Tradeweb and TSE collaborate to expand liquidity in Japanese ETFs

Tradeweb Markets, a leading, global operator of electronic marketplaces for rates, credit, equities and money markets, and the Tokyo Stock Exchange (TSE), one of the largest stock exchanges in the world, have collaborated to offer institutional investors enhanced access to liquidity in Japanese exchange-traded funds (ETFs). The launch of a new direct link between Tradeweb and TSE’s request-for-quote (RFQ) platform, CONNEQTOR, allows Tradeweb buy-side clients to include CONNEQTOR liquidity providers when launching a trade enquiry on the Tradeweb Japan-listed ETF marketplace. Global X Japan executed the first transaction using this new connectivity.

Moriyuki Iwanaga, President of Tokyo Stock Exchange, said: “CONNEQTOR has been developed as a platform to enable investors to trade ETFs “faster and cheaper”. We hope that the new connection with Tradeweb will promote investment in the Japanese market by allowing investors outside Japan, who have had difficulty using CONNEQTOR, to easily access ETFs listed on the Tokyo Stock Exchange from overseas. TSE will continue to strive to provide and develop a highly convenient market environment, where investors can enjoy better prices and smoother execution.”

With Tradeweb’s direct link to CONNEQTOR, clients can submit orders from the Tradeweb user interface to CONNEQTOR’s list of market makers — in addition to Tradeweb’s network of liquidity providers — and receive the best two-way quote back. Clients will continue to benefit from innovative functionality, such as Tradeweb’s rules-based automated execution tool, AiEX, and the post-trade infrastructure of TSE, where transactions with CONNEQTOR market makers will be cleared and settled.

The collaboration with TSE builds on Tradeweb’s award-winning offering that allows buy-side traders to transact Asia, Europe and U.S.-listed ETFs, while benefitting from multi-dealer liquidity, greater pre-trade transparency and competitive pricing. Clients can also leverage Tradeweb’s new generation of automated trading via its AiEX tool, as well as advanced functions such as time release. Tradeweb is a global leader in ETF RFQ execution, revolutionising trading in this asset class since the launch of its first ETF platform in Europe in 2012, in the U.S. in 2016, and in Asia in 2018. Between Q1 and Q3 2024, Tradeweb reported global ETF trading volumes exceeding USD 1 trillion. Over the same period, institutional ETF volumes transacted by Asia clients on Tradeweb’s RFQ marketplace increased by 30% year-over-year.

Since its launch in February 2021, CONNEQTOR has aimed to improve the speed of ETF trading in Japan, allowing investors to trade at real-time best price quoted, while reducing transaction costs and improving operational efficiency. CONNEQTOR is used by more than 250 institutional investors, and they can trade ETFs by requesting simultaneous quotes from market makers around the world, without having counterparty risks. Its monthly trading value reached a record high of JPY 295.5 billion (USD 1.93 billion), and an average daily trading value of JPY 13.4 billion (USD 87 million), a 97% increase over the previous year in July 2024.

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