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Covington Advises SIS SegaInterSettle AG on Electronic Settlement Facility for US Companies Trading on AIM

November 28, 2006

WASHINGTON, DC, November 28, 2006 — Covington & Burling LLP client, SIS SegaInterSettle AG, the Swiss clearing and settlement agency, is now offering to the London market a settlement service specifically designed to permit trades in shares of US companies on AIM to be settled electronically. This service went live last week. Covington advised SIS on the development of this facility.

The practice in the London market up until now was to require trades in shares of US companies on AIM for at least a year after their IPOs to be settled with paper certificates. This requirement was imposed in order to assure compliance with SEC Regulation S and thereby avoid SEC registration. However, this practice complicated the process for the back offices of London brokerage houses and had a negative impact on the liquidity of these “Reg. S shares.”

Covington worked with SIS to solve this “physical delivery” problem by utilizing certain technological capabilities of the SIS computer settlement system in a manner that would permit compliance with Regulation S through electronic communications.

Tod Ackerly led the Covington team.

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