LSE Launches New Segment For Non-UCITS ETFs

August 15, 2014

The London Stock Exchange has launched a new segment that will allow non-UCITS (undertakings for the collective investment in transferable securities) exchange traded funds to be launched and traded.

The new segment, called IECR, comes on the back of client demand and is anticipated to appeal to institutional investors, according to a spokeswoman from the LSE.

The new IECR segment will see the products listed settle in CREST. There is also a pan-European option called EUET, which will settle the products in Euroclear Bank utilising the Euroclear Bank Settlement trading service for ETFs.

While most, in the region of 95 percent, of the ETFs in Europe are UCITS compliant there are still products, such as open ended funds, that are exchange traded but not considered UCITS. Having UCITS approval was previously a requirement for ETFs to gain admission to the London Stock Exchange. However, the UK Listing Authority allows for UCITS and non-UCITS ETFs to be listed, so long as they comply with the relevant regulation.

 

 

 

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