BNY Mellon Unveils ETF Basket Construction Platform

The platform will increase scalability for asset managers using ETFs.

Reviewed by: Staff
Edited by: James Rubin

BNY Mellon has introduced a new platform aimed at simplifying the management of ETFs for asset managers.

The platform will provide a digital system—underpinned by NAV data—to help ETF issuers communicate information to liquidity providers.

The firm said the new platform will enable valuing, creating, and publishing basket information more efficiently.

The platform—which BNY Mellon developed with clients—will enable asset managers to customize and retrieve ETF baskets via an API solution.

Bob Humbert, global head of ETF product at BNY Mellon, said: “This breakthrough in ETF technology can help greatly reduce complexity in the front-office ETF process.

"The result is a workflow which enables portfolio managers and support staff to fully focus on key objectives—to manage existing strategies more efficiently, generate ideas for new best-in-class ETF products, and better serve liquidity providers and end investors.”

Expanding ETF Management Products

The move aligns with the firm's recent efforts to expand its suite of ETF management products, launching an intelligent basket builder custom negotiation tool and asset flow analytics dashboard in April 2022, both aimed at making the ETF ecosystem run more efficiently.

BNY Mellon said it has also made investments to increase financial information exchange (FIX) protocol connectivity last year.

Furthermore, the firm expanded its service offering this month, with BlackRock adding BNY Mellon as a post-trade service provider for its Irish-domiciled ETFs.

BNY Mellon will join State Street as a service provider, covering depositary, fund administration and fund accounting services to a “selection” of its ETFs.