European Stock Exchanges Agree Market Model - Electronic Market Of Markets For European Blue Chips By November 2000

In Brussels today the CEOs of the eight European exchanges (Amsterdam, Brussels, Frankfurt, London, Madrid, Milan, Paris, Swiss Exchange) agreed on the basis for trading in European blue-chip markets: The CEOs of the Alliance exchanges signed off a common market model for the most liquid European securities with common functionality, supported by harmonised rulebooks. They also agreed on one electronic interface. The market model and interface will be implemented by November 2000. This market model is the key step in the establishment of an efficient, integrated, electronic, cross-border market for European blue-chips. The market model defines the functional standards for any Alliance Market. Each exchange will now migrate to this model. In parallel with market consultation, the exchanges are developing standards for a common interface to support the harmonisation of trading. Following a meeting in Brussels today, the heads of the eight European Exchanges said: "The market model will, for the first time, create across Europe common access for each exchange's customers to the Alliance Markets. It marks a major commitment by all eight exchanges and will require each exchange to make changes to the way their market operates. "This model is based on, and develops further, existing electronic order book trading across Europe and therefore minimises systems complexities for marketcustomers" The market model has been developed against seven core objectives: Increasing liquidity, enhancing market transparency, simplifying transaction procedures, minimising systems complexities for users, attracting new capital flows, serving investor protection and enhancing the integrity of the markets. Exchanges agreed to adopt the following key market model principles and attributes: Continuous electronic order driven trading with an opening and closing auction and optional intra-day auctions; Harmonised approach to access arrangements to each market/order book for each exchange's customers; Pre and post trade anonymity and trading supported by central counterparty arrangements or equivalent; Harmonised functionality for continuous trading e.g. order types, size, use of auctions, dealing capacities, tick sizes; Functionality to support hidden or 'iceberg' orders - facilitating block trades; Common approach to preventing market or index manipulation - with each exchange supervising trading of its own Alliance Market securities; Market access will be fair and equal regardless of the member firms geographic location.