The London Stock Exchange today announced that its new covered warrant market will be launched on 28 October 2002. Six investment banks, Commerzbank Securities, Dresdner Kleinwort Wasserstein, Goldman Sachs International, JP Morgan, SG and TradingLab, intend to issue an innovative range of covered warrants.
Covered warrants give the holder the right, but not the obligation, to buy or sell an underlying asset at a specified price, during, or at the end of, a specified time period. They have proved very popular investment products in other European markets, where over 51,000 listed covered warrants last year attracted turnover of 52 billion with typical volumes of 85,000 trades per day.
Chris Broad, Head of Broker Services at the London Stock Exchange, said: “The UK Listing Authority (UKLA) has been working closely with the Inland Revenue to gain the confirmation that issuers will not be liable for stamp duty on the issuance of certain covered warrants. Now that the UKLA has successfully gained this confirmation, we are looking forward to launching what we believe will become an important financial instrument for private investors”.