Deutsche Börse and SWX Swiss Exchange have signed a letter of intent to combine their warrant and certificate trading activities in a jointly operated exchange for securitised derivatives.
Both partners will contribute their existing business in securitised derivatives to the venture, which will operate exchanges both in Switzerland and in Germany.
SWX will spin off its business in warrants and certificates into a new Swiss-based exchange, which will go live on 1 January 2007.
At the same time a holding company will found an exchange in Germany under the mantle of the Bremen Stock Exchange, which SWX acquired in 2005. This new exchange is scheduled to open in the fourth quarter of 2007.
Issuers will have the choice of having their securities admitted to trading either on a fully automated basis or by means of a specialist.
Trading on the exchanges will initially be conducted on separate electronic dealing systems before being transferred to a common platforrm by the end of 2009.
The parties say the joint venture will be profitable from the start.