Designated Sponsor- Frankfurt Stock Exchange

Shares in one of the selection indices of Deutsche Börse must be continuously tradable. The underlying criterion is the liquidity of the security. Designated Sponsors secure higher liquidity by quoting binding prices for buying and selling the shares. The probability that placed orders are executed increases considerably. Based on the principle ”liquidity attracts liquidity“, actively supported shares are more popular with investors.

Designated Sponsor Definition: Banks or specialized traders who bridge temporary imbalances between supply and demand in Xetra electronic stock trading, thereby improving a stock’s liquidity. They do so by quoting bid and ask limits (market making), either on their own initiative, on request of a market participant (quote reuest) or in auctions. The fact that these quotes are shown in the order books gives investors greater security for limiting their orders. Depending on the market segment involved, a stock may have one or more designated sponsors, or none at all. On arrangement with issuers, designated sponsors with the necessary capabilities may also provide research or investor relations services.

The specialist trading platform of which the Frankfurt Stock Exchange Open Market utilizes makes it one of the most competitive exchanges in the world for listing upon.

If you are looking to list on the Frankfurt Stock Exchange, contact info@fselistings.com

Here is the designated sponsors guide: http://deutsche-boerse.com/dbag/dispatch/en/binary/gdb_content_pool/imported_files/public_files/10_downloads/31_trading_member/30_Market_Making/20_Stocks/10_Designated_Sponsors/DS_Formulare/Designated_Sponsor_Guide.pdf

Share The Story

About the author