Deutsche Börse and SWX to launch joint warrants and certificates exchange

Deutsche Börse and the SWX Group are to open a joint warrants and certificates exchange. Although plans are in the initial stages, both parties have signed a letter of intent and the exchange is provisionally planned to begin operations at the beginning of next year.

Under the agreement, Deutsche Börse and SWX Group will merge their own warrants and certificates trading businesses into a single co-owned company based in Zurich. But separate bourses will continue to operate from Bremen and Zurich under the joint umbrella, which in turn will be regulated by the German and Swiss authorities respectively. Although they will initially operate on separate platforms, plans are afoot to bring in a single electronic platform by 2009.

According to a spokesman for SWX Group, the move is designed to increase market share of the two exchanges by offering cross-border access to the German and Swiss securitised derivatives markets at reduced costs. “Members will be able to participate in both exchanges and this is a big advantage for issuers, which won’t have to deal with the extra costs involved when they deal across the border,” he said.

The two companies have already collaborated extensively on Eurex, the European derivatives exchange in which both companies have a 50-50 share.