NYSE EURONEXT ADDS PRICE DISCOVERY, TRANSPARENCY FEATURES TO WARRANTS AND CERTIFICATES MARKET

Posted March 25, 2009

NEW YORK – NYSE Euronext has added new features to its European Warrants and Certificates market to improve its transparency and efficiency. Designed in co-operation with the warrants and certificates market participants, the new features integrate the price discovery mechanism specific to this market segment. These features offer greater transparency ensuring investors always trade at a price in line with market conditions.

One of the key new features is that no transaction may occur outside the price boundaries set by the issuer. Before order execution, a mechanism ensures issuer prices are always updated to reflect market conditions, taking into consideration the last changes in the underlying asset price. Issuers provide permanent liquidity for these instruments by continuously proposing a bid and an offer for minimum size.

“These positive changes, recently introduced into the Warrants and Certificates market, will increase the transparency of the products and improve price formation,” says Jean-Luc Jancel, Spokesman, Association Française des Produits Dérivés de Bourse (French Association of Securitized Listed Derivatives). “They are completely aligned with the Code of Good Practice that governs the members of the Association of Derivatives Issuers, and they also protect investors from the risks related to trading.”

The price discovery and transparency features will stimulate growth in the warrants and certificates trading, according to NYSE Euronext, building on an expansion of the market in which the number of listed products rose by 153 percent since January 2005, and the number of trades increased by 112 percent percent since January 2005.

“The new features of our European Warrants and Certificates market represent real assets for investors as they ensure that all transactions are executed within a price range that is permanently secured by the issuer himself,” says Alicia Suminski, Product Manager for Warrants and Certificates, NYSE Euronext. “The new features reinforce the key role played by issuers as experts on their listed products.”

Euronext regulators have approved a preliminary pilot phase for the new features, under which the current and the new features will coexist on the trading platform.