Iceland Stock Exchange

(also known as ICEX)

(Icelandic: Kauphöll Íslands)

Serious Information

Trivia

The Iceland Stock Exchange was established in 1985 as a venture of several banks and brokerage firms on initiative of the Nation's Central bank. Trading began in 86 in Icelandic government bonds, and trading in equities began in 1990. Equities trading increased rapidly then. A wide variety of firms are listed on the exchange, including firms in retail, fishing, transportation, banks, insurance and numerous other areas. Because of the small size of the Icelandic economy and low cost of public listing, many of the companies traded on the ICEX are relatively small and relatively illiquid.

All domestic trading of Icelandic bonds, equities and mutual funds take place on ICEX. Bonds and equities are regularly traded, though liquidity is small in comparison with other exchanges. No mutual funds are currently listed on the market. Since its founding, the ICEX has used various electronic systems.

Since 2000, it has used SAXESS system of the NOREX alliance, which allows for cross-listing of stocks on Nordic stock exchanges. No foreign company lists directly on ICEX, as the small size and illiquidity of the market makes such a move redundant. Conversely, few Icelandic firms have listed abroad, including DeCODE. Faroese bonds were listed on behalf of Virðisbrævamarknaður Føroya in 2003.

After making public their quarterly results, companies listed on ICEX have, to an increasing extent, held meetings, where analysts and investors have been given an opportunity to put questions to company management. As an indication of the significance of these meetings, it could be pointed out that they are often held the same day as results are made public and the presentation slides made available in the ICEX News System as soon as possible following the conclusion of the meeting. Even though the results announcements and presentation slides have been made available in the ICEX News System, analysts have seen cause to attend these meetings. This indicates that the value of the meetings is not limited to the information appearing in the News System. In addition, listed companies have to an increasing extent held investor meetings on occasions other than to present their financial results.

Trading on the NOREX exchanges is carried out in the electronic trading system SAXESS, which was developed by OM Technology. SAXESS offers functionality to support both order driven markets and price driven markets. For order driven markets bids and offers are entered in the relevant order book and automatically matched to trades when price, volume and other order conditions are met. For price driven markets, interests are entered into the relevant order book and transactions are negotiated manually and reported into the system. SAXESS also offers functionality to support issuing of new bonds via an electronic order book. The trading is decentralised, which means that member firms are connected to the system and trade from their respective home offices, inside and outside the Nordic countries.

SAXESS is a state-of-the-art trading system with a capacity of handling more than 2000 orders per second. It gives member firms access to an electronic order book for each financial instrument with a number of facilities supporting and increasing liquidity. It is designed to carry out trading in not only equities and bonds but also in a wide range of financial instruments. Thus, it offers the member firms on the respective NOREX exchanges equal and easy technical access to the Nordic securities markets. Information is presented in real-time on the traders´ screens in the form of order books, market briefs, trade information, index information and various reports. All market players receive market information simultaneously. Broadly speaking, the SAXESS system consists of three main parts; the central SAXESS system, a network and a local environment at the member firm. The local member system usually consists of a number of workstations, which are connected to the network via a server. The member firms either develop their own local systems environment so that it can communicate with the SAXESS system, or buy a system from a third party supplier. There are a number of third party solutions available on the market.

Iceland Stock Exchange, Laugavegur 182, Iceland.

Email: icex@icex.is

Phone: 525-2844 Cell phone: 868-9836 Fax: 525-2888

http://www.icex.is/is

Names in foreign nations

Germany = Isländische Börse

Trivia

Reykjavík (pronounced 'rei?ca?vi?k) is the capital of Iceland, its largest city and the world's most northern national capital. Its latitude being 64°08' N, not far from the Arctic Circle (at 66°33' N), it receives only four hours of daylight per day in the depth of winter, and in the summer the nights are almost as bright as day. 114,800 in the city.

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