030218_25 Monte Titoli

Twenty-five years ago, on 15 February 1978, Banca d'Italia, Convenzione Interbancaria per l'Automazione (the Interbank Convention for Automation) and the Italian Stockbrokers Association founded Monte Titoli, an institution for the centralised custody and administration of securities, which assumed the role of national central securities depository in 1986.

"In the last 25 years, Monte Titoli has contributed to the development of the financial market by rationalising custody, administration and settlement of financial instruments," said Angelo Tantazzi, Chairman of Monte Titoli. Centralised administration has allowed the introduction of the transfer of financial instruments by book-entry, favouring the shortening of the settlement period as well as achieving increasing economies of scale with significant advantages for all the players in the Italian financial market."

"Monte Titoli, today fourth in Europe in administered financial instruments by market value and third for pre-netting transactions settled, performs an important role in both the domestic and international financial infrastructure," added Giovanni Sabatini, Chief Executive Officer of Monte Titoli.

As of 6 December 2002, Monte Titoli became part of the Borsa Italiana/Italian Exchange Group, which includes, in addition to the Group leader, Cassa di Compensazione e Garanzia (CCP for derivatives), BIt Systems (ICT services) and Piazza Affari Gestione e Servizi (Facility and Property Management).

"The entry of Monte Titoli into the Borsa Italiana/Italian Exchange Group is aimed at maximising the advantages of a unitary, coherent management of the country's entire financial system, ensuring its international projection and expanding the range of services offered to customers," added Massimo Capuano, Vice Chairman of Monte Titoli and President and C.E.O. of Borsa Italiana.

Monte Titoli, which is currently one of the most efficient, cost effective securities settlement systems in Europe, offers its members a wide range of custody and settlement services, through straight-through-processing that allows the management of growing volumes of business with significant economies of scale.

By the end of 2002, the volume of securities under management reached €2,000 billion (of which 99.8% in dematerialised form) in terms of market value, with over 38,500 types of centralised securities.

Over 580 Italian and foreign intermediaries and 1,250 issuers participate in the system, while there are eleven links that Monte Titoli currently maintains with foreign central securities depositories, many of which are assessed by the European Central Bank for the settlement of monetary policy operations.

Monte Titoli's constant engagement in the creation of an integrated European financial market led, in 1997, to the participation in the founding of the ECSDA, the European Central Securities Depositories Association - whose Chairman is Giovanni Sabatini - which has the objective of establishing standards principles for a secure, efficient securities settlement system for the European Union.

During its 25 years of activity, Monte Titoli has achieved major recognition: in 1992, it was called upon, exclusively, to provide settlement services through the Liquidazione dei Titoli (LDT) system, with the consequent centralisation of all Italian financial instruments; in 1998, the European Central Bank included it in the list of Securities Settlement Systems that satisfy the standards issued by the European Monetary Institute for the monetary policy operations of the European System of Central Banks; in August 2000, the Treasury Ministry decree implementing the new Code of Laws on Financial Intermediation (Testo Unico della Finanza) assigned it the centralised administration of Italian Government bonds while, in September of the same year, it received the authorisation of the Banca d'Italia and the Consob for the exclusive management of settlement services on a net and gross basis.

In November 2000, Monte Titoli launched Express, a real-time gross settlement system, and in 2002, it started the development of Express II, the new integrated clearing & settlement platform which will replace the LDT and which is expected to begin operation by the end of September 2003.

The launch of Express II, which integrates settlement functions on both a net and gross basis, will achieve significant synergies from a technical and operational point of view and will allow the Italian financial market to have a highly efficient clearing and settlement system in line with the most advanced international standards.

Milan, 18 February 2003