NOREX: Letter Of Intention Signed - Joint Press Release From The Copenhagen Stock Exchange, The OM Stockholm Exchange And The Oslo Stock Exchange.

The Copenhagen Stock Exchange, the OM Stockholm Exchange and the Oslo Stock Exchange have today signed a letter of intent for the Oslo Stock Exchange to participate in the NOREX stock exchange alliance. The Norex alliance represents a co-operation on equal terms between independent stock exchanges to form a common market place for financial instruments. This market place is to be one of the world´s most efficient securities markets. The purpose of the alliance is to make use of synergy benefits through the increased distribution and improved cost efficiency which economies of scale can offer. The alliance will build on proactive and binding co-operation to attract and retain investors, issuers and members by satisfying their needs for simplicity, accessibility, cost efficiency and quality. The alliance aims to ensure competitive market quality with a focus on product development, market surveillance, regulation and efficiency for all aspects of the securities market. The co-operation is based on the principle of concentrating market liquidity. The goal is that each security need only be listed on one of the stock exchanges in the alliance ("single point of liquidity") in order to enjoy a better price performance in the market. This also serves to satisfy investors´ need for liquidity whilst removing the need for multiple listings on stock exchanges within the alliance. In order to implement the principle of concentrating liquidity, the parties to the alliance will offer: cross membership; a common regulatory framework for listing, membership and trading ; harmonisation of the price structure for listing, membership and trading; a shared industrial classification/listing structure for quoted companies. The alliance partners intend to use the same trading system in order to make full use of the distribution advantages that are offered by the extension of each of the exchanges´ network of investors, issuers and members. The SAXESS trading system developed by OM Technology will be used from the start of the co-operation. The parties to the alliance will work to develop cost-effective settlement systems which will ensure efficient transaction terms across national boundaries. The three exchanges will continue to work together to find competitive solutions in co-operation with the Nordic securities depositories. The Norex alliance is an equal co-operation between independent exchanges. The company Nordic Exchanges AS will represent the apparatus for taking advantage of the synergies created and for ensuring the implementation of the alliance. The three parties will have equal shares in the company, and it will be staffed and allocated responsibilities so that it becomes a driving force in the work of further developing the alliance. The tasks which are expected to the delegated to the company include joint marketing, the development of external relationships, product development, training, the authorisation of members, harmonisation of regulations etc. Investors and members will find that they are dealing with one market place instead of three exchanges. Access to the markets will be simplified by shared technology and regulation. International expansion of membership of the three exchanges will create a larger network of Nordic and international investors. This will mean that the need for Nordic companies to seek listings of their shares outside the Nordic region will be reduced since Norex will create a joint shop window to the world´s most important investor groups. The move to virtual trade in securities has made it possible for smaller players to become world leaders in terms of distribution, price performance and cost efficiency. By creating the Norex alliance, the Scandinavian exchanges have taken a step towards their vision of becoming one of the world´s most efficient and attractive market places, comments Tor G. Birkeland, acting President and Chief Executive of the Oslo Stock exchange. By expanding the investor network through a greater number of members we can offer the whole world access to Nordic shares through the same channel. The alliance will clearly lead to increased trading activity and better liquidity, comments Hans-Ole Jochumsen, Chief Executive of the Copenhagen Stock Exchange. By jointly developing new technological and market opportunities we are creating the basis to better cater for our customers´ needs, comments Carl Johan Högbom, Chief executive of the OM Stockholm Exchange. The alliance partners expect to complete negotiations on the final form of agreement during the course of the first quarter of 2000. The process of implementing the alliance will then start, including the incorporation of Nordic Exchanges AS and the initiation of other activities. It is expected that the Oslo Stock Exchange will start to use the joint trading system SAXESS before the end of the second half of 2001. The co-operation announced today does not represent the final target for the Nordic exchanges´ efforts to strengthen their position in the global stock exchange competition. The current co-operation may therefore be extended to include further exchanges, as well as alliances with other exchanges or players, to the extent that this would increase the participating exchanges´ ability to satisfy the needs of the alliance´s customers. Negotiations are already under way with the three Baltic states. Iceland is also considering whether to start negotiations for possible membership of the Norex alliance.