Notice N60/99

LONDON STOCK EXCHANGE
29 September 1999

For the attention of the
chairman/senior partner/compliance officer,
all member firms                                                      N60/99

STOCK EXCHANGE NOTICE

CONSULTATION ON PROPOSED RULE AMENDMENTS

PTM LEVY

Background

1.  Stock Exchange rule 2.19 sets out the circumstances in which a member firm
should collect PTM levy on contract notes.  The current principles that
determine whether the levy is charged are that the total consideration shown
on the contract note exceeds £10,000 sterling and that the nominal value of
the relevant security is expressed in sterling. 

2.  Recent events have led to the Exchange and the Panel on Takeovers and
Mergers reviewing the rule, since the wording of the current rule excludes
certain UK companies which should be included in the provisions.  These events
are;

(a) the fact that a number of corporate restructurings have led to certain UK
companies having ordinary shares denominated in non-sterling currencies; and

(b) the introduction of the euro on 1 January 1999.

Securities denominated in currencies other than sterling

3.  In order to ensure that the levy is payable on relevant contract notes for
securities denominated in currencies other than sterling, it is proposed that
rule 2.19 (b) is deleted, so that the currency in which the nominal value of
the security is expressed is no longer relevant in assessing whether PTM levy
is payable.

Contract notes issued in euro

4.  In advance of the start of trading of UK securities in euro on the
Exchange trading system, it is proposed that rule 2.19 should be amended to
exempt from the PTM levy any euro contract notes where the total consideration
shown is equal to or less than a euro amount specified within the rule.  At
the outset, this will apply to contract notes with a total consideration of
15,000 euros or less.  This figure may be reviewed at a later date in the
light of any substantial fluctuations in the sterling/euro exchange rate.

Contracts issued in currencies other than sterling or euro

5.  For a contract note in a relevant security, issued in a currency other
than sterling or euro, it is proposed that member firms should calculate a
value equivalent to £10,000 in that currency to establish whether or not the
levy is payable. 

Rate and currency of PTM levy 

6.  Member firms are advised that the appropriate euro rate for the levy set
by the Panel will be 0.40 euro (40 euro cents) per relevant contract note. 
The sterling rate of PTM levy will remain at 25p until further notice.

7.  Payment of the levy will be accepted in euros.  This will allow member
firms to raise the levy in euros on contract notes.  This is optional and
member firms may raise the sterling equivalent of the euro amount payable if
they wish to do so.

Irish securities

8.  Member firms are reminded that the London Stock Exchange requirements are
not relevant to trades in securities issued by companies incorporated in the
Republic of Ireland.  Member firms should consult the Irish Takeover Panel in
relation to those securities.

UK securities held on overseas registers

9.  There is no requirement to charge the levy on transactions in securities
that are held on an overseas register of a UK company. 

Daily Official List

10. In cases of doubt as to whether PTM levy should be charged on a contract
note relating to a particular security, member firms should refer to the Stock
Exchange Daily Official List, which will continue to carry a marker against
any security for which PTM levy is not payable.

Consultation

11. The proposed rule amendments are set out in the attachment to this Notice
and are subject to a consultation period ending on 27 October 1999. 

12. Additions to existing wording are underlined and deletions struck through.
 A further Notice will be issued at the end of the consultation period to
confirm the finalised rules.


A E Scott-Bishop
Head of Regulatory Development

Any comments and consultation responses on this Notice should be addressed to
Reg Dobson, Market Regulation department, London Stock Exchange, London EC2N
1HP.

Email: [e-mail].
Telephone [phone] (STX 3310).