The Philadelphia Stock Exchange Creates Sector Index License Program For Otc Structured Products“ - Agreement Signed With Six Banks ”

The Philadelphia Stock Exchange (PHLX) announced today that it has created a Sector Index license program for use in the OTC market, notably the PHLX Housing Sector sm (HGXsm) and the PHLX/ KBW Bank Index (BKXsm). PHLX has entered into license agreements with Merrill Lynch, Morgan Stanley, UBS, ABN AMRO, Royal Bank of Canada, and Goldman Sachs.

OTC products formed on PHLX Sector Indexes are distributed by sponsor firms to private investors and institutional customers in the form of new tools to mitigate risk and participate in the direction of indexes backed by a principal guarantee. Merrill Lynch & Co., Inc. formed and distributed the first OTC PHLX structured note product based on the PHLX Housing Sector (HGX).

“PHLX has extended the value proposition of its industry recognized benchmark Sector Indexes to the OTC marketplace,” said PHLX Vice President of New Products, Daniel Carrigan. “High net worth and institutional customers of these prestigious banks can utilize innovative structured products to meet their trading and hedging needs. To date, over $250 million has been benchmarked to PHLX Sector Indexes with many deals in the pipeline, Carrigan said.