Deutsche Bourse Xetra upgrade lays the foundations for HFT restrictions
Deutsche Börse has introduced a further-developed version of its electronic trading system with Xetra Release 14.0. Functionalities, interfaces and order types have been improved in line with the demands of the market.
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The German High-frequency Trading Act (Hochfrequenzhandelsgesetz) which was adopted in the spring provides for the regulation of algorithmic and high-frequency trading through the introduction of various measures. Deutsche Börse is laying the system-related foundations for implementation of the act with Xetra Release 14.0.
The new release also introduces system-based risk management in electronic trading, enabling market makers to minimise their operating and market risks. This involves the automatic deletion of quotes and orders from designated sponsors when a certain threshold is exceeded within a pre-defined period.
Iceberg orders were previously only valid for one day; they will be valid for 360 days with Release 14.0. An iceberg order refers to a type of order where only a small part of the order book volume is visible, in order to avoid major price movements.
Access for trading participants has also been improved via the FIX Gateway interfaces and the Enhanced Transaction Solution, and more information is now available in this way.
"The ongoing development of our trading system serves to reinforce our leading international role and competitiveness. Release 14.0 also supports market participants in meeting the legislative requirements under the German HFT Act," said Dr Martin Reck, Cash Market Managing Director at Deutsche Börse.