Settlement Details Reminder

1. Introduction

Members are reminded of LCH.Clearnet Ltd (the clearing house) Circular No: 1940, Bclear – The New Administrative and Clearing Service for Wholesale Equity Derivatives dated 7 October 2005. Section 3 of the circular, requested members to submit Settlement Details forms to the clearing house in order to process settlement transactions correctly.

The clearing house has encountered several situations where members have not submitted a form, resulting in the clearing house having no settlement details set up. This is causing overnight and intra-day operational difficulties.

The purpose of this circular is for members to review their settlement details. Members must ensure that settlement details have been submitted for all CPS position keeping accounts across all trade types and that where settlement details are incorrect or have not previously been submitted that they (re)submit the relevant settlement detail forms. The circular also advises members of the clearing house’s future intentions in dealing with absent forms or incorrect settlement accounts.

2. Settlement Details Forms

Currently members are required to provide the clearing house with CREST and Euroclear settlement account details for Equity Futures, Equity Options and Stock Contingent business.

Members are responsible for ensuring that the clearing house has the relevant settlement account details for Crest and Euroclear. Members are able to nominate one Euroclear/CREST account for each CPS position keeping account that they hold (e.g. Segregated, Non-Segregated, House or Market Maker). The selected account can be the same across each CPS position keeping account or can be different for each CPS position keeping account. For those members selecting a different Euroclear/CREST account for each CPS position keeping account, a separate form must be completed for each.

Please ensure that the form(s) is(are) completed, signed by an authorised signatory and returned to the clearing house by no later than 24 October 2006.

The procedure and forms can be found in Section 7.7.9.4 – 7.7.9.8 LCH.Clearnet Euronext.liffe Deliveries – Equity Future/Option, and Stock Contingent Trading Delivery Procedures, within the clearing house’s General Regulations, Default Rules and Procedures.

3. Absent Settlement Details Forms

Members are advised that in the absence of a completed form, for any account where no settlement details exist, the clearing house will allocate settlement details. This will be done by replicating the existing settlement details held for the Equity Option, house account (If no settlement details are available for house then segregated delivery accounts will be used) and applying those details to each trade type (Futures, Options and Stock contingent) and CPS position keeping account for Crest and Euroclear deliveries. This will ensure that settlement instructions received by the clearing house are processed. For clarity, members will be expected to undertake delivery under the allocated settlement account.

Members are reminded that the clearing house require a minimum of five business days notice of amendments or updates to settlement details. A new form must be completed and provided for each change.

4. Further Information

For further information in relation to this circular please contact LCH.Clearnet Business Operations on 020 7426 7688 or e-mail

EquityClearBusinessOps@lchclearnet.com.

Yours Sincerely

Cliff Staden
Senior Manager, Equities