Deutsche Börse to introduce electronic subscription rights trading

Source: Deutsche Börse

Continuous trading in subscription rights via Deutsche Börse's pan-European electronic trading system Xetra will be available to investors starting January 3.

Subscription rights trading forms part of the latest version of the Xetra software release 7.1, which was successfully launched on Monday. This will allow
Deutsche Börse to expand the range of services of its fully electronic Xetra system, and increase transparency and efficiency in subscription rights trading. Prices for subscription rights will also continue to be determined once daily on the floor of the Frankfurt Stock Exchange.

"All of the roughly 300 Xetra participants from around 20 countries are now able to take part in subscription rights trading - including participants who do not have access to floor trading at the Frankfurt Stock Exchange," said Rainer Riess, Managing Director of Deutsche Börse and responsible for the Cash Market. Fully electronic trading will enable Deutsche Börse Group customers to better utilize the arbitrage opportunities between subscription rights, their underlying stocks, and the corresponding derivatives on the derivatives exchange Eurex. According to Riess, "trading in subscription rights will become more liquid, transparent, and international." Subscription rights and underlying stocks being traded on the same electronic platform, with very narrow spreads, will benefit companies that issue rights.

Trading is supported by a so-called "Designated Sponsor", who continuously quotes buy and sell prices throughout the entire trading day, facilitating liquid trading in the open Xetra order book. The lead manager together with the issuer applies for the inclusion of the subscription right at Deutsche Börse. The minimum order volume for subscription rights with a nominal value of at least one euro is 1,000 units, the minimum order volume for subscription rights with a nominal value of less than one euro is 5,000 units.

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