NSCC’s ETF process provides the following efficiencies and risk controls around the creation and redemption of ETFs:
- Provides Members with the ability to select only the portfolios they need for next day’s trading through a web based on-line view. Through this mechanism, Members can download the portfolio details in an Excel spreadsheet format.
- Enables Members to elect to receive a nightly Portfolio Composition File (PCF) data file containing information that pertains to the ETF for the following trading day. This information is also available through the ETF web-based tool.
- Supplies an instruction detail file containing the details for each create and redeem
- Provides Members with the ability to submit a supplemental portfolio on trade date for standard and custom portfolios.
- Reduces manual deliveries.
- Provides clearance and settlement of the ETF, as well as the underlying components, through NSCC's CNS and non-CNS settlement processes. When eligible, settlement of the underlying components of ETFs and certain eligible ETFs through CNS (minus the transaction fee) are guaranteed by NSCC.
- Allows Members to create or redeem ETFs on T+2 or T+1 (next day) basis.
- Allows Members to create or redeem a customized portfolio with cash in lieu of securities.
- Allows Members to create or redeem a portfolio either against cash or through the exchange of securities.