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RESEARCH: Navigating the future of ETFs

The ETF market has experienced unprecedented growth, with global assets under management (AUM) increasing to $12.71 trillion. Recognising this rapid expansion and its potential, Calastone, in partnership with ETF Stream, conducted a comprehensive survey of the three main players in the ETF primary market ecosystem – Asset Servicers, Authorised Participants (APs), and Fund Issuers.

The research uncovers crucial insights and highlights the pressing need for standardisation in the ETF primary market. Here are some key findings:

  1. Complexity in Products: 40% of asset servicers identify increasing product complexity as the primary challenge, driving the need for advancements in market servicing and technology.
  2. Settlement Challenges: 38% of ETF issuers highlight the transition to T+1 settlements as the biggest hurdle in ETF primary market servicing.
  3. Technology Satisfaction: While 60% of asset servicers rate current servicing technology as 'very good,' this sentiment is shared by just over 10% of APs and less than 5% of fund issuers.

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