Euronext Considers Centralizing ETF Listings to Enhance European Market Unity
Euronext NV is evaluating options to consolidate the trading of all exchange-traded products (ETPs) listed on its seven exchanges into a single trading venue. This move aims to address the fragmentation of Europe's capital markets and enhance liquidity for ETP issuers.
According to sources familiar with the matter, Euronext is considering several scenarios, including:
* Centralizing all ETP listings on the Amsterdam exchange
* Allowing each product issuer to select a single exchange for all their listings
With over 3,000 ETP listings from around 50 issuers across its exchanges in Amsterdam, Paris, Oslo, Brussels, Dublin, Lisbon, and Milan, Euronext seeks to increase efficiency and reduce complexity for issuers. This consolidation could be implemented as early as the third quarter of 2025.
The European ETF industry has experienced rapid growth, with assets under management reaching €2.3 trillion ($2.4 trillion). However, market fragmentation has hindered liquidity and increased costs for issuers, making it challenging to compete with the larger US market.
Euronext's proposal aligns with the European Union's ongoing efforts to unify its markets. The bloc is working towards creating a consolidated tape, a centralized data feed for various asset classes. This consolidation would enhance transparency and liquidity.
As part of its three-year strategic plan, Euronext aims to accelerate revenue and earnings growth. The bourse operator is committed to building the most efficient ETF offering in the market and reversing the trend of fragmentation in European ETF liquidity.
The impact of this change on market participants is still being assessed. Euronext is exploring options to provide access to the Amsterdam exchange for participants not currently connected, should it be selected as the single trading venue.
The exchange group is also considering how to structure clearing and settlement under the proposed plans. One option would involve settling euro-denominated products through Euronext Securities, while non-euro trades would be processed via Euroclear Bank.