“The global API connectivity is the next logical step in the continued digitization of our ETF servicing business,” said Frank Koudelka, global head of ETF Product at State Street, announcing the State Street’s strategic expansion of ETF services worldwide via API features. Photo: State Street

“The global API connectivity is the next logical step in the continued digitization of our ETF servicing business,” said Frank Koudelka, global head of ETF Product at State Street, announcing the State Street’s strategic expansion of ETF services worldwide via API features. Photo: State Street

Financial services provider State Street has expanded its Fund Connect ETF portal globally, enhancing API capabilities to meet the growing demand for automated ETF creation and redemption processes.

State Street Corporation has broadened the scope of its Fund Connect exchange-traded fund (ETF) platform, enhancing its application programming interface (API) features to extend services to clients worldwide, including those in Europe and the Asia-Pacific region, the firm on Thursday 8 February 2024. Previously available in the US and Canada, where it contributed to nearly half of the North American order volumes, the Fund Connect ETF API’s expansion marks a significant step towards global accessibility, State Street remarked.

The Fund Connect ETF portal, known for facilitating the creation and redemption of ETFs, serves as a unified access point to multiple issuers. Its automated order routing system enables transactions in various currencies, establishing a direct communication link between authorised participants (APs), order takers, sub-advisors and sponsors. State Street expects this advancement in API technology to empower global market participants by enhancing their ability to scale operations and achieve efficiency gains while minimising risks.

The ETF market has experienced remarkable growth in recent years, prompting a surge in the demand for greater automation within the creation and redemption framework, State Street said in its announcement. The enhanced API integration now enables clients around the world to directly place orders with funds through their own order management systems.

Frank Koudelka, the global head of ETF product at State Street, described the global API connectivity as a natural progression in the digital transformation of the company’s ETF servicing business. He noted that approximately 100 authorised participants globally communicate their create/redeem orders to State Street via Fund Connect, expressing a preference for system-to-system communication over traditional web portals. Koudelka added that Fund Connect is the first creation/redemption portal fully enabled via APIs across the Asia-Pacific, Canada, Europe and the United States.

As of 31 December 2023, State Street reported managing assets worth $4.1trn globally.

The company employs an estimated 1,000 staff in Luxembourg.

Related articles