Debt Securities Trading Model To Be Harmonized In The Baltic Exchanges

Starting with August 1, 2005, the Riga and Tallinn stock exchanges will complement trading in debt securities by a new market segment. The model is already operational at the Vilnius Stock Exchange. The launch of the automatch submarket for debt securities in the Riga and Tallinn stock exchanges is another step in harmonization of the cash markets in the Baltics.

The automatch model facilitates the order input for the brokers: to trade with debt securities, they have to indicate yield to maturity in buy or sell orders, and the orders are automatched according to the yields. The new model may be applied for trading of short-term debt securities and fixed rate long-term debt securities.

The launch of the new market segment in the Riga and Tallinn stock exchanges on August 1, 2005 will involve changes of the debt securities trading codes in the Baltic markets. The debt securities traded in the automatch segment will have a code built of 11 symbols, for example, LTGB079006A, where LTG stands for the issuer, namely, Lithuanian Government debt security; B – long-term debt security; 0790 – fixed income security with coupon rate 7.90%; 06 – maturity in 2006; A – securities series.