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State of Israel and EuroMTS Formalise Agreement to Launch MTS Israel

EuroMTS is pleased to announce that it has formalised an agreement with the State of Israel to establish MTS Israel, which will be designated as the official electronic interdealer market for Israeli government bonds. The launch of MTS Israel, scheduled for the latter half of 2005, will follow the introduction of Israel’s primary dealer system.

To this end, EuroMTS and the Israeli Ministry of Finance (MOF) are currently in the process of defining terms for the new market, including the formation of a committee that will consult with the MOF with regard to listing criteria for securities and parameters in relation to quoting obligations. The committee will comprise of two representatives from the MOF, a representative from each of the Israeli primary dealers and one representative from EuroMTS. The MOF may, in addition, appoint a representative from the Tel Aviv Stock Exchange and from the Israeli Central Bank.

Dr. Yaron Zelekha, Accountant General, Ministry of Finance, State of Israel, commented: "The imminent introduction of the primary dealer system and the establishment of MTS Israel represent years of dedicated collaboration. The formation of this market, which will improve the liquidity of our bonds and lead to greater efficiencies, reflects our commitment towards the modernisation and globalisation of our capital market."

Gianluca Garbi, Chief Executive Officer, EuroMTS Ltd, said: "An increasingly global capital market and ever increasing demands for liquidity and efficiency necessitate mechanisms that will assist issuers, dealers and investors alike. With the establishment of the MTS model in Israel, our priority is to deliver to the Israeli debt market the same benefits of a single network and improved transparency that have served to enhance liquidity and efficiency throughout Europe’s bond markets."

Today’s announcement follows upon discussions in 2003 between Mr. Garbi and Israeli Finance Minister Benjamin Netanyahu, during which time the two committed to build the new market as part of Israel’s efforts to modernise its debt management policy and to promote the integration of its financial system with the global financial markets.

MTS Israel will operate as a division of EuroMTS, which is regulated by the United Kingdom’s Financial Services Authority. In addition, the Tel Aviv Stock Exchange will provide operational services for the support of MTS Israel.