Virt-x, SWX To Launch Exchange Traded Funds

by Carla Johnson, Investors Offshore, London

25 March 2002

Virt-x plc, the operator of the virt-x pan-European cross-border exchange, announced on Friday that in conjunction with the SWX Swiss Exchange it would launch a new market segment for Exchange Traded Funds ("ETFs") on 6 May 2002.

The market will initially support trading in 23 ETFs comprising:

• 4 FRESCO funds issued by UBS AG;
• 15 LDRS issued by Merrill Lynch International; and
• 4 iShares issued by Barclays Capital

The exchange says that the new market segment is being launched to meet the demand from virt-x members for access to the rapidly expanding European ETF market. Trading these ETF products on virt-x will ensure that investors benefit from virt-x's flexible and integrated trading and settlement model as well as providing issuers with access to a pan-European pool of liquidity.

The launch will be made in collaboration with SWX Swiss Exchange, building on SWX's expertise in the rapidly developing European ETF market and virt-x's existing pan-European infrastructure. Since the collaboration falls under the definition of a related party transaction under the AIM rules, full details will be announced separately upon completion of the collaboration agreement.

Commenting on the launch of this new market segment, Antoinette Hunziker-Ebneter, CEO of virt-x plc, said:

"The introduction of ETFs on virt-x will give our members access to this exciting new equity class. It also strengthens our position as the only truly pan-European stock exchange and offers virt-x an additional revenue stream. Developing a market for ETF products in conjunction with SWX not only gives the market place immediate critical mass, it also gives the issuers of these products access to a pan-European pool of liquidity.

"The European market for Exchange Traded Funds is in its infancy, however we fully expect the demand for these products to grow rapidly and mirror the success of ETFs in North America, where they account for a significant proportion of daily traded volume."

The European market for ETFs has grown rapidly during the last 2 years. At the start of 2001 there six European ETFs with EUR 760m under management, there are currently over 70 with 91 different listings with assets under management of EUR 7.5bn.

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