Market Makers
Market Makers Liquidity counts
Designated Sponsors on Xetra and FWB® the Frankfurt Stock Exchange specialists ensure trading is liquid and price quality is high.
Shares in one of Deutsche Börse’s selection indices must be included in continuous trading. One criterion here is the security’s liquidity. Designated Sponsors guarantee higher liquidity on the trading venue Xetra®. In Xetra, Designated Sponsors (e.g. banks and securities trading houses) ensure that continuous trading is possible in less liquid securities by posting binding bid and sell prices (quotes).
In addition to Designated Sponsors, there are other trading participants that operate a market-making strategy in certain securities even without being mandated by an issuer. The minimum requirements for such market makers are lower in terms of quotation duration and quality compared to the requirements for Designated Sponsors, and are set by European capital market regulation. Market Makers must display their trading activity by officially registering as a Market Maker on Xetra. Further information can be found here.
Deutsche Börse provides its specialists service as a way of supporting small and medium-sized enterprises (SMEs) in trading on the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse, FWB®).
- Xetra: Designated Sponsors
- FWB Frankfurt Stock Exchange: Specialists
FWB Frankfurt Stock Exchange: Specialists
The trading model “Continuous Auction with Specialist” enhances FWB® the Frankfurt Stock Exchange’s appeal as an efficient trading platform, specifically for small and mid-caps. In addition, market members benefit from the most comprehensive product range in the world and from improved trading quality through the Specialists, who furnish liquidity.
Specialists ensure that equities traded in the ‘Continuous Auction’ market model remain liquid and continually tradable. They commit to post attractive spreads and avoid partial executions that make no business sense. Their duties include providing indicative price information based on current market conditions and furnishing additional liquidity.
