Eurex Serves Up New Offerings

Terry Flanagan

Deutsche Börse’s Eurex continues to roll out new trading systems and offers its latency-sensitive customers easier access to the derivatives exchange.

Its latest product will allow for better synchronization of the clocks of customers’ installations in Deutsche Börse’s co-location facility with the matching engines of Eurex. It is also providing the service, which will use a Global Positioning System to better harmonize time over the dedicated network, for its cash market Xetra. The system will be in operation from next month.

“The Time Service solution is a further, innovative tool of Deutsche Börse’s leading co-location solutions and of great value for our customers,” said Wolfgang Eholzer, head of trading system design at Eurex. “The exact and synchronized time will contribute to increased transparency and enables new analysis options for co-location customers.”

Earlier this month, Eurex, which is jointly operated by Deutsche Börse and SIX Swiss Exchange, announced plans to enter into agreement with the Singapore Exchange (SGX) to link their data centers to allow traders of each other’s derivatives products easier and cheaper access.

Eurex will be moving its existing access point in Singapore into the SGX co-location data center. In return, Eurex will act as a network service provider to SGX’s customers in Europe. This initiative is expected to be implemented by mid-2012.

“Today’s collaboration is part of our Asian strategy and will lower the connectivity costs for our Asian customers while improving our footprint in a growth region,” said Juerg Spillmann, member of the Eurex executive board.

Eurex is also planning a new trading platform that will put the derivatives market on a par with futures trading, at least as far as trade speed is concerned. It is hoped that this new venue, which aims to become operational by the end of the year, will attract more high-frequency traders and will be based on a system that was rolled out over a year ago at its International Securities Exchange U.S. options trading subsidiary.

The move, subject to regulatory approval, will enhance Deutsche Börse’s ability to compete globally and keep platforms open around the clock as the trading day moves around the globe.

The moves by Deutsche Börse and its derivatives arm—Eurex—are seen as another sign of the co-operative deals and standalone systems that some exchanges are increasingly putting in place to boost trading volume. It is in response to regulators turning down exchange mergers worth around £37bn since December 2010, according to Bloomberg, including the blocking of Deutsche Börse’s proposed $9bn merger with NYSE Euronext in February of this year. The deal was denied on the grounds that the combination of Deutsche Boerse’s Eurex and NYSE’s Liffe derivatives exchanges would have given the company a dominant position in the market for exchange-traded derivatives.

However, earlier this week Deutsche Börse said that it will sue the European Union competition regulator over its decision to block the merger with NYSE Euronext. Deutsche Börse says the decision by the European Commission to block the deal to be “faulty” on several counts and is taking its complaint to a European court in Luxembourg. NYSE Euronext is not party to the legal action.

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