In an attempt to boost liquidity and work around the fragmented European market, BlackRock (NYSE: BLK) is set to launch an international exchange traded fund structure under the so-called Project Fusion.
The iShares Eurostoxx (Ex-Financials) Ucits ETF has been proposed as the first ETF to be reworked under the new structure on December 16, reports Joe McGrath for Financial News.
Through the international security structure, iShares Europe-listed ETFs will settle to one common depositary, which BlackRock hopes will provide higher settlement rates, lower broker costs and lower transaction costs for investors. The fund will settle via Euroclear.
Leland Clemons, head of capital markets (Emea) for BlackRock’s iShares ETF unit, said that we can expect “two [other launches]under this structure in the first quarter, maybe two in the second quarter” if the first is successful.
Many European countries require issuers to acquire local listings before their ETFs are able to trade within the country. Consequently, the limitations have held back ETFs from growing across the fragmented European market.