Foundation of Pan-European equity market for small & mid-caps

14 July 2008

PLUS Markets Group plc is pleased to announce that it has entered into a non-binding Heads of Terms Agreement (“the Agreement”) with Bayerische Börse AG, the operator of the Munich Stock Exchange in Germany.

Under the Agreement, the parties will develop new integrated pan-European market services, specifically designed to meet the needs of small and medium-sized companies. The co-operation envisaged by the Agreement is wide-ranging and encompasses both capital markets and trading services.

The parties will examine ways in which to co-ordinate their existing exchange-regulated capital market services, to offer small and mid-cap companies enhanced profile and liquidity across leading financial centres and to facilitate access to a broader pool of equity capital than is provided by existing markets for non-listed securities. The parties consider that, through the extension of their investor reach beyond their home countries, European small and mid-cap companies will be able to improve their fundraising capabilities on an initial and continuing basis.

This initiative will take advantage of the increasing harmonisation of regulatory structures under the auspices of EU single market directives, which makes it possible to provide internationally accepted, stream-lined cross-border regulation specifically suited to the needs of small and mid-cap companies.

The Agreement also includes indicative terms for the creation of a new pan-European market segment, offering quote-driven trading services in the shares of smaller companies, to be known as “PLUS-Europe”. PLUS-Europe will be positioned under the regulatory permissions of Bayerische Börse AG as a Market Operator under the Markets in Financial Instruments Directive (“MiFID”). Further, PLUS-Europe will apply the high, MiFID-compliant standards of transparency and market surveillance expected of a full Stock Exchange and will be supported by the provision of key services and infrastructure by the Company including its rules and its high performance trading platform.

It is intended that PLUS-Europe will deploy the pan-European passport rights afforded to Bayerische Börse AG under MiFID, such as to be fully accessible to market participants based in London via their existing systems and connectivity providers. PLUS-Europe would provide an effective mechanism for trading AIM securities through the fully competitive regulatory environment already in place in Germany and the Company remains confident that it will be able to offer full AIM stock coverage before the end of 2008.

The Agreement is subject to various pre-conditions, including the conclusion of definitive legal agreements and the finalisation of the regulatory structure of PLUS-Europe. The launch of PLUS-Europe will be subject to the approval of the relevant supervisory authorities in Germany, with whom discussions have commenced. Further details will be announced as appropriate.

Simon Brickles, Chief Executive Officer of PLUS Markets Group plc, said: ”We are delighted to be working with our counterparts in Germany to lay the foundations of a pan-European equity market, to offer small and mid-caps companies access to European capital and liquidity. London is the deepest pool of international capital in the world and PLUS Markets is the new gateway to that capital for both listed and unlisted companies. We are excited at the prospect of opening this doorway to additional European issuers through our co-operation with our colleagues at the Munich Stock Exchange, such that they can realise the benefits of a route to London.”

Andreas Schmidt, CEO of Bayerische Börse AG, said: „As the operator of Munich Stock Exchange, a stock exchange being in place for 178 years, we are the home exchange to blue chips like Allianz, BMW, Munich Re or Siemens. Nevertheless our special focus lies on providing fundraising and trading solutions for Small and Mid Caps. We have a great understanding for the needs of these firms. Therefore we are very pleased to work together and share a common vision of a truly pan-european small and mid-cap market with our like-minded partners of Plus Markets.”

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