Changed tick sizes for shares and ETFs
With the deployment of MIFID II regulations new tick sizes have been introduced. To be compliant all open orders on Xetra and Frankfurt floor trading had to be deleted.
The directive also affects the tick sizes of shares and ETPs. Tick sizes describe the smallest possible change of prize for a security.
The tick size is now defined for shares and DRs and selected ETFs based on the combination of the average daily number of transactions for the instrument for the past year which refers to a specific "liquidity band" and the price level (the price of the order) which results in a minimum price increment.
For the two markets Xetra and Frankfurt floor trading all tick sizes were adjusted to the new regulation to be MIFI compliant. Deutsche Börse decided to delete all open orders in the order books of both venues.
Regarding the reason behind the deletion: the new tick size regime for shares and depository receipts, as well as for ETFs, ETCs and ETNs, implies that the tick sizes are modified for most listed instruments on Xetra and Boerse Frankfurt. Because a significant portion of the orders remaining in the order books on 2nd December would not have been compliant with the new tick size regime, it was decided to delete all orders after closing on 29th December 2017 and to provide a clean slate to the market. Trading members such as your depot bank or broker were informed end of November and beginning of December with the task to inform their customers as well.
- Further details about MIFID II can be found at deutsche-boerse.com.
- List of new tick sizes depending on prize and liquidity ranges
8 Januar 2018, © Deutsche Börse AG