Migration Swiss Auctions Of First Issues Through Eurex Repo As Of End Of February - Auctions For Registered Money-Market Claims And Swiss Federal Bonds In Two Steps - Karl Hug, SNB: "Utilization Of The Electronic Trading System Boosts Efficiency"

Eurex, the European exchange organization, is expanding its line of products and functionalities on the Eurex Repo platform: As of the end of February, auctions of first issues of Swiss registered money-market claims and Swiss federal bonds will be carried out via the electronic trading platform that Eurex has been operating for repo trading since June 1999. The company made the announcement on Wednesday. The electronic issuing procedure replaces the existing auctions by fax and phone and is directly linked to the clearing and settlement of SIS SegaInterSettle AG via SIC Swiss Interbank Clearing. Eurex is thus simplifying the auction process, and also reducing the costs, for the Swiss National Bank (SNB) and the Swiss Federal Finance Administration as well as for participants. At the same time, the process security is raised due to the use of an electronic trading system.

The migration of the auctions for first-time new issues is aligned with the issuing calendar of SNB and Swiss Federal Finance Administration, and will take place in two steps. The very successful launch for GMBF was February 27, the federal bonds will follow on March 28. The use of Eurex Repo will shorten the auction duration from two days to a matter of hours. Karl Hug, head of money-market and foreign-exchange trading at the Swiss National Bank, said: "The SNB will regularly hold auctions of registered money-market claims and bonds issued by the Swiss federal government via the Eurex Repo electronic trading system. Use of the electronic trading system increases the efficiency of the auctions and enables integrated clearing and settlement". The Swiss Federal Finance Administration and SNB are the first users to decide in favor of Eurex Repo for their auctions. The price formation process can follow the Dutch procedure - the auctioneer sets the same price for all bidders after evaluating the bids - or the U.S. procedure, in which the auctioneer assigns the bids up to a certain minimum price.