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Copenhagen Stock Exchange: The Limits Of Best Execution Raised For Share Transactions

Date 02/11/2001

The limit of when a trade is subject to Best execution for share transactions has been raised from DKK 400,000 to up to approximately DKK 5 million in respect of the shares of KFX companies. The change is a consequence of the settlement rules in the Norex Member Rules. The limits for bond and derivatives transactions remain at DKK 3 million in market value per bond transaction and DKK 3 million in market value of the underlying asset in a derivatives transaction.

The Copenhagen Stock Exchange has also clarified to its members how they should counsel and guide their customers in connection with securities trading. To ensure that all customers can approach the same frame of reference, members must in future apply the following designations when counselling their customers: stock exchange trade, action price trade, immediate trade and average price trade.

The Board of Directors of the Copenhagen Stock Exchange has just adopted a new set of rules on ethics, from which the above-mentioned changes appear among other things. The changes to the Rules of Ethics have been adopted in continuation of the Norex Member Rules, which entered into force on 1 October 2001 and of the Danish Securities Council's new executive order on good securities trading practice, which will become effective on 1 December this year.

The Rules of Ethics apply to members of the Exchange in connection with trading in securities listed here on the Copenhagen Stock Exchange.

Technically, the limit for share transactions has been changed to 250 round lots. A round lot is the number of shares it takes for an order to influence pricing, which is not the case for orders which are below one round lot. As regards the KFX companies, the value of one round lot is equivalent to approximately DKK 20,000, whereas the amount of one round lot for other shares and unit trust certificates is up to approximately DKK 10,000 in market value. In practice, this means that the limit of Best execution for shares outside the KFX family and for unit trust certificates has been raised from DKK 400,000 to approximately DKK 2.5 million.