The FIX Trading Community’s ETF Working Group has published recommended practices for ETF creation and redemption, setting out a common electronic communication framework for the primary market.
The industry-led group brought together issuers, authorised participants, market makers and service providers to tackle the patchwork of proprietary workflows, bilateral integrations and manual processes that has held back the scaling of a global market.
The first phase establishes a baseline covering core creation and redemption workflows, including order submission, acknowledgements, approvals, status management, rejections and cancellations. It is designed as a foundation on which further ETF workflows and use cases can be standardised over time.
Jim Kaye, executive director of the FIX Trading Community, said the recommended practice “removes barriers to adoption, reduces operational bottlenecks and creates the conditions for firms to scale their ETF businesses more effectively.”
Emma Lokko, co-chair of the working group and Head of EMEA Market Structure at Susquehanna International Group, said the standard is “simplifying connectivity and creating a foundation that allows participants to automate and scale these processes efficiently.”
Christopher Sabaitis, co-chair of the working group and Vice President at BlackRock, said that because the work was built by practitioners for practitioners, firms can adopt the standard today using existing FIX Protocol capabilities.