Released today, the new report by Market Structure Partners (MSP) entitled ‘There is no Market in Market Data’ revealed findings that suggest incumbent venues are supplementing dwindling equity market revenues and volumes with hikes in market data pricing, ultimately leading to what the paper calls “stifling of growth and innovation”.

Among the exchanges listed in the report are Euronext, Deutsche Börse, the London Stock Exchange Group’s Turquoise and Nasdaq Nordics.

Read more – Some exchanges pocketing nearly £5 billion from ‘inexplicable’ market data price rises, finds report

“The data presented in the report contains multiple errors and does not accurately present Turquoise’s trading volumes and market data costs,” said a spokesperson for LSEG.

“The conclusions drawn in the report are therefore inaccurate and we will be contacting MSP to request the necessary extensive corrections throughout.”

One example of an inaccuracy in the findings noted by LSEG are figures relating to its private investors data fees. The report claims that LSEG has increased its data fees for private investors by over 150% between 2017-2024.

“Market data for retail investors on Turquoise has always been free and there was no change in the LSE data charge for this community over this period,” continued the LSEG spokesperson. “Since January 2025, LSE fees for market data for retail have also been waived. Furthermore, all of LSEG’s equity trading entities are required to make Reasonable Commercial Basis disclosures.”

At the heart of MSP’s findings released on Tuesday is the claim that market data – which MSP argues should be a by-product of trading volumes – has grown to become a far larger revenue stream than it should be that is supplementing other business areas such as trading that are suffering from a lack of innovation and attention from exchanges.

In its findings, MSP claims that trading turnover on LSEG’s Turquoise reduced by 61% between 2020 and 2022. However, in the same period, market data revenues increased by 16.5%, according to the report.

Naming other specific venues, the report also found that between 2020 and 2023 – despite total equity markets transacting value reducing by 17% – Euronext only saw total equity market revenue decline by 0.5% thanks to an 8% uptick in market data revenue.

“An independent analysis commissioned by FESE and published by Oxera in September 2024, shows exchanges market data pricing remains reasonable, reflecting shifts in data consumption, evolving fee structures, and broader industry costs,” a Euronext spokesperson told The TRADE in response to the report.

The MSP report also names Deutsche Börse and Nasdaq Nordics.

In its findings it suggests that between 2020 and 2023, Deutsche Börse saw transacted value in equity markets reduced by 29%. Total equity market revenue, however, only declined by 12% due to a 10% increase in market data revenue.

The research on Nasdaq Nordics tells a similar story, seeing a 27% reduction in transacted value in equity markets between 2021 and 2023 but only seeing a 9% decline in total equity market revenue stemming from a 4% rise in market data revenue.

“The claim that exchange data fees are increasing is misleading; any price increases have been below inflation over the same period, and we are fully committed to fair and transparent pricing,” a spokesperson for Nasdaq Nordics told The TRADE.

“We are relentlessly focused on innovation and enhancing the resilience of our world class markets and data services, to ensure they keep up with the accelerating pace and sophistication of trading.”

Deutsche Börse did not respond to a request for comment at the time of publication.

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We’re very much looking forward to our launch on Monday (9 December) and are definitely optimistic. We have a good mix of clients – both international and German – who are ready to start from day one. 

Once we got approval from regulators on 28 November – who of course look into every detail which takes time when it comes to Q&As etc. – we allowed time for everyone to get prepared. 

The banks and proprietary trading firms who are ready to go have more than 40% of the market share on Xetra today, and we also have some more in the pipeline that are interested and in preparation. 

We will see how it goes on Monday and the first weeks after launch, but we have a good idea of how liquidity in the midpoint book will evolve. As you know we have two order types, the sweep orders and the midpoint orders. Midpoint orders stay in the midpoint book if they are not immediately executed while sweep orders go directly to the lit book in case they don’t get executed in the midpoint book at entry. We actually designed this in a way that makes it a pure upside to use the sweep option compared to a regular order that you would send directly to the lit book: it has no latency disadvantage and it costs you the same.

One step further, if you’re lucky, you can find a price improvement saving half the spread compared to the aggressive execution in the lit book. Therefore, we expect that sweep will be used heavily even if not at all times. It’s an interesting offer where you can use the sweep functionality with no disadvantage at all and then the midpoint orders that will be passively written in the book will not have to wait for long to get executed. 

In terms of the initial launch, we’re also starting with an attractive incentive programme for the midpoint orders to start with, just to ensure maximum efficacy. 

We’ve previously spoken about the idea of an integrated approach to dark trading, why is this important?

I think it’s very important because when we took the decision to enter that segment it’s not an entirely new thing. There are dark pools all over the place but being the reference market (source for reference prices) is unique and allows us to tailor in a way that others simply cannot. 

First of all, we have the real time midpoint prices that other venues also have to use so whenever an external dark pool offers trading in German equities they have to use those prices in order to calculate that midpoint and technically we have those prices without any delay.

This also means there’s no stale pricing, and thus there’s no risk that you have some players in our dark pool that have information advantages over others. This is different from external venues to which a latency arbitrageur could leverage a faster private connection in order to have information on changes in the reference price first transported to that venue before the reference price is even updated there. 

The midpoint book is hosted on the same machine as the lit and incoming order messages are being sequenced strictly across both those books and we can process the sweep order execution in one matcher transaction.

That means in the midpoint book where it might find some immediate execution there and then it goes to the central limit order book. Essentially, it’s only one transaction and only after all those things have happened the next order message is being processed by our matching engine. Therefore, there’s no overtaking. I think that’s compelling.

Can you tell us more about how this is a client-led development?

The idea was born back in Spring 2023 when some of my colleagues came back from a roundtable with some clients and debriefed that midpoint was something we should be looking into.

From there it was basically a joint brainstorming between some clients and us on how we could best leverage our position as reference market and importantly how we could do a complementary offering to others that already exist.

Following that comes finding a release time. We have many ideas and allocate our developer resources carefully at our company that it’s almost like an internal competition as well when it comes to what can be prioritised, but here with clients so involved of course we are focused here. At the end of the day, it’s a business case and when it comes to meeting client needs it’s a back and forth – inspired by an initial idea and then build upon. 

Following the roundtable, we continued bilaterally with those clients we felt were most interested and most committed to providing their insight, really digging into what exactly they wanted from this. 

What are the main technical challenges Deutsche Börse is prioritising when it comes to further enhancing dark trading? 

There were a couple of functionalities and features that we developed, guided by our clients, that we tailored especially for the special needs in midpoint trading. One of the priorities for example is that we have a minimum acceptable quantity (MAQ), something that when we consulted clients was flagged as essential.

Next thing, our clients were very specific on wanting dedicated MIC codes for the regulatory reporting. Essentially all the transactions from our midpoint book are reportable under a dedicated MIC only for this purpose. 

Third, it may seem like a small detail but also an interesting thing when it comes to user friendliness: We’ve learnt that clients, if they use the sweep order, want to do it without even looking at the specific situation or the specific instruments. The result is that on Xetra Midpoint you can use sweep orders even in instruments or at times where the midpoint book is currently not available, without getting an order reject – it will simply be routed to the lit book. 

Another focus is on self-match prevention, as exists in our lit books. Instead of re-using our existing functionality, we learned that actually it’s much more efficient in midpoint trading to use a “cancel passive” logic that allows a trader to switch from bid to ask by simply sending a new order that will automatically delete the older orders marked with the same ID on the other side while the new order is entirely sustained.

And last but not least, the matching algorithm that we use in our midpoint book is different from our central limit order book – optimised to maximise executable volume, reflect individual execution constraints such as MAQs, and checking for potential executions not only when new orders come in, but also if the reference price changes.

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Paul Battams was named head of international equity trading at BlackRock following 23 years with the firm. He was most recently head of EMEA equity trading, overseeing a team of 14 traders covering the scope of equities and equity derivatives execution for the entirety of BlackRock’s investment teams. Prior to joining BlackRock as equity derivative trader in 2009, Battams was an equity trader at Barclays Global Investors for 11 years.

Following this, BlackRock appointed Nick Craze to take over from Battams as head of the EMEA equity trading desk.  Craze has been on the desk for more than 15 years and prior to this promotion oversaw the ‘model and derivatives group’ on the BlackRock EMEA equity desk since 2016. He will now manage the entire desk, made up of 14 traders, having previously managed a team of six. Craze joined the asset manager back in 2006, initially working in asset allocation and equity investments before becoming an equity trader.

Tourmaline Partners appointed Peter Murden as managing director – equity trading, as it seeks to further enhance its market reach, as revealed by The TRADE. In his new position, effective as of this month, Murden will be London-based and take on a client-facing role. Before the move to Tourmaline, Murden was a managing director at RBC Capital Markets and prior to this, spent 18 years at Redburn, most recently as a partner in equity trading, before departing following the Rothschild takeover in 2022. Murden has almost 30 years’ experience in the industry having worked several trading roles across the sell-side having begun his career at JP Morgan, then Flemings, back in 1994. His equity trading experience covers Asia, Europe, North America, and the UK.

Stephan Leithner has been appointed as the chief executive officer for Deutsche Börse, taking on the role from 1 October 2024. Leithner will take over the position from Theodor Weimer who has held the chief executive job since 2018. The two will operate as co-CEOs until the end of the year. Leithner has been a member of the executive board of Deutsche Börse AG since 2018, responsible for pre- & post-trading. Deutsche Borse said a decision on his succession will be made in due course. Weimer took over the chief executive role in 2018, moving over from his CEO position at HypoVereinsbank UniCredit Bank. During that time, he has overseen the acquisition of SimCorp and Axioma, among other initiatives such as a 10-year partnership with Google Cloud.

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Leithner will take over the position from Theodor Weimer who has held the CEO job since 2018. The two will operate as co-CEOs until the end of the year.

Leithner has been a member of the executive board of Deutsche Börse AG since 2018, responsible for pre- & post-trading. In the role he has been chairperson for Clearstream and covered Investment Management Solutions segment with ISS STOXX and SimCorp.

Deutsche Borse said a decision on his succession will be made in due course.

“I would like to thank the supervisory board for this vote of confidence and I am delighted to take on my new role,” said Leithner. “In recent years, we have successfully developed the business model and demonstrated the potential of this company and, in particular, its employees, who work in 56 locations around the world. The challenge now is to further realise this potential across the Group to shape the markets of the future.”

Weimer took over the CEO role in 2018, moving over from his CEO position at HypoVereinsbank UniCredit Bank.

During that time, he has overseen the acquisition of SimCorp and Axioma, among other initiatives such as a 10-year partnership with Google Cloud.

Martin Jetter, chairman of the supervisory board of Deutsche Börse AG, said: “Stephan Leithner is a proven and recognised expert in the capital markets to be CEO. He knows the global exchange landscape and understands the needs of our clients. In recent years, Stephan Leithner has played a significant role in the strategic development of the company. We are convinced that Stephan Leithner has all the prerequisites to continue Deutsche Börse’s successful development.”

Looking back on Theodor Weimer’s term of office, Jetter added: “In 2018, Theodor Weimer was faced with the challenge of leading Deutsche Börse out of a period of deep uncertainty. He and his team have accomplished this challenge with brilliance. The annualised growth in net revenue and EBITDA of 13 per cent during his term speaks for itself. Today, Deutsche Börse is once again a self-confident company that enjoys a high level of public trust. I would like to thank Theodor Weimer for leading Deutsche Börse to new strength.”

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Deutsche Börse entered into a binding agreement to acquire SimCorp in an all-cash public takeover in April, with the acquisition at the time expected to complete in Q3 2023.

SimCorp has been valued at $4.3 billion as part of the transaction. The minimum acceptance level is 50% plus one share of all SimCorp shares. SimCorp’s board of directors have previously unanimously recommended to shareholders that they accept the offer.

Once completed, Deutsche Börse has confirmed it will seek to have SimCorp shares removed from official listing on Nasdaq Copenhagen.

The company also plans to combine its existing data and analytics subsidiaries Qontigo and ISS. These are set to be grouped under a newly created investment management solutions segment.
 
Read more – SimCorp expands Dimension platform with Qontigo partnership

At the time the deal was announced, Theodor Weimer, chief executive of Deutsche Börse, said: “SimCorp A/S is a perfect fit strategically and culturally. It is one of the leading global investment management software providers, serving the largest asset managers and asset owners worldwide.”

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The discussion delved into the key impacts of automation within fixed income, in particular, how it could shape the future role of traders themselves.

Among the panellists was Adrian Dacruz, vice president, strategic market development capital markets at Deutsche Börse who touched on the positive correlation between automated solutions and individuals being freed up to focus on higher value tasks, such as strategy and building client relationships – “working on managing the execution process rather than partaking in it”.

He added that, “Automation allows us to reduce the biases that exist in the investment sphere because of us as humans. Day to day behaviours, like herd behaviour, bias, and over confidence is reduced with an automated strategy. Humans act on emotion, but a system acts on what it’s told to do, which is a key factor.”

Andrew Kovacs, director of product management EMEA at Charles River Development agreed, suggesting that, “There is a need for technical expertise to evaluate the resulting trades that have been processed through this automation process”.

If everything is done manually, said Kovacs, “You have a very deep understanding of every trade you’ve actually executed as opposed to when you pass things through a machine. Looking for ways to improve or optimise the process on the trading desk requires new skills to make sure the quality of the trades remain high.”

He went on to say: “The skills that traders have today may not lend themselves particularly well to this exercise, so trade desks may have to bring in talent to complement the process.”

Other speakers included Lu Fu, managing director, head of eSales and digital transformation EMEA at Mizuho and James Bunting, global head of partnerships at Finsemble.

Interoperability is essential

The panel established that automation is a multi-faceted, dynamic problem to solve. A large portion of the discussion centred around interoperability, which the speakers agreed is vital to the future of the space.

Bunting said ensuring applications and services were working together cohesively was essential “even though they’ve never been designed to.”

For Fu, one of the most important considerations from a trading desk perspective was to ensure that users have a say in how they want their workspace to look and operate in order to increase efficiency.

“We need to upgrade the trading desk skill set in a way people feel comfortable in knowing how the systems work together now […] the majority of the time end-users struggle to see how systems interact. It’s a long journey and as Andrew pointed out a lot of time is [spent] training on the desk, and hiring more diverse types of talent on the desk to help with this,” Fu said.

Panellists also discussed what credit trade workflow could look like in the next two years, with Kovacs highlighting how the line between traders and PM roles is becoming increasingly blurred as the traders’ realm opens up.

“Years ago, traders had control over all the data related to trading activity, but now PMs have insight into a lot of information such as liquidity and pricing and they might use that to help inform their security selection process,” he noted. “Now more than ever, PMs are helping make decisions about which trades to automate” – a situation which he stated will only continue to be more prevalent as automation increases.

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The agreement specifically relates to Deutsche Börse and Clearstream’s recently co-developed new fixed income data service, Bond Liquidity Data.

Through this partnership, Overbond customers will be able to access settlement-level fixed-income transaction data derived from the 170 million transactions that Clearstream processes annually. This covers 60 domestic markets and includes 100 currencies.

With this move, Overbond AI plans to “generate a robust European fixed-income trading data set,” aimed at plugging the gap in the fixed income markets in Europe that continue to be challenges for traders.

Overbond uses six months of historical data to train its AI model. The firm said its combination with Clearstream transaction data would create “the most robust European AI training data set available for the benefit of a better informed fixed income in Europe”.

The fixed income markets have typically been heavily over the counter and manual in past years and for this reason the space lacks transparency. While Europe is on the cusp of implementing a consolidated tape for bonds, until regulators do so the industry remains reliant on data aggregation services such as these.

Vuk Magdelinic, chief executive of Overbond, said: “Complete and accurate data is a foundational tool for achieving consistent profitability in the bond markets. Incorporating Clearstream data into the training set for Overbond AI is a game-changer. It allows us to create a great tool for traders of European debt and enables them to automate up to 40% of their trades using Overbond.”

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To complete the deal, Deutsche Börse will launch an all-cash voluntary recommended public takeover offer for all SimCorp shares except for its treasury shares.

SimCorp has been valued at 3.9 billion euros ($4.3 billion) as part of the transaction that is expected to be completed by the third quarter of this year, subject to regulatory approvals and a minimum acceptance level of 50% plus one share of all SimCorp shares.

In a statement, the pair confirmed that SimCorp’s board of directors has already unanimously decided that it intends to recommend shareholders to accept the offer when published.

Once completed, Deutsche Börse has confirmed it will combine its existing data and analytics subsidiaries Qontigo and ISS, grouping them under a newly created investment management solutions segment.

The pair have an extensive existing partnership. In September 2021, SimCorp partnered with Qontigo to offer clients a portfolio optimisation, and risk management and modelling service via its buy-side front-to-back investment management system, SimCorp Dimension.

Read more – SimCorp expands Dimension platform with Qontigo partnership

“SimCorp A/S is a perfect fit strategically and culturally. It is one of the leading global investment management software providers, serving the largest asset managers and asset owners worldwide,” said Theodor Weimer, chief executive officer at Deutsche Börse in a statement.

“Through our existing partnership we have come to know and appreciate the management of SimCorp A/S and the strategic transformation they have initiated, backed by a highly competent team of skilled employees. In addition to the SimCorp A/S transaction, we have decided to merge ISS and Qontigo. Both transactions will bring long-term growth, sizeable and tangible synergies, and a significant increase of our recurring revenues.”

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As part of the agreement, Deutsche Börse will utilise Google Cloud as its preferred partner for cloud consumption for the next 10 years, alongside receiving help from the platform to enhance its cloud adoption and efficiency.

Google Cloud’s infrastructure and data and analytics capabilities will be leveraged by Deutsche Börse to develop its digital securities platform D7, innovate its digital asset market operations, and enhance its data distribution and data use cases in the cloud.

“Innovation and technological advancements are at the core of Deutsche Börse Group’s DNA,” said Theodor Weimer, chief executive of Deutsche Börse.

“To trailblaze changing market environments and not only meet but anticipate customer demand, it is key to couple our financial services expertise with the technological prowess of a true market heavyweight. Our deep market infrastructure understanding, combined with Google Cloud’s technology expertise and scale, will drive tangible success for our business and broader financial markets.” 

The development of Deutsche Börse’s digital securities services platform, D7, will be accelerated through the partnership. Google Cloud’s scalable and secure infrastructure will underpin the D7 platform, with a data analytics layer powered by Google Cloud’s BigQuery and Analytics Hub, as well as Google’s data capabilities.

According to Deutsche Börse, its digital asset business will be innovated with an institutional-grade offering, including a digital assets business platform with a cloud-native market infrastructure, combining centralised and decentralised financial infrastructure to deliver crypto spot and derivatives products. These capabilities are expected to be expanded to additional asset classes over time.

A data mesh is also planned to be deployed by the two companies for Deutsche Börse’s various data distribution and data use cases in the cloud. The new platforms will be underpinned by Google Cloud’s infrastructure alongside its data and connectivity products.

Read more: LSEG to spend £2.3 billion on Microsoft cloud partnership as part of expansive 10-year deal with tech giant

“Exchanges sit at the epicenter of the financial ecosystem and have an increasingly important role to play to drive the future of market innovation and efficiencies,” said Thomas Kurian, chief executive of Google Cloud.

“Our partnership with Deutsche Börse Group underscores the wide range of opportunities and benefits that secure and reliable cloud technology, data analytics, and AI can have for all market participants.” 

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The transaction involves a bond with a volume of €20 million, a term of two years and a coupon of 2.381%. Deutsche Bank acted as lead manager for this transaction, and Hengeler Mueller as legal advisor.

Melanie Kehr, member of the executive board of KfW Group, said: “Digitalisation is a central component of our KfWplus strategy adopted in April. It is therefore remarkable that KfW’s treasury and transaction management have implemented this pioneering electronic transaction via the D7 platform. Innovation in the area of our refinancing is important to us in order to improve efficiency and reduce operating risks and transaction costs.”

Clearstream said it plans to enhance D7 with decentral capabilities and to offer it in further jurisdictions, including Luxembourg, in line with the respective regulations and market interest.

Jens Hachmeister, head of issuer services and new digital markets at Clearstream, added: “With the digital post-trading platform D7, we offer our clients a significantly quicker and scalable solution for securities issuance. Following the successful launch of our structured products offering, we are now enhancing D7 to include the digital issuance of debt securities, such as Frankfurt, 8 December 2022 Media Release Internal commercial papers and straight bonds.”

Earlier this month, Clearstream migrated asset manager DWS’s range of ETFs ad ETCs listed across 11 exchanges globally to an international issuance and settlement structure. 

In a statement, Clearstream said: “Regardless of whether a product issuer uses local CSDs or the centralised ICSD, seamless connectivity is crucial to the user experience, and Clearstream is proud to provide this system alongside our own domestic issuance models.”

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