The Exchange Council of the Frankfurt Stock Exchange resolved on Wednesday to terminate lead-broker based floor trading and to introduce the Xetra specialist model for shares and bonds as well, with effect from 23 May 2011. From this date on, trading will take place exclusively via the Xetra system.
Xetra uses specialists who ensure sufficient liquidity in trading. Despite the termination of lead-broker based floor trading using the Xontro system, the presence of specialists will ensure that the Trading Hall of the Frankfurt Stock Exchange (Frankfurter Wertpapierbrse, FWB) remains in operation. With the transition to the Xetra specialist model, the Frankfurt Stock Exchange is strengthening its position amid increasing competition on the European market. Xetra’s international orientation and the performance requirements of its specialists will further increase the market quality of the FWB. Since 2008, the Xetra specialist model has been successfully used for trading structured products on Scoach as well as in fund trading on the FWB.
Dr Lutz Raettig, Chairman of the FWB Exchange Council, said: “The Exchange Council welcomes the consensual agreement of the lead brokers to end floor trading before the expiry of the planned transition period. With today’s decision, we are responding to the changes in the competitive and regulatory environment of the stock exchange and ensuring that the FWB can strengthen its competitive position while at the same time optimally fulfilling its economic role.”
The FWB Exchange Council originally decided on 1 March 2010 to migrate FWB floor trading to the Xetra specialist model as of 28 March 2012. However, since the Exchange Council favoured an earlier introduction of the specialist model, it asked the management of the Frankfurt Stock Exchange and the lead brokers to investigate all options and possibilities for an earlier termination of current floor trading. All lead brokers who work on the Frankfurt Stock Exchange have declared their willingness to take on specialist roles in Xetra and have consented to the early termination of floor trading. Their agreement made the Exchange Council’s decision possible.
D.C.