IEM PROSPECTUS: TAIWAN_VS
2000 Presidential Election in Taiwan
Vote Share Market

At noon Iowa time on Monday, November 22, 1999 (2:00 am on 11/23 in Taiwan) the Iowa Electronic Market (IEM) in cooperation with the Center for Chinese Electoral Studies, Duke University, will open trading in a market based on the outcome of the 2000 Presidential Election in Taiwan scheduled for March 18.

Contract liquidation values in this Presidential Election Vote Share market will be determined by the share of the nationwide vote won by candidates for the election. Initially, four contracts will trade in this market, three representing specific candidates and the fourth representing all candidates for the election except for these three. The liquidation values of each contract will be determined as $1.00 times the share of the vote won by the candidate or the set of candidates represented by that contract.

This document describes that market and should be viewed as a supplement to the IEM Trader's Manual. Except as specified in this prospectus, trading rules for this market are the same as those specified in the Trader's Manual for the Iowa Electronic Market.


CONTRACTS

The initial financial contracts traded in this market are as follows:

     Symbol          Contract Name

     TWLien_VS        $1 x Vote share of Lien Chan,
	                       Kuomintang party candidate
     TWChen_VS        $1 x Vote share of Chen Shi'ism,
	                       Democratic Progressive Party candidate
     TWSoong_VS       $1 x Vote share of James Soong,
	                       independent candidate
     TWrof_VS         $1 x Vote share of all qualified candidates
	                       not separately listed
      

The contract TWLien_VS is associated with the candidacy of Lien Chan as the representative of the Kuomintang Party. While the contract name and symbol refer to the candidate for ease of identification, this contract is tied to the Kuomintang party. If Mr. Lien should withdraw from the campaign and be replaced by another candidate for the Kuomintang party, all rights in the contract will transfer to the new candidate, and the symbol and name for the contract will be changed to reflect that change.

Likewise, TWChen_VS refers to the candidacy of Chen Shui-bian of the Democratic Progressive Party. Should Mr. Chen withdraw, interest in this contract will transfer to the candidate chosen by the party to replace him, and the symbol and name of the contract will change to reflect that new candidate.

The contract TWSoong_VS represents the candidacy of Mr. James Soong as an independent candidate for the presidency. Should Mr. Soong fail to receive any votes as an independent candidate for whatever reason (including but not restricted to failure to qualify for candidacy, withdrawal from the race for other reasons, and adoption as a candidate for another party) then shares held in this contract will be declared worthless after the market closes and those shares will earn a liquidation value of $0.00.

The contract TWrof_VS represents all qualified candidates for the election who are not separately identified by individual contracts as of the close of the market.

The IEM and the Center for Chinese Electoral Studies reserve the right to spin off new contracts from the TWrof_VS contract at any time. If a new candidate should emerge with sufficient viability (as judged by the Center), then a new contract will be created to represent this new candidate and it will be introduced as a spin-off of the TWrof_VS contract. Specifically, each share held in an original TWrof_VS contract will be replaced by two shares, one in the new, candidate-specific contract and one in a continuing but revised TWrof_VS contract. Upon contract liquidation, all vote shares which would have been credited to the TWrof_VS contract in the absence of the spin-off will be split between the two post-spinoff contracts according to the votes cast in the election. Accordingly, no holder of the pre-spinoff contracts will be adversely affected. Decisions to spin-off a contract will be announced at least two days in advance of the spin-off. The new contract names, the specifications regarding liquidation values and the timing of the spin-off will be included in the announcement. This announcement will appear as a News Bulletin on your WebEx login screen. All limit orders to buy or to sell TWrof_VS will be canceled just prior to the spinoff.


DETERMINATION OF LIQUIDATION VALUES

This is a vote-share market. Each contract will earn a post-election liquidation value of $1.00 times the share of the nation-wide vote won by the candidate (or candidates) represented by that contract.

The United Daily News and the China Times will be the official sources for election results. Specifically, final vote counts reported by these newspapers within 2 days after the election will be taken as the official vote count for determination of vote shares, and thus of liquidation values. Should there be a difference in the vote count reports by the two newspapers, the average of the reported votes for each candidate will be used as the official result.


MARKET CLOSING

This market will close at 10:00 am Iowa time on Friday, March 17, 2000 (midnight in Taiwan) in anticipation of the election in Taiwan the next day. Contract liquidations will be made on or about March 21, after the official election results (as described above) become known. Proceeds from these liquidations will be credited to the cash accounts of market participants, and checks for the resulting balance in those accounts will be issued and mailed as soon as possible thereafter. Taiwanese election laws allow for the postponement of the election under certain conditions, the death of a qualified candidate, for example. If the election is postponed, the market will continue with such modifications as become necessary. Any changes in the specifications of the market (contract names or the closing date of the market, for example) will be made under the authority of the market organizers (The IEM and the Center for Chinese Electoral Studies at Duke University) and will conform as closely as possible to the original intent and design of the market.


UNIT PORTFOLIOS

Bundles, or unit portfolios, consisting of one share of each of the contracts in this market can be purchased from or sold to the IEM system at any time. The price of such bundles is $1.00. Since contract liquidation values are determined as $1.00 times the vote shares of the represented candidate, and since those vote shares will necessarily sum to one, the total of the liquidation values earned by all the contracts in a bundle will be exactly $1.00, the same as the original price of the bundle. Thus, the IEM system with neither make nor lose money on the sale or repurchase of these bundles.

To buy or sell unit portfolios from the system, use the "Market Orders" option from the Trading Console and select the TAIWAN_VS bundle.


MARKET ACCESS

Access to the TAIWAN_VS market is restricted to IEM traders who specifically register for the Taiwan 2000 Markets. Investment deposits are in U.S. dollars, but those funds are kept separate from funds invested in other US$ denominated IEM markets, so separate registration is required. To register, go to the 2000 Taiwan Election Markets signups page. Investments are limited to the range of $5.00 and $500. Additions to your investment account, up to the $500 limit, can be made at any time. Withdrawals are not permitted until after the market closes in March, 2000.