SEC Division of Corporation Finance no-action letter: Barcelona Stock Exchange, Bilbao Stock Exchange, Madrid Stock Exchange and Valencia Stock Exchange

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Securities Act of 1933 — Rule 902(b)(2)

March 11, 2003

Response of the Office of International Corporate Finance Division of Corporation Finance

Re:

Barcelona Stock Exchange, Bilbao Stock Exchange, Madrid Stock Exchange and Valencia Stock Exchange Incoming letter dated February 10, 2003

Luis de Carlos Bertrán Uría & Menéndez Jorge Juan 6 28001 Madrid Spain

Re: Barcelona Stock Exchange, Bilbao Stock Exchange, Madrid Stock Exchange and Valencia Stock Exchange

Dear Mr. Bertrán:

This letter will confirm the response of the Division of Corporation Finance to your request that the Division designate the Barcelona Stock Exchange, the Bilbao Stock Exchange, the Madrid Stock Exchange and the Valencia Stock Exchange each as a "designated offshore securities market" within the meaning of Rule 902(b) of Regulation S under the Securities Act of 1933. A copy of your letter is enclosed in order to avoid having to recite or summarize the facts set forth therein. On the basis of the facts presented, we hereby so designate the Barcelona Stock Exchange, the Bilbao Stock Exchange, the Madrid Stock Exchange and the Valencia Stock Exchange.

Pursuant to delegated authority,

Paul M. Dudek Chief Office of International Corporate Finance

Incoming Letter

URÍA & MENÉNDEZ

JORGE JUAN 6,�28001 MADRID,�SPAIN tel:�34 91 586 04 00 fax:�34 91 586 04 04 email:�all@uria.com url:�www.uria.com

1933 Act / Rule 902(b)(2)

Madrid, February 10, 2002

Alan L. Beller, Director Division of Corporation Finance United States Securities and Exchange Commission 450 Fifth Street, N.W. Washington, DC 25049

Dear Mr. Beller:

We are writing to you on behalf of the Barcelona Stock Exchange ( Bolsa de Barcelona ), the Bilbao Stock Exchange ( Bolsa de Bilbao ), the Madrid Stock Exchange ( Bolsa de Madrid ) and the Valencia Stock Exchange ( Bolsa de Valencia ) (these four stock exchanges collectively, the "Official Spanish Stock Exchanges") to seek the classification of each of them as a "designated offshore securities market" for purposes of Regulation S ("Regulation S") under the U.S. Securities Act of 1933, as amended. This designation is being sought in order to assist market participants who are eligible for the safe harbor provided by Rule 904 of Regulation S in satisfying the requirements specified in that rule when reselling securities "in, on or through the facilities of" the Official Spanish Stock Exchanges.

As discussed below, each of the Official Spanish Stock Exchanges, both individually and in its joint operation with the others of the Spanish continuous trading system, has the attributes specified in Rule 902(b)(2) of Regulation S. Further, as demonstrated by these and other factors discussed below, each of them constitutes a market with a clear "foreign locus," subject to extensive home country regulation, in which investors cannot fairly be viewed as relying for protection on U.S. registration requirements. Accordingly, we are requesting that you, as Director of the Division of Corporate Finance, exercise the authority delegated to you by the Commission ( see 17 CFR § 200.30-1(i)) to classify each of the four Official Spanish Stock Exchanges as a "designated offshore securities market."

Introduction to the Official Spanish Stock Exchanges

The four Official Spanish Stock Exchanges operate as distinct markets linked together through an electronic continuous trading system known as the Sistema de Interconexión Bursátil Español (the "SIBE"). On a combined basis, the Official Spanish Stock Exchanges constitute the fourth largest market in Europe for equity securities based on trading volume. Trading volume in equity securities on the Official Spanish Stock Exchanges exceeded €444 billion in 2001, of which more than 99.2% involved securities traded through the SIBE. The total market capitalization of the Official Spanish Stock Exchanges was approximately €580 billion at December 31, 2001, of which 76.7% related to securities traded through the SIBE. 1 Detailed information regarding trading volume in equity securities on the Official Spanish Stock Exchanges is attached hereto as Appendix A.

In addition to equity securities, fixed-income instruments are listed and traded on the Official Spanish Stock Exchanges. Trading in fixed-income instruments exceeded €57.4 billion in 2001 with an aggregate face value of €17.2 billion at December 31, 2001. Detailed information regarding trading volume in fixed-income securities on the Official Spanish Stock Exchanges is attached hereto as Appendix B. Less significant markets exist on the Official Spanish Stock Exchanges for warrants and securities referred to as "certificates" (commonly linked to stock or industry indices). The most important of these is the Madrid Stock Exchange, which as of December 31, 2001 listed 1,092 separate issues of warrants (with €1.6 billion in premiums traded in 2001). As a result of the recent creation of a new market segment for warrants, certificates and other products within the SIBE, trading in these securities on the Official Spanish Stock Exchanges is expected to increase in the future. No trading facility or privileges are provided on any of the Official Spanish Stock Exchanges for any security that has not been registered with the CNMV and duly listed on the relevant exchange.

Despite the strong relationships among the four Official Spanish Stock Exchanges, each of them is organized as a separate exchange with individual operations, and all transactions carried out through the SIBE are allocated to one of the exchanges (i.e., the exchange to which the member who enters the buy order belongs).

Barcelona Stock Exchange . The Barcelona Stock Exchange was officially founded in 1915. As required by Spanish law, it is managed and operated by the Sociedad Rectora de la Bolsa de Valores de Barcelona S.A. , a corporation organized under the laws of the Kingdom of Spain. The membership of the Barcelona Stock Exchange consists of 18 major financial institutions and nine established securities dealers. At December 31, 2001, approximately 715 domestic and foreign companies had their equity securities listed on the Barcelona Stock Exchange. The total market capitalization of the equity securities listed on the Barcelona Stock Exchange at December 31, 2001 was €515.4 billion.

Bilbao Stock Exchange . The Bilbao Stock Exchange was officially founded in 1890. As required by Spanish law, it is managed and operated by the Sociedad Rectora de la Bolsa de Valores de Bilbao S.A. , a corporation organized under the laws of the Kingdom of Spain. The membership of the Bilbao Stock Exchange consists of seven major financial institutions and one established securities dealer. At December 31, 2000, approximately 413 domestic and foreign companies had their equity securties listed on the Bilbao Stock Exchange. The total market capitalization of the equity securities listed on the Bilbao Stock Exchange at December 31, 2001 was €485.5 billion.

Madrid Stock Exchange . The Madrid Stock Exchange was officially founded in 1831. As required by Spanish law, it is managed and operated by the Sociedad Rectora de la Bolsa de Valores de Madrid S.A. , a corporation organized under the laws of the Kingdom of Spain. The membership of the Madrid Stock Exchange consists of 41 major financial institutions and 12 established securities dealers. The Madrid Stock Exchange is the largest of the Official Spanish Stock Exchanges. At December 31, 2001, approximately 1477 domestic and foreign companies had their equity securities listed on the Madrid Stock Exchange. The total market capitalization of the equity securities listed on the Madrid Stock Exchange at December 31, 2001 was €552.4 billion.

Valencia Stock Exchange . The Valencia Stock Exchange was officially founded in 1980. As required by Spanish law, it is managed and operated by the Sociedad Rectora de la Bolsa de Valores de Valencia S.A. , a corporation organized under the laws of the Kingdom of Spain. The membership of the Valencia Stock Exchange consists of 12 major financial institutions and two established securities dealers. At December 31, 2001, approximately 593 domestic and foreign companies had their equity securities listed on the Valencia Stock Exchange. The total market capitalization of the equity securities listed on the Valencia Stock Exchange at December 31, 2001 was €469.9 billion.

Ownership of the Official Spanish Stock Exchanges . As mentioned above, each Official Spanish Stock Exchange is managed and operated by an individual corporation, referred to as a sociedad rectora . The sociedades rectoras are statutorily created for-profit entities required to carry out their activities in the best interests of the market and investors and under the direct supervision of the CNMV. Until recently, the sole shareholders of each of the four sociedades rectoras were the members of the relevant exchange. As part of an initiative to simplify the corporate structure governing the secondary markets and settlement systems in Spain, all of the members of the Official Spanish Stock Exchanges recently exchanged their respective shares in the individual sociedades rectoras for shares in a new holding company, the Bolsas y Mercados Españoles, Sociedad Holding de Mercados y Sistemas Financieros, S.A. (the "OSSE Holding Company"). As a result of this reorganization, which was completed in October 2002, the individual corporations that formerly operated the Official Spanish Stock Exchanges, the national clearance and settlement system and certain other secondary markets in Spain are now owned and controlled by the OSSE Holding Company. In turn, the members of the Official Spanish Stock Exchanges and the shareholders of the other secondary market systems in Spain own, directly or indirectly, all of the shares of the OSSE Holding Company.

The corporate reorganization described above is intended to achieve greater administrative efficiency, and does not affect or reduce the oversight functions of the CNMV over the affected entities or materially change the attributes of the Official Spanish Stock Exchanges discussed later in this letter. Further, each of the Official Spanish Stock Exchanges continues to operate as a separate exchange in the same manner as it did previously. Accordingly, the classification of each of these exchanges as a "designated offshore securities market" as requested herein is not affected as a result of the reorganization.

Trading on the Official Spanish Stock Exchanges . As mentioned above, trading on the Official Spanish Stock Exchanges occurs primarily through an electronic continuous trading system linking the four exchanges known as the SIBE. The SIBE is managed and operated by the Sociedad de Bolsas S.A. , a corporation organized under the laws of the Kingdom of Spain and owned in equal parts by the four Official Spanish Stock Exchanges. In 2001, trading through the SIBE represented approximately 99.2% of the aggregate trading volume in equity securities on the Official Spanish Stock Exchanges, with the remaining 0.8 percent represented by trading through a traditional "call market" conducted every morning at each of the Official Spanish Stock Exchanges.

Orders to buy and sell securities are entered into the SIBE through members of the Official Spanish Stock Exchanges. A pre-opening session is held from 8:30 a.m. to 9:00 a.m. on each day of trading, during which an opening price for each security is established through a real-time auction in which orders can be entered, modified or cancelled, but not executed. The SIBE operates from 9:00 a.m. to 5:30 p.m., during which period buy and sell orders entered into the system are executed as soon as they can be matched. Additionally, trades in excess of €300,000 may occur outside the SIBE between 5:30 p.m. and 8:00 p.m. without prior approval from the Sociedad de Bolsas within a specified price range and subject to certain conditions, and may also occur outside the SIBE at any time and at any price with prior approval from the Sociedad de Bolsas in special cases, such as negotiated block sales of securities. Regardless of whether a trade occurs within or outside the SIBE, it must be communicated to the Sociedad de Bolsas on the same day and reported the next day electronically and in the Boletín de Cotización , an official publication of the Official Spanish Stock Exchanges.

Clearance and settlement of securities traded on the Official Spanish Stock Exchanges occur exclusively through an entity analogous to The Depositary Trust Company in the United States, referred to as the Servicio de Compensación y Liquidación de Valores (the "SCLV"), of which the Official Stock Exchanges and the OSSE Holding Company are shareholders. All securities listed on the Official Spanish Stock Exchanges are held in book-entry form and all trades are settled on a T+3 basis in accordance with procedures that are fully compliant with the standards recommended by the "Group of Thirty," which are intended to increase efficiency and reduce risks in the settlement of securities transactions. In addition, the SCLV is a covered system under Spanish legislation implementing a special European Union directive concerning the reduction of system risks in clearance and settlement activities. As a result of recently approved legislation, by May 2003 the activities of the SCLV are required to be merged with the activities of the settlement system currently used for transactions in public sector debt securities. In furtherance of this new legislation, the relevant Spanish authorities are expected to issue rules and regulations to govern the activities of the merged entity.

Regulation of the Official Spanish Stock Exchanges . As mentioned above, each of the Official Spanish Stock Exchanges is managed and operated by a statutorily-mandated corporation whose sole shareholder is the OSSE Holding Company. These corporations establish rules and standards governing the trading activities of the exchange's members. All activities of the Official Spanish Stock Exchanges and their managing corporations are under the direct supervision and regulatory authority of the CNMV. The CNMV fulfills a role similar to that of the Commission in the United States, acting as the primary government regulator of the securities markets in Spain whose ultimate mission is to protect investors. The CNMV is a member of the International Organization of Securities Commissions (IOSCO) and serves alongside the Commission on the Technical Committee, which consists of members from more developed securities markets.

Discussion of the Attributes Specified in Rule 902(b)(2)

Rule 902(b)(2) contains a non-exclusive list of the attributes to be considered by the Commission in determining whether to classify a particular securities market as a "designated offshore securities market." As discussed below, each of the Official Spanish Stock Exchanges possesses those attributes.

Organization under foreign law. As contemplated by Spanish law, each of the Official Spanish Stock Exchanges, the SIBE and the SCLV is operated by a corporation organized under the laws of the Kingdom of Spain, and is under the exclusive jurisdiction of the regulatory authorities in Spain.

Association with a generally recognized community of professional intermediaries with an established operating history. Under Spanish law, all transactions on the Official Spanish Stock Exchanges must be executed by a member of one of those exchanges. Failure to adhere to this requirement would result in the nullification of the transaction involved. Only financial institutions and securities brokers that are duly authorized to provide investment services in Spain or another member country of the European Union (as required by E.U. directives on open markets) are entitled to become members of the Official Spanish Stock Exchanges. Entities from non-E.U. jurisdictions may apply for membership on a case-by-case basis, but the Spanish authorities may deny any such application if the applicant is not subject to comparable home country regulation or for other discretionary reasons. In all cases, prospective members must comply with substantive and procedural requirements established and verified by the CNMV, thereby ensuring that the ownership, corporate structure and financial resources of those entities have been examined and approved by government regulators with a view to preserving the integrity of the market.

The membership of each of the Official Spanish Stock Exchanges consists of the leading Spanish and European financial institutions and securities dealers. (The figures that follow were prepared on a consolidated basis in accordance with home country GAAP and are provided once only for each financial institution at December 31, 2001, unless otherwise indicated.) Members of the Barcelona Stock Exchange include: BBVA Bolsa S.V. S.A., a subsidiary of Banco Bilbao Vizcaya Argentaria S.A. (€309.2 billion in assets); Banesto Bolsa S.A. S.V.B., a subsidiary of Banco Español de Credito S.A. (€44.9 billion in assets); Santander Central Hispano Bolsa S.V. S.A., a subsidiary of Banco Santander Central Hispano S.A. (€358.1 billon in assets); Caja Madrid Bolsa S.V. S.A., a subsidiary of Caja Madrid S.A. (€66.7 billion in assets); Deutsche Securities S.V.B. S.A., a susidiary of Deutsche Bank Corporation (€918.2 billion in assets); and Invercaixa Valores S.V. S.A., a subsidiary of la Caixa S.A. (€87.7 billion in assets). Members of the Bilbao Stock Exchange include: Banesto Bolsa S.A. S.V.B.; BBVA Bolsa S.V. S.A.; Santander Central Hispano Bolsa S.V. S.A.; and J.P. Morgan Bank, S.A., a subsidiary of JPMorgan Chase (US$693.6 billion in assets). Members of the Madrid Stock Exchange include: ABN Amro Equities (Spain) S.A. S.V.B., a subsidiary of ABN AMRO Bank S.V. (€597.4 billion in assets); BBVA Bolsa S.V. S.A.; Banesto Bolsa S.A. S.V.B.; Santander Central Hispano Bolsa S.V. S.A.; BTM Securities (Spain) S.A. S.V.B., a subsidiary of Bank of Tokyo-Mitsubishi (¥93,489 billion in assets); Caja Madrid Bolsa S.V. S.A.; Crédit Agricole Indosuez Cheureux España S.V., a subsidiary of Crédit Agricole Indosuez Cheureux S.A. (€563.3 billion in assets); Crédit Lyonnais, S.A., Sucursal en España, a subsidiary of Crédit Lyonnais S.A. (€202.4 billion in assets); Credit Suisse First Boston S.V.B. S.A., a subsidiary of Credit Suisse First Boston Corporation (CHF1,022.5 billion); Deutsche Securities S.V.B. S.A.; Invercaixa Valores S.V. S.A.; Merrill Lynch Capital Markets S.V.B. S.A., a subsidiary of Merrill Lynch (US$419.4 billion in assets); Morgan Stanley Dean Witter SVB, a subsidiary of Morgan Stanley Dean Witter & Co. (US$482.6 billion in assets at November 30, 2001); and UBS Warburg Dillon Read Securities S.V.B., a subsidiary of UBS Group (CHF1,253.3 billion). Members of the Valencia Stock Exchange include: Amro Equities (Spain) S.A. S.V.B.; BBVA Bolsa S.V. S.A.; Banesto Bolsa S.A. S.V.B.; Santander Central Hispano Bolsa S.V. S.A; HSBC Intermediarios (España) A.V.B., S.A., a subsidiary of HSBC Holding plc (US$695.8 in assets); and Invercaixa Valores S.V. S.A.

Oversight by a governmental or self-regulatory body. As discussed above, each of the Official Spanish Stock Exchanges is managed and operated by a statutorily-mandated corporation that has established an extensive body of rules and standards covering all aspects of the exchange's operations and governing the activities of its respective members and exchange-listed issuers. Also as discussed above, the CNMV regulates these corporations and supervises their operation of the Official Spanish Stock Exchanges. The relationships between the CNMV and the Official Spanish Stock Exchanges closely resemble those between the Commission and self-regulatory organizations (SROs) in the United States.

The stated objective of the CNMV in its regulation of the Spanish securities markets, including the Official Spanish Stock Exchanges, is to promote the transparency and efficiency of those markets for the protection of investors. In carrying out its oversight functions, the CNMV:

requires its approval (or the approval of the appropriate regional authority) of the by-laws and composition of the board of directors of the corporations that manage and operate the Official Spanish Stock Exchanges;

may invalidate decisions taken by the corporations that manage and operate the Official Spanish Stock Exchanges if it deems those decision to be contrary to applicable law;

requires its prior approval for the admission of securities to the Official Spanish Stock Exchanges;

requires the Official Spanish Stock Exchanges to collect and report information regarding trading activity in the securities listed on those exchanges;

is authorized to suspend trading in a particular security if it deems that insufficient information has been provided by the issuer of that security;

analyzes and supervises the technological systems utilized by the Official Spanish Stock Exchanges;

requires companies listed on one or more of the Official Spanish Stock Exchanges to furnish, on a public basis, detailed business and financial information; and

requires public notification of significant sales and purchases of equity securities of companies listed on one or more of the Official Spanish Stock Exchanges.

The CNMV also has regulatory authority over the clearance and settlement activities of the SCLV.

As mentioned above, securities cannot be admitted to any of the Official Spanish Stock Exchanges without the prior approval of the CNMV. Issuers who wish to obtain such approval from the CNMV must satisfy certain substantive requirements in their corporate and capital structure and, in addition, must submit for review detailed information (typically in the form of an offering or listing prospectus or " folleto ") about their business (including audited financial statements covering at least two fiscal years) and the securities to be listed. An issuer who successfully completes this process and lists its securities on one or more of the Official Spanish Stock Exchanges must thereafter furnish periodic financial and other information. Securities may be delisted if the issuer fails to comply with reporting or other legal requirements or if trading in the security falls below a minimum level. Voluntary delisting is available in some cases and usually requires the issuer to make a prior offer to purchase the securities to be delisted.

Oversight standards set by an existing body of law . The framework for the regulation of the Spanish securities markets is established by the Ley 24/1988, de 28 de julio, del Mercado de Valores (the "1988 Securities Market Act"), which superseded a fragmented legislative scheme that regulated the Spanish securities markets for over 100 years. The 1988 Securities Market Act created the CNMV, established its jurisdiction and regulatory authority and charged it with the mission of protecting investors by promoting transperency and efficiency in the financial marketplace. The 1988 Securities Act also mandated the corporate structure for the Official Spanish Stock Exchanges and created the SCLV.

The dictates of the 1988 Securities Act are supplemented by: reales decretos (royal decrees), which are approved by the Council of Ministers; ordenes ministeriales (ministerial orders), which are approved by the Minister of Economy; and circulares (official circulars), which are approved by the CNMV. One or more of these supplemental regulatory devices have been adopted in practically all areas relevant to the regulation of capital markets in Spain, including the activities of the Official Spanish Stock Exchanges. Examples of the latter include royal decrees specifying the criteria and procedures for the admission of financial institutions and securities brokers as members to the Official Spanish Stock Exchanges, establishing guidelines for the by-laws, structure and operations of the corporations that operate those exchanges and specifying criteria for access to the SIBE, as well as ministerial orders establishing criteria for access to the SCLV and official circulars requiring audits and reports of the operations of the Official Spanish Stock Exchanges.

Reporting of securities transactions on a regular basis to a governmental or self-regulatory body . The cornerstone of the 1988 Securities Act is market transperency, and Article 43 thereof requires the CNMV and the Official Spanish Stock Exchanges to adopt regulations for the collection and dissemination of information regarding securities transactions. All sale and purchase transactions on the Official Spanish Stock Exchanges must take place through one or more of their members, who are required by the terms of their membership to report all transactions promptly. Information regarding all transactions in securities traded on the SIBE is collected through electronic messages produced each time a transaction is executed that contain information about the price, volume and identity of the members involved, and this information is in turn made available electronically on a real-time basis to market participants and financial news services. In addition, a Boletín de Cotización (Market Bulletin) is published every business day providing detailed information about the previous day's trading in each security listed on the Official Spanish Stock Exchanges. Transactions that occur "after-hours" in the limited circumstances described above must be communicated immediately to the Sociedad de Bolsas and reported publicly on the next business day. In addition, each of the Official Spanish Stock Exchanges provides Internet-based access to databases of current and historical information about trading in the securities listed thereon.

In addition to the multiple sources of real-time and historical information described above, the CNMV has promulgated regulations requiring persons with significant positions in publicly traded securities to prepare and file reports. These regulations resemble those promulgated by the Commission in the United States requiring the preparation and submission of reports on Schedules 13D and 13G. The CNMV regulations generally require persons who purchase or sell shares of a publicly traded company to file a report if, as a result of such purchase or sale, its position in the subject security increases or decreases by five percent or any increment thereof. Additional reporting obligations are imposed in the case of transactions involving company directors or the "control person" of a group of companies.

A system for exchange of price quotations through common communications media. As discussed above, practically all trading on the Official Spanish Stock Exchanges occurs through the SIBE, an electronic continuous trading system linking the four exchanges. (Only 0.8 percent of trading occurs outside the SIBE through a traditional "call market" conducted every morning at each of the Official Spanish Stock Exchanges; trading through this traditional call market, which is generally limited to smaller issuers listed on a single exchange, is reported in the daily Market Bulletin in the same manner described above.) The SIBE operates as an electronic marketplace, similar to the New York Stock Exchange's electronic continuous trading system, providing up-to-the-second price quotations and automatically matching buy and sell orders based on price and time of receipt. Sale and purchase transactions are allocated "blindly" on the SIBE, as neither buyers nor sellers have control over or knowledge of the identity of their counterparty in any transaction (even though members are able to view information about other members' buy and sell orders at any given moment). The real-time data collected through the SIBE is made available to hundreds of market participants and financial news services, both directly and through authorized distributors.

An organized clearance and settlement system . As discussed above, clearance and settlement of all securities traded on the Official Spanish Stock Exchanges occur on a T+3 basis through the SCLV. The SCLV operates in accordance with procedures that are fully compliant with the standards recommended by the "Group of Thirty," which are intended to increase efficiency and reduce risks in the settlement of securities transactions. Access to the SCLV is limited to authorized members of the Official Spanish Stock Exchanges and, with the prior approval of the CNMV, to certain other securities intermediaries. The latter include the Bank of Spain, Spanish credit institutions, non-Spanish settlement and clearance systems and Spanish securities dealers and brokers who are not members of any exchange. Entities with access to the SCLV are referred to as "participants," and currently number approximately 140. All participants must possess adequate control systems and technical resources in order to participate in the SCLV, which continuously monitors and tests compliance with such requirements.

Securities listed on the Official Spanish Stock Exchanges are held in book-entry form only. The SCLV maintains an electronic registry of the number of units of each security held by each participant, with separate figures provided for units held by that participant for its own account and units held by that participant on behalf of third parties. Each participant is in turn required to maintain records of the beneficial ownership of the securities held by it on behalf of third parties through its account at the SCLV.

Conclusion

When the Commission adopted Regulation S, it established a process for the designation of securities markets as "designated offshore securities markets" in the context of resales under Rule 904, modifying the more liberal approach in its original proposal that would have automatically extended the safe harbor for resales to qualifying transactions carried out on any "established foreign securities exchange" (with no definition of that term provided). See Offshore Offers and Sales, Release No. 33-6679 (June 10, 1988) (proposed rule). In the Commission's view, transactions carried out on a foreign securities market that had been so designated would "provide objective evidence of the foreign locus of the transaction" such that "buyers in such markets may be presumed to rely on the regulatory protections afforded by local law and not U.S. registration requirements." See Offshore Offers and Sales, Release No. 33-6863 (April 24, 1990) (final rule).

As demonstrated by the above discussion, the Official Spanish Stock Exchanges constitute well-established, robust securities markets, subject to extensive home country regulation. Transactions carried out on those exchanges have a clear foreign locus and the parties thereto cannot fairly be viewed as relying for protection on U.S. registration requirements. Accordingly, market participants who sell and purchase securities "in, on or through the facilities of" those exchanges in transactions otherwise complying with the requirements of the safe harbor for resales provided by Rule 904 should be provided with the additional measure of comfort provided by that safe harbor. Accordingly, we respectfully request that you confirm the designation of each of the Barcelona Stock Exchange, the Bilbao Stock Exchange, the Madrid Stock Exchange and the Valencia Stock Exchange as a "designated offshore securties market" under Rule 902(b)(2). This action on your part would be consistent with the similar designation, subsequent to the adoption of Regulation S, of the Berlin Stock Exchange, the Copenhagen Stock Exchange, the European Association of Securities Dealers Automated Quotation System, the Lima Stock Exchange, the Mexican Stock Exchange, the Singapore Stock Exchange and the Warsaw Stock Exchange.

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We would be happy to discuss our request with your further and answer any additional questions you may have about the regulatory or operational aspects of the Official Spanish Stock Exchanges. Please do not hesitate to contact the undersigned on +(34) 915 860 374, with any questions.

Sincerely,

Luis de Carlos Bertrán

Endnote

1 The statistical information regarding the Official Spanish Stock Exchanges cited here and elsewhere in this letter were obtained from the Informe anual sobre los Mercados de Valores 2001 (Annual Report on the Securities Markets for 2001), published by the Comisión Nacional del Mercado de Valores ("CNMV"), as well as official information made available on the websites of the Official Spanish Stock Exchanges.

APPENDIX A

SECONDARY MARKETS. EQUITIES. EFFECTIVE TRADING IN EQUITIES ON THE SPANISH STOCK EXCHANGES.2001

Amounts in millions of euros

Total

Electronic Market

Outcry Market

Outcry Markets

Second Market

Madrid

Barcelona

Bilbao

Valencia

1998

261,092.6

257,921.1

3,158.2

2,291.0

475.9

176.3

215.0

12.7

1999

289,353.9

286,020.4

3,302.4

2,003.1

885.1

170.2

244.0

31.1

2000

492,301.7

488,888.5

3,382.2

2,062.4

695.1

259.9

364.7

18.3

2001

444,301.8

440,604.8

3,672.1

2,469.6

660.2

296.7

245.6

24.9

January

46,611.4

46,432.6

177.7

119.1

31.0

11.0

16.7

1.1

February

36,831.8

36,579.2

252.0

178.5

45.5

15.9

12.3

0.5

March

39,486.6

39,270.4

215.4

130.9

54.1

15.2

15.2

0.8

April

36,018.7

35,868.4

149.8

113.2

24.4

6.4

5.8

0.5

May

36,703.2

36,487.8

214.9

156.2

29.0

15.8

13.9

0.5

June

38,600.1

38,320.2

277.4

159.7

62.6

29.5

25.6

2.6

July

35,866.6

35,117.5

745.4

584.9

103.4

27.2

29.9

3.7

August

27,520.6

27,332.5

187.9

109.2

12.9

45.7

20.1

0.2

September

34,640.7

34,417.3

220.3

130.9

37.9

23.2

28.3

3.2

October

35,321.6

35,041.7

277.3

172.6

58.0

18.5

28.1

2.6

November

38,358.2

38,016.8

338.1

244.1

60.5

20.6

12.9

3.4

December

38,342.3

37,720.5

615.9

370.4

141.0

67.7

36.8

5.9

Pro Memoria Change 01-00 (%) Share in 2001 (%)

-9.8 100.0

-9.9 99.2

8.6 0.8

19.7 67.3

-5.0 18.0

14.1 8.1

-32.7 6.7

35.9 0.0

Share: Trading on the electronic, outcry and second markets of the total and trading on the outcry market in each exchange as percentage of total outcry trading.

APPENDIX B

SECONDARY MARKETS. FIXED-INCOME. STOCK EXCHANGES. EFFECTIVE TRADING VOLUME. 2001

Amounts in millions of euros

Total

Electronic Market

Outcry Market

Outcry (2)

Pro Memoria E.M. share (%) (3)

Barcelona

Bilbao

Valencia

1997

54,219.6

25,546.7

28,672.9

10,468.7

17,965.0

239.2

47.1

1998

53,238.0

2,607.5

50,630.5

23,136.4

27,211.8

282.3

4.9

1999

44,908.9

2,598.0

42,310.9

28,615.0

13,405.6

290.3

5.8

2000

40,704.0

1,965.3

38,738.7

30,729.0

7,440.1

569.6

4.8

2001

57,463.1

2,383.8

55,079.3

50,498.8

4,142.8

437.6

4.1

January

2,524.1

137.0

2,387.1

2,014.7

317.7

54.7

5.4

February

2,559.3

123.1

2,436.2

2,101.3

291.3

43.6

4.8

March

5,043.4

151.2

4,892.2

4,489.7

360.4

42.0

3.0

April

5,363.4

474.0

4,889.4

4,428.6

440.4

20.3

8.8

May

5,570.3

139.1

5,431.2

4,987.6

404.1

39.6

2.5

June

4,957.1

100.4

4,856.6

4,386.3

445.0

25.3

2.0

July

5,251.6

130.0

5,121.6

4,765.8

296.7

59.2

2.5

August

4,507.0

62.0

4,445.0

4,164.0

243.7

37.4

1.4

September

4,854.6

425.1

4,429.5

4,081.5

317.1

30.9

8.8

October

6,081.2

318.1

5,763.1

5,392.5

330.8

39.8

5.2

November

6,293.4

181.1

6,112.3

5,683.3

405.1

23.9

2.9

December

4,457.6

142.7

4,314.9

4,003.5

290.5

20.9

3.2

Change (%)

1998 / 97

-1.8

-89.8

76.6

121.0

51.5

18.0

1999 / 98

-15.6

-0.4

-16.4

23.7

-50.7

2.8

2000 / 99

-9.4

-24.4

-8.4

7.4

-44.5

96.2

2001 / 00

41.2

21.3

42.2

64.3

-44.3

-23.2

Share (%)

1998

100.0

4.9

95.1

43.5

51.1

0.5

1999

100.0

5.8

94.2

63.7

29.9

0.6

2000

100.0

4.8

95.2

75.5

18.3

1.4

2001

100.0

4.1

95.9

87.9

7.2

0.8

(1) Includes fixed-income warrant trading. 198 millions euros in 1999 and 902 millions euros in 2000.

(2) All fixed-income trading on the Madrid Exhcange is conducted in the electronic market.

(3) Percentage of total fixed-income trading. E.M.: Electronic Market.

http://www.sec.gov/divisions/corpfin/cf-noaction/offshore031103.htm

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Modified: 03/18/2003