German exchange group Deutsche Börse has unveiled the pricing schedule for Xetra International Market (XIM), its pan-European trading segment, which is due to launch in November.
According to Deutsche Börse, the pricing model offers a “considerable” incentive to provide liquidity. Xetra participants that provide a certain volume of liquidity to the platform will receive a rebate of 0.36 basis points of the volume executed. All other orders will be charged at 0.12 bps and clearing positions will cost 0.06 bps.
XIM’s order charge undercuts pan-European mutlilateral trading facilities’ (MTFs) liquidity removal fees. Chi-X Europe, BATS Europe and Nasdaq OMX Europe all levy a 0.3 bps fee for taking liquidity, Turquoise charges 0.28%. Hungary-based Quote MTF, currently the cheapest pan-European trading platform, charges 0.14 bps for liquidity removal.
Deutsche Börse further claims that XIM is the only trading platform in Europe offering purely value-based pricing for trading and clearing, with no minimum fees.
“The top market quality, the price model aimed at competition and the low set-up costs for Xetra participants will provide an excellent springboard
for XIM in pan-European blue-chip trading,” said Frank Gerstenschläger, member of the executive
board of Deutsche Börse with responsibility for the cash market, in a statement. “As hardly any additional costs will be incurred when operating the system, the new trading segment will enable Deutsche Börse to achieve economies of scale on Xetra and in its clearing
house. Thus, we are expecting a sustainable business model for XIM.”
XIM will be launched in stages. Trading and clearing participants and vendors have been testing the platform since the beginning of September. Between the November launch and January 2010, trading in each of the European markets covered by XIM in its initial phase – France, the Netherlands, Belgium, Spain, Italy and Finland – will be activated.
More countries will be added in a second phase in 2010, depending on feedback from the first phase. According to Deutsche Börse’s plans, XIM will eventually trade European blue-chip stocks and the corresponding equity and index derivatives in 19 European markets, including all constituents of the Dow Jones EURO STOXX 50 pan-European large-cap index.