Helsinki Exchanges and the German-Swiss derivatives exchange Eurex have agreed upon large-scale co-operation in April 1999. Eurex extends its Trading System to Nordic Countries starting from Helsinki, Finland. The objective of the agreement is to begin trading in Eurex´s System with the central derivative products of Helsinki Exchanges in October 1999.
The planned co-operation makes it accessible for all the members of Eurex to trade with the principal derivative instruments of Helsinki Exchanges. Correspondingly, the members of Helsinki Exchanges will be able to trade with the variety of Eurex´s listed derivative products.
"The objective now attained has actually been in sight in various ways from the moment that development of the book entry system started at the beginning of the decade," states Helsinki Exchanges CEO Juhani Erma. The Deputy CEO of Eurex Zürich sees the co-operation as a step in promoting Eurex´s target of connecting the international derivatives markets. He says: "Exchanges have to provide their market participants with easy and cost efficient access to as many products as possible with highest liquidity."
On account of the agreement the companies involved introduced the first Nordic Stock Index, which was connected to the Dow Jones STOXX (sm) index family forming the first commercial index common to the Nordic region. Dow Jones STOXX (sm) Nordic 30 Index comprises of the 30 largest regional market-sector leaders in the Nordic region, which is considered as one region for selection of components for this index.
The weights of the companies will be examined four times a year and the maximum weight of any stock will be limited to 10 per cent of the total market capitalisation of the index. This capitalisation-weighted index has been created to reflect efficiently the market sector leaders in the Nordic region. The index calculation has already started in May 1999.
In order to trade in Eurex the Finnish derivative brokers have to be members of Eurex. Virtually all the brokers of Helsinki Exchanges are expected to apply for Eurex-membership. "The membership application is not a mere formality for brokers, because they must also pass the Eurex brokers examination," says Jan Forsbom, the vice-president of Helsinki Exchanges. Helsinki Exchanges is going to support the Finnish brokers by offering its own risk management services.
For further information, please contact Pekka Lehtinen.
This article contains general information on the subject matter and shall not be relied upon for a specific case. Specialist advice should be sought with respect to any specific circumstances.
