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Internalisierung und Marktqualität: Was bringt Xetra Best?
Credit and Capital Markets – Kredit und Kapital, Vol. 35 (2002), Iss. 4 : pp. 550–571
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Erik Theissen, Bonn
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Abstract
Internalization and Market Quality: An Assessment of Xetra Best
Deutsche Borse AG plans to introduce a system (Xetra Best) allowing brokers and broker-dealers to internalize the orders of retail customers. Further, Xetra Best supports payment for order flow arrangements. Both internalization and payment for order flow may be detrimental to market quality This paper discusses advantages and disadvantages of these arrangements. It draws on experiences made in the US. We derive policy implications that aim at a more stringent interpretation of "best execution", and at higher transparency.