Hong Kong Exchanges Implements OM’s clearing system and strengthens its derivatives market infrastructure: With OM’s SECUR Clearing System, Hong Kong Exchanges and Clearing Limited is strengthening its derivatives market infrastructure with the implementation of the SECUR clearing system developed by OM group, the Swedish company that owned the Stockholm Stock Exchange.

Hong Kong Exchanges also expects to enter into a five-year support agreement with OM for the CLICK system which the Exchange purchased from OM in 1994.

This will reinforce Hong Kong’s position as a leading international financial center.

Hong Kong Exchanges is the publicly listed holding company of The Stock Exchange of Hong Kong Limited, Hong Kong Futures Exchange Limited, and Hong Kong Securities Clearing Company Limited. It operates Hong Kong’s securities and derivatives markets, and provides a comprehensive range of pre-and post-trade investment services.

OM is a publicly listed company, organised in three divisions: Technology, Transaction, and Jiway.

Jiway is a joint venture between OM (60%) and Morgan Stanley Dean Witter (40%) and is the worlds’ first fully integrated stock exchange. OM has operations in Europe, North America and Asia, with offices in 11 countries. The parent company, OM Gruppen, is listed on the OM Stockholm Exchange.

Singapore Exchange begins the trading of Amex’s ETFs: On 4 May 2001, the Singapore Exchange will start the listing and trading of Amex-listed Exchange-Traded Funds (ETFs) and HOLDRS, following the agreement signed in June last year between the two exchanges.

The agreement envisaged the creation of a joint venture for the trading of ETFs in the Asian time zone. Under this arrangement, a Singaporean joint venture company owned equally by both exchanges is being created to promote the listing and trading of ETFs and HOLDRS.

It will provide both retail and institutional investors with their first opportunity to trade ETFs across the North American and Asian time zones.

The Singapore Exchange will list and trade the following products:

- S&P 500 SPDRs
- DJIA DIAMONDS
- iShares SM S&P 500 Index Fund
- iShares SM MSCI Singapore Index Fund
- iShares SM S&P Europe 350 Index Fund
- iShares Dow Jones U.S. Technology Sector Index Fund
- Internet Architecture HOLDRS SM
- Biotech HOLDRS SM
- Europe 2001 HOLDRS SM

The products will be cleared and settled through the coordinated efforts of the US Depository Trust Company (DTC) and the Central Depository (CDP), the Singapore Exchange subsidiary responsible for securities clearing, settlement and depository services.

The Amex and Singapore Exchange joint ETF trading network will allow an investor to buy an ETF or HOLDRS in Singapore and sell it in the US, and vice versa. CDP maintains an account with its counterpart in the US, the DTC, facilitating the cross-broder transfers of ETFs or HOLDRS between CDP and DTC participants. The settlement period for ETFs will T+3.

Union of Arab Stock Exchanges and Securities Commission meets in Egypt: A meeting of the Union of Arab Stock Exchanges and Securities Commissions will be held in Sharm EL-Sheik (Egypt) later this month.

The meeting will discuss the proposal of setting up a unified Arab Stock Exchange, study the feasibility of the Arab Clearance Institution project, and go over issues related to the Arab Network for Financial Markets.

FTSE launches regional indexes for ethical funds: Ethical investing has been growing rapidly these recent years. The term “ethical” is increasingly being replaced by “socially responsible investing” or SRI.

While initially focused on excluding certain industries such as arms or tobacco, it has developed to include wider environmental concerns and broadened further to consider sustainability issues.

The growth in “socially responsible investment” was underlined by the launch of a series of indexes by the FTSE.

Criteria on which stocks will be selected by the FTSE include:

the environent, human rights, social issues, and shareholder relations.

An independent committee will meet every six months to review the indexes. It will act as an “appeals board” for companies that feel they should have been included.

The four indexes (for the UK, Europe, the US and the whole world) will be launched, providing benchmarks against which institutions can measure and promote the performance of their ethical funds.

Revenue will come from licensing the indexes to clients, and from a 70 cent charge on each trading screen showing the data. The SRI indexes will be marketed under the branding FTSE4Good.

This initiative has been taken in conjunction with Unicef, the United Nations Children’s Fund. All revenues, calculated at about USD 1m for the first year, will go to Unicef.

Dow Jones launched a similar series of indexes in 1999, run from Zurich by SAM Sustainability Gruop.

FTSE will also launch four tradable indexes for each of the four regions. These will allow for the construction of exchange traded funds, products similar to unit trusts but tradable like shares.

The “universe” from which each will be built will be the relevant broad-based index. For the UK, it will be the 800-plus stocks of the FTSE All-Share.

The UK and European indexes will be laucnched in June, the other two by the end of the year. Mark Makepeace, FTSE chief executive, said that half the stocks in the FTSE All-Share will not meet criteria for inclusion in the SRI Index. Of the FTSE 100, a little more than a half meet the criteria.