Lead broker
At German stock exchanges, lead broker is the new job title for the previous stockbroker since July 2002 . The lead broker is responsible for determining exchange prices in the regulated market , unless these are determined using electronic trading systems.
General
Since the Fourth Financial Market Promotion Act of July 2002, stockbrokers are no longer legally trading brokers , but are referred to as lead brokers. Only their job title is sometimes still stock exchange or price broker, especially since laypeople are more likely to imagine the profession here . Today they are only required in floor trading because business deals are concluded on computer stock exchanges through the electronically controlled combination of buy and sell orders ( automated trading ). These stock brokers brokered the buy and sell orders of the stock exchange traders and were involved in the quotation .
Exchange traders, in turn, are the representatives of the credit institutions who hand over their customers' securities orders to the stockbrokers so that they can find a counterparty through the brokerage of the lead broker . The price broker (stockbroker) previously active in the former “official trade” has been abolished, as has the “official quotation”. The term broker has been replaced by lead broker, his public law appointment is no longer applicable.
Stock exchanges in Germany are institutions under public law ( Section 2 (1) BörsG ), so that the stockbrokers were in a public-law relationship with the stock exchange. The lead brokers, on the other hand, are self-employed or employed by a financial service provider .
Legal issues
Since July 2002, lead brokers have been admitted to trading as trading participants in accordance with Section 2 (8) of the BörsG pursuant to Section 19 of the BörsG. Your appointment and dismissal will be carried out by the exchange supervisory authority after hearing the exchange management board. As legal entities, lead brokers can choose between the legal forms of sole trader or, as managing directors of a financial services institution (AG or GmbH) as a course brokerage company. You are entitled to conduct your own transactions if there are no limit orders close to the market.
According to Section 27 BörsG, the management of a stock exchange can, upon application, entrust companies admitted to trading with the determination of stock exchange prices on this stock exchange (admission as lead broker). The applicant must have the reliability required for lead brokerage and be suitable for lead brokerage based on their professional and economic performance. The management has to admit persons who are to be authorized to trade for a lead broker in lead brokerage (lead brokers), if these persons are exchange traders and have the professional qualifications required for lead brokerage.
The management has to revoke the admission as lead broker after hearing the exchange supervisory authority, except in accordance with the provisions of the Administrative Procedure Act , if the lead broker is guilty of a gross breach of his obligations. The management can revoke the approval if the BaFin has taken measures to ensure the fulfillment of the lead broker's obligations to his creditors. In urgent cases, the management can provisionally prohibit a lead broker from participating in stock market trading with immediate effect, even without his or her hearing; Objections and actions for rescission have no suspensive effect. If there is a well-founded suspicion that one of the prerequisites did not exist or has subsequently ceased to exist, the management can order the suspension of the admission of a lead broker for a maximum of six months. BaFin must inform the management immediately if it has taken measures to ensure that the lead broker's obligations to his creditors are met.
tasks
The lead broker is the market participant who is admitted to trading in securities on a floor exchange and who arranges and concludes stock exchange transactions in the regulated market . The task of a lead broker only extends to one security, for which he has to enter all existing securities orders in an order book ( order book ) in accordance with the exchange rules .
Since July 2002, according to § 28 BörsG, the lead broker has had to work towards an orderly market development and to carry out lead brokerage neutrally. The task of a lead broker is in the detection of market-oriented exchange rates out of his supervised Skontro out. A order book is an electronic order book in which the lead broker can see all orders for a security. He has to take appropriate organizational measures to ensure compliance with his duties. When determining the price, he must act without instructions. Duties must be carried out in such a way that effective monitoring of compliance with duties is guaranteed. The lead broker must treat all orders available at the time of price determination equally when executing them, taking into account the special regulations existing on the exchange.
The stock exchange prices of most securities are determined according to the principle of most execution . It is important to determine the rate at which the highest turnover with the lowest excess on the buy ( demand excess ) or sell side ( supply excess ) is traded ( quotation ). In addition, course continuity must be maintained so that excessive course jumps (which are reported in advance with a plus / minus announcement) are avoided. Derivatives, on the other hand, which are priced over the counter by their issuer in market making , are traded according to the market maker-based system. A stock exchange price of a derivative may not be determined to be worse than the quote ( bid and ask price ) of the issuer.
The lead brokers determine the official price quotation for the securities they are responsible for in official trading on the basis of the securities orders that are listed on the stock exchange via the banks as the standard price . Since lead brokers are also allowed to carry out limited proprietary transactions in accordance with Section 36 BörsO, Section 6 BörsG regulates possible conflicts of interest when acquiring significant investments ( Section 1 Paragraph 9 KWG ; 10% or more), which, like insider trading ( front running ), are carried out by the trading surveillance office ( Section 7 BörsG) are to be monitored.
specialist
In May 2011, the lead brokers in floor trading at the Frankfurt Stock Exchange were replaced by specialists for the XETRA electronic trading system with modified tasks; lead brokers are still available at other regional exchanges .
Specialists are employees of credit institutes who monitor the execution of securities orders on the trading floor of the Frankfurt Stock Exchange. A specialist is responsible for each individual security, who records all orders in the electronic order book and initiates the price determination by the XETRA trading venue.
Individual evidence
- ↑ Alpmann Brockhaus, Fachlexikon Recht , 2005, p. 286
- ↑ BT-Drs. 14/8017 of January 18, 2002, draft of a law for the further development of the financial center Germany (Fourth Financial Market Promotion Act) , p. 63
- ↑ BT-Drucksache 14/8017 of January 18, 2002, draft of a law for the further development of the financial center Germany (Fourth Financial Market Promotion Act) , p. 72
- ↑ BT-Drucksache 14/8017 of January 18, 2002, draft of a law for the further development of the financial center Germany (Fourth Financial Market Promotion Act) , p. 84
- ↑ Wolfgang Gerke, Gerke Börsen Lexikon , 2002, p. 497
- ↑ Springer Fachmedien Wiesbaden (ed.), Compact Lexicon Economy , 2014, p. 501
- ↑ Springer Fachmedien Wiesbaden (ed.), Compact Lexicon Economy , 2014, p. 514
