The American Stock Exchange (Amex) and Euronext, the first pan-European exchange for exchange traded funds (ETFs), this week signed a memorandum of understanding to create a joint venture, subject to regulatory approval, to cross list and trade US, European and other internationally sourced ETFs.
ETFs were first listed by the Amex in 1993 and launched on Euronext under the name Trackers in January 2001. ETFs and Trackers are indexed funds that trade throughout the day in the same way as individual stocks. Designed to closely track the performance of an index or basket of stocks, they can be liquid and cost-effective investment vehicles. Retail or institutional investors buy a single share of a specific ETF or Tracker. One attraction of ETFs for investors is the fact that they offer the flexibility of a share but with the diversification benefits of a mutual fund.
The joint venture will be a part of a global network of ETF marketplaces aiming at offering the best facilities for trading, cross listing, information dissemination, and marketing of the products globally. Ultimately Amex and Euronext hope to achieve seamless 24-hour global trading of ETFs.
Salvatore F. Sodano, Amex chairman and chief executive officer, commented on the joint venture: 'Bringing Amex-listed ETFs to Europe, a critical market, is the essential next step in our strategy to develop a global ETF trading network. The Amex-Euronext alliance is truly revolutionary, as it aims to provide investors with the opportunity to trade the same class of ETF shares across time zones.'
Jean-François Theodore, Euronext chairman and chief executive officer, added: 'Euronext, the first European exchange, is very proud and very pleased to sign this agreement with Amex, the world’s leading market for ETFs. It will consolidate the successful launch of Trackers last month on NextTrack by offering investors world wide opportunities."
Euronext will be the exclusive European partner for cross trading Amex-listed ETFs and Amex will be the exclusive American partner for cross trading Euronext’s Trackers listed on NextTrack, Europe's preferred ETF marketplace.
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