Lead brokers at the Frankfurt Stock Exchange (FWB) will introduce upper limits on fees for brokerage transactions in certificates, reverse convertibles, warrants, and knock outs, with effect from 4 April 2005.
Brokerage commissions will thus be capped at a maximum of EUR3 in the case of leveraged products, and EUR12 in the case of investment products, per order executed. The maximum broker commission is reached with an order volume for investment products of EUR15,000, and does not increase for larger orders. In the case of leveraged products, the lead brokers in Frankfurt charge a maximum of EUR3 per order executed for volumes starting at just EUR3,750. Every third order for investment and leveraged products on the Frankfurt Stock Exchange is set to profit from the capped broker fees.
“Deutsche Brse welcomes this initiative by the Frankfurt lead brokers with regard to investment and leveraged products, which will mean low fees for investors,” said Rainer Riess, Managing Director of Stock Market Business Development at Deutsche Brse AG. “By restricting broker commissions, Frankfurt will be able to offer investors another advantage over off-exchange trading.” In addition, investors at the FWB benefit from supervised exchange trading, guaranteed order execution in no more than 30 seconds, the possibility of limit orders as well as binding, tradable minimum volumes.
“Brse Frankfurt Smart Trading” offers investors efficient trading for good value on a neutral exchange platform with independent lead brokers. On average, more than EUR350 million per week is turned over in investment and leveraged products on the Frankfurt Stock Exchange. This equates to an increase of around 56 percent on the average weekly turnover in these securities at the launch of “Brse Frankfurt Smart Trading”, in September 2003.