The Montréal Exchange's Clearinghouse Earns An "AA" Rating From Standard & Poor's

Bourse de Montréal Inc. (Montréal Exchange) today announced that its wholly owned subsidiary, Canadian Derivatives Clearing Corporation (CDCC), has been assigned an "AA" rating by Standard & Poor's. Among the agency's reasons for handing out the rating were the CDCC's prudent risk management policies and procedures that protect the clearinghouse from abnormal market conditions.

The CDCC plays a key role in the activities of the Montréal Exchange by guaranteeing the contractual commitments of the parties to an exchange transaction. Among other things, it guarantees the payment by the purchaser of the amount committed to the vendor on a transaction. The CDCC is unique in North America. It is the only clearinghouse to offer clearing services on both options and futures products.

"The Canadian Derivatives Clearing Corporation manages a nominal risk of approximately 200 billion dollars and it cleared more than 14 million transactions in 2001," stated Luc Bertrand, President and Chief Executive Officer of the Montréal Exchange. "The CDCC is at the very core of our operations and plays a key strategic role in the development of the Exchange."

"Obtaining a credit rating is an important step for the CDCC and is the logical end product of a series of initiatives implemented by the CDCC since it demutualized and was integrated into the Montréal Exchange," added Michel Favreau, Senior Vice-President and Chief Clearing Officer at the Montréal Exchange. "These initiatives were undertaken for the primary purpose of positioning the CDCC in a highly competitive market which offered excellent business opportunities. The CDCC plans to promote the advantages it can offer investors involved in over-the-counter trading who face high counterparty risks. The CDCC is also considering expanding its service line and clearing, or guaranteeing, a comprehensive range of exchange traded contracts."

Earlier this year, the CDCC received another competitive boost when an amendment to the Payment Clearing and Settlement Act - Bill S-40 - received Royal Assent, allowing the CDCC to compete on an equal footing with clearinghouses in other major countries. The legislation ensures the same legal protection as other clearing corporations and provides increased certainty to members that the CDCC can meet its commitment to clear their transactions. For more information, please refer to the news release issued by the Montréal Exchange on June 7, 2002.