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Euronext Paris Derivatives: Eleven Market Makers For 5-year Euro future

Date 21/05/2001

Since mid -May, there have been eleven market makers for the 5-year Euro bond future traded on Matif, the derivatives market of Euronext Paris.

They are ABN Amro, BNP Paribas, CDC Ixis, Crédit Agricole Indosuez, Crédit Lyonnais, HSBC CCF, JP Morgan, Lehman Brothers, Natexis Banques Populaires, Salomon Smith Barney and Société Générale.

These market makers undertake to offer bid/ask spreads for significant quantities at all times, allowing clients to find counterparties for purchases or sales under conditions of optimum efficiency in terms of timing, prices and volumes.

Market making in the 5-year Euro contract, which has the full support of Euronext Paris, comes in response to the requirements expressed by major market participants. These institutions need permanent access to an effective tool, matching the scale of the underlying market, to cover bond holdings on the 5-year segment of the euro yield curve.

Deliverable securities for June and September 2001 maturities of the 5-year Euro contract include both French BTANs and German BOBLs. They represent totals of EUR 72 billion for the June delivery and EUR 65 billion for the September delivery.

As a hedging instrument, the 5-year Euro contract is all the more reliable as no single participant can take a dominant position and block the market. The upper limit on the position of each client is 50,000 lots, and Euronext monitors compliance with this rule.

Launched in September 1997, the 5-year Euro future is traded electronically.