Frankfurt
04 July 2017
Reporter: Drew Nicol

Deutsche Börse engages T7 for cash


Deutsche Börse Group’s Xetra trading platform has migrated its cash trading to its new T7 facility for the Frankfurt Stock Exchange, putting both Xetra and Eurex derivatives trading on the same system.

According to Deutsche Börse Group, the new system reduces latency, meaning the time for order processing, even further. Harmonising Xetra and Eurex trading technology also produces significant synergies and means lower development and maintenance costs.

Deutsche Börse also confirmed that Eurex trading participants will benefit from easier access to Xetra, while regulatory requirements and technical updates can also be integrated into the trading system more quickly and efficiently.

The Xetra trading platform on the Frankfurt Stock Exchange is the global reference market for German equities and the leading market for European exchange-traded funds trading.

Roughly 1,000 international equities and 1,500 exchange-traded products are currently tradable on Xetra.

Eurex Exchange, the European Energy Exchange and the Bombay Stock Exchange already use T7 trading technology, while the Vienna Stock Exchange and the Irish Stock Exchange will soon migrate their systems to T7.

Hauke Stars, Deutsche Börse executive board member responsible for cash market, pre-IPO and growth financing, said: “The new trading technology T7 gives investors and exchange-listed companies access to a sustainable and extremely reliable system that already has a proven track record on different international stock exchanges.”

“Trading participants specifically benefit from cash market and futures trading synergies and further reduction in latencies.”

The migration to T7 follows Eurex’s move to become the only exchange that offers futures and options on all major MSCI indexes this week, in response to the launch of futures and options on the MSCI EAFE index.

Eurex promises the new products will address the structural behaviour changes of the buy side.

According to Eurex, passive products like exchange-traded funds are gaining momentum and this affects the derivatives markets because it creates new hedging needs for asset managers.

Mehtap Dinc, head of derivatives product development at Deutsche Börse, said: “The European market for corporate bonds plays a key role in the financial ecosystem. It has grown consistently after the financial crisis, both in terms of market participants and overall assets under management.”

“The new environment creates demand for innovative hedging solutions in the form of exchange-traded derivatives. The same is true for MSCI products.”

“With more providers of MSCI-related vehicles and growing competition on pricing these, an increased need for cost-effective and efficient hedging tools in the form of futures and options arises.”

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