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Deutsche Börse Group – Best European Trading Venue

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Last year was a challenging market environment for all global exchanges with key interest rates falling to historic lows. Consequently, Deutsche Börse Group’s net revenues declined by 9 per cent to EUR1.932billion (compared to EUR2.121billion in 2011), while net interest income from the banking business decreased to EUR52.0million (EUR75.1million in 2011). Despite this, operating costs fell slightly year-on-year to EUR958.6million. Mainly because of lower net revenue, Deutsche Börse Group’s earnings before interest and tax (EBIT) declined to EUR969.4 million (EUR1.162billion in 2011).

Deutsche Börse’s most important clients, the banks, today face huge regulatory and macroeconomic uncertainties. This has resulted in both a positive and negative impact on trading activities. “In addition to requiring hard work from us in dealing with the changes, it presents us with many opportunities, of which we have taken will continue to take advantage.

Deutsche Börse has developed solutions for banks and companies in the real economy quickly, competently and early on,” explains a Deutsche Börse spokesperson.

Robust clearing and settlement processes are critical for maintaining the integrity of the financial markets, in light of events in 2008. And it is precisely these processes that Deutsche Börse has mastered “better than anyone else” says the spokesperson.

“Our combination of global leadership in trading and clearing options, an international central securities depository (Clearstream), risk and collateral management services and a range of IT and market data products within one group is unique in our industry. This puts us in an excellent position for helping to shape the markets of tomorrow.”

The Group has achieved three milestones in recent times. Firstly, last May it concluded an agreement with the largest international trading houses for introducing a clearing offer for over-the-counter interest swaps.

Secondly, in 2011 it won Cetip, the Brazilian central securities depository, as its first customer for Clearstream’s Global Liquidity Hub. “In addition to Brazil, we already have agreements with Canada, Australia, South Africa and Spain to join this Clearstream initiative. We will add a few of these markets to the Global Liquidity Hub this year,” confirms the spokesperson.

Thirdly, by connecting the central counterparty of its derivatives subsidiary, Eurex, with Clearstream, Deutsche Börse can offer products and services which combine the strengths of both areas.

The Asian markets are a key area for business expansion at Deutsche Börse. In 2009 it acquired a banking licence in Singapore through Clearstream and now has some 70 staff working there. In addition to Singapore, the Group has representative offices in Hong Kong, Beijing, Tokyo and Dubai.

“In the derivatives market we have, together with the Korean stock exchange, developed a forward-looking form of cooperation, in which we utilise the global Eurex network outside the Asian time zone for Asian products – in this case derivatives on one of the most traded indices worldwide, Korea’s leading index, KOSPI. In 2012, more than 32million KOSPI contracts were traded on Eurex – nearly twice as many as in the previous year.

“At the beginning of February, we expanded this form of cooperation with the Taiwan Futures Exchange TAIFEX. The planned cooperation extends to trading and clearing of derivatives on the TAIFEX index, and is scheduled to start in the fourth quarter of this year,” explains the spokesperson.

On winning the award, the spokesperson comments: “We are delighted and feel that this award confirms our strong position in today’s exchange environment.”

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