A characteristic feature of warrants is that they give the right to buy or sell a particular share at a pre-determined price. Whilst warrants often entitle the issuer to settle by cash payment, they are based on the physical delivery of the underlying shares. Warrants do not enjoy any shareholder rights. The new products that will be admitted to listing on Monday will all have the same term, but different exercise prices.
The products will take the form of European style call options. Svenska Handelsbanken is the leading player in the Swedish warrants market, and has indicated that it also wishes to be an active player in this area in the Norwegian market.
Warrants are normally issued by a financial institution and are traded in the secondary market in the same way as shares. The institution that issues a warrant is the counterparty when the warrant is exercised. In just the same way as for listed shares, information on prices and turnover for listed warrants will be provided on the Oslo Børs Internet pages at www.ose.no.
Stockholmsbörsen has listed warrants since September 1994, and almost 1,400 warrants are now listed, principally with shares listed on Stockholmsbörsen as the underlying instrument.
Oslo Børs requires that listed warrants shall have a term of two years or more in order to differentiate this product from the derivative products traded in the standardised market. Issuers will be able to list both European style warrants (warrants that can be exercised only on the expiry date) and American style warrants (warrants that can be exercised on any trading day up to and including the expiry date).
Further information on the warrants to be listed on Oslo Børs can be found in the individual prospectuses. These are available from Svenska Handelsbanken and can also be found at www.handelsbanken.no/warrants.
