TRADING VENUES

Deutsche Boerse Xetra suffers trading decline

Xetra trading revenues down 15% in 2016 as it prepares closure of MidPoint in summer this year.

By Hayley McDowell hayley.mcdowell@strategic-i.com February 16, 2017 12:43 PM GMT

Deutsche Boerse’s Xetra business suffered a 10% decline in net revenues in 2016 compared to the year prior, as the exchange operator prepares to close its dark pool.

Xetra saw overall revenues fall from €185 million to €165 million in 2016, with trading sales suffering a 15% annual decline.

The drop follows news of Deutsche Boerse’s decision to close its Xetra MidPoint dark pool in the summer of this year. 

The exchange told The TRADE it would be implementing a new trading system in anticipation of MiFID II‘s large-in-scale waiver and there would be no reason to continue dark pool trading for small-size transactions.

“Xetra MidPoint today supports dark trading for all trade sizes. With the volume thresholds of 4% and 8% in the reference price waiver we see limited potential for this transparency waiver.

“That’s why we will no longer offer MidPoint after our technology upgrade to a new system in summer 2017. We trust that our existing auction mechanism as well as our Volume Discovery Order from 2018 onwards are viable options to execute large-in-scale orders under MiFID II,” a spokesperson said.

Deutsche Boerse reported net revenues across the business increased 8% in 2016 to €2.4 billion, compared to €2.2 billion the year prior.

Recent statistics revealed the exchange’s potential merger with the London Stock Exchange (LSE) could cost both firm’s up to £304 million, with Deutsche Boerse set to incur £129 million of the costs.

LSE and Deutsche Boerse confirmed plans to merge in February this year. If completed, the merger would create one of the largest exchange groups in the world.