Many experts thought they had heard the death knell for most trading centres outside of Frankfurt a good 25 years ago, but the exchanges have yet to die out.

The Bremen Exchange closed in 2007, with only a research and cultural foundation now left. And the Berlin Stock Exchange is threatened with extinction by the end of 2025, as it becomes increasingly insignificant. Otherwise, the saying that the dead live longer applies. The remaining exchanges in Frankfurt, Hamburg, Hanover, Dusseldorf, Munich and Stuttgart continue to exist – some of them are certainly alive and kicking.

When we talk about Frankfurt here, we are referring to the Börse Frankfurt, rather than the electronic Xetra market. Furthermore, the category of so called regional stock exchanges, which once handled trading locally, is no longer applicable, since any bank or online broker can access any stock exchange in the country electronically.

The term „floor trading exchange“, which dates back to the days of on-the-spot trading, is also long outdated. The intensive electronic networking of exchanges, banks and brokers provides the basis for speed and innovation in trading, but also for high liquidity. In fact, for a long time, it was only the Stuttgart Stock Exchange that established a sustainable niche on a larger scale with the creation of the Euwax market segment in 1999 – and still today holds the market leadership in trading securitised derivatives today.

The situation is entirely different for the traditional stock exchanges in Hamburg, Hanover and Dusseldorf, which are housed together with the electronic trading system Quotrix (Dusseldorf) and the operating company Börsen AG (Böag) in Hamburg. Initially, this will not result in a single additional order, but it will save costs. Due to low volumes, Böag is just as reluctant as the traditional Munich exchange to publicise the turnover of the individual exchanges. Only a total Böag exchanges turnover of 67 billion euros is made public. The lion's share of this is contributed by the Lang & Schwarz Exchange (LSX), which is also operated by Böag. Lang & Schwarz Tradecenter, a private market maker that runs the business, is closely involved.

Böag Supervisory Board Chairman Thomas Ledermann describes this structure, which combines the advantages of favourably priced off-exchange direct trading with the quality of supervised exchange trading, as a „neo exchange“. The term also applies to the Munich-based Gettex Exchange, founded in 2015, which, with the involvement of market maker Baader Bank, does not charge brokerage fees or exchange fees and has a neutral trading monitoring centre to ensure investor protection.

Berlin's Tradegate Exchange is a pioneer for this type of new exchange, under the umbrella of the financial holding company Berliner Effectengesellschaft. Since 2009 it has grown to become the German trading centre with the highest turnover after Xetra, with 146 billion euros. Stuttgart, with a turnover of 90 billion euros, has been overtaken, while the Frankfurt exchange, which is not exactly bursting with ideas, has been left behind with a turnover of 25 billion euros.

Stock exchanges are trying to kill two birds with one stone –namely, the combination of good quality at a low price – in other words, a favourable fee for investors should go hand in hand with high efficiency. In recent years, decisive impulses in this direction have repeatedly come from Tradegate and Lang & Schwarz, but also from Gettex, so that the neo-exchanges can be considered the winners over the traditional trading centres. However, if the goal of quality at a lower price is to be achieved primarily through economies of scale, it is clear that the prevailing environment of cut throat competition will continue to intensify.