe and instruct settlement to the local central securities depository of the respective exchange listing of the respective trading venue.

Christian Reuss, Head SIX Swiss Exchange: “SIX Swiss Exchange has been a trailblazer in the ETF industry for over 20 years. The launch of ETF QOD Europe reaffirms our commitment to innovation, providing a unique, cross-market trading experience for our users. We believe this groundbreaking service will set a new standard in the European ETF landscape. ETF QOD Europe not only expands the variety of ETF products available but also addresses the need for a greater variety of execution mechanisms to satisfy best-execution in ETF trading. The service offers a high level of liquidity, execution quality, and pricing, making it a game-changer for both traders and asset managers.”

Laura Bayley, Head SIX x-clear: “By supporting the ETF QOD Europe service, we empower our members with seamless access to diverse markets and simplified clearing and settlement processes. The interoperable collaboration with our partner CCPs ensures a streamlined settlement process, eliminating counterparty risk and providing significant cost optimization benefits.”

Vikesh Patel, President, Cboe Clear Europe: “We are excited to be providing our clearing services to the ETF QOD Europe service being offered through SIX Swiss Exchange. This demonstrates our desire to improve Europe’s ETF market structure and deliver innovative services that allow participants to manage their risks of trading this asset class. It also signals our steadfast commitment to open access and clearing interoperability, which brings proven benefits in terms of innovation, post-trade efficiencies and greater participation through reduced costs.”

Further reading about Quote on Demand (QOD).