Bloomberg News

Nomura, Financiere Tradition Open ETF Alternative Trading System

February 20, 2012

Feb. 20 (Bloomberg) -- Nomura Holdings Inc. and Cie. Financiere Tradition SA’s inter-dealing broking unit started an alternative trading system for exchange-traded funds today to capitalize on regulatory pressure for greater transparency.

The joint venture, called Navesis-ETF, is all-electronic and the industry’s first multilateral-trading facility, Nomura and Tradition said in an e-mailed statement. It will allow “qualifying” customers to trade ETFs in real time, they said.

Alternative equity-trading systems such as Chi-X Europe Ltd. and Bats Europe emerged after new rules in 2007, competing with traditional exchanges such as Bolsas y Mercados Espanoles SA, Deutsche Boerse AG, London Stock Exchange Group Plc and NYSE Euronext, driving costs and trading fees lower. The systems have begun to extend into other asset classes.

In January, ETFs attracted the most investment in 16 months, driven by record deposits in securities holding bonds. Investors poured $34.1 billion into ETFs worldwide, the most since September 2010, according to data compiled by New York- based BlackRock Inc., the industry’s largest provider. Fixed- income ETFs gathered $9.1 billion, compared with the previous high of $6.7 billion in January 2009.

ETFs, which typically hold baskets of securities that track an industry or market benchmark, trade throughout the day like stocks. Unlike mutual funds, whose shares are priced once a day, ETFs are listed on an exchange and the shares are traded like equities.

--Editors: Alan Soughley, Will Hadfield

To contact the reporters on this story: Nandini Sukumar in London at nsukumar@bloomberg.net or NandiniSukumar on Twitter

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net


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