Notice N41/99

LONDON STOCK EXCHANGE
13 July 1999

For the attention of the
chairman/senior partner/compliance officer,
all member firms                                                     N41/99

STOCK EXCHANGE NOTICE 

RULE AMENDMENT

INTERNATIONAL EQUITY MARKET
DEVELOPMENT OF SEAQ INTERNATIONAL  

Background

1.    Following consultation with the market, with effect from Monday 19 July,
the Exchange intends to restructure the Developing Markets sector on SEAQ
International, as indicated in the Stock Exchange Service Announcement dated
24 May 1999.

2.    The purpose of the restructuring is to enable securities to be placed in
a more logical order on the trading system and to be positioned in line with
market perception. In order to accommodate this restructuring, a number of
minor changes will need to be made to rule 3.18 and to the definition of an
international equity market security as outlined below. 

Amendments to rule 3.18

3.    Rule 3.18 will be re-numbered 3.5 and the heading of the rule will be
amended to reflect its revised contents. 

4.    Currently, rule 3.18 sets out both the admission criteria and the
positioning on the Exchange's trading system for securities that trade in the
Developing Markets sector on SEAQ International.  The new rule will set out
the criteria for one of the routes by which securities may be admitted to
trading in the international equity market.  This route is applicable to those
securities listed on an exchange which is included only on the Federation
International des Bourses de Valeurs ('FIBV') list and which are not listed on
the Exchange or on an approved organisation.

5.    The rule will no longer determine the positioning of this type of
security on the trading system.  For this reason, paragraph (a) of the current
rule, which refers to depositary receipts and their positioning on the trading
system, has been deleted.

6.    Part of the wording of paragraph (b) of the current rule will not be
incorporated into rule 3.5.

Amendment to the definition of an international equity market security

7.    In view of the amendments to rule 3.18, the Exchange has taken the
opportunity to clearly set out the routes by which a security may gain
admission to the international equity market.

8.    The revised definition of an international equity market security will
expressly provide for securities that have a London listing and in which the
Exchange has permitted trading on the international equity market.   The
definition will also recognise that securities listed on an exchange which is
included only on the FIBV list may be traded on the international equity
market. 

Effective date

9.    The rule amendments indicated above will take effect from Monday 19 July
1999 to coincide with the restructuring of Developing Markets on the
Exchange's trading system. 

10.   The amended rule and definition are set out in the attachment to this
Notice with additions to existing wording underlined and deletions struck
through.  Hole punched pages for insertion into the Stock Exchange Rule Book
will be issued shortly.

Other changes

11.   Following the signing of Memoranda of Understanding with six further
European exchanges, the Exchange is also taking the opportunity to reconsider
the need to maintain the related sectors on SEAQ International.  These sectors
are Belgium, France, Italy, the Netherlands, Spain and Switzerland. 

12.   Consideration will also be given to the future of the remaining six
European country sectors: Austria, Finland, Luxembourg, Norway, Portugal and
Sweden. Further announcements will be made in due course concerning both these
developments. 

A E Scott-Bishop
Head of Regulatory Development

Any comments or queries on this Notice should be addressed to the Market
Regulation department, telephone [phone] (STX 32096).