Deutsche Börse is to launch a new block trading service on Xetra MidPoint on 29 July and has named Liquidnet, the global institutional trading network, as the block agent for the new service.
The block trading model provides a platform where more than 240 Xetra members will have the opportunity to trade directly with Liquidnet’s network of more than 700 of the world’s leading asset management firms safely and efficiently with minimal market impact and maximum price improvement.
Xetra MidPoint’s Block Agent model will combine the liquidity of multiple sources, increasing the probability that large orders will be executed at midpoint.
“Connecting Liquidnet provides our members the opportunity to execute block sized orders in a manner that serves the specific requirements of this segment, with all advantages of exchange trading via Xetra MidPoint. The Block Agent model offers access to considerably greater block liquidity for Xetra MidPoint execution, increasing execution probability for all Xetra participants,” says Martin Reck, cash market managing director at Deutsche Börse.
Mark Pumfrey (pictured), head of EMEA, Liquidnet, says: “We have long championed borderless equity trading by opening up investment opportunities for our members in markets where they can create value and improve their investment performance. When combined with an average execution size of EUR1.1m on our platform, the Xetra MidPoint liquidity will significantly enhance institutional block trading in German stocks. We believe this cooperation will make trading of these stocks more efficient, drive performance, and lead to an increase in foreign institutional investment.”
All German shares that can be settled via the CCP may be traded using the Block Agent model, including those of the four selection indices DAX, MDAX,TecDAX and SDAX, as well as other small and midcaps.