Exchange council of the Frankfurt Stock Exchange resolves introducing Xetra specialists

Deutsche Börse: Exchange Council Of The Frankfurt Stock Exchange Resolves Introducing Xetra Specialists For Equities And Fixed-Income Securities


On Monday, the Exchange Council of the Frankfurt Stock Exchange (FWB) resolved unanimously to terminate lead-broker based floor trading on the regulated market with effect as of 28 March 2012. The lead brokers at the Frankfurt Stock Exchange support this transition. Once the transitional period has expired, trading on the regulated market of the Frankfurt Stock Exchange will be conducted exclusively via the Xetra electronic trading system. Specialists who ensure sufficient liquidity in electronic trading will replace lead brokers. For some time now, the specialist model has been successfully used for trading structured products on Scoach as well as in fund trading on Xetra. Even when floor trading is terminated in 2012, the Trading Hall at the Frankfurt Stock Exchange will remain. Xetra specialists are also required to be present in the Trading Hall.

In taking this move, the Exchange Council addresses the development in the Frankfurt Stock Exchange’s competitive and regulatory environment in recent years. Issuer and trading participant requirements for a modern trading venue, along with increasing national and international competitive pressure as well as current regulatory and market developments have, in particular, called presence trading into question. In order for the Frankfurt Stock Exchange to remain competitive, it is necessary to further improve trading quality through performance-oriented specialists who provide liquidity. This measure is intended to ensure international investor access to all tradable securities. The Exchange Council’s adoption of the resolution for floor trading to be completely replaced by specialists in the fully electronic trading system Xetra by March 2012 will achieve these goals.

Dr Lutz Raettig, Chairman of the FWB Exchange Council, said: "In adopting this resolution, we ensure that the Frankfurt Stock Exchange can optimally fulfill its economic function as a stock exchange under considerably changed market conditions as well.”

The Exchange Council welcomes the mutually agreed initiative of the lead brokers to end floor trading even earlier than 28 March 2012. As soon as a smooth transition to the specialist model has been ensured, the Exchange Council will discuss moving up the planned 28 March 2012 transition period deadline to end floor trading.

Furthermore, the Exchange Council confirmed Frank Gerstenschläger as chairman of the FWB board for a three-year term.