UPDATE 1-Deutsche Boerse says Xetra cheaper than Chi-X

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By Peter Starck

FRANKFURT, June 20 (Reuters) - Deutsche Boerse (DB1Gn.DE: Quote, Profile, Research) said on Friday transaction costs in its Xetra electronic order-matching system were considerably lower than on rival electronic platform Chi-X, launched just over a year ago.

"Total transaction costs on Chi-X (are) 83 percent higher than on Xetra," the German stock exchange operator said in slides prepared for the group's investor day.

"Xetra is clearly more cost-efficient," Boerse executive board member Frank Gerstenschlaeger told the webcast event.

Chi-X Europe's Chief Executive Peter Randall told Reuters in an interview on Monday that trading costs on Chi-X are one-tenth of what traditional exchanges charge, and that the clearing of transactions can be up to two-thirds cheaper.

Analysts see competition from Chi-X and another electronic trading platform, the yet-to-start Project Turquoise, backed by a number of top investment banks, as a threat to cash equities trading volume growth on established stock exchanges.

For Deutsche Boerse Group, which also runs derivatives exchanges Eurex and ISE and settlement and custody house Clearstream, Xetra accounts for less than one fifth of revenue and operating profit.

Deutsche Boerse said on Friday average daily turnover on Xetra was 7.6 billion euros ($11.8 billion) between April 1 and June 16 compared with 11.3 billion euros in the whole of the first quarter of 2008 and 10.3 billion euros in full-year 2007.