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Frequently Asked Questions

Frequently Asked Questions (FAQ)

Request for Quotes FAQ:

 

How to access the RFQ trading protocol?

The RFQ trading protocol can be accessed via FIX Interface or Web GUI. Please find further going information regarding FIX Specification here  and Web Trading here.

What is the webpage for the webtrading?

Find below the links forwarding to the specific webtrading webpages:

Internet

Leased Line

To succesfully access these webpages, a valid client certificate for Eurex Bonds webtrading must be installed in the web browser.

How to access the FIX API for the Request for Quote Trading Protocol?

FIX API connectivity Eurex Bonds RFQ is performed via Leased Line or via internet with TLS encryption. In order to get access for a technical user, a regular Eurex Bonds trading user must already exist. Contact clearingdata@deutsche-boerse.com to request a FixCompld.

See the FIX Specification for details.

What is the difference between the Xetra Webtrading and the Eurex Bonds Webtrading? Do they use the same backend?

The webtrading application at trade. / trade-simu.eurex-bonds.com is connected to the same Xetra (Eurex Bonds) backend and all trades are settled straight-through Eurex Clearing’s CCP.

The new Trading GUI has the following capabilities:

  • Orderbook trading (same as before)
  • Pre-Arranged-Trading / OTC Trade Entry (same as before)
  • Trading protocol RFQ/RFO (not supported by the Xetra webtrading).

It is also more lightweight than the old webtrading as it does not require Citrix but runs immediately within the web-browser and it makes logging in each morning much easier, because it features a one-step login process compared to the three-step-login used previously without compromising any security.

What are the requirements for using the RFQ trading protocol?

Every existing Eurex Bonds trader can immediately use the RFQ trading protocol. It can be integrated into existing trading via FIX API or by using the gateway of ION or ICUBIC. It can also be accessed via a webtrading application.

Who is able to initiate RFQs? Who is able to receive RFQs?

In the Eurex Bonds trading protocol, the classical roles “Client” and “Dealer” do not exist. Everybody is able to initiate Requests for Quote and to receive (and respond) to them.

 
 
 

Member Readiness FAQ:

 

What is the procedure for applying for an Eurex Bonds membership?

Eurex Bonds members need to have a Eurex Clearing® membership (as NCM, DCM, or GCM) under the same legal entity as well as a connection to the Eurex Bonds platform (Xetra®, but not necessarily Xetra® membership) and they need to fulfill the application requirements.

Generally, registration of members of Eurex Bonds GmbH takes place according to the criteria defined in the Eurex Bonds rules and regulations.
Legally the registration process can be simplified since Eurex Bonds is a privately owned company under German law and not an exchange. Therefore public registration as a stock exchange member is not necessary.

What are the rights and obligations of Market Makers and Market Participants?

Market Making on Eurex Bonds is on voluntary basis, all market participants are authorized to act as Market Makers.

As Eurex Bonds is Eligible Platform in Austria, Denmark, Finland and the Netherlands, Primary Dealers fulfill their quoting obligations towards the respective issuers on our platform.
The fee model differentiates between the aggressor of a trade and non-aggressor. The liquidity provider pays less or even receives a credit.
Eurex Bonds measures the quotation activities of the market participants in the selected products and informs them electronically about their own performance, if requested.

Can we use our existing Eurex member ID to view the future leg confirmation of a basis trade in Eurex®?

Yes, however it is necessary to set up a separate Eurex® user ID in order to enter the future leg in Eurex®. E.g., the Eurex® user ID for the future leg entry is XXXFRTRD999.

Confirmation messages for transactions carried out under this user ID will be visible for all traders of the same subgroup. Trade Confirmations for that user ID are available to all traders with trader IDs ranging from XXXFRTRD001 to XXXFRTRD998, but not with trader ID XXXFRBRO001.

How will new users be set up (traders or assistants)? Which rights will they have (in contrast to Xetra®)?

Eurex Bonds members (based on a separate member ID) will be enabled to trade Eurex Bonds products. This is in analogy to the authorization concept used in Xetra®. Eurex Bonds generates the member supervisor (e.g. XXXEBMBRSPV), who will consequently set up the required traders. Users who are supposed to trade in Eurex Bonds have to be specified to Eurex Bonds and will then be allowed to trade.
Although this concept is similar to the concept in Xetra®, user rights set up for Xetra® users (e.g. XXXFRLTR001) do not apply in the Eurex Bonds context, but have to be set up separately for Eurex Bonds users (e.g. XXXEBLTR001).

To add or delete users please find the user reference data sheet in the Eurex Bonds Members Only section.

Additionally, it is possible to administer users via the Xetra® member section.

Is the trade confirmation of the future leg of a basis trade sent to the existing member ID in Eurex® (e.g. XXXFR)?

Trade Confirmations for the basis trade in Eurex Bonds are sent to the Eurex Bonds member ID (e.g. XXXEB).
This trade is then further processed by generating the future leg in Eurex under the Eurex member ID (e.g. XXXFR) and a trade in the cash bond leg under the Eurex Bonds member ID (e.g. XXXEB). Therefore, trade confirmations for these two transactions are sent to the member set up in the corresponding systems.

 
 
 

Functional FAQ:

 

What are Eurex Bonds special products and how are they segmented?

Basis products

Basis products represent a combination of immediately priced cash bond and future contracts
Cash bond leg:

  1. Bonds issued by the German Federal Government or the Italian Government
  2. Fixed-coupon securities
  3. Deliverable against BUND, BOBL, SCHATZ or in case of italian basis instruments FBTP futures contract
  4. Maturity of 1.75 to 10.5 years

Future legs

Future contracts currently listed on Eurex® (short-term government bonds [FGBS], medium-term government bonds [FGBM], long-term government bonds [FGBL], and long-term Italian government bonds [FBTP])

Break Even products

Break-even instruments are a combination of trades between an inflation-linked bond and a nominal bond. The purchase of break-even instruments means the purchase of an inflation-linked bond and the simultaneous sale of a nominal bond. Thereby, the volume of the break-even transaction corresponds to the trading volume of the inflation-linked bond.

Currently tradable are break-even instruments for German and French inflation linked bonds.

For more information about our special products please have a look to our special products page.

Are there differences in settlement-periods between simulation and production environments?

Yes, since the technical structure of the Xetra simulation environment deviates from the production, there are differences regarding the settlement dates of trades. The quickguide below may picture the characteristics:

Settlement-date in production: Trade-date + 2 working-days (T+2), where calendar-day is the current Business-day.

Settlement-date in simulation: In the simulation environment, there are gaps between calendar-days and the actual business-days in the system, due to various technical reasons. When calculating the settlement-day in the simulation environment, only distinct business days are counted according to the Simulation-Calendar.

Examples:

Example 1

Trade-day:

20.06.2017

Business-day (T)

21.06.2017

Next different business-day (T+1)

22.06.2017

Next different business-day (T+2)

28.06.2017

Example 2

Trade-day:

24.06.2017

Business-day (T)

28.06.2017

Next different business-day (T+1)

29.06.2017

Next different business-day (T+2)

05.07.2017


The current Simulation-Calendar is always provided here: http://www.xetra.com/xetra-en/newsroom/trading-calendar in the Excel format. Please note that for the Eurex Bonds Simulation environment, the “Simulation Calendar” calendar applies. Only for the Eurex Bonds Advanced Simulation, the “Advanced Simulation Calendar” applies.

Are trade cancellations possible in Eurex Bonds?

Eurex Bonds provides a cancellation functionality according our rules and regulations, i.e. market supervision is able to cancel mistrades of cash bonds or cancel the cash bond leg of basis trades. The future leg has to be cancelled by market supervision by entering a counter trade in Eurex. As in Xetra, members will not be able to cancel mistrades on their own.

What is the default settlement period for products on Eurex Bonds?

The settlement period is defined in the corresponding static data of the instrument. Normally, the settlement of the cash bond transactions will be carried out on the second business day following the day of the trade (T + 2) - delivery vs. payment.

For pre-arranged trades entered via the Eurex Bonds pre-arranged trade facility, the settlement period can be set as required between 1 and 89 days.

Calculation of the settlement date is based on the "Eurex Bonds Trading Calendar".

What is the clearing and settlement procedure for Eurex Bonds products?

For the settlement of cash bond transactions in Eurex Bonds each trade will be routed to the settlement organization the market participant has chosen.

  • Generally, all cash instruments except Danish products can be settled via Clearstream Banking Luxembourg and Euroclear.
  • German bonds can also be settled via Clearstream Banking Frankfurt.
  • Danish products are settled via home market settlement in VP Securities A/S.

Above settlement procedure also applies to transactions in cash bonds resulting from basis trades. Future legs resulting from basis trades are exclusively cleared by Eurex Clearing AG.

What are the key differences between the new market model of Eurex Bonds and the market model of bonds traded in Xetra®?

In Xetra®, bonds are traded in the specialist trading model.

In contrast, Eurex Bonds market model has the following characteristics:

  • Continuous trading model without any auctions.
  • Open quote book.
  • Additional instruments for basis and break even trading.
  • Higher round lot sizes, no odd lot sizes.
  • Support of multiple settlement locations.
  • All cash trades are cleared via CCP.
  • Only orders (unlimited or limit orders) entered as hit orders (execution restriction FOK or IOC) are accepted.
  • Only open to members admitted by the Eurex Bonds GmbH.

Is it possible that different bonds have different Tick Sizes? What is the Tick Size for Basis Instruments?

The Tick Size for all products is generally 0.001.

What is the transaction flow for orders or quotes entered for Basis products?

Transaction flow description

For a Eurex Bond member ABCEB, who is Eurex member under the member code ABCFR, any basis trade executed on Eurex Bonds will be immediately confirmed to ABCEB via execution and trade confirmation. That trade will be further processed, generating a basis trade confirmation routed to the mapping tool.

OTC-Trade Entry for cash leg / cash bonds price calculated using the last traded futures price, price of basis and conversion factor. The respective trade confirmation is sent to the Eurex Bonds member.

Login to Eurex using dedicated member ID and password to be provided by the member.

Calculation of number of futures contracts based on daily-calculated hedge ratios for each basis product. Entry of futures leg into Eurex through Eurex Basis Trade Facility.

Futures leg confirmation messages will be visible for all traders assigned to the same subgroup.

Example: The Eurex user ID for the futures leg entry is ABCFRTRD999. The respective trade confirmation is visible for all traders with user Ids ABCFRTRD001 to ABCFRTRD998, but will for example not be visible to ABCFRBRO001.

It is strongly recommended that Eurex User Ids are - although to be assigned to one specific person - newly defined and uniquely used for the above described purpose. To avoid abuse to the highest possible extent, the resource access level settings shall be restricted to the functions needed in the described processes. Eurex Bonds will provide appropriate settings of resource access levels.

How is the mapping of the various fields (e.g. Text, Member Internal Order Number...) concerning a basis trade performed on Xetra and Eurex?

The different fields are mapped as displayed in the following slide

Basis Trade Process Flow - mapping of Text Field contents

The Eurex Bonds platform provides two user defined text fields within the basis order entry.

The contents of these text fields will be copied into the next fields for cash leg and futures leg as described below:

  • Default entries may be specified for each Eurex Bonds User ID within the profile settings on the Trading Frontend. Any such default text has to be at most 12 digits long, otherwise it will be right truncated when copied to the respective Eurex text field.
  • The additionally available field "Ord Num" on the Futures leg will contain "EB" plus the Eurex Bonds transaction Number of the Basis Trade excution.
  • In addition tho the mapping of text fields, the time stamp of the trade confirmation in the basis will be copied into the cash leg's field "OTC Trade Time".