Continuous reporting and surveillance to continue
In anticipation of the introduction of a common trading system for the exchanges in Copenhagen, Stockholm, Reykjavik and Oslo, new rules for trading in fixed income instruments were formally approved on 25 October 2001 in the form of the Norex Member Rules. The new rules will come into force at the time the Saxess trading system is implemented.
The provisions for reporting trades in bonds contained in the new trading rules are on the whole unchanged from the current trading rules. This means that all transactions must be registered in the trading system no later than five minutes after the trade has been entered into. The exceptions from these rules are repo-trades (repurchase agreements) and odd-lot trades, and these categories must be reported no later than the close of the trading day. Oslo Børs will accordingly be fully able to continue its surveillance of trading in the fixed income market despite the changes in the transparency rules.
Access to correct market prices
As part of a new primary dealer agreement for 2002, the five primary dealers in Norwegian government bonds have agreed that orders shall, in some cases, be for significantly higher volumes than has so far been the case. The primary dealer agreement for 2001 required that individual orders would be for a minimum of NOK 5 million for all the bonds included in the agreement. The new agreement for 2000 to introduces differentiated order sizes, ranging from NOK 5 million for the bond with the longest maturity (S469) up to NOK 20 million for the two bond issues with the shortest maturity (S463 and S465). This relates to orders subject to automatic matching which are accordingly reported on a continuous basis.
Oslo Børs believes that the increased order volumes provided for by the primary dealer agreement will mean that players in the bond market should have sufficient access to correct market prices, even though the exemption to delay reporting trades is now extended to cover all manually reported trades. This is because increased order sizes will help ensure that the bid and offer prices registered in the trading system represent correct market prices.
