Eurex Abandons Plans to Pursue MTF Authorization, Shifts Emphasis on Asia

MiFID II has quickly redefined the playing field in the financial services industry, including Eurex's operations.

Eurex has seen a change to its corporate structure in light of a rapidly shifting regulatory climate and market structure. The implementation of MiFID II legislation was particularly relevant for the marketplace group, which will usher in multiple changes in its operations. Moreover, the group has abandoned its filing of an authorization as a Multilateral Trading Facility (MTF).

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MiFID II has quickly redefined the playing field in the financial services industry – of course, the regulation was a long time coming and groups had months or in many cases a year or more to prepare. Still, it’s impossible to not underscore the importance the regulation has had on the financial services space.

As one of Europe’s leading derivatives marketplaces, Eurex has had to adapt and shift its structure in light of these new regulations. This has resulted in adapting its existing setup in Switzerland while also bolstering its offering in Asia. First and foremost, Eurex’s plans to file for a separate MTF authorization under the new Swiss Financial Market Infrastructure Act (FMIA) has been scrapped.

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Consequently, in accordance with FINMA, Eurex Zürich AG will henceforth be discontinuing its operational trading activities by March 31, 2018. Given this subsequent lapse of admission to Eurex Zürich AG’s trading members, these participants will be relieved from their respective statutory duties under FMIA, while their respective fees due for the transaction reporting related to Eurex Zürich AG will no longer applicable.

Thomas Book

Thomas Book, CEO of Eurex, commented on the changes: “Our focus in a fast changing environment is to maximise agility and efficiency, We are very pleased to implement changes that will reduce regulatory complexity and cost for our clients. In addition, expanding our distribution creates new and exciting trading opportunities.”

Looking ahead, Eurex will now be serving all its European and global clients via its existing German exchange and rulebook in Frankfurt, which is operated in adherence to the recently implemented MiFID II regulation. In doing so, this framework will support the reduction of legal and operational complexity as well as costs given participants no longer need memberships at two separate exchanges.

In tandem to this, Eurex is looking east in a bid to strengthen its global services suite. This will coincide with a greater emphasis on the Asian market, with an extension of trading hours to include the Asian time zone. The move will help cater to a global group of clients, while also allowing for more broad-based hedging opportunities.

However, this expansion and emphasis on Asia will not see Eurex continue to pursue the establishment of a separate regulated entity in Singapore. This is due to help reduce complexity and effort for its members, while simultaneously solidifying the business and presence of the operational hub for Deutsche Börse Group in Asia in Singapore.

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