A FIX Trading working group is drafting new protocols to bring ETF primary processes into private networks. ETF creation and redemption are labour-intensive, but as issuers and authorised participants (APs) warn, private-network connection costs need to be considered.
At FIX Paris 2025 on 20 November, the ETF working group presented proposals to improve the stubbornly manual processes associated with ETF primary workflows. The group aims to standardise the creation and redemption of ETFs within the FIX network.
At Vanguard, which manages more than US$5.4 trillion in ETF assets, a spokesperson told Global Trading: “We can confirm we are highly supportive of the initiative. We have done a lot of work in recent years to ensure that around 80% of our create/redeem volume already uses FIX.”
Jim Kaye, executive director at FIX, said: “Authorised participants are telling us that they’re now turning business away because having to manage multiple, manual system integrations and workflows creates significant levels of risk and cost.” He added: “Lack of automation in primary markets is also increasing spreads, particularly during volatile periods, and negatively impacting secondary markets.”
While ETF trading is largely electronic via RFQ and FIX connectivity on the secondary side, primary processes often still rely on issuer-specific portals, emails, and spreadsheets. That forces APs to manage a long list of bilateral connections and workflows for what is a very high-value but ultra-low-frequency activity.
According to one of the issuer present, the typical pattern is one large primary trade per line per day — an activity that remains operationally complex and heavily reliant on human intervention.
Bo Bjurgert, COO of ETPLink, a FIX member also said: ““Everyone uses FIX already, and the protocol can be updated easily and flexibly to solve these problems.”
He added: “Both issuers and APs recognise the need to have the entire chain from creation and redemption to trading and settlement automated via FIX.”
Yuhang Wang, business initiative director at FIX confirmed this, saying: “The feedback is that people would like a global standard, and FIX is seen as a very good tool for communicating the information needed.”
She added: “One AP said that in three to five years, if people don’t have a standard and don’t use FIX, they’re not sure they can keep up with the business.”
FIX is now working on a recommended practices document for ETF workflows. Beyond developing industry-wide standards for creation and redemption, the group also aims to establish a standard for communicating ETF metadata and intrinsic data such as iNAV, as well as to address the settlement complexities linked to fragmented settlement locations and the challenges of T+1 settlement for cross-border ETFs.
