HM Treasury News Release

134/98                                              11 August 1998
------------------------------------------------------------------

          THE CLEARING OF OVER THE COUNTER INVESTMENT
                          TRANSACTIONS

Regulations to encourage the development of the UK's clearing
services industry while safeguarding the operation of the financial
markets came into force today.

The regulations extend the modifications to insolvency law contained
in Part VII of the Companies Act 1989 to clearing 'over the counter'
business carried out by recognised clearing houses and recognised
investment exchanges.

To ensure proper regulation, the measures will also allow the
Financial Services Authority (FSA) to ensure that clearing houses and
exchanges have the necessary and appropriate procedures in place
under their 'default rules'. They will also have to comply with
statutory requirements.

Commenting on the changes Economic Secretary Patricia Hewitt said:

     "These changes will make it less risky to clear 'over the
      counter' products in the UK and should increase the amount of
      business done here - this has to be welcome. "

NOTES TO EDITORS

1.   A consultation document describing the proposals in more detail
was issued on 9 April. More information is available in Treasury
News Release 50/98.

2.   If you have access to the Internet, you can find this news
release and other Treasury material at
http://www.hm-treasury.gov.uk.

# = pounds sterling