RNS Number:5615S
Office of Fair Trading
27 November 2003


153/03                                         27 November 2003


                  LONDON STOCK EXCHANGE REDUCES ITS FEES


The London Stock Exchange (LSE) has agreed to reduce its UK main market annual
issuer fees following an investigation by the OFT.

   The OFT's investigation, under the Financial Services and Markets Act 2000,
was in response to the LSE's significant increase in issuer fees for the year
2002/3.

   The LSE has agreed to reduce its annual fees for issuers by more than 25% on
average with effect from 1 April 2004 (see Annex). The OFT estimates that these
price reductions will reverse most of the 2002/03 increase - bringing it down
from an increase of around 85% to an increase of 35%. The LSE has also agreed
not to raise main market annual fees significantly for a further two years.

   The LSE has also undertaken to reduce its admission and annual fees on AIM
(the LSE's market for smaller companies). In all, it is estimated that had these
prices been in place in 2002/03 the LSE's revenue from charges would have been
around #5.8m lower.

In view of the LSE's agreement to reduce its fees, the OFT will conclude its
investigation with a finding that the LSE's increase in fees does not have a
significantly adverse effect on competition.  The OFT will publish a full report
on its investigation and conclusions in due course.



NOTES

1.   'Issuer fees' are fees charged to companies for their issued equity to be
traded on the LSE's exchange. There are two main types of fees: 'admission fees'
are those paid when a company's equity is first admitted for trading on the
exchange, or when additional equity is issued; 'annual fees' are paid by
companies for their issued equity to continue to be traded on the exchange.
Issuer fees are paid by companies whose equity is traded on the LSE's main
market (which covers, for example, the FTSE 100 companies) and on AIM.



2.    The OFT investigated the LSE under the competition scrutiny provisions
of the Financial Services and Markets Act 2000 (FSMA). As the LSE is a
Recognised Investment Exchange (RIE), and therefore a 'recognised body' under
FSMA, the prohibitions in the Competition Act 1998 do not apply to its
regulatory provisions and practices. Instead, these are scrutinised for their
effects on competition under FSMA.



      If the OFT had identified a significantly adverse effect on competition it
would have been required to publish a report, and a further investigation of the
LSE's increase in issuer fees would have been carried out by the Competition
Commission. Under section 304(3) FSMA, the OFT has a discretion to produce a
report where no significantly adverse effect on competition is identified, and
it intends to produce and publish such a report in this case. A copy of the
report will be sent to the Competition Commission to the Treasury and to the
Financial Services Authority, but the OFT will not ask the Competition
Commission to investigate the fee increase.  The OFT will continue to keep the
LSE's fee structures under review as it is required to do by section 304(1)
FSMA.



3.   The new fees that will apply from 1 April 2004 are shown in the attached
Annex.



ANNEX


New Tariff for UK Main Market from 1 April 2004


 Market capitalisation             New tariff            Current tariff                 Reduction
                    #m                      #                         #                         %
                     2                  3,375                     5,125                        34
                     5                  3,375                     5,125                        34
                    10                  3,375                     5,125                        34
                    25                  3,375                     5,125                        34
                    50                  3,375                     5,510                        39
                   100                  3,881                     6,280                        38
                   250                  5,400                     8,590                        37
                   500                  7,931                    12,440                        36
                  1000                 16,369                    20,140                        19
                 2,000                 33,244                    35,540                         6
            Over 2,000                 33,244                    43,240                        23



The new tariffs for the AIM market from 1 April 2004 are #4,000 for both
admission and annual fees. These are both reduced from #5,125.


PUBLIC enquiries: 0845 7224499            enquiries@oft.gov.uk

OFT reports and consumer information leaflets are available free from:

OFT, PO Box 366, Hayes UB3 1XB   0870 6060321 oft@eclogistics.co.uk




                      This information is provided by RNS
            The company news service from the London Stock Exchange
END

STRUBURROORAUAA