Citi has emerged as the major winner in BlackRock’s rebalancing of its provider panel for the USD2.3trn iShares’ assets in U.S.-domiciled ETFs. The decision is the culmination of a nearly two year-long due diligence process with the selection of four of the leading custody banks to support the growth of U.S. iShares ETFs and strengthen the broader ETF ecosystem.
Citi will take 40pct of the AuM, with J.P. Morgan at 30pct, and State Street and BNY Mellon each on 15pct. Each firm will provide custodial, fund administration, fund accounting, and transfer agency services to a subset of U.S.-listed iShares ETFs. The transition of ETF assets to the new providers is expected to begin in the second half of 2022 and projected to take 18 months to complete. The RFP and due diligence process for iShares’ Ireland-domiciled ETFs is ongoing and the outcome will be announced at a later date.
Derek Stein, senior managing director and global head of technology & operations at BlackRock, said: “All four providers have long-standing relationships with BlackRock and have proven track records in the post-trade servicing of funds. The decision to diversify across these world-class financial institutions is based on our desire to create a robust operating model for servicing ETFs, which will help us scale the iShares franchise and mitigate concentration risk.”