The Helsinki Stock Exchange (HEX) is planning to establish a new internet marketplace in which private investors can trade in bonds. Trading is scheduled to start in Spring 2002. Initially, only bonds issued by the Finnish state and a few others are expected to be listed. Similar plans were originally mooted in 2000, but failed to be implemented due to differences of opinion between the HEX and several market participants.

Currently bonds in Finland are mostly traded by mutual funds. In addition, private investors may invest in bonds by using the brokerage services of a local bank, although most Finnish banks have quit market-making activities due to a lack of liquidity.

The HEX aims to make investing in bonds as easy as investing in listed shares, and is seeking market-makers for the new venture. However, success partly depends on the domestic banks, which may see it as a threat to the services that they provide. Other Scandinavian exchanges have already established similar marketplaces for bonds, but according to the Finnish press a similar system in Sweden has only reached about €2.2 million in daily trading.

For further information on this topic please contact Ari-Pekka Saanio at Borenius & Kemppinen by telephone (+358 9 615 333) or by fax (+358 9 61 53 34 99) or by email ([email protected]).