As the Frankfurt certificates exchange Börse Frankfurt Zertifikate celebrated its 10th anniversary on September 10, SRP spoke to Florian Claus (pictured), managing director and member of the executive board at the German exchange.

What are the highlights in the development of certificates on the exchange?
Over the past 10 years, we have established Frankfurt as a major exchange for retail structured products and have managed to attract traders and retail investors. While we have expanded our market share, the entire industry went through a deep downturn at the time of the financial crisis. A lot of trust was destroyed, which the industry was only able to get back slowly. Compared to that, our renaming after the separation from our former Swiss cooperation partner from Scoach Europa into Börse Frankfurt Zertifikate was somewhat of a cakewalk. We were able to convince our clients that every good experience they had under the Scoach brand, in service, quality, performance and innovation, would stay the same.

How would you rate 'Zertifigurator' and the response from investors? How important are these tools to boost trading activity and sales volumes?
With our online-tool-kit, the so-called Zertifigurator, which is based on Bank Vontobel´s Deritrade, investors can easily select the product characteristics of their certificate, such as type, underlying or maturity. Investors can create their own personal certificate and directly compare the offers of the issuers. This means the highest possible individuality, combined with the protective mechanisms of exchange trading in Frankfurt. We expect these multi-issuer platforms to be helpful in the future with respect to self-tailored products to investors' needs, decreasing product numbers as well as gaining and retaining clients with this kind of gameification. But I don't believe we are talking about a sprint, it is more of a marathon.

How would you describe the competitive landscape around the certificates market in Germany?
In Germany, the certificates market is dominated by over the counter (OTC) trading. Less than an estimated 40% is traded through regulated, transparent markets. And we are one of the two leading stock exchanges. But we have succeeded in integrating the advantages of OTC trading in stock exchange trading. Since the end of 2015, we have been offering a direct trading service through the Frankfurt Stock Exchange, combining the security and transparency of exchange trading with the advantages of OTC trading. Investors send a request for quote to the stock exchange and directly receive an indicative price that can then be confirmed or rejected with just one click. More than 20% of executed orders in Frankfurt result from this relatively new order type, even though the buyside majority has not yet implemented the functionality.

What are the exchange's plans to keep up with investor needs? What can Börse Frankfurt Zertifikate do to promote and develop the market?
Firstly, it is important to increase the number of individuals who are interested in securities trading and investing, so we have to talk about awareness and education. That's why we launched an e-learning course for structured products via our Capital Markets Academy. Finding or creating the right product, straightforward access and easy trading are also crucial. Therefore, we want to further improve the usability of our platform. Over the last years, we have developed numerous new order types, like Trailing-Stop, Order on Event or One-Cancels-Other, to help investors. We hope that even more online brokers and banks will integrate these so-called intelligent order types into their trading systems. This also applies to our direct trading service, which will hopefully find an even broader application if more brokers offer the service.

What are the challenges to continue growing the exchange traded certificates' market?
The challenge is to compete against the low-cost OTC-offer and the high marketing spending contract for difference companies offering something that seems to be quite similar but is not a security nor comparable. Our no exchange fee initiative for small volume orders in Frankfurt is quite successful and we have experienced a high interest from traders and investors who have gotten in touch with our products and our exchange through this initiative.

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