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On 16 January this year, the Milan Stock Exchange celebrated its bicentenary. It was in January 1808 when, by Napoleon’s decree, Borsa Italiana was instituted at the original location of the Monte di Pieta, in the old commercial part of the town. Born as a public institution, and turned into a private joint stock company in 1998, Borsa Italiana has greatly expanded its business over the last 10 years in order to cover all services related to the exchange industry; listing to post-listing, from information services to facility and property management services.

That process of development reached a crucial stage in 2007 by means of Borsa Italiana’s merger with the London Stock Exchange (LSE), giving birth to the leading diversified exchange group in Europe.

The strategic alliance between Borsa Italiana and the LSE brings together two highly efficient and complementary businesses, coupling the strengths of the LSE in the UK and international equities with those of Borsa Italiana in Italian cash equities, derivatives, securitised derivatives, fixed-income products and exchange-traded funds (ETFs), as well as in efficient post-trade services.

Specifically, the contribution of the Milan Stock Exchange to the success of the merger can be summed up in numbers as follows.

Over the last 10 years, Borsa Italiana has consolidated its position within the European financial markets and reached a peak in 2007 when it achieved all-time highs for cash and derivatives turnover, with an increasing number of initial public offerings (IPOs).

Specifically, in the first five months of 2007, the Italian primary market experienced a phase of high activity with 16 new listed companies, of which 12 were IPOs. Moreover, trading in shares reached an average of 307,300 trades per day and E6.5bn (£5.1bn), up 24% and 37% respectively on the corresponding period for the previous year. New records were also set by ETFs (daily average of 5,000 and E109m (£86m)) and securitised derivatives (daily average of 22,000 and E375m (£295m)). Finally, equity derivatives reached all-time highs, with a daily average of 158,400 standard contracts (up 19% on the corresponding period for 2006).

The combined group resulting from the merger will represent Europe’s leading equities business, with 48% of the FTS Eurofirst 100 by market capitalisation and the most liquid order book by value and volume traded; in addition, it will be the leading market for electronic trading of ETFs, securitised derivatives and fixed-income market, through its interest in Italian government bond market MTS.

Together, the Milan Stock Exchange and the LSE will be able to leverage their broad and highly compatible range of skills to contribute to the development of their marketplaces, as well as to create a greater platform for additional strong growth of both markets on a European and global scale.

After a quick glance at the objectives achieved so far, the bicentenary celebration of Borsa Italiana provides an opportunity to think over future goals for the Italian financial markets.

Taking due account of the remarkable impact of the Markets in Financial Instruments Directive (MiFID) regulation on the local and international scenario, the next challenges to be faced by the Milan Stock Exchange can be summed up as follows:

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