Daily ETF launches and supporting that crypto launch

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Stephen O'Brien, BNY Mellon

BNY Mellon | Best European Equity ETF Issuer ($1bn-$5bn) | Best ETF Custodian - BNY Mellon launched one ETF per day, every day in the last year, says Stephen O’ Brien, ETF Product Management, at the firm. The firm has been busy building its asset servicing business to USD1.23 trillion in assets, and servicing 1,490 ETFs. 2021 saw the firm produce over 300,000 NAVs and transmit 3.3 million trades to custody.

“I don’t see us as just a BNY Mellon team, but as an extension of the ETF issuers that happens to work in a BNY Mellon office. BNY Mellon works collaboratively with our clients, challenging them, and delivering a successful ETF product,” O’Brien says.

The business has grown year on year due to a combination of things, O’Brien, who is based in Dublin, says.

“There is growing local demand in Europe for ETFs,” he says. “ETFs have been a slow burner, but people are waking up to the fact that ETFs are a great product with the ability to have different shares classes and the intraday trading nature of an ETF, which offers a hedging perspective.”

Recent market volatility due to the Russia-Ukraine war is something that the firm has become used to over the years.

With the Russia situation, all the banks were globally impacted, he says. “It’s no different in terms of being able to play by the rules and service our ETF clients. Ultimately when you step back, the market functioned as it was intended to do, as it has in other similar situations when the underlying market becomes uninvestable. The industry took the same approach in terms of removing stocks from the index and writing the assets down.”

Trends over the year include the boom in issuance and demand for cryptocurrency products. BNY Mellon supported the launch of BTCE last June, which enjoyed enormous support. In addition, the Fixed Income Bond market is positioned for continued growth.

“The growth has been significant and driven by the technology that underpins our platform,” O’Brien says. “We have made a significant investment in our platform to build scalability and resiliency to handle all that growth, but it’s good to be challenged by your clients as well – it keeps you on your toes and moves you out of your comfort zone as well.

“We offer a consultative approach and we make sure that the ETF product works for our clients. We feel that with our technology and experienced ETF professionals we can offer something different.”

O’Brien reports some consolidation in thematics which have dominated much of the industry over 2021 and 2022. And he also reports more interest in ETFs from mutual fund managers.

“I have been fielding phone calls from mutual fund managers asking: ‘what is an ETF?’” he says. “They have a basic understanding of the terms so we explain the process and how they can launch an ETF share class, we explain the listing process, market making, authorised participants and the creation process – long may this continue!

“We can work with a client and ask what is it you want to do? How can we educate you? We look at ourselves as partners with them – consulting with them. Our client’s success is our success as well,” he says.

 

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Beverly Chandler
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