Form 20-F 2005

Euronext Paris may temporarily reserve trading in a security listed in Continu on Eurolist by Euronext if purchases and sales
recorded in the system would inevitably result in a price beyond a certain threshold, determined on the basis of a percentage
fluctuation from a reference base. Trading may be suspended for up to four minutes. The thresholds vary depending on whether the
price fluctuation occurs when trading commences or during the trading session. Euronext Paris may display an indicative trading
price during such reservation period. Once trading has commenced, further suspensions for up to four minutes are also possible.
Euronext Paris also may suspend trading of a security listed on Eurolist by Euronext in other limited circumstances, including, for
example, where there is unusual trading activity in the security. In addition, in exceptional cases, the Autorité des marchés financiers
or AMF, the French stock exchange regulatory authority, may also request a suspension in trading.
Trades of securities listed on Eurolist by Euronext are settled on a cash settlement basis (“au comptant”) on the third trading day
after the trade. However, market intermediaries are also permitted to offer investors a deferred settlement service (ordre stipulé
à règlement livraison différé, or “OSRD”) for a fee. The OSRD allows investors to benefit from certain leverage and other special
features of the former monthly settlement market (marché à règlement mensuel). The OSRD is only available for trades in securities
that have both a total market capitalization of at least €1 billion and a daily average volume of trades of at least €1 million on
Euronext Paris S.A. and that are cited on the list published by Euronext Paris S.A. Our shares are eligible for the OSRD service.
Investors in securities eligible for OSRD service can elect on the determination date (date de liquidation), which is at the latest the
fifth trading day before the end of the month, either to settle by the last trading day of the month or to pay an additional fee and
postpone the settlement decision to the determination date of the following month.
Equity securities traded on a deferred settlement basis are considered to have been transferred only after they have been registered
in the purchaser’s account. Under French securities regulations, any sale of securities executed with a deferred settlement basis
during the month of a dividend payment date is deemed to occur after the dividend has been paid. If the sale takes place during
the month preceding a dividend payment date, the purchaser’s account will be credited with an amount equal to the dividend paid
and the seller’s account will be debited by the same amount.
Prior to any transfer of securities held in registered form on Eurolist by Euronext, the securities must be converted into
bearer form and accordingly recorded in an account maintained by an accredited intermediary with Euroclear France S.A., a
registered clearing agency. Transactions in securities are initiated by the owner giving instruction (through an agent, if appropriate)
to the relevant accredited intermediary. Trades of securities listed on Eurolist by Euronext are cleared and settled through
Euroclear France S.A. using a continuous net settlement system. A fee or commission is payable to the broker-dealer or other
agent involved in the transaction.
Purchase and Trading by Rhodia in our Own Shares
Purchase of our own shares
In accordance with French law, we may not subscribe to our own shares. However, pursuant to the European regulations,
French law and the AMF’s regulations, we may, either directly or through a financial services intermediary (prestataire de services
d’investissement) purchase our own shares up to 10% of our share capital in connection with a share repurchase program prospectus
(note d’information). Since July 26, 2005 the obligation to obtain a visa from the AMF on the share repurchase program prospectus
was suppressed. The public will now be informed of such program through a document called program description (descriptif du
programme) which will be freely available to the public and publicized on the AMF’s website. In addition, we may not repurchase
an amount of shares that would result in our holding, directly or through a person acting on our behalf, more than 10% of our
outstanding share capital, or if we have different classes of shares, 10% of the shares in each class.
We must hold any shares that we repurchase in registered form. These shares also must be fully paid up. Shares repurchased by us
are deemed outstanding under French law but are not entitled to dividends or voting rights, and we may not exercise the preferential
subscription rights attached to them.
88 Form 20 - F 2005 - Rhodia