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One year Eurex EnLight extension – review and outlook

Release date: 04 May 2020 | Eurex Exchange

One year Eurex EnLight extension – review and outlook

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Randolf Roth, Member of the Eurex Executive Board

While it first launched in June 2018, one year ago Eurex extended its selected RfQ-based service to cover all equity and equity index options, as well as the corresponding futures. What has happened since then and are there new extensions in the pipeline? We spoke to Randolf Roth, Member of the Executive Board of Eurex Frankfurt AG.

Randolf, one year has passed since the Eurex EnLight extension. What was the reason for the extension and what has happened in the meantime?

Eurex’s key strength is the strong and interconnected liquidity pools on the trading and clearing side. Eurex EnLight extends the liquidity pool concept on the trading layer from the order book for regular trade sizes to the market for large and complex orders. Without Eurex EnLight, these orders would be arranged outside Eurex, often still via phone or chat. It is a big step, not only for us but also for the market participants who need to adjust their processes. We have therefore introduced Eurex EnLight in several steps, the biggest one being last year in May with the launch of trading in all equity and equity index options and corresponding futures. 

How many contracts have been traded and how many members have contributed?

By the end of March 2020, over 2.3 million contracts had been traded on Eurex EnLight. This demonstrates that the platform is becoming more and more accepted by our members. Over 75 different Eurex members have already traded via Eurex EnLight.

We also saw a new functionality with Straight-Through-Processing in November last year?

Yes, we introduced Straight-Through-Processing (STP) for Eurex EnLight with the T7 Release last November. The new functionality supports customers by simplifying their operational workflow. After the negotiation of an EnLight deal is closed, the trade will be automatically executed and subsequently cleared. This increases the efficiency of the whole workflow and additionally helps customers to avoid late approvals of TES trades.

As you continue to develop the service. Can you give us a sneak preview on what is next?

With T7 8.1, we will introduce Eurex EnLight SMART RfQ and Eurex EnLight Anonymous Negotiation. Eurex EnLight SMART RfQ will support requesters by targeting the top responders in the relevant product based on cirteria weighted by the requester. This will increase the probability of tighter spreads and better pricing outcomes for the end client or risk desk.

Furthermore, Eurex will provide the possibility to negotiate deals and execute trades via Eurex EnLight without disclosing the identity of the requester and responders. This functionality will offer a new means of negotiation for requesters that are sensitive to inventory tracking or simply wish to remain anonymous. 

Our goal is to constantly improve Eurex EnLight to make it the off-book price-discovery venue of choice for European equity, equity index and fixed income derivatives. We will therefore continue to address our members’ needs by introducing new features.
 

 

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