Service Announcement

Trading and London Market Information Link (LMIL)

Small Cap securities move to SETSmm

Live Date: 11 July 2005

The purpose of this Service Announcement is to advise customers of the extension of SETSmm to cover FTSE Small Cap securities.

The Exchange will introduce a phased rollout of the changes, beginning with the migration of 200 Small Cap securities currently trading on SEAQ onto SETSmm for launch on 11 July 2005. Based on the success of the phase one securities trading well on SETSmm, the remaining Small Cap securities traded on SEAQ will be migrated to SETSmm in December 2005.

In addition to this, other changes will also be made to SETSmm at the same time.

All non FTSE250 securities trading on SETSmm will be migrated to the new SETSmm segment;

Removal of the closing price being based on the VWAP price from the last ten minutes of continuous execution. Closing prices for all SETSmm securities will either be based on the closing auction trade, or in the event of no uncrossing trade, the mid of the best bid / offer price at the end of the closing auction; and

Introduction of new period rules to replace the period rules used to calculate the VWAP price from the last ten minutes of continuous execution.

Full details of the market model, including details of the testing facilities will be contained in a new Service and Technical Description which is available on the London Stock Exchange website at:
http://www.londonstockexchange.com/domtrading

Full details of the consultation feedback can be found on the London Stock Exchange website at: http://www.londonstockexchange.com/domtrading

To allow for the trading of Small Cap stocks on SETSmm, a new segment is being created on the trading system. The table below highlights the new segment, sectors and period rules to be created.

SEGMENT CODE SEGMENT DESCRIPTION SECTOR CODE SECTOR DESCRIPTION
SSMM SETSMM MARKET 2 SSC1
SETSMM SMALL CAP. SECURITIES 1 -5% MAX

SSC2
SETSMM SMALL CAP. SECURITIES 2 -5% MAX

SSC3
SETSMM SMALL CAP. SECURITIES 3 -5% MAX

SSC4
SETSMM SMALL CAP. SECURITIES 4 -5% MAX

SSC5
SETSMM SMALL CAP. SECURITIES 5 -5% MAX

SSC6
SETSMM SMALL CAP. SECURITIES 6 -5% MAX

SSC7
SETSMM SMALL CAP. SECURITIES 7 -5% MAX

SSC8
SETSMM SMALL CAP. SECURITIES 8 -10% MAX

SSC9
SETSMM SMALL CAP. SECURITIES 9 -10% MAX

SC25
SETSMM SMALL CAP. SECURITIES 10 -10% MAX

SS11
SETSMM SMALL CAP. SECURITIES 11 -15% MAX

SMOS
SETSMM OTHER SECURITIES 12- 5%MAX

SMMS
SETSMM OTHER SECURITIES 13- 10%MAX

SSMS
SETSMM OTHER SECURITIES 14- 15%MAX



New Period Rules

Period Code Period Description Default / Temporary
MPT1 Mandatory Trading Period.1 10 Default
MPT2 Mandatory Trading Period.2 10 Default
MPT3 Mandatory Trading Period.3 10 Temporary
MPT4 Mandatory Trading Period.4 10 Temporary
MPT5 Mandatory Trading Period.5 25 Default
MPT6 Mandatory Trading Period.6 25 Default







Customer Development Service (CDS)

The CDS environment will be live with the new Market structure from 11 April 2005. However, as the actual securities to be migrated will not be known until after the June 2005 FTSE reclassification, the 200 securities for phase 1 will be based on the March 2005 reclassification.


Additional Information

If you have any queries or require further information please contact your account manager or the Technical Information Desk on 020 7797 3939 (STX 33939).

An archive of previously issued service announcements is available on the Exchanges website at www.londonstockexchange.com/techlib

If you would like to amend or add further recipients of service announcements, please send the revised email contact details to service.announcements@londonstockexchange.com.

If you have any queries or require further information please contact your account manager or the Technical Information Desk on 020 7797 3939 (STX 33939).