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London Stock Exchange To Explore Ways Of Reducing Failed Cross-Border Trades

Date 23/07/2002

The London Stock Exchange today announced that it is looking at ways to reduce the number of failed cross-border trades, which are estimated to cost the global securities industry around £2.2 billion every year.

Around £460 million of this loss can be linked directly to problems identifying the securities involved in cross-border transactions. These include existing systems being unable to provide codes quickly enough for shortened settlement times, as well as difficulties providing codes for global securities or those with multiple listings. Drawing on many years of experience as the UK's National Numbering Agency, the Exchange is in discussions with data users and vendors to develop a solution that would be suitable for all global markets. If an appropriate solution can be found, it will be introduced as one of the Exchange's new range of products.

One proposal being considered is to change the SEDOL coding structure from a seven digit numeric to a seven digit alphanumeric code to create a hugely increased number of codes.

David Lester, the Exchange's Chief Information Officer, said: "With an ever-increasing number of financial instruments, alphanumeric SEDOLs would allow for a much greater number of codes.

"More importantly, they could provide a solution to one of the major inefficiencies facing our market place - the lack of a globally recognised unique identifier for cross-border trades."