PLUS

Further to the market notice issued on 29 January 2009 confirming the revised PLUS Trading Rules due to come into effect on 23 February 2009, PLUS has made changes to the PLUS Default Rules effective immediately and the PLUS membership rules effective as of 23 February 2009.

PLUS Default rules

The PLUS Trading Rules specify the treatment of unsettled market contracts where the defaulter is party as principal (“unsettled principal market contracts”) in rules 6.17-6.22 (Rules 9.19-9.24 in the revised PLUS Trading Rules) and the treatment of unsettled market contracts where the defaulter is party as agent (“unsettled agency market contracts”) in rules 6.24-6.27 (Rules 9.26-9.29 of the revised PLUS Trading Rules). However, the rules are unclear as to which of these two, mutually exclusive, group of rules would apply in respect of an unsettled market contract that falls to be treated as both an unsettled principal market contract and as an unsettled agency market contract under the rules, i.e. where the defaulter is party to one side of the contract as principal and to the other side of the contract as agent.

For clarification, where the defaulter is party to one side of the contract as principal and to the other side of the contract as agent, the rules shall treat such contract as an unsettled principal market contract.

The rules will be therefore be amended as follows, with immediate effect.

Insertion of definitions in the "Interpretation" section of Chapter 6 (Chapter 9 of the revised PLUS Trading Rules) “unsettled principal market contract” and “unsettled agency market contract” as follows:

unsettled agency market contract means an unsettled market contract to which the defaulter i) is a party as agent and ii) is not also a party as principal

unsettled principal market contract means an unsettled market contract to which the defaulter is a party as principal

Replacement of rule 6.11 (rule 9.13 in the revised PLUS Trading Rules) in its entirety, with the following replacement rule 6.11 (rule 9.13 in the revised PLUS Trading Rules):

Notifications

6.11 Upon a declaration of default the default manager shall, as soon as is reasonably practicable:

PLUS membership rules

In order to be eligible to trade off book in securities on the hittable-quote board or in the PLUS pool members must establish a relationship with the Central Counterparty. This may be a direct relationship, where the member is a General Clearing Member or an Individual Clearing Member, or an indirect relationship via a General Clearing Member who clears trades on its behalf.

There are obligations placed on General Clearing Members under the PLUS Trading Rules and accordingly General Clearing Members will need to be members of PLUS.

Accordingly, the rules relating to PLUS membership have been amended as follows, effective as of 23 February 2009:

The definition of a member has been amended appropriately.

Rule 2.1 has been amended to add an additional category of membership and an additional rule has been added after rule 2.1:

Rules 2.1 and 2.2 will now read:

A clean version of the rules effective as of 23 February 2009 is available for inspection here.

A marked up copy of the rules is available for inspection here.

CONFIRMATION OF REVISED PLUS TRADING RULES

1. Introduction

On 1 September 2008 PLUS launched a market consultation in relation to proposed changes to its Trading Rules to reflect the expansion of its existing quote-driven services to provide a dark pool in small and mid cap securities and hittable quotes in the more liquid securities. This is in response to demand from PLUS market participants and will provide greater flexibility and choice of execution method.

PLUS now confirms the Trading Rules. A clean copy of the rules is available for inspection here.

A marked up copy showing the changes since the draft published for purposes of the consultation exercise is available for inspection here.

It is expected that the revised Trading Rules will come into effect on 23 February 2009 with the exception of those relating to hittable quotes, which will become effective as from a date to be communicated in due course.

Further details, including:

• the list of securities traded on the different trading models
• tick sizes
• lot sizes
• the quote refresh period for hittable-quotes

together with confirmation of the effective dates will be confirmed via market notices at a later date.

2. PLUS trading day

3. Summary changes from the consultation draft

Chapter	Main changes
Chapter 2 Membership	Rules regarding direct client connectivity have been added (Rules 2.11-2.20)
Chapter 4 Trading rules for on book execution	Stop losses have been removed hittable quotes have been confirmed as hittable only during the MQP of the home market. Where the home market is closed a market maker need not quote but if they elect to do so the quotes will be firm for off book trading but will not be hittable  (Rules 4.4 and 4.5) Clarification  on amendment of orders in the dark pool has been added (rule 4.64 and associated guidance) Rules reflecting the opening algorithm have been added (guidance to rule 4.66)
Chapter 8 Clearing and settlement	Detailed rules have been added following discussions with the CCP, such rules: clarifying the obligations of members, PLUS and the CCP (rules 8.8-8.15) providing details of the treatment of corporate actions for CCP eligible securities (rules 8.31) clarifying the situation regarding settlement netting (rule 8.32)
Chapter 9 Default rules for off book trades	An amendment has been made to the definition of default price to add clarity

Any questions regarding the revised Trading Rules should be directed to the Regulation Department of PLUS at:

PLUS Markets Group plc
Standon House
21 Mansell Street
London E1 8AA

E-Mail: regulation@plusmarketsgroup.com

Telephone: 020 7553 2035