Source and ETF Exchange, two European ETF issuance platforms, have both unveiled new members.

Source today disclosed that J.P. Morgan and Nomura have become shareholders, joining founder shareholders Goldman Sachs, Morgan Stanley and Bank of America Merrill Lynch. Nomura has been working with Source since the middle of last year as a distribution partner and has now acquired a shareholding. As Source is a private company, no information is available on the precise stakes being acquired by the new shareholders and Source, J.P. Morgan and Nomura have all declined to disclose this.

Meanwhile, ETF Exchange, the consortium issuer set up by ETF Securities last year, has revealed that Barclays Capital is to sign up to its platform as an authorised participant and swap provider, joining Bank of America Merrill Lynch, Citi and Rabobank International. ETF Exchange is owned 80% by ETF Securities and 20% by hedge fund SW1 Capital, while consortium members have the chance to become owners over time based on the fulfilment of certain performance criteria.

Source has also announced that its approved dealer list now totals ten firms: Nyenburgh, AllOptions, BancaIMI, Exane, Flow Traders, IMC, LaBranche, Newedge, SG Securities and UniCredit.

One London-based ETF market observer, commenting on the platforms’ expansion, said: “Both Source and ETF Exchange have introduced a standardised way of selling their balance sheets (via swaps) to the market. This has created efficiencies for many of the banks that offer swap products. It allows them to sell delta-one products to a wider range of clients through the ETF structure, and means that those clients only have to deal with one standardised counterparty (the ETF provider). With that in mind, I wouldn’t see any conflict in a bank signing up to a number of these structures to maximise their potential sales universe.

“ETFs work more efficiently with multiple participants in the market and the addition of other banks can only help to strengthen the offering in all areas, be it market-making, the provision of underlying swaps, or general marketing. What will be interesting to observe is whether the potential conflicts of interest between the banks (i.e. when they market new products jointly with their competitors) will start to bubble to the surface.”