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October 2011 AMEDA Conference, Cairo

October 2011 AMEDA Conference, Cairo. Joint Venture partners. Ten leading CSDs. Link Up Markets. - 2 -. Efficiency by interoperability. Link Up Markets. Past. Link Up Markets model has replaced inefficient set-up. Single point of access for CSDs to participating markets

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October 2011 AMEDA Conference, Cairo

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  1. October 2011AMEDA Conference, Cairo

  2. Joint Venture partners Ten leading CSDs Link Up Markets -2-

  3. Efficiency by interoperability Link UpMarkets Past Link Up Markets model has replaced inefficient set-up • Single point of access for CSDs to participating markets • Easy implementation of enhanced CSD-links • Reuse of efficient local infrastructures • Absorbing differences in market standards • Best-in-class CSD services for all asset classes and multiple currencies • Continuous harmonisation of market practices • Flexible extension of market coverage in Europe and beyond • Successful launch on 30 March 2009 Other CSDs Today DIRECT CROSS-BORDER ACCESS via local CSD infrastructures

  4. Business opportunities for Issuer CSD • Become counterparty of foreign Investor CSD • Expansion of customer base • Efficient management of incoming link portfolio • Attract more inflow by providing efficient services • “As close to market as possible” • Upgrade of existing CSD links to full service • Participate in market harmonization efforts • Position themselves as gateway into the region • Own domestic market • Single window into their regional network 

  5. Business opportunities as an Investor CSD • Transform business model to become specialised custodian for outbound business • Diversify services • Generate new revenue stream • Build cross-border capabilities in-house • Streamline existing cross-border business • Direct access to markets at domestic CSD cost • Simplify setup and maintenance of links • Harmonization as a result rather than a pre-requisite • Access 50% of European, 90% of African markets 

  6. Strategic Positioning for CSDs • “Close the gap” reasons • Opportunity to “benchmark” service offering to other CSDs in the fast evolving post-trading environment. • Independence • Strengthen market and product position, while still options available for regional strategy • Educational factor and Know-How transfer • Joining Link Up Markets offers comprehensive and more useful “hands-on” involvement and knowledge transfer. • Harmonisation and community effect • Harmonising connectivity, standards, formats and services between the partner CSDs. • Platform for identifying other business opportunities between the CSDs for new product development or new partnerships. • “Develop once and use many” interoperability concept.  -6-

  7. Customer Benefits Features Benefits for market participants Pooling of domestic and international business • Direct access to domestic and international markets via single, familiar interface • Increased liquidity pool allowing for greater securities financing and collateral management product usage • Greater scale and price advantage with preferred CSD gateway Unbundling of custodian services • Significant fee saving potential* in • Cross-border settlement fees • Safekeeping fees for non-domestic assets Risk reduction • Supply chain consisting of market infrastructures only, no intermediaries * Pricing at discretion of each CSD -7-

  8. Solution delivered as promised • Successful launch in March 2009 with just 12 months time-to-market • Development cost well within announced budget of EUR 10 million • 10 CSDs live: CBF, CSE, Helex, Iberclear, OeKB, SIX SIS, VP, VP LUX, CSE, Strate and MCDR – joined already, strong interest from other CSDs globally with highest focus in Europe • 6 CSDs already transformed their business model into Investor CSD. • Solution well positioned as showcase for interoperability as well as facilitator for T2S

  9. Growing demand for CSD interoperability • 17.5 mio messages since the beginning of Link Up Markets and 5.4 mio messages in H1 2011 • 17.5 mio messages representing approx. 4.4 million settlement instructions • >80% of settlements against payment • 47% growth over 2010 • Each new market with additional volume potential – inbound & outbound

  10. Key objectives in 2011 • CSDs that joined in 2010 and 2011 to become active as both issuer and investor CSDs • Finalise positioning for post-T2S world, i.e. Link Up Markets as common interface to T2S and develop common solution • Further extension of market coverage in Europe and beyond !

  11. Clive Cherry CSD Implementation Manager Link Up Markets Plaza de la Lealtad, 1 28014 Madrid Espana Tel.: +34 91 709 5031 info@linkupmarkets.com

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