Eurex Group, an exchange and clearinghouse operator, has announced its new structure to promote a fairer financial market in order to stay up to date with evolving investment behavior and a changing regulatory environment.
As part of its market structure roadmap, which aims to enhance the organization, transparency, and fairness of the financial markets, the Eurex Group has expanded the functionality of its Eurex EnLight feature as well as launched Eurex Improve and Eurex Protect.
“We want to attract as much diversified flow as possible to our main tool, which is the central limit order book. As there is also a need for large-scale business, we developed solutions to attract this heterogeneous flow on exchange as well,” the statement said.
Outline of Eurex Group Tools
Eurex EnLight is the company’s solution for large-scale business off-book trade conclusions. The aim of this function is to move its over-the-counter (OTC) business in Eurex products to on-exchange and into central clearing.
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By doing this, banks and brokers will be able to selectively contact Market Makers with quotes so they can find a trading counterparty. These orders are executed through Eurex’s T7 Entry Service. Following this, they are automatically transmitted for post-trade processing.
The aim of the Eurex Improve tool is to attract additional trading volumes through guaranteeing its members end-customers with full executions of any trading quantity to the best price available in the market, the statement from the company outlined.
According to Eurex Group: “The objective behind Improve is to motivate banks/brokers to attract more customer flow to the order book by providing them with preferred customer interaction ability. This counters fragmentation as it strengthens the order book. To the benefit of the end-client, this market-driven solution is meant to increase facilitation of customer flow to interact with the price improvement competition in the order book.”
The final tool is Eurex Protect. The purpose of this mechanism is to address the speed disadvantage liquidity providers have in the order book when compared to certain aggressive super-fast strategies. This tool particularly allows liquidity providers to focus on the end-clients, such as institutional investors.