iShares is working on a new multiple counterparty swaps platform to rival that of ETF Securities’ ETF Exchange.

What Investment understands that ‘Project Switch’ is looking at the viability of a platform that will be a multi-sponsor ETF consortium and the business is now measuring interest from other financial institutions.

Potentially, this would give investors greater peace of mind about the strength of their ETF provider, as there would be no reliance on one individual counterparty.

Providers are increasingly attempting to reassure investors about counterparty risk with the collapse of Lehman Brothers and bailout of AIG still fresh in most people’s minds.

BlackRock recently embarked on an aggressive recruitment campaign to bolster its iShares team of exchange traded fund experts, hiring in expertise from a variety of competitors including Schroders, Deutsche Bank and State Street to work on this and other projects.

Caroline Hancock, spokeswoman for iShares, was reluctant to discuss any specific detail on the launch.

She said, ‘I can’t really comment on that much, certainly not on any project names or anything like that. At the beginning of this year, we planned to be expanding our swap product range. We have both swap and physical based products.

‘We have swap products already available off the back of our German platform and we are looking to bring that [model] to the UK. There isn’t going to be a change in strategy at all, we have quite a wide range already.’

ETF Securities’ multi-counterparty platform, The ETF Exchange, has been in discussions with as many as 15 global banks and financial institutions to join its consortium.

It is not yet clear whether the iShares project has attracted the same level of interest.

According to BlackRock – the parent company of iShares – its European market share dropped 2.06 per cent in the second quarter of 2010 compared to the same period the previous year.