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LONDON-Lloyd's of London is investigating several possible cases of insider trading in connection with the market's auctions of syndicate capacity.

A "handful" of alleged cases of insider trading in the capacity auctions, which were first introduced two years ago, currently are being investigated, according to Richard Murphy, head of the monitoring division of Lloyd's regulatory board.

He announced the probe as Lloyd's unveiled new rules and conditions for the eight capacity auctions scheduled for this year.

The new features include a fully electronic auction system aimed not only at speeding up the settlement process but also providing closer monitoring to help prevent any breaches of auction rules.

Mr. Murphy said that under the new rules, "we'll take action swiftly" if any indications of insider trading by members who have access to privileged syndicate information are detected.

One of the rules requires disclosure by key personnel at Lloyd's-including member agents, managing agents, Lloyd's advisers, members of the Lloyd's Council, Regulatory and Market Boards and anyone closely connected with any of those individuals, such as a spouse-of plans to participate in any auction.

Lloyd's says the changes to this year's auctions "are designed to improve the efficiency of the administration of the auction and increase price stability."

While Lloyd's members' services unit will deal with the day-to-day administration of the auctions, the capital management division will oversee the actual auction process, and Lloyd's regulatory division will monitor all disclosures.

Also new this year is a process in which bidders will actually pay the price they bid, rather than common "strike price" paid by all bidders in last year's auction based on the price of the lowest successful bid.

This year's auctions are scheduled for July 8 and 22, Aug. 5 and 19, and Sept. 2, 9, and 23. There will be an additional auction on Dec. 16 of capacity released by members who have died.

In last year's auctions, some (British pounds) 1.4 billion ($2.4 billion) of capacity-representing 14% of Lloyd's total 1997 capacity-was allocated at a value of (British pounds) 35 million ($59.9 million).