Tallinn Stock Exchange     TRADING             28.07.2005



IMPROVED DEBT SECURITIES TRADING MODEL TO BE LAUNCHED  IN

                     RIGA AND TALLINN



Starting with August 1, 2005, the trading system in  Riga

and Tallinn stock exchanges will be complemented by a new

market  segment for debt securities. The orders  will  be

matched  automatically according  to  yield  to  maturity

specified in the buy or sell orders. The model is already

operational at the Vilnius Stock Exchange.



The  new  model will facilitate the order input  for  the

brokers: to trade with debt securities, they will have to

indicate yield to maturity in buy or sell orders, and the

orders  will be automatched according to the  yields.  As

previously, the brokers will have to specify the  nominal

value  of securities in the orders. The new model may  be

applied  for  trading of short-term debt  securities  and

fixed rate long-term debt securities.



The  new  model will operate alongside with the  existing

one, where the orders are not matched automatically,  and

the  price  has  to be quoted in percentage  of  nominal,

including  accrued income (the so-called  “dirty  price).

The  trading  of debt securities with variable  rate  and

contract deals with non-standard settlement date will  be

possible only in the previous model.



The  launch of the new market segment on August  1,  2005

will involve the changes of debt securities trading codes

in  the Baltic markets. The debt securities traded in the

automatch  segment will have a code built of 11  symbols,

for  example,  SBMB047507A,  where  SBM  stands  for  the

issuer, namely, AS SBM Pank; B – long-term debt security;

0475 – fixed income security with coupon rate 4.75%; 07 –

maturity  in 2007. The last, 11th symbol, will enable  to

descry  debt  securities, which data will  coincide.  The

trading  code of debt securities not traded in  automatch

segment  will  be built of 12 symbols – the  11th  symbol

will  be  followed  by letter “B” (stands  for  “bulletin

board” principle) – for example, SBMB047507AB.





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