SEC Quarterly Review 

Oct-Dec 2001 
OTHER  MARKET  INFORMATION
Stock Exchange of Hong Kong Limited- changes to the Takeovers Code:  The Securities and Futures Commission (SFC) announced certain changes to the Takeovers Code including, among other things, reduction of trigger threshold from 35% to 30% and corresponding changes to the definition of  “control”. The changes are effective from Friday, 19 October, 2001
The Exchange encourages all issuers to assess whether, and how, the announced changes to the Takeovers Code will affect their obligations under the Listing Rules in respect of any of their existing or potential transactions.
Kuala Lumpur Stock Exchange introduces circuit breakers: The Kuala Lumpur Stock Exchange (KLSE) will introduce circuit breakers by the first quarter of 2002. The  Exchange expects that they will enhance market stability and investors confidence.
The implementation of the circuit breakers at the KLSE was announced at the recent National Budget for the year 2002 as part of the of the efforts to ensure stability in the stock market. The budget announcement on the circuit breakers have the capacity to halt trading activities temporarily when large declines are experienced during a trading day. These halts are based on predetermined trigger levels
Circuit breakers will be triggered when the KLSE Composite Index (KLSE CI) declines below its closing index of the previous market day by 10%, 15% and 20%.
Singapore Stock Exchange to raise securities clearing fee: On 8 October 2001, the Singapore Stock Exchange raised the maximum clearing fee (or fee “cap”) for securities trades above SGD 200,000 from SGD 100 to SGD 200, with effect from 1 December 2001. The current clearing  fee of 0.05% of the contract value will be maintained.
Currently, the exchange charges a single, bundle clearing fee, subject to a cap of SGD 100, for the full range of post – trade services in the securities market. These services are provided by the Central Depository, the securities clearing  and depository unit of the Singapore exchange. They include clearing, settlement and custody, as well as the central counter party   guarantee for the settlement of all securities trades.
The exchange expects that the increased cap on securities clearing fees will impact its total operating revenue up by between 2% and 7%.
Saudi Exchange introduces new electronic system: The Saudi stock market will introduce a new electronic trading system  called TADAWUL with the aim to stimulate the transactions, replacing the ESIS (Electronic Securities Information System) introduced in 1990
The new system features a number of improvements as it will integrate not only the trading, but also the clearing, settlement and depository operations. The system allows for real time settlement of trades, on-line submission of regulatory news and enhanced  Straight –Through- Processing (STP). TADAWUL brings the Saudi exchange in line with the international standards in terms of trading and settlement operations.
London Stock Exchange launches new market segment : On 2 November 2001, the London Stock Exchange launched the first international market for health companies called techMARK  mediscience.
The new market builds on the success of techMARK, the Exchange’s international market for innovative technology companies which celebrated its two years of existence, by bringing together its 48 listed companies from the biotechnology, pharmaceuticals, diagnostics, drug delivery and medical technology industries
techMARK  mediscience was developed in response to customer demand, with the support of industry participants and the Bio Industry Association (BIA) and fills a gap in the market by raising the profile of  healthcare companies.
The new market has its own index developed by FTSE, the  techMARK  mediscience  index, composed of emerging healthcare companies. The index is designed to reflect the market performance  of these companies and to provide investors in small and medium–sized companies from the healthcare industry with a measurement tool of this market. The new index forms part of the FTSE techMARK Index Series and will be reviewed quarterly, by an independent Committee of market users. The visibility of techMARK mediscience will be further raised and maintained through a dedicated website.    
Korea Stock Exchange expands quotation information disclosed: Currently order information on 5 best bid and ask quotations for all listed stocks is disclosed to the public on a real time basis along with the aggregate order quantity of each side. From  January 2002, the provision of the aggregate  order quantity will be discontinued.
Instead, the scope of the bid/ask information disclosed will be expanded to 10 best bid and ask quotations. This change is designed to prevent the attempt to mislead investment decisions by placing unreasonably large orders (fake order) at the prices that are unlikely to be matched, i.e. intentionally increasing the aggregate order quantity of a certain issue.
Singapore Exchange launches first stage of  securities lending : On 1 November 2001, Singapore Exchange began building  a lending pool of investors as the first step of the securities lending program.
The Central Depository (CDP), the  securities clearing and depository division of Singapore Exchange, has invited participation from investors who hold at least 50,000 of any eligible stock from an initial list of stocks listed on the exchange main board. Investors wishing to be lenders must send an application form to CDP indicating which securities they wish to lend and the respective quantities.
The Central Depository will lend securities only to its Depository Agents which comprise the Singapore Exchanges member stock broking firms, trust companies or bank nominees registered with CDP. The Central Depository will charge its Depository Agents  a borrowing fee of 6% per annum and an  administration fee of SGD 20 per borrowing of request. From these revenues, the Central Depository will pay lenders whose security are eventually borrowed, a fee of 4% per annum on the value of the borrowed securities. Investors can borrow securities through the Depository Agents who will determine their own lending rates.
The borrowing period is T+3  business days which coincides with the securities settlement cycle. Borrowers have the option to extend the loan for another T+3 business days after which they may initiate a new loan.
As the counterparty to both lenders and borrowers, the Central Depository assures the return of loaned securities.
The launch of securities lending facility is an important development for the Singapore market. The start of lending and borrowing activities is expected  to begin by the end of the year.
New York Stock Exchange launches NYSE Open Book :  After having received the Securities and Exchange  Commission approval, the New York Stock Exchange launched the NYSE  Open Book, a new market data service that will allow subscribers to see  information contained on the exchange limit order books.
Designed to further enhance the transparency of the New York Stock Exchange, NYSE Open Book  offers market participants a comprehensive view of the aggregate limit-order volume at every bid and offer price outside the displayed NYSE quote. The  exchange expects to implement the new service with market data vendors and users in the late January 2002.
The NYSE  Open Book responds to the demand of  broker- dealers  and institutional investors for more in-depth and detailed market data. The demand stems in part from the six-fold increase in the number of price points brought  about by decimalization.
Singapore Exchange installs automated real-time market surveillance system for securities market: On 11 December 2001, the Singapore Exchange installed a real-time automated market surveillance system which will enhance the exchange’s surveillance of its securities market.
The  system  known  as  SMARTS,  employs the latest technology to automatically detect and alert the exchange of irregular market behaviour  such as unusual price movements  of trading  volumes. The  system  also enables the Singapore Exchange to find trace of historical trading, allowing  investigators to identify the sequence of orders, quotes or trades that give rise to a particular situation.