Stock market reform and internationalization: 21st century

Deutsche Börse’s business model covers a broad range of business areas. It has been continuously developed during the past years and today covers the complete process chain including securities and derivatives trading and clearing, transaction settlement, custody, the provision of market information, as well as the development and operation of electronic trading systems. An important milestone of Deutsche Börse AG was its own IPO on 5 February 2001. The subsidiaries Eurex, Clearstream and Deutsche Börse Systems drive the growth and internationalization process of Deutsche Börse Group. With the acquisition of ISE, the world’s largest equity options exchange, in December 2007, Eurex significantly expanded its liquidity network into the U.S. and into U.S. Dollar products. With this process-oriented business model, Deutsche Börse increases the efficiency of capital markets. Issuers benefit from low capital costs; investors enjoy the advantages of high liquidity and low transaction costs.

Deutsche Börse has also proved its innovation skills as a stock market organizer. In March 1997, it established Neuer Markt, thereby giving smaller growth companies completely new opportunities for raising equity. Transparency requirements were particularly stringent for this new market segment.

In response to the Fourth Capital Market Promotion Act, Deutsche Börse reformed the German stock market. Since 1 January 2003, issuers at FWB® Frankfurter Wertpapierbörse (the Frankfurt Stock Exchange) have been able to choose between a listing in either Prime Standard or General Standard. Whereas Prime Standard integrates the stringent transparency requirements of Neuer Markt, statutory requirements apply in General Standard. Neuer Markt was closed. In March 2003, TecDAX® was launched as the new blue-chip index for technology shares.

With the Introduction of Entry Standard within the Open Market in October 2005, a new segment for small and medium-sized companies was created. Their shares can be included in exchange trading while meeting less stringent formal requirements. Since October 2008, the sub segments First Quotation Board and Second Quotation Board structure the Open Market. All companies with an initial listing in Open Market are included in the First Quotation Board. All companies whose shares are already listed at or included in another international or domestic trading venue and apply for admission to the Open Market are included in the Second Quotation Board.

In April 2000, the market segment for ETFs, XTF® was introduced, making it possible to continuously trade index funds at a stock exchange in Germany for the first time. Since November 2000, actively managed funds have also been listed in the market segment Active ETFs.

New upper limits on brokerage fees for floor trading were implemented in April 2005 for warrants, knock-outs, certificates and reverse convertibles orders. Since July 2005, private investors have been guaranteed no-spread trading in DAX, MDAX®, TecDAX and SDAX® titles at the Frankfurt Stock Exchange.

Since April 2006, Deutsche Börse covers international markets in the new index family DAXglobal®. With the introduction of ETC Exchange Traded Commodities in November 2006, investors gained access to a broad range of euro-denominated commodities for the first time.

In November 2007, Deutsche Börse created an independent segment for companies from the real estate sector. REITs – Real Estate Investment Trusts – are traded on the stock exchange and add to the spectrum of real estate investments available to investors.

Since April 2008, all securities on Scoach, the exchange for certificates and warrants, are tradable on Xetra. Scoach is a joint venture between the Swiss SFMS (formerly SWX Group) and Deutsche Börse AG. It offers trading in more than 300,000 structured products.

The listing platform of Deutsche Börse is growing increasingly international. In 2007, a considerable number of foreign companies made their stock exchange debut in Frankfurt. For the first time, several IPOs were listed by companies from China, Russia and the Ukraine.

Deutsche Börse offers the lowest capital costs among the world’s leading stock exchanges in all three listing segments, Prime, General and Entry Standard.

Deutsche Börse Group has offices in key financial centers around the globe: in Europe, the Group has offices in London, Paris, Moscow and Zurich; in the US, in Chicago and New York, and in Asia in Dubai, Hong Kong, Singapore and Tokyo. The company aims to expand its service for a growing number of local customers and maintains contact with national authorities and capital market institutions. In cooperation with its partners around the world, the group promotes the internationalization of the financial markets, thereby opening them to European and international investors and companies alike.

The modernization of the Main Trading Hall at "Alte Börse", the older stock exchange building, started in October 2006 and has been given a new, modern look. The trading floor was replaced, the trading counters for the lead brokers and the ceiling lights were completely redesigned and TV broadcasting ambience and conditions were improved. The hall’s new harmonious lighting concept is completed by a stylized world map created by fluorescent lights which surrounds the hall and shows the most important trading venues worldwide. Moving LED displays indicate the respective benchmark indices as well as news from these venues.