Digitalbox Regulatory News (DBOX)

8 May 2006 11:21

PLUS Markets Group PLC08 May 2006 Press release, 8 May 2006 • Study shows PLUS beats SETSmm• Quote driven flexibility facilitates improvement over the order book• £1billion value traded on PLUS since launch Significant benefits to users of Plus Markets Group plc's PLUS trading serviceover SETSmm have been quantified in an independent academic research studyconducted by City University's Cass Business School. When faced with a choice ofexecution platforms - PLUS and SETSmm - data from both exchanges shows thatprice improvement gains accrue to users of the PLUS platform at no significantvariation in cost. The study was conducted by Ian Marsh, Professor of Finance at Cass BusinessSchool and Panayotis Parpas, Department of Computing, Imperial College London.The study analysed all trade execution data on PLUS during February 2006comparing them with SETSmm data for the same period. In total 23,769transactions in 348 different stocks were analysed on five key issues: - Actual trade prices on PLUS were compared with quoted prices. This showedan average price improvement (quoted prices to transactions) of around 77% percent. - Costs of trading on PLUS were calculated and showed an average of lessthan 0.5%, almost exactly the same as the cost of trading on SETSmm. - Over 90% of actual PLUS transaction take place at or better than the bestoffer price on SETSmm. - Almost 99% of PLUS transactions could have been executed immediately onSETSmm on trades up to 2 normal market size ("NMS"). However over 3NMS thisfalls to 65% - indicating comparably positive market depth for size on PLUS. - Where deals can be executed on PLUS and SETSmm the average gain fromdoing so on PLUS was one third of one percent on deals up to 2NMS, rising to twothirds of one percent over 2NMS. I.e. with a SETSmm mid-price datum of 300p PLUSsellers would get 301-303p and buyers would pay 299-297p depending on size. Foreven larger deals execution on SETSmm may not be possible. Commenting on the result, Cyril Theret, Business Development Director at PLUSMarkets Group plc, said. "This report shows, for the first time, solidstatistical evidence of the measurable benefits of our quote driven system andthe flexibility inherent in it to deliver improved prices." "Not only are fees lower on our market but the prices at which shares can bebought are generally better. This shows that traditional stock exchanges are notonly open to competition but that competition is proving effective. Investorsshould check that their broker is a member of PLUS to ensure they are gettingthe best service. " Since the launch of the PLUS service in December 2005, 155,875 bargains worthover £1 billion value, representing 1.84 billion shares traded, have beenexecuted through PLUS rather than through traditional exchanges. END For more information contact: John Parry - Rostron Parry 020 7490 8062 Cass Business School Notes to editors: Cass Business School delivers innovative, relevant and forward-lookingeducation, training, consultancy and research. Located on the doorstep of one ofthe world's leading financial centres, Cass is perfectly positioned to be theintellectual hub of the City of London. Our dialogue with business shapes thestructure and content of all our programmes of study, our executive educationprogrammes and our research. Our MBA, Specialist Masters and UndergraduateProgrammes have a reputation for excellence in professional education. OurExecutive MBA is ranked 10th in the world by the Financial Times. Within Cass, CassExec has been creating and delivering executive education tothe world of business for more than 15 years. The disciplines we cover rangefrom finance and insurance through to leadership, corporate governance and risk.At the heart of our success is the importance we place on working in partnershipwith our clients to construct entirely bespoke programmes that truly meet theirbusiness needs. The school undertakes research of national and international significance andsupports almost 100 PhD students. Cass has the largest Finance Faculty and thelargest Actuarial Science & Statistics Faculty in Europe. Our finance researchis ranked 2nd in Europe and 4th in the World outside the US by FinancialManagement Magazine and our insurance and risk research is ranked 2nd in theworld by the Journal of Risk and Insurance. Cass is a place where students, academics, industry experts, business leadersand policy makers can enrich each other's thinking. For further informationvisit: www.cass.city.ac.uk or contact Caleb Hulme-Moir 0207 040 5147, 0786 6707262 This information is provided by RNS The company news service from the London Stock Exchange