A new pricing model for Deutsche Boerse’s Xetra trading will apply starting 2 November. The main idea is to phase out the Automated Trading Program (ATP) discount model, which has been applicable since 2004.
In future, pricing incentives will be extended to all participants trading on the basis of the new functionalities launched with Xetra release 10.0 in June 2009, such as the Enhanced Transaction Solution high-speed interface. Transaction fees for the execution of speed-optimized (non-persistent) orders in liquid instruments, in particular, will be reduced considerably. The new pricing model yields participants in Xetra trading an average of 13% lower transaction fees on the basis of this years volumes.
Deutsche Brse had prepared for the increase of algorithmic trading early on. It has granted discounts on automatically generated orders since 2004 in addition to implementing measures to accelerate the reaction time of the Xetra system and to continuously increase capacity. The share of algorithmic trading volume on Xetra currently stands at around 45%. However, in addition to these orders, equities trading has become significantly more price-sensitive, demonstrated by the emergence of Smart Order Routers that optimize transaction costs and which are increasingly being used in Europe.
For clearing, the existing ATP discount model will be extended to all Xetra orders, also as from 2 November 2009. Due to the strong decrease in average order size on Xetra from EUR30,000 (Q3/2008) to currently EUR19,000, the fixed clearing transaction fee will be halved to EUR0.09 per Xetra order as from 1 July 2009. This measure will have a positive effect especially on small, fragmented orders that are frequently generated in computer-supported trading. Transaction cost advantages to clearing customers will average 28% on the basis of this years volumes.
Our new pricing model aims at all price-sensitive orders for securities tradable on Xetra. Thus, we create the basis for continued growth, says Frank Gerstenschlger, member responsible for the Xetra segment (cash market), Deutsche Brse AG Executive Board.
L.D.