Shares should be sold by open auction without any special rights for stock exchange participants.

The submission supports the Committee on Stock Exchange's proposal that primary responsibility for supervising stock exchange activity and securities trading over other marketplaces be referred to the Banking, Insurance and Securities Commission, but points out that public supervision should be accompanied by daily supervision of trading. This supervision must be carried out by the marketplace itself, which has the optimal basis for continuous monitoring of the market. This approach to organising supervision of trading is consistent with international trends in the area of supervision.

Norges Bank stresses the importance of maintaining a dividing line between the commercial activities of the stock exchange and supervision of its activities. Norges Bank supports the majority view of the Committee concerning a statutory provision requiring the establishment of a supervisory committee for stock exchanges. A competitive securities market in Norway presupposes a high degree of confidence and integrity.

Norges Bank supports the proposal to establish three categories of marketplaces which, in the view of the central bank, should be designated stock exchange, authorised marketplace and marketplace. A hierarchy of this type contributes to ensuring efficiency, as there is a need for well-functioning marketplaces also for unlisted securities.

The proposal provides for the establishment of stock exchanges as ordinary limited companies, and stipulates rules for a possible conversion of the Oslo Stock Exchange into a limited company. With regard to this proposal, Norges Bank supports the minority which proposes that the initial sale of shares should be undertaken by open auction so that anyone who wishes can bid on the shares. Arguments supporting this are that the values represented by the stock exchange have been built up by a large number of agents, and that selling techniques or methods of distributing ownership other than by auction entail a transfer of values from society at large to individual participants. Norges Bank is of the view that the investors that are willing to bid highest for the stock exchange's shares, within the limits set by the applicable ownership rules, will contribute most to developing the stock exchange.

As to the discussion on ownership of the assets accumulated by the stock exchange, Norges Bank points out that current stock exchange values primarily derive from payments for services performed by the stock exchange for brokers and issuers. However, those who have paid for these services have been able to pass on the costs to the general public. Government has also made a substantial contribution to fostering the necessary confidence in the Oslo Stock Exchange. On this basis, it is not appropriate that the values accumulated accrue to today's participants.

Norges Bank agrees with the Committee's proposal to transfer the sales revenues to a non-stock stock exchange foundation whose purpose would be to promote a smoothly functioning Norwegian market for financial instruments. Users, government bodies, research and education institutions would be represented in the foundation.

Norges Bank is of the view that an ownership limit of 20 per cent in ordinary limited companies without restrictions on voting rights provides an appropriate balance between the arguments for and against ownership limits. Norges Bank thus supports the majority on this point. Emphasis is placed on the owners' ability to exercise influence in order to promote a well-functioning market and avoid an administration-driven institution.

Norges Bank considers the minority proposal to set the capital adequacy requirement on a discretionary basis, with reference to the concept of capital adequacy, as the most practical approach, because there could be substantial differences in the size and obligations applying to stock exchanges under the new act.