MTS SpA And PARIS BOURSE SBF SA To Establish MTS France With CLEARNET SBF SA As Its Clearing House.

MTS SpA and Paris Bourse SBF SA announce a joint agreement for the establishment of MTS France, a new company which will organise and manage the screen-based secondary market for French government debt. CLEARNET SA, a fully-owned subsidiary of PARISBOURSE SBF SA will be the clearing house for MTS France. In addition, CLEARNET SA and MTS SpA will co-operate in the development of a central counterpary for trades in Italian government securities. Two letters of intent to that effect were signed by Jean-François Théodore, Chairman and CEO of PARISBOURSE SBF SA and Gianluca Garbi, Managing Director of MTS SpA. The first letter of intent provides for the establishment of MTS France with both PARISBOURSE SBF SA and MTS SpA as shareholders. The company's capital will be opened to Spécialistes en Valeurs du Trésor (SVT) who will also provide liquidity to the MTS France trading system through continuous two-way quotes. MTS France will use the "Telematico" trading platform which is already being used by MTS Italy, MTS Amsterdam and EuroMTS. CLEARNETSBFSA will be used by MTS France as a central counterparty to all trades on the new system. MTS SpA will also offer CLEARNET SBF SA central clearing facilities to EuroMTS and other domestic MTS systems. The creation of MTS France responds to the needs of French public debt issuers and of financial institutions for an efficient wholesale electronic trading platform in order react to the rapid developments in electronic bond trading. MTS France will benefit from MTS's ten years of expertise in electronic bond trading in Italy as well as on a European scale with the successful creation last year of EuroMTS for trading European benchmarks. MTS France thus becomes the fourth link of a network that already comprises MTS Italy, MTS Amsterdam and EuroMTS. Additional domestic markets are set to be launched in the near future. Under the second letter of intent, CLEARNET SBF SA, which clears trades on regulated as well as OTC markets, and MTS SpA will co-operate in the provision of central counterparty facilities for Italian government bond trades, in compliance with Bank of Italy's regulations. CLEARNET was the first clearing house in Europe to offer netting and centralised clearing facilities for OTC business, as early as 1998. This provides significant reductions in terms of the number of open positions tying up valuable credit lines and operational costs, through the single counterparty and settlement of net positions. "Bond trading is undergoing the electronic revolution. By combining MTS's performance and expertise in electronic bond trading with CLEARNET's market security, today's agreements offer the ingredients for more efficient, transparent and cost effective bond trading " declared Jean-François Théodore. "These agreements demonstrate the ability of two innovative market organisations to combine their expertise for the benefit of the European financial community" stated Giorgio Basevi, Chairman of MTS SpA.