19 Nov 2020

Eurex

Introduction of a Mistrade Process for Eurex EnLight Trades

Eurex Circular 091/20 Introduction of a Mistrade Process for Eurex EnLight Trades


1.    Introduction

Eurex will introduce a mistrade process and ranges for off-book trades that are concluded on Eurex EnLight as an additional safety layer for participants active on the selective Request-for-Quote platform.

The mistrade process for Eurex EnLight is comparable to the process applied in order book trading at Eurex. Hence, the same mistrade ranges and procedures to define a reference price will apply. A key difference is that a mistrade can be filed throughout the trading day but not after the post-trading period of the respective product. Also, no price adjustment is possible.

Eurex EnLight trades can, however, still be reversed on bilateral agreement between the involved parties, as defined in section 4.9 of the Conditions for Trading at Eurex Deutschland.

The new Eurex EnLight mistrade process will become effective as of 1 December 2020.

2.    Required action

There is no required action.

3.    Details of the initiative

Currently, a Eurex EnLight trade can only be reversed on bilateral agreement between the involved Trading Participants. The introduction of new functionality like fully automatic processing of Eurex EnLight trades (Straight Through Processing) or anonymous negotiation of Eurex EnLight trades led to the consideration of introducing a mistrade process as a further layer of security for platform users. Especially since Trading Participants active on EnLight do not necessarily need to know each other or, in the case of anonymously negotiated trades, do not know who they traded against, the introduction of a Eurex EnLight mistrade process shall guarantee fair and orderly trading on the on-exchange selective Request-for-Quote platform.

An Eurex EnLight mistrade application can be filed with Derivatives Trading Operations in case a Trading Participant involved in an Eurex EnLight trade deems the transaction price being outside the mistrade ranges and the counterparty does not agree to a reversal of the transaction. Like order book mistrade applications, this is subject to a fee of €500, irrespective of the outcome of the mistrade decision. Only Eurex EnLight mistrade applications in the correct format filed by authorised personnel of the Trading Participant are being processed. The application shall contain the following information:

  • Name of the applicant and of the person authorised to represent the applicant
  • Information that it is a Eurex EnLight trade and the time of conclusion of the trade
  • Price of the executed trade
  • Name of contact
  • Transaction number of the Eurex EnLight trade

and needs to be submitted via telephone (+49-(0) 69-211-1 12 10), via fax (+49-(0) 69-211-1 43 45) or electronically via e-mail (mistrade@eurex.com) to Derivatives Trading Operations.

The determination of the Eurex EnLight Reference Price and the Eurex EnLight Mistrade Range will follow the procedure applied for order book mistrades as described in section 2.9 of the Conditions for Trading at Eurex Deutschland. Eurex reserves the right to apply mistrade ranges to transactions concluded on Eurex EnLight, which deviate from the ranges applied for order book trading. If Eurex executes this right, market participants will be informed via Eurex Circular in advance. In contrast to the order book mistrade process, the filing of an application is possible throughout the trading day, but not later than the end of the off-book post-trading period for the respective product of the relevant Eurex EnLight trade. Also, only a reversal of the Eurex EnLight trade is possible, no price adjustment.

The reversal of anonymously negotiated Eurex EnLight trades will follow the procedure defined in Eurex Circular 051/20. In case that the counterparty does not agree to a reversal, the Trading Participant can file a Eurex EnLight mistrade application, like for non-anonymous EnLight trades.

The introduction of a Mistrade Process for EnLight Trades is addressed in the updated Section 4.9 of the Conditions for Trading at Eurex Deutschland. For further information, please refer to the 22nd Amendment Ordinance to the Conditions for Trading at Eurex Deutschland which can be found on the Eurex website www.eurex.com under:

Rules & Regs > Eurex Rules & Regulations > Trading conditions

If you have any questions or require further information, please contact Derivatives Trading Operations via e-mail: eurextrading@eurex.com, or Marcel Rothacker via e-mail: marcel.rothacker@eurex.com.

Attachments:

  • Attachment 1 – Amendments to the Conditions for Trading at Eurex Deutschland
  • Attachment 2 – Amendments to the Fee Regulation of Eurex Deutschland


Further information

Recipients:

All Trading Participants of Eurex Deutschland and Vendors

Target groups:

Front Office/Trading, Middle + Backoffice, IT/System Administration, Auditing/Security Coordination

Contact:

Derivatives Trading Operations, tel. +49-69-211-1 12 10, eurextrading@eurex.com;
Marcel Rothacker, tel. +49-69-211-1 32 19, marcel.rothacker@eurex.com

Related circular:

Eurex Circular 051/20

Web:

Eurex EnLight

Authorised by:

Randolf Roth


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