Nomura and Tradition partner to launch electronic ETF trading platform

The Navesis-ETF platform will allow institutional traders, sell-side banks and market-makers to carry out intra-day and auction trading of exchange-traded funds

Nomura and interdealer broker Tradition have partnered to launch Navesis-ETF, an electronic trading platform for exchange-traded funds (ETFs). The launch comes at a time when the ETF market is evolving rapidly, reflected by a substantial increase in ETF platform trading activity. Total assets under management (AUM) for exchange-traded products (ETPs) reached an all-time high at $1.168 trillion in the second week of February, according to a Deutsche Bank report.

Navesis-ETF, which was officially launched on February 20, will allow institutional traders, sell-side banks and market-makers to carry out intra-day and auction trading. “We’re taking something that happens over the counter and bilaterally, [and] creating a central market-place for all industry participants to trade ETFs electronically,” says Leonie Ryan, London-based head of equities strategy and business development at Tradition.

The ETF industry has expanded rapidly over the past 10 years, but structural inefficiencies have meant the market has not reached its true potential, according to Lee Burrows, head of delta one for Europe, the Middle East and Africa at Nomura in London. “We expect this to become the primary market-place for ETF trading,” says Burrows.

Market participants will be able to complete ETF orders in real-time and with full transparency. The platform will provide competitive pricing, with industry participants able to view and execute orders against streaming prices on screen, referenced to the net asset value (NAV).

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