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100 days after the MiFID has come into force, Deutsche Börse draws a positive interim balance: The electronic trading system Xetra benefited from order shifts resulting from the directive and expanded its market share in German blue chips trading in January to approximately 99 percent. The 2007 annual average market share was 97 percent. Thus, Xetra underscores its relevance as a MiFID best execution platform with the highest liquidity and best prices.
The platform for bilateral exchange-based bank trading, Xetra BEST, posted record turnovers in the last three months. In January, 183,000 transactions were executed with 1.6 billion Euro being turned over, following 105,000 in November 2007 with 1.1 billion Euro turnover.
Xetra BEST is a special Xetra functionality through which private investors always get a price improvement compared with the current Xetra price. Furthermore, orders processed using Xetra BEST are generally executed fully and immediately in one transaction. Since December of last year, DZ Bank is now the tenth bank to participate in Xetra BEST. The first foreign online bank is, since January, broker jet from Austria. Further banks want to start using Xetra BEST. The Xetra BEST functionality is an integrated component of Xetra and therefore offers exchange-based and monitored trading on an EU regulated market. Banks that select Xetra as their execution venue ensure with the Xetra BEST service best execution vis-à-vis the Xetra order book within the meaning of the MiFID.
Moreover, Deutsche Börse has acquired around 60 European customers for the MiFID OTC post-trade transparency service thus far. The service covers all instruments that are subject to post-trading transparency requirements Europe-wide, and offers optional automatic delay for large transactions, in accordance with MiFID. In line with MiFID, investment firms are required to disclose their off-exchange purchases and sales of equities in real-time on the market. Background on the MiFID Since the MiFID went into effect as at 1 November 2007, banks must guarantee their clients that orders are executed at the best possible terms concerning price, cost, and execution speed and likelihood. The banks have agreed to implement and regularly review an execution policy. The banks must prove to their clients that they comply with this policy.
Background on Xetra BEST
Xetra BEST is a Xetra functionality with which banks execute order from their customers against pre-defined banks so called Best Executors. Baader Wertpapierhandelsbank, Commerzbank, equinet, ICF Kursmakler and STEUBING currently function as BEST executors. Banks currently providing orders are amongst others Broker Jet Commerzbank, DZ Bank and SEB Bank.
