Deutsche Börse upgrades Xetra

Deutsche Börse says it has introduced a more advanced version of its Xetra electronic trading system today. With the new 16.0 release, it offers its customers new matching functions specially designed for larger volume orders. In addition, hardware optimisation has led to an overall performance improvement and reduction in latency.

Dr Martin Reck, managing director cash market says that with the new release Deutsche Börse is supporting its customers from an early stage concerning the implementation of regulatory requirements resulting from the EU Markets in Financial Instruments Directive, MiFID II. “We are furthermore increasing the attractiveness of on-exchange trading compared to OTC trading through new features such as the Volume Discovery Order (VDO),” he says.

The new VDO is described as a MiFID II-compliant solution for safe execution of large orders on Xetra with minimum market impact. The EU financial market directive will only allow a very limited proportion of order volume to be traded on dark pools; market participants will therefore need an alternative for large volume orders and the VDO offers this alternative.

Another new feature is the “designated sponsor quote request” for ETFs and exchange-traded products, which combines the features of OTC and exchange trading. Market participants on Xetra will be able to enter quote requests and trade against the quote directly in the order book. As a result, participants will benefit from potential price improvements for large orders as a result of interaction with the entire order book, from efficient order processing along the existing process chain and from the security of a central counterparty.