MiFID II: Eurex prepares for the home stretch

The clock is ticking: Only four more months until the biggest market reform of the last decade kicks off. The Markets in Financial Instruments Directive (short: MiFID) II will fundamentally re-design Europe’s derivatives markets and provides strategic opportunities for Eurex, one of the leading derivatives exchanges and part of Group Deutsche Börse.

Eurex is about to conclude its own preparations and has scheduled the technical implementation of the new requirements for December. Already this month, market participants will gain access to a simulation trading environment so that they have sufficient time to adapt to the new reality.

The industry currently undergoes the gargantuan task to oblige to the deadline”, says Randolf Roth, Member of the Eurex Executive Board. “We support the market to be able to cross the finish line ribbon.

Eurex already started to introduce services to address the overarching objectives of MiFID II. The exchange increased the transparency of the off-book market and supports market participants’ best execution efforts with a new Request for Quote platform. This electronic price discovery service allows banks and brokers to contact market makers selectively with requests for quotes in order to find a trading counterparty.

This is one further step in delivering fully automated and efficient solutions for market participants. Eurex addresses the market’s needs by applying its core competences around transparency and process efficiencies to the Over the Counter market. In this context, the exchange also supports the futurization of products, such as the Total Return Future (TRF) that was introduced in December 2016.

In August, Eurex’ latest trading statistics again showed strong demand for its innovative products. The traded volume in TRFs was 216,000 contracts since launch, and it marked a record month in August with nearly 48,000 contracts.

Overall, trading volumes at Eurex were at 110.7 million contracts and therewith 18 percent higher than in August 2016 (93.5 million). The development in the fixed income segment was particularly strong (+30 percent compared to August 2016), followed by the equity index segment (+21 percent), while the equity segment was weak (- 12 percent).

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