German exchange group Deutsche Börse will attempt to persuade the Frankfurt Regional Court to lift before the end of the month the injunction that closed its new electronic bond market.
A spokesman for the exchange told theTRADEnews.com that Deutsche Börse will present its opinion to the Frankfurt Regional Court on 21 January.
On 5 January, Deutsche Börse suspended trading on its new electronic bond market indefinitely only a month after launch, following an injunction secured by two brokers. Bond trading on the floor of the Frankfurt Stock Exchange is not affected.
The new bond trading service, which uses Deutsche Börse’s Xetra electronic trading platform and employs ‘specialists’ to make markets in the bonds, started trading on December 1 for 700 euro-denominated corporate bonds. Three brokers – Close Brothers Seydler Bank, ICF Kursmakler and Wolfgang Steubing – met Deutsche Börse’s approval to act as specialists for the service from launch. Nine brokers applied to be specialists.
However, on 5 January Deutsche Börse suspended trading on the new service until further notice after two trading participants, whose applications to become specialists had been rejected, obtained a preliminary injunction from the Frankfurt Regional Court.
According to Deutsche Börse, the injunction prohibits the exchange from disadvantaging the two brokers by limiting electronic bond trading to the three successful brokers.
The exchange said in a statement that the injunction was issued without a hearing for Deutsche Börse and that attempts to reach an out-of-court settlement with the two brokers have been unsuccessful.
The new electronic bond trading service is one of several initiatives aimed at expanding Deutsche Börse’s capabilities across Europe. It launched Xetra International Market, a pan-European trading platform for blue-chip equities, at the beginning of November and announced plans at the end of the same month to buy a 75% stake in Tradegate, an off exchange trading platform aimed at private investors, and convert it from a multilateral trading facility to a regulated exchange.