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Eurex Improve – Joint usage of Eurex Improve by affiliated Exchange Participants

Release date: 11 Mar 2020 | Eurex Exchange

017/2020 Eurex Improve – Joint usage of Eurex Improve by affiliated Exchange Participants

Eurex Circular 017/20

1. Introduction

With this circular, Eurex Deutschland (hereafter: “Eurex”) announces that as of 14 April 2020, Eurex Improve can also be jointly used by different, but affiliated Exchange Participants and hence independent of the individual organisational set-up of an Exchange Participant.

For this purpose, Eurex amends the Contract Specifications for Futures Contracts and Options Contracts at Eurex Deutschland (the “Contract Specifications”). The updated Contract Specifications will further contain a legal clarification that the order of an Improve request, which is not entered on behalf of a customer, is a principal order of the Exchange Participant and must be booked into a Principal Position Account (P-Position Account or M-Position Account).

The amended sections of the Contract Specifications are attached to this circular.

Production start: 14 April 2020

2. Required action

Exchange Participants who are affiliated companies and are interested to jointly use Eurex Improve, need to declare and, by providing sufficient information, prove towards Eurex their affiliation. To do so, Exchange Participants are requested to complete and submit the form “Declaration of Multi-Member-Affiliates for Eurex Improve”. The form is available on Eurex’s website www.eurexchange.com following this path:

Affiliated Exchange Participants must not jointly use Eurex Improve before having received confirmation from Eurex that all necessary requirements have been fulfilled.

3. Details of the initiative

Eurex Improve is a new functionality that provides our Exchange Participants with a tool, suitable to guarantee their customers full execution of their orders below minimum block trade sizes at the best price available in the orderbook. Eurex Improve was launched for all equity options and equity index options on 3 February 2020.

Two different ways to use Eurex Improve

To initiate an Improve event, an Improve request containing two orders has to be submitted to Eurex: One of these orders is on behalf of a customer of the Exchange Participant and the other order is a principal order of the Exchange Participant. This can be done in different ways:

  • one trader of one Exchange Participant submits a double-sided Improve request containing both orders
  • two different traders of the same Exchange Participant submit two one-sided Improve requests. One of these one-sided Improve requests contains to the customer order and the other one-sided Improve request contains the proprietary order. For the T7 trading platform to successfully map the pair of one-sided Improve requests together, both one-sided Improve requests need to be entered within 15 seconds and must contain the same unique identifier (arrangement ID).

Irrespective of whether an Improve event is initiated via the submission of one double-sided Improve request or via two one-sided Improve requests, it can be initiated via the T7 GUI as well as via the Enhanced Trading Interface (ETI).

New additional offering: Joint initiation of an Improve event by different, affiliated Exchange Participants

Effective 14 April 2020, Eurex enlarges the existing scope of how Improve events can be initiated by allowing two different traders of two different, but affiliated Exchange Participants to jointly submit a pair of one-sided Improve requests. The conditions for successfully mapping a pair of one-sided Improve requests together in T7 remain unchanged. To make use of this offering, respective Exchange Participants must provide evidence to Eurex that one Exchange Participant, directly or indirectly, controls, is controlled by or is under common control with the other Exchange Participant(s). For this purpose, the form specified in section 2. has to be submitted.

If Exchange Participants jointly initiate Improve events before they receive confirmation from Eurex that all necessary information has been provided, they commit a breach of Eurex’s rulebook which results in Disciplinary Proceedings. As a result of such proceedings and in line with the German Stock Exchange Act, the Disciplinary Committee can decide to issue a reprimand or a monetary fine of up to €1 million or exempt in full or in part the Exchange Participant from trading on Eurex for up to 30 business days.

Booking of Improve requests

Independent of how an Improve event is initiated, the customer order must be booked into an Agent Position Account (A-Position Account) and the principal order must be booked into a Principal Position Account (P-Position Account or M-Position Account). 

Attachment: 

  • Updated sections of the Contract Specifications for Futures Contracts and Options Contracts at Eurex Deutschland

Further information

Recipients:All Trading Participants of Eurex Deutschland and Vendors
Target groups:Front Office/Trading, Middle + Backoffice
Contact:Kirstin Meissner, Market Structure & Regulation, tel. +44 207 8 62 72 55, kirstin.meissner@eurexchange.com
Related circulars:Eurex circulars 036/18, 114/19, 003/20
Web:Eurex Improve
Authorised by:Randolf Roth

 

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