Eurex Clearing revises clearing price model

Eurex Clearing, Europe’s largest clearing house, announced that it will introduce a revised clearing price model for cash market transactions effective 1 December 2010. The transaction fees will be noticeably reduced compared to the current price model. This is the result of a 50% reduction in the fixed clearing fee and an expansion of the discount models for Xetra transactions. On average, Frankfurt Stock Exchange (FWB) participants will benefit from around 11 percent lower total clearing costs based on Q3/2010 volumes. Moreover, clearing fees for transactions on the Irish Stock Exchange will also be reduced by 40 percent.

„With the new pricing model, we are positioning ourselves for further growth in the European cash equity clearing business and are stimulating trading on the cash markets cleared by Eurex Clearing,” said Frank Gerstenschläger, Deutsche Börse AG Executive Board member responsible for the Xetra cash market segment.

Specifically, the fixed transaction fee for Xetra transactions is to be cut by 50 percent, from 0.06 to 0.03 euro cent. Additionally, existing discounts are to be increased by as much as 100 percent, thus the fixed transaction fee can be as low as 0 cent. The variable transaction fee for Xetra transactions will be reduced by up to 50 percent via a new discount model. At the same time, the fee for delivering net positions after offsetting (delivery management fee) will be raised from € 0.40 to € 0.60 to cover the corresponding settlement cost, although this fee remains significantly lower than that of other clearing houses.

Due to the stimulation in trading and clearing activity as a result of the new pricing model, Deutsche Börse expects a largely neutral effect on total turnover from the Xetra segment.