With effect from 1 October, bond trading on Xetra will be expanded to include over 2,000 international government and corporate bonds and 60 German government bonds.

Trading participants will benefit from a transparent and liquid bond market and gain access to a broad investor network via Xetra.

For the first time, the open Xetra order book will have a depth of five, showing the five best bid- and ask-limits and the market data dissemination offers trading participants complete transparency in pre and post trading. Xetra Bonds thereby meets the highest transparency requirements.

Designated sponsors and specialists provide additional liquidity in trading and quote bid and ask prices on a continuous basis. The first designated sponsors are Optiver VOF Netherlands, Florint and Close Brothers Seydler Bank, which also acts as specialist. Further specialists in bond trading are Steubing and ICF Kursmakler.

Continuous trading of German government bonds is settled via the central counterparty (CCP) Eurex Clearing. This means that counterparty risk will be reduced for all trading participants, internal business processes simplified and the efficiency of workflows further improved. The CCP acts as counterparty between the trading partners, who themselves remain anonymous, but deposit appropriate collateral for their open positions.

“We already meet the transparency requirements of the revised MiFID financial market regulations which will be mandatory in two to three years' time,” says Rainer Riess, managing director Xetra market development at Deutsche Börse. “Exchange trading always means transparent pricing. However, a large number of government and corporate bonds are still traded OTC – with a lack of transparency, high risks and unclear prices for trading participants and investors. Xetra Bonds is a pan-European bond trading model with high transparency and binding quotes; designated sponsors and specialists provide high liquidity – so all market participants profit equally.”