Euronext To Launch London ETF Trading Venue

Euronext is planning to launch its own London-based trading venue to attract exchange traded fund (ETF) listings from clients who are not already in the City, which will improve pan-European fund liquidity and lower costs for investors.

Euronext London will go live in October with the first ETF listing and will have a ticker of LD for Bloomberg and .LD for Reuters.

Brieuc Louchard, business manager, ETFs and funds, Euronext, said the stock exchange has already had commitments from various ETF providers, but declined to say which ones.

“The advantage of our offering is that it will attract new ETFs to the London market without creating fragmentation," he said. “It expands the distribution network that will be accessible to our issuers. We want to grow liquidity which is the main issue nowadays for ETFs in Europe.”

Euronext has stock exchanges set up in Paris, Lisbon, Amsterdam and Brussels, and has 641 ETFs and 45 exchange traded products and exchange traded notes listed. This compares to 825 ETFs and 379 ETPs on the LSE.

“Our aim is, step by step, to offer a one stop shop pan-European solution at Euronext; that’s a good development,” said Louchard. “We have clients who don’t have any ETFs listed in London and are keen to access UK investors in a cost-efficient manner.”

Many dominant European providers do not list all of their funds in London – for example, French-based Lyxor only has around half of its range on the LSE.

Adam Laird, passive investment manager at Hargreaves Lansdown, said choice is “never a bad thing”.

“More accessibility and more options are advantageous and can help with liquidity and spreads for investors; it also might mean more ETF issuers do business in the UK,” he said.

Euronext floated on exchange in May last year when it split from parent company IntercontinentalExchange Group. It now offers various trading facilities for ETF investors and provides around 20 currencies to trade in.

The structure of the exchange across various European markets is similar to BATS Chi-X Europe, a pan-European exchange which offered issuers free listings this year to grow its ETF base. It has only acquired nine ETF listings from iShares, Lyxor and Van Eck since it was approved in May 2013.