Agency broker Bloomberg wants to bring the block trade from cash equities to the exchange traded fund market.
How?
Bloomberg Tradebook announced that is launching an electronic request for quote (RFQ) system designed to give investors anonymous, integrated and transparent solution for trading more than 1,500 ETF products. By providing more data anonymously, the hope is traders will post and execute larger orders. The system will target liquidity from both U.S. and European investors.
The decision to goose block trading volume lies in the fact that despite the rapid growth in assets under management held in ETFs, average daily exchange traded volumes have stalled and now appear to be in decline, according to Bloomberg Tradebook. This has happened party because ETFs are now traded off exchange, as well as on exchange.
“Market infrastructure has not evolved with the development of more specialized products and overall liquidity has even started to fall,” said Ray Tierney, CEO and President of Bloomberg Tradebook. “Our ETF RFQ platform gives institutional investors a better picture of the ETF market place, as well as optimal execution opportunities.”
The RFQ platform looks to tap upwards of 1,500 ETF products, including specialized or smaller ETF securities, electronically.
“Bloomberg Tradebook’s ETF RFQ enhances our ability to achieve competitive execution on low volume ETFs,” said Sean Breckenridge, vice president of investments, Select Asset Management and Trust. Select currently uses the RFQ service.
The ETF marketplace is estimated at $2.6 trillion globally, according to Bloomberg Tradebook.
