Xetra, Quotematch Buoy 'Alex' Bourses
EXCHANGE TECHNOLOGIES
FRANKFURT—A variant of the Xetra trading platform from Deutsche Börse is slated to power the Alternative Exchange (Alex), a new structured products exchange from the German exchange and the SWX Swiss Exchange, officials confirm.
Alex will serve domestically regulated exchanges in Germany and Switzerland. In Switzerland, Alex will be the parent of a newly created exchange, while in Germany, Alex will be the co-parent of the warrants and certificate trading business on the Frankfurt Stock Exchange. Operations are slated to start for both exchanges on Jan. 1, 2007.
From that date, the Swiss-based exchange will be powered by the SWX's Quotematch system. Via this platform, issuers can list their products using the Internet Based Listing (IBL) process.
However, the German market will use the Xetra trading platform in early 2008. Near the end of 2009, the two exchanges will both operate on a new variant of the Xetra platform, dubbed Xetra+. "The Xetra+ platform for derivatives trading will be different from Xetra today, including new functionalities, and will cover market needs for this market segment," says a spokesperson for SWX. The Xetra platform was selected over the SWX's Quotematch because "Xetra has many more participants and access points than SWX," says the SWX spokesperson.
The new exchange is also planning to implement the clearing and settlement structures that will enable cross-border transactions that will be subject to local tariffs. Deutsche Börse and SWX officials did not provide a timetable for such implementation.
The Frankfurt Stock Exchange, independently from Alex, is planning further enhancements to the trading of structured products with the introduction in November of a semi-automated pricing procedure for specialist-based trading, allowing order execution times to be reduced.
The Alex holding company will have its registered office in Luxembourg, with subsidiary companies domiciled in Germany and Switzerland. The management board of Alex will include Marc Zahn as CEO and Michael Jung as chief financial officer (CFO) and chief operating officer (COO). Jung is currently senior project manager at Deutsche Börse. Zahn is head of marketing and sales at the SWX Swiss Exchange and the London-based exchange Virt-x.
The creation of the joint venture between the Deutsche Börse and SWX was first announced in May, when the two exchanges signed a letter of intent (DWT, May 8). Initially, the new entity was expected to develop a new trading platform. However, the Xetra platform was favored.
Deutsche Börse and SWX are already collaborating on Eurex, a futures and options exchange set up in 1996. They are also partners in the European provider of security market indices, Stoxx, a venture that includes Dow Jones.
Officials at Deutsche Börse were not available for comment by press time.
Olivier Laurent
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