Deutsche Borse is taking the introduction of the new Markets in Financial Instruments Directive (MiFID) as an opportunity to enhance its service portfolio: the company plans to introduce a range of new services for the cash market and with respect to market data.
The Frankfurt Stock Exchange, where trading is conducted both on the Xetra platform and on the trading floor, will according to Deutsche Borse meet the transparency requirements set out in the Directive. The Frankfurt stock exchange is also able to fulfill the requirements for the “best execution” of client orders. Market Data & Analytics will be offering its MiFID toolbox.
MiFID is designed to create a transparent, fair competitive environment for all market participants and to improve investor protection. As a result, the Directive will introduce stringent regulations on pre- and post-trade transparency for both exchange and off-exchange equities trading.
Investment firms will be obliged to offer “best execution” in the future, whereby orders must be executed on the terms that are most favorable to the client.
The high liquidity, immediate execution and low transaction costs offered by the Frankfurt Stock Exchange mean that it already offers the best execution of client orders for over 120,000 securities. International studies regularly rank Xetra among the leaders with respect to what are known as implicit trading costs for highly liquid stocks (e.g. DAX stocks), while trading on the Frankfurt trading floor is subject to rigorous quality criteria that are assessed on an ongoing basis as part of a performance analysis.
“The Frankfurt stock exchange already leads the field in terms of best execution, and we want to build upon our price and liquidity leadership in 2007,” says Rainer Riess, the Managing Director of Stock Market Business Development.
“Our services, which are bundled in the MiFID toolbox, not only allow our clients to ensure transparency, but also provide data histories and statistics, a transaction reporting service and support with counterparty cleansing,” adds Holger Wohlenberg, the Managing Director of Market Data & Analytics.