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Presentation to the Danish Stockbrokers Association Olof Neiglick, CEO October 1, 2008

Presentation to the Danish Stockbrokers Association Olof Neiglick, CEO October 1, 2008. A new way of trading Nordic equities. 1. Exchange and Clearing Industry in transformation. Low-cost entrants. MIFID and Regulation Breakup of the traditional value chain. Technology DMA

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Presentation to the Danish Stockbrokers Association Olof Neiglick, CEO October 1, 2008

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  1. Presentation to the Danish Stockbrokers Association Olof Neiglick, CEO October 1, 2008 A new way of trading Nordic equities 1

  2. Exchange and Clearing Industry in transformation Low-cost entrants MIFID and Regulation Breakup of thetraditional value chain Technology DMA Algorithmic trading Latency race Exchange consolidation CCP introduction Facilitating x-border trading Regulators pressing for interoperability NYSE-Euronext 2

  3. Burgundy - cutting costs and providing advanced functionality Burgundy primary objectives; Nordic perspective Strengthening the Nordic region as a financial center and supplier of public equity for Nordic companies long term Burgundy will be a cost effective alternative to existing trading venues Cost Platform functionality and performance Burgundy will provide a fast, low latency solution offering advanced trading functions for algo trading 3

  4. Three value creation levers for the Nordic industry Efficient execution Market information CCP Speed Low latency Localized orderbooks Level 1 and Level 2 live market data Cooperation with 3rd party C/House In-scope for Q2/2009 delivery

  5. Nordic exchangerevenueestimates – equities (MSEK) Source: Oslo Bors,/OMX reports, own analysis

  6. Alternative venues trading fees vs incumbents ~80%reducedfee Avg bps / trade, Source: FPK Research, Wagner

  7. A Pan-Nordic platform Helsinki • High-performance matching engine • Low latency • Algo-friendlyfunctionality • Localisedmarket model Burgundy Oslo Stockholm Copenhagen London Hub

  8. Instrument universe available for trading • Cash equities • Rights, interim shares • Warrants • Structured notes • ETF - Currency denominated as in home market ~ 800+ equities- Large/Mid/Smallcaps Gradual rollout starting in Q2/2009

  9. Regional members – large potential 60% 48% A large number of Nordic banks and brokers has joined or presented a positive view on Burgundy. Burgundy´s goal is that its shareholders will distribute more than 50 percent of the total trading volume in the Nordic region Source: Inner circle, OMX statistics, SSX cash market, total traded volume. Outer circle, active traders with more than 2 percent of local main exchange volume.

  10. Burgyndy structure Shareholders A group of Nordic banks and securities houses are founding members and equal investors of Burgundy Two independent directors, one of which is to be Chairman. Up to 9 directors from shareholders Board of directors CEO Operational since September Legal framework Application filed with the Swedish Financial Supervisory to operate an MTF in the Nordic Countries. Financing Capital raised from existing shareholders in September Trading platform Cinnober Trade Express

  11. Burgundy organisation Open on all Nordic trading days ~ 25 FTE’s

  12. Clearing & Settlement Matching Member NCSD ORC Order Settlement Burgundy Trading VPC OMX VP VPS Back office FIX FRONT • Burgundy will keep current means and provisions for clearing and settlement – no changes as compared to OMX / OSE • However, introducing a CCP would have certain advantages and Burgundy will follow market development closely • The total number of transactions is expected to increase as a result of market fragmentation and lower transaction costs Transaction processing after the trade is made will not be changed/impacted as a result of Burgundy

  13. Anyone for cash market clearing ?

  14. 2009 will offer increased complexity Trading CCP Settlement NCSD OMX Exchanges ? OMX Exchanges LCH Clearnet

  15. How to avoid a ”spaghetti” solution ?

  16. Important evaluation criterias for choosing a CCP • Support MTF:s and legacy venues • Risk sharing or Risk Compliant ? • Business model (Profit maximisation or Cost allocation) • Experience • Time to market

  17. Burgundy’s position • Mandatory CCP increase attractiveness to members • Different needs depending on member type • Need to respect large market participants time to market due to ”hard-wiring” of retail STP flow Burgundy can handle BOTH solutions

  18. June 2008 Jan 2009 June 2009 Build organization Public announcement Required authorization System tests CEO, Board of directors, Financing Launch Trading on Burgundy starts during first half of 2009 18

  19. Summary of Burgundy offering Burgundy is a new Nordic MTF that will be launched during first half of 2009 Burgundy aims at Keeping order matching in the region Introducing competitive trading solutions in the region Launching a price competitive, advanced functional trading platform during the first half of 2009 Current shareholders are Avanza Bank, Carnegie, Evli, Handelsbanken,Kaupthing, Neonet, Nordnet Bank, SEB, Swedbank, Öhman and HQ Burgundy´s vision is to be the leading platform for trading Nordic shares 19

  20. join@burgundy.se

  21. Contact Details Olof Neiglick, CEO olof@burgundy.se Voice: +46-705545224 Assistant Julia Hadmark Voice: +46-850314375 julia@burgundy.se

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