031230_ statements

"Today sees the closing of a year marked by significant economic growth of the United States and the Asian continent and, in the second half, by moderate recovery in Europe - Angelo Tantazzi, Chairman of Borsa Italiana, points out. The equity markets have welcomed this new situation positively with growth of the indices after three years of decline.

Despite the geopolitical tensions, which continue to represent an element of uncertainty, the macroeconomic context for 2004 seems to be more positive, encouraged by low interest rates and fiscal policies which are intended to prop up production output.

In this context, the Borsa Italiana Group has recorded important results from a development and efficiency viewpoint. Post-trading activity has been integrated with start-up of the Central Counterparty for the equity market and the new settlement system Express II, thus providing the Italian market with a secure and efficient financial infrastructure, in line with the best international standards. Looking to the future, the Group intends to confirm its contribution - together with the other Authorities - to the process of tightening up our financial and regulatory system".

"The work carried out this year - says Massimo Capuano, President and CEO of Borsa Italiana, is the starting point for a further thrust to the Group's growth on the international stage, both from the industrial viewpoint and in terms of participating towards the development of a European financial market. At home, integration was completed of the organizational and operative structure between front end and back end, as the market participants required.

Though in a situation characterized by criticalities affecting certain Italian companies, including some highly important ones for investors, the Italian market is today able to react in a mature and timely way. The initiatives that will be taken, either case by case or designed to produce a new organization of the supervisory tasks, will see a conscious participation from Borsa Italiana, in relation to the competencies and duties connected to its established role in the management of regulated markets.

Many of the initiatives started up in 2003, among which restyling of the Nuovo Mercato and start-up of the Expandi market dedicated to small and medium size businesses wishing to approach the capital market, will have an impact in 2004. They will contribute to the development and broadening of the official list, which may also reap the benefits of the recent tax incentives on listing and on the funds that invest in mid and small caps.

The corporate bonds market - thanks also to the investments already made in the MOT platform (Italian electronic bond market) - will be further developed, also in competition with the Luxembourg market, counting on the strong will and interest of the entire Italian system.

2004, with election of the President of the FESE (Federation of European Securities Exchanges), will be the year in which Borsa Italiana will be able and will have to commit itself even further in order to affirm its guiding role both in respect of the development of European Directives and in the consolidation between the various continental stock exchanges.

"In the course of 2003, the Central Counterparty service managed by Cassa di Compensazione e Garanzia (CC&G) was put in place, replacing the previous mechanisms for guaranteeing trades. Today Italian market has a risk management system that is open for interoperability with similar foreign systems.

Monte Titoli, through a process of continuous dialogue with the supervisory authorities and the market participants, has continued its work of putting in place the new clearing system Express II, introduced in December for fixed income securities and scheduled for implementation with all the other financial instruments in January next.

Communication in real time of the S&P/Mib index - the fruit of a collaboration between Borsa Italiana and Standard & Poor's - started in June, while November saw the first trades on the relative ETF, the first of an array of financial instruments with the S&P/Mib as underlying index. Characterized by a more complete representation of the Italian equity market, thanks to the role of sectorial classification in keeping with international best practice and to the consideration the free-float of the listed companies, the new index has all that is needed to be effectively an underlying for new financial products.

The equity derivatives market (Idem) was revamped, with a new version of the trading platform being put in place. Among the changes implemented, the introduction of the Circuit Breakers is of importance. This function, as has already been the case on the equity market and as occurs on other international derivatives markets, allows traded instruments to be automatically suspended when certain price variation limits are exceeded. Also, it automatically oversees the regular conduct of trades, thereby avoiding the risk of contracts being concluded at anomalous prices.

The activity of promoting the Italian markets continued with Italian and foreign brokers, today numbering 128 - where the number of international operators is particularly noteworthy, rising to 35 in the year.

Work in growing BIt System, Borsa Italiana's ICT company in partnership with SIA, continued as also did consolidation of the business of subsidiary company Piazza Affari Gestione e Servizi, which operates the Congress and Training Centre in Palazzo Mezzanotte. Finally the new version of the Borsa Italiana web site www.borsaitaliana.it became operative, with new contents and services, and recorded over 150 million pages visited in the year".

At regulatory level, Borsa Italiana actively collaborated, together with the main associations of market participants, in the drafting of three positioning papers on the proposals contained in European Directives, regarding investment services and organization of the markets, prospectuses accompanying the offer of financial instruments, and rules governing take-over bids.

Milan, 30 December 2003