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London Stock Exchange Covered Warrants Take Off

Date 28/10/2002

160 covered warrants were issued today as the London Stock Exchange launched its new covered warrant market, making them available to the UK private investor for the first time. The Exchange expects more covered warrants to be issued in the days ahead.

Covered warrants are now available on some of the UK's leading companies and international indices. These include companies like BP, GlaxoSmithKline and Vodafone, as well as indices such as the FTSE100, NASDAQ100 and Dow Jones Industrial Average.

Commerzbank Securities, Dresdner Kleinwort Wasserstein, Goldman Sachs International, JP Morgan, SG and TradingLab will all have covered warrants programmes that give private investors geared access to a range of underlying assets.

To coincide with the market launch, the Exchange has developed a dedicated educational online service. Available at: the key features include:

  • in-depth information for private investors, stockbrokers and issuers; and
  • a pricing analysis tool providing 15 minute delayed prices and comprehensive details of covered warrants listed on the Exchange.
Clara Furse, Chief Executive of the London Stock Exchange, said: "The launch of the covered warrants market today is a significant step both for the London Stock Exchange and the UK private investor. Investors in the UK now have access to a low cost financial product, which opens up a much wider range of investment strategies on a variety of assets.

"Key attractions of covered warrants include gearing and the ability to trade free of stamp duty when investors use cash-settled warrants.? Together these aspects make for an exciting market for retail and institutional investors."

Covered warrants give the holder the right, but not the obligation, to buy or sell an underlying asset at a specified price, during, or at the end of, a specified time period. They have proved very popular investment products in other European markets, where over 51,000 listed covered warrants last year attracted turnover of 52 billion with typical volumes of 85,000 trades per day.