Deutsche Börse has been forced to suspend trading in Government bonds over the Xetra electronic platform following a legal challenge by two local brokers.
The German exchange operator launched the new trading model with 700 corporate bonds listed in early December with support from three leading brokers - Close Brothers Seydler Bank, ICF Kursmakler and Wolfgang Steubing - chosen from a field of nine candidates.
The system - billed by the Börse as a 'continuous auction with specialists' - was designed to attract private investors and small to medium-sized institutional investors by promising high execution quality in on-exchange bonds trading with continuous quote presence and commission-free near-time execution by the chosen specialists.
The suspension in trading follows complaints from two of the brokers that failed to win a seat as specialists in the system.
Deutsche Börse says it is seeking a court date in January in an effort to overturn the ban.