Deutsche Börse Release Xetra 16.0

The latest enhancements include new matching functions designed for larger volume orders, in addition to improvements to hardware that have led to increased performance and a reduction in latency, according to Deutsche Börse. 

Volume Discover Order (VDO) is based around MiFID II, with a goal of allowing users a way to safely execute large orders with minimum market impact. Under MiFID II firms will not be able to trade all of their large-volume orders on dark pools. VDO is a compliant alternative.

VDO has received a dedicated waiver from the European Securities and Markets Authority (Esma) and Hessian stock exchange regulator, meaning it’s not subject to the volume-cap restrictions.

VDO executes the hidden part of the order against other VDOs at the midpoint of the bid–ask spread in the order book through a second limit. Asset managers Allianz Global Investors, Deka Investment, and Union Investment have already adopted the order type.

Designated Sponsor Quote Request has also been added to Xetra, focusing on exchange-traded funds and other exchange-traded products. Xetra users will be able to enter quote requests and trade against the quote directly in the order book.

This offers users potential price improvements on large orders because of interaction with the entire order book. 

“With the new Xetra release, we are supporting our customers from an early stage concerning the implementation of regulatory requirements resulting from the EU Markets in Financial Instruments Directive, MiFID II,” said Martin Reck, managing director, cash market, at Deutsche Börse, in a statement. “We are furthermore increasing the attractiveness of on-exchange trading compared to over-the-counter (OTC) trading through new features such as the Volume Discovery Order.”