Notice N26/00

London Stock Exchange
12 May 2000


For the attention of the
chairman/senior partner/compliance officer,
all member firms                                                      N26/00

STOCK EXCHANGE NOTICE

CONSULTATION ON PROPOSED RULE AMENDMENTS

RULE AMENDMENT PACKAGE

1. As part of a periodic review of the Rules of the London Stock Exchange, a
number of required amendments to existing rules and guidance have been
identified. The purpose of this Notice and attachment is to consult on the
proposed amendments.

Explanatory notes to proposed changes

Definitions

2. Firm exposure orders - the definition of a 'firm exposure order' has been  
re-worded to clearly differentiate it from the definition of an 'indicative
exposure order'.

Chapter 2 - Core rules

3. Guaranteed delivery - to ensure that a transaction in a CREST eligible
security dealt for guaranteed delivery is duly settled, rule 2.34 has been
amended to require the member firm delivering stock to raise the settlement
priority of the transaction in CREST on the settlement date.

Chapter 8 - Transaction and trade reporting

4. Use of 'R' trade type indicator - Rule 8.20 has been amended and guidance
added in relation to the use of the 'R' trade type indicator. Member firms
that need to make a system change to implement this amendment are asked to do
so as soon as it is practical, and should inform the Exchange if this process
will not be completed within three months of the effective date of these
rules.

5. Portfolio transaction markers - Rule 8.28 has been amended to clarify that
individual 'PA' notifications should only be reported for protected portfolio
transactions that do not include order book securities.  Portfolios which
include order book securities should continue to be reported using the 'PN'
trade type indicator.

6. Block trades - guidance has been added under rule 8.30 to ensure that there
is no delay in the release of a block trade after offsetting has reached the
required level.

Chapter 10 - Settlement and clearance

7. Appendices 1-11 - relating to entitlements and rules 2.14 and 2.15 relating
to cum and ex dividend transactions have been transferred to chapter 10 for
ease of reference.  New Rules 10.38 and 10.39 now relate to special cum and
special ex transactions and member firms should note that Rule 10.38 has been
expanded to include all benefits. 

8. Appendix 12 - the Model Code for AIM companies has been moved to Appendix 1
as a result of the above changes.

9. Roll-overs - the guidance on roll-over trades has been amended to clarify
the types of transactions that will be categorised as roll-overs.

Consultation 

10. Proposed additions to existing wording are underlined and deletions struck
through, except in the case of Chapter 10, where the rules have been set out
in their entirety without mark-ups.  For convenience, a cross-reference to the
existing rule numbers has been included in brackets at the end of each rule in
Chapter 10.

11. Member firms are invited to comment on the proposed amendments by         
12 June 2000.  After this date, a further Notice will be issued setting out
the finalised rules and guidance and confirming the effective date of the
changes.


Andrew McStravick
Head of Market Regulation

Any comments or queries on this Notice should be addressed to Regulatory
Development, telephone [phone] (STX 33310) or 
Email: [e-mail].

This Stock Exchange Notice will be available on the website at
www.londonstockexchange.com/techlib/notices/