Dr. Rolf-E. Breuer, Supervisory Board chairman of Deutsche Börse, said in Frankfurt on Tuesday that the new entity would be the leading exchange organization in Europe and one of the strongest worldwide. "Deutsche Börse and London Stock Exchange are building on their expertise to create a European exchange that sets store in Europe's two most important financial centers: Frankfurt and London," Breuer said.
At its meeting on Tuesday, the Supervisory Board approved the planned division of operations between the two locations of the new corporation in Frankfurt and London. According to this plan, areas of expertise that have shaped the success of Deutsche Börse in the past will remain in Frankfurt. Deutsche Börse Systems, which develops and operates the electronic trading systems Xetra and Eurex, will also remain in Frankfurt, as will the derivatives market Eurex, which will have a second location in Zurich, just as it has up to now.
Neuer Markt, which is to be expanded into the pan-European growth market through the cooperation with Nasdaq Europe and the inclusion of the British techMARK, will be operated from Frankfurt. This is also where the operating company of FWB, the Frankfurt Stock Exchange, will be based, of which Neuer Markt will continue to be a part in the future. This means that Neuer Markt and the pan-European growth market in the future will be under German regulation and German exchange supervision. All functions that have been based in Frankfurt to date will also remain there in the future. The marketing company, which is to attract new issuers Europe-wide, will be headquartered in London.
The corporate headquarters of iX-international exchanges will be in London, as announced at the beginning of May. On Tuesday, the Supervisory Board was of the same opinion as the two negotiation partners, that the environment for building up and expanding a company with global operations and a focus on financial services was more favorable there. The management of the new company will be based in Frankfurt as well as in London, with Management and Board meetings at both centers. The City's image as a central trading place and the high level of acceptance for the British regulatory environment among issuers and international investors makes it obvious to organize the trading in blue chips in London, was the reasoning given.
iX-international exchanges will not prescribe a market segment for the issuers. Rather, the new exchange organization will create designated markets for blue chips in London and high-growth companies in Frankfurt, thus offering the issuers options. The issuer is the one who decides on which market its shares will be traded. Deutsche Börse is convinced, however, that these markets will have a strong suction effect. The existing markets at FWB and LSE will continue to exist for companies that do not want to be traded on these markets or do not meet the prerequisites for a listing. Single and dual listings are both possible as a matter of principle. Deutsche Börse and LSE, moreover, also want to examine whether companies in the market for blue chips or growth stocks can be traded without being listed in London or Frankfurt.
On Tuesday evening, the Supervisory Board also discussed the question of which currency would be used to list and quote companies. iX-international exchanges will ? based on the so-called multi-currency capability of Xetra - offer trading in various currencies as a matter of principle. However, every issue will be quoted in only one currency, in order to concentrate the liquidity in one order book. The trading currency has no effect on the question of which currency a company uses for its accounting and reporting or dividend payments.
