Euroclear: Identifying The ETF User

Last Updated: 18 January 2023

In June this year Euroclear Bank teamed up with asset manager BlackRock to launch a pilot programme for the first iShares exchange-traded fund (ETF) to settle in an international central security deposit (CSD). The move, which is intended to reform ETF trade processing and settlement across Europe, formed part of a drive by the global post-trade service provider to boost transparency in the ETF market.

And in the last two years it has been working on an identification service for ETF providers. The system, which allows ETF issuers to identify who is investing in the funds and was launched in 2011 following a pilot platform, is now picking up pace.

Pre-dominantly focused in the settlement of domestic and cross-border securities transactions Euroclear is user owned and user governed.  It holds assets of €23 trillion for investors and sees €540 trillion in securities transactions settled every year.’s editor, Rebecca Hampson talks to Bas Kortenhoff, Euroclear’s Head of Issuer Services in the Netherlands to see what they have been doing. What is Euroclear doing?

Bas Kortenhoff: We have set up a system that allows ETF issuers and providers to identify precisely who has invested in the funds. It’s effectively an identification service and our aim is to create more transparency enabling ETF issuers to better serve their users.

We started about two years ago with pilot programs, now we are broadening out and approaching all market participants. What is the point of this service?

BK:  Currently, when an ETF issuer launches an ETF on a stock exchange it cannot see the end investor buying the product. There is a holding chain between the issuer and the end user, which at the moment is incredibly opaque.

Between the issuer and the end investor there is a chain consisting of intermediaries such as global and local custodians, banks and others which could comprise up to eight layers. Effectively it is difficult to see which entity holds what and where. It means that the issuer cannot keep track of the buy and sell transactions taking place and the subsequent change in ownership.

The aim of this identification service is the help growth. We are trying to strengthen relationships with ETF issuers and their clients. Is not a commercial gimmick for ETF issuers?

BK: No, I don’t think it is a gimmick because it helps the end investor as well. Issuers are able to get information on investor behaviour and their needs and concerns. Investors can then enter into a dialogue with the issuer and for example build products that better meet investors’ needs.

Also, there is incoming regulation that means this service will be needed for regulatory reporting. How exactly does it work?

BK: An issuer can mandate Euroclear Netherlands to map the intermediaries and end users having a holding in a specific ETF product. Once mandated, Euroclear Netherlands will send out disclosure requests to those intermediaries requesting them to disclose the positions they hold on behalf of clients in the holding chain below them. This process is repeated until we reach the end investor. We can interrogate the entire market and not just those with shares in Euroclear. We send disclosure requests to everyone.

We will then map end investors per country, segment and name. Our business is then to create a picture of the holdings and we deliver this to the issuers within 4-6 weeks of getting the data.


  • Hello, my name is Luke Handt; I am a successful Bitcoin trader, financial analyst, and researcher. I have been studying the market trends for the conventional stock exchange system globally since I was in college.

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