State Street’s SSGA cuts European ETF listings to boost liquidity

State Street Global Advisors is to reduce the number of European listings for five exchange traded funds in order to concentrate liquidity.

The US asset manager is to delist the SPDR MSCI EM Asia Ucits ETF (EMAE) from Euronext Paris and delist the SPDR MSCI Japan EUR Hdg Ucits ETF from the London Stock Exchange, both with effect from May 10, according to stock exchange announcements.

Meanwhile, the SPDR Bloomberg 10+ Year US Treasury Bond, SPDR Bloomberg 7-10 Year US Treasury Bond and SPDR Bloomberg China Treasury Bond Ucits ETFs are to be delisted from the Borsa Italiana with effect from July 10.

SSGA underlines that for each ETF that will be delisted, there will be at least one other listing on another European exchange that will be maintained, and that no funds will be closed as a result of the move. All five of the ETFs will remain listed on the Deutsche Börse Xetra.

This article was previously published by Ignites Europe, a title owned by the FT Group.

The directors of the SSGA SPDR ETFs Europe I umbrella vehicle, domiciled in Ireland, said the delistings aimed to “concentrate liquidity on a smaller number of exchanges and to reduce spreads rather than having listings on a larger number of exchanges with lower volumes”.

“Maintaining listings which only have small volumes of trading can result in reduced liquidity at a higher price,” they added.

According to the directors, SSGA “is of the view that the company should aim to list shares on exchanges where there is sufficient demand, concentrated liquidity and where trades can be made with competitive spreads”.

Once the ETFs have been delisted from the relevant exchanges, investors may continue to hold their shares but may no longer sell them on the exchange from which they are to be delisted.

They may sell those shares on any of the other exchanges on which they remain listed but there may be additional costs associated with using another exchange, SSGA said.

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