Settlement transaction types
ETFT: Exchange Traded Funds
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ETFT marks a settlement that belongs to the creation or redemption of exchange traded fund units, typically between an authorised participant and the ETF.
- Code
- ETFT
What ETFT means
ETF units are created and redeemed in the primary market by authorised participants. In a creation the participant delivers a basket of the underlying securities (or cash) to the fund’s custodian and receives new ETF units; in a redemption the units go back and the basket comes out. Those settlements are flagged ETFT.
Buying and selling ETF units on an exchange is an ordinary TRAD. Subscriptions and redemptions in non-listed funds use SUBS and REDM, and in-specie moves into pooled funds use INSP.
When you see it
- On basket deliveries and ETF unit receipts between authorised participants and the ETF’s custodian.
- In Singapore, where LuxCSD’s 2014 notice lists ETFT among the accepted codes on equity instructions.
What to do next
- Use ETFT on both the basket and the unit legs of a creation or redemption, so that the fund’s custodian can link them. Secondary market trades in the ETF stay TRAD.
Where it appears in MT and ISO 20022
MT (ISO 15022)
- MT540, MT541, MT542 and MT543: sequence E (SETDET), field 22F,
:22F::SETR//ETFT. The SETR qualifier is mandatory, so every instruction carries one code (format:4!c/[8c]/4!c; with a data source scheme a proprietary code may be sent instead). - Repeated in the confirmations MT544, MT545, MT546 and MT547 (sequence E,
:22F::SETR//ETFT) and in the MT548 status advice (sequence B, where SETR is mandatory when the sequence is present). - Optional in the statements: MT536 subsequence B1a2 and MT537 subsequences B2b and C2.