STOCKHOLM, Sweden, Dec. 9, 2002 (PRIMEZONE) -- OM AB (Other OTC:OMGPF) (Stockholm:OM) and London Stock Exchange plc today announced that they are to develop and provide derivatives market services specifically tailored for equity market participants through the creation of a new international equity derivatives business, EDX London.
EDX London will combine the strength of London Stock Exchange's global equity market offering and expertise with OM's flexible technology and Stockholmsborsen's experience in equity derivatives. Initially, EDX London's business will be built around the Scandinavian equity derivatives business of Stockholmsborsen's subsidiary, OM London Exchange. EDX London will take responsibility for the operation of this business, expand the product range and seek to create new business lines.
"Developing EDX London is in line with Stockholmsborsen's strategy to enhance efficiency for our customers through strengthening the Swedish equity market by building international networks on a common technology. The cooperation with EDX London gives Stockholmsborsen opportunities to a broader membership network, products and services. This will increase liquidity in our derivatives and the overall interest in the Swedish equity market," said Kerstin Hessius, President at Stockholmsborsen.
The relationship between EDX London and Stockholmsborsen is built on the fundamentals of the Nordic derivatives exchange link concept. All members to the linked NOREX exchanges: Stockholmsborsen, Oslo Bors and Copenhagen Stock Exchange, respectively OM London Exchange can trade in a joint order book in the CLICK system.
"Creating EDX London in partnership with London Stock Exchange will strengthen the Nordic region in general and the equity derivatives operations in particular. Using a single order book, the introduction of Scandinavian equity derivatives to London Stock Exchange's customer base will give the opportunity to enhanced liquidity," said Kerstin Hessius, President at Stockholmsborsen.
The CEOs of Copenhagen Stock Exchange and Oslo Bors have expressed their full support to include EDX London in the derivatives linked network. EDX London will attract other derivatives exchanges with international ambitions to the network.
Press Meeting -- Stockholmsborsen
Today there will be a Press meeting in Swedish with Kerstin Hessius, President at Stockholmsborsen, about how the creation of EDX London will affect Stockholmsborsen. The meeting will be at Norrlandsgatan 31, December 9, at 1:30 pm.
For further information
Questions related to Stockholmsborsen:
Maria Andark, +46 (0)70 597 52 76
VP Corporate Communications Stockholmsborsen
Other questions:
London Stock John Wallace - Media +44 (0)20 7797 1222
Exchange Paul Froud - Investor Relations +44 (0)20 7797 3322
Ruth Anagnos - Investor Relations +44 (0)20 7797 3322
OM Anna Eriksson - Media +46 70 554 52 06
Jakob Hakanson - Investor Relations +46 8 405 60 42
Please see also the press release from OM AB and London Stock Exchange Plc.
Facts
EDX London in Short
EDX London will have a strong focus on equity derivatives and the creation of an efficient environment for trading those products. The exchange will target the special needs from the equity customer groups and allowing synergies between cash equity and equity derivatives.
-- Stockholmsborsen's subsidiary, OM London Exchange securities derivatives business will be sold to EDX London. Stockholmsborsen will have a 24% ownership of EDX London and London Stock Exchange 76%. -- EDX London will use the existing exchange links between Stockholmsborsen, Oslo Bors and Copenhagen Stock Exchange and use OM London Exchange's CLICK system for derivatives trading and the SECUR system for clearing. -- EDX London will build on the OM London Exchange existing derivatives business and London Stock Exchange's network of membership and trade Scandinavian derivatives products. -- EDX London will in conjunction with London Clearing House (LCH) develop an over-the-counter (OTC) equity derivatives trade confirmation and clearing service for wholesale market participants, which will provide capital and operational savings.
OM London Exchange
OM London Exchange was established 1989 as a U.K. Recognized Investment Exchange, offering trading and clearing of Swedish equity derivatives among other products and services. The exchange has served as a successful London hub of Stockholmsborsen, currently connecting 84 international members to the Swedish derivatives market. OM London Exchange has enabled Stockholmsborsen to offer its international members a local connection with the benefits of local jurisdiction, local clearing, closeness to the personnel etc.
The trading volume has continuously grown since the start, and OM London Exchange's volume currently accounts for around 25% of the Swedish derivatives market. The daily trading volumes are approximately 60 000 contracts.
The NOREX Alliance -- A Harmonized Nordic market
NOREX is an alliance between Copenhagen Stock Exchange, Iceland StockExchange, Oslo Bors and Stockholmsborsen and was established in 1998.The NOREX Alliance has a wide distribution network through theexchanges' existing members. Several of the largest global investmentbanks are members, ensuring easy access to the NOREX markets regardlessof the investors' geographical location. The alliance is based upon cooperation between independent stock exchanges and builds on thefollowing underlying principles, making the market more efficient formembers:
-- Cross membership. The participating members in the NOREX Alliance increase liquidity through cross memberships. -- Single point of liquidity. The issuing companies need only to list their securities on one NOREX exchange since it reaches the members of all the exchanges. -- Common trading system, SAXESS for equities -- Common regulatory framework. NOREX has harmonized trading rules and membership requirements as well as training and authorization of brokers.
LEC -- Linked Exchanges and Clearing
The exchange linked concept was developed by Stockholmsborsen in 1989 in connection with the establishment of OM London Exchange. The network was the world's first derivatives linkage for trading in real-time between independent exchanges and clearing houses. The cooperation is today between NOREX exchanges Stockholmsborsen, Oslo Bors and Copenhagen Stock Exchange, and OM London Exchange and NOS (Norwegian Futures & Option Clearinghouse). All the members in the linked exchanges can connect to the system and trade in joint order book in the CLICK system. Trades are settled through the local clearing organization which clears both domestic and foreign products. The exchanges and clearinghouses involved are responsible for monitoring their own particular members.
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