Deutsche Börse Launches Private-Investor Initiative - Package Of Measures For Even Greater Liquidity And Transparency

Deutsche Börse will steadily continue to expand the services for private investors on the Xetra electronic trading platform and on the Frankfurt trading floor. According to Executive Board member Volker Potthoff, the company wants to further enhance liquidity and thus the price quality and speed of order execution, as well as further improve transparency for private investors. "Frankfurt already offers private investors superior products and services. Our initiative for private investors will further increase our competitive edge over other exchanges and off-exchange trading places," Potthoff said at a press conference in Frankfurt on Tuesday.

Potthoff said the main innovation for the first quarter of 2001 was Xetra Live: Xetra Live is an information screen that is modelled on the Xetra electronic trading system and enables private investors to look inside the current Xetra order book. It shows the five best bid and ask prices, among other things, and will thus substantially enhance transparency for private investors. Deutsche Börse wants to make Xetra Live available on the Internet via partners.

Also during the first quarter of the year, the much-improved performance orientation in trading on the floor is to be anchored in the rules and regulations. The interests of private investors are also to be the focus of these changes. As far as price determination in international securities is concerned, for example, the stock-exchange price has to be oriented to the main markets, in other words the most liquid market. Moreover, as of 2001, the responsibility for price determination in equities trading in all segments will be granted to brokers on the basis of a performance orientation. In the future, failure to meet the performance standards will trigger sanctions.

With the aim of further boosting the liquidity in less liquid stocks in electronic trading, Deutsche Börse then wants to introduce a new intermediary concept for these stocks in Xetra during the second half of the year. The model calls for a Designated Sponsor who functions as an exclusive liquidity provider in a particular stock. According to Deutsche Börse's plan, the current brokers with price determination responsibility (Skontroführer) in trading on the floor, banks and securities houses are to take over the role of this Designated Sponsor.

Finally, Deutsche Börse, working jointly with the market surveillance unit of FWB, the Frankfurt Stock Exchange, wants to bring together all existing contact addresses in a central service hotline for private investors. Moreover, next year the company will also offer additional workshops for private investors, some of which will run online over the Internet.