Trading ETFs on the London Stock Exchange

INTERVIEW: The UK market is leading the way in improving liquidity and transparency around ETF trading in Europe, explains Gillian Walmsley of the London Stock Exchange

Hortense Bioy, CFA 1 May, 2013 | 7:00AM
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We recently spoke with Gillian Walmsley, Head of Listed Products at London Stock Exchange (LSE) about the exchange’s success in attracting ETF trading volume, the measures being undertaken to improve transparency around ETF liquidity, and the continuous need for investor education.

Morningstar: 2012 wasn’t a good year for overall trading activity, and European ETP trading was no exception. ETP turnover fell significantly across all European exchanges, except on the London Stock Exchange. How did the LSE manage to maintain its ETP trading activity, and thus increase its market share in Europe?

Gillian Walmsley: Last year was certainly one of challenging market conditions and we did see a relatively small drop in trading volumes (value turnover for ETFs on our London market was down by 0.2% on the previous year) but despite this, a number of factors indicate that our ETF market continues to go from strength to strength. London Stock Exchange’s market share of ETF trading across Europe grew in 2012 and now accounts for 22% of all pan-European on-exchange ETF trading.

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About Author

Hortense Bioy, CFA

Hortense Bioy, CFA  is global head of sustainability research at Morningstar