Tradepoint Financial Networks plc (Tradepoint) - London Clearing House - Euroclear Platforms provide basis for first integrated Pan-European Exchange

Tradepoint Financial Networks plc ("Tradepoint") - which plans to launch its pan-European equities exchange later in the year - announced today that it has reached agreement with London Clearing House (LCH) to clear, and the Euroclear Operations Centre to settle, trades conducted on its pan-European exchange. The new exchange will: be the first European equities exchange to offer its members straight-through, pan-European clearing and settlement; offer significant cost advantages, improved trading hours and anonymity to members; facilitate pan-European securities trading under a common rule book and market structure with an electronic anonymous order book; initially trade the top 300-400 European equities, by market capitalisation; and have the full support of the Consortium of leading international brokerage and financial services firms, which has a 54% holding in Tradepoint, in developing a European equities exchange which should be the principal marketplace - by trading volume and central price formation - for the trading of the Eurotop 300 stocks, by the fourth quarter of 2001. As a UK Recognised Investment Exchange, Tradepoint has already been designated as a Regulated Market throughout Europe under the Investment Services Directive. Commenting on the announcement Richard Kilsby, Chief Executive of Tradepoint, said: "This integrated exchange model, coupled with the support of leading international brokerage and financial services firms, who have a significant European equities presence, places Tradepoint in a very strong position to realise its goal of establishing the first truly pan-European equities exchange. "The combination of Tradepoint, London Clearing House and the Euroclear System will allow us to create a market that will not only simplify the process of European equity trading and settlement, but will also offer significant cost advantages to our members and reduce the risks of cross border trading." In providing a straight-through pan-European equity trading facility - which will remove many of the complexities, costs and risks normally associated with cross border pan-European trading - Tradepoint has reached agreements with London Clearing House (LCH) to clear and the Euroclear Operations Centre to settle trades on Tradepoint. This approach is based on the model that Tradepoint uses in the UK and will allow Tradepoint's members - which currently number over 100 - to execute, clear and settle trades using a single, straight-through processing system. Acting as central counterparty for all order book transactions on Tradepoint's European exchange, LCH will become principal to each transaction between Tradepoint clearing members, protecting them against counter-party credit risk and providing trade anonymity. LCH will also provide facilities to Tradepoint clearing members for trade aggregation and netting, reducing the number of settlements required and therefore the cost of settlement. Advantages include: potential for reduced settlement costs through netting; financially guaranteed settlement; a totally anonymous market; and centrally managed counter-party credit risk. Settlement of pan-European equity transactions conducted on Tradepoint will follow the industry standard of trade date +3 in the Euroclear System. Netted instructions will be settled on a book-entry basis in the Euroclear System, thereby reducing costs significantly. Advantages include: a single entry point from trade to cross-border settlement; the ability to use a centralised pool of collateral for cross-collateralisation purposes; settlement-integrated margin call management and securities delivery; and the possibility of leveraging Euroclear's pan-European equity settlement capabilities. David Hardy, Chief Executive of London Clearing House, said: "We are delighted to be commencing our pan-European central counterparty service for Tradepoint's integrated pan-European exchange. This model not only reduces the risks associated with trading pan-European equities, it also offers the opportunity to reduce the cost of trading by netting trades in individual stocks prior to settlement." Ignace R. Combes, Managing Director, Euroclear Operations Centre, went on to say: "This arrangement reinforces our emerging position as the premier provider of cross-border securities services for equities. We are pleased that Tradepoint views the Euroclear System as a natural choice to achieve its goal of establishing a competitive, straight-through, trade-to-settlement exchange." The LCH clearing and Euroclear settlement platforms will form the backbone of the European trading platform to be launched by Tradepoint. The trading platform will be based on the Company's existing electronic order book. Trading will take place between 07:00 and 17:30 UK time with orders being posted anonymously in the order book and being automatically matched in price/time priority. Access to the system will be available to Tradepoint members via their Trader Workstation software on a stand-alone PC or as part of a fully integrated in-house trading system. As a UK Recognised Investment Exchange, Tradepoint has already been designated as a Regulated Market throughout Europe under the Investment Services Directive. At the time of the launch, anticipated to be by the fourth quarter of 2000 Tradepoint will offer trading in the top 300-400 European equities, by market capitalisation. The initial securities coverage will be drawn from the major European indices including, the FTSE Eurotop 300, the Dow Jones STOXX 50 and the MSCI Euro international indices. Additional stocks will be added over time to meet market demand. In addition trade reporting will be supported in almost all European listed stocks. The Consortium of leading international brokerage and financial services firms, which has a 54% interest in Tradepoint, has given its full commitment to the success of the new European equities exchange. Underlining its commitment to the success of Tradepoint's European expansion plans, the Consortium today re-emphasised its strategic objective of creating a consolidated exchange that implements an integrated trading, clearing and settlement infrastructure and operates an attractive, well-regulated, neutral, efficient and high quality market. The Consortium expects such a consolidated exchange to be operational in the second half of this year and that it should be the principal marketplace - by trading volume and central price formation - for the trading of the Eurotop 300 stocks, by the fourth quarter of 2001. Duncan Paterson, Chief Operating Officer of the Consortium, said "We are seeking to develop Tradepoint - for the benefit of all market participants - as the core of a consolidated European equity exchange marketplace. Today's announcement is further evidence that Tradepoint will achieve the Consortium's strategic objective. "By partnering with LCH and Euroclear we believe that Tradepoint will be able to offer the financial community efficient, liquid and low cost trading and settlement. We believe that it is these characteristics that will enable Tradepoint's European equity trading platform to be the basis of the principal marketplace in Europe by the end of 2001."