Deutsche Börse is to offer block trading of German equities through an arrangement with buy-side network Liquidnet.
Under the agreement, more than 240 members of the German market's Xetra platform will have the opportunity to trade directly with Liquidnet's 700-strong network of asset management firms. The bourse says the facility will proide better performance for large-scale trades with less market impact and price improvement.
Martin Reck, cash market managing director at Deutsche Börse, says: "The Block Agent model offers access to considerably greater block liquidity for Xetra MidPoint execution, increasing execution probability for all Xetra participants."
All German shares that can be settled via the central counterparty may be traded using the new model, including those of the four selection indices DAX, MDAX, TecDAX and SDAX, as well as other small and midcaps.
Mark Pumfrey, Head of Emea, Liquidnet, believes the arrangement will drive an increase in foreign insitutional investment in the German market.
"When combined with an average execution size of €1.1 million on our platform, the Xetra MidPoint liquidity will significantly enhance institutional block trading in German stocks," he says.