Integrated Financial Markets:

1. Integrated Financial Markets: The Drive Towards Increased Efficiency & Liquidity Emma Shand Vice President, South East Asia Hanoi, Vietnam 30 August 2006

2. Presentation Agenda • Introduction to OMX • Emerging markets and the quest for efficiency across the securities transaction chain • Electronic trading patterns & trends • Integrated Markets – global trends and technology as an enabler • An Asian & ASEAN Perspective

3. Introduction to OMX A Leading Expert in the Exchange Industry

4. OMX owns and operates Northern Europe’s largest securities market and is the world-leading provider of technology solutions and services for financial markets.

5. OMX Exchanges Norex members Stockholm Oslo Helsinki Iceland Tallinn Riga Copenhagen Vilnius OMX • Listed in Stockholm, Helsinki, Copenhagen • Market value EUR 743 billion • Turnover/business day EUR 2,99 billion • 680 listed companies • 148 trading members

6. Experts in the Exchange Industry – Settlement and depository • Owns and operates national CSDs • Estonia • Latvia • Lithuania (40%) • NCSD (Finland and Sweden) (20%) • Commitment and Solutions to meet needs of CSDs worldwide • Range of services to ensure business continuity and competitiveness • IT operations • IT consulting • Advisory services

7. OMX has expertise across the entire transaction chain… …and a track record in efficiency

8. Market presence – More than 60 customers • Americas • AMEX - American Stock Exchange • Bahamas InternationalSecurities Exchange • Barbados Stock Exchange • Bermuda Stock Exchange • Boston Stock Exchange • Canadian Trading & Quotation System • ICAP • ISE - International Securities Exchange • Jamaica Stock Exchange • NASD - National Associationof Securities Dealers • Trinidad & Tobago Stock Exchange • Middle East & Africa • Abu Dhabi Securities Market • Bahrain Stock Exchange • Bourse Regionale des Valeurs Mobilieres • Cairo & Alexandria Stock Exchange • Doha Securities Market • Dubai Financial Market • Nigerian Stock Exchange • Palestine Securities Exchange • Tadawul (Saudi Arabia) • Tehran Stock Exchange • Europe • Athens Exchange • Borsa Italiana • Bucharest Stock Exchange • Budapest Stock Exchange • Copenhagen Stock Exchange (OMX) • Cyprus Stock Exchange • EDX London • Helsinki Stock Exchange (OMX) • ICAP • Iceland Stock Exchange • Icelandic Securities Depository • Istanbul Stock Exchange • Malta Stock Exchange • MICEX • Nord Pool / Nord Pool Clearing • NOS • NYMEX Europe • OMIP – Iberian Power Exchange • OPCOM / Romanian Power Exchange • Oslo Börs • Polish Power Exchange • Riga Stock Exchange (OMX) • Stockholm Stock Exchange (OMX) • SWX Swiss Exchange • Tallinn Stock Exchange (OMX) • TLX • Turkish Derivatives Exchange • Vilnius Stock Exchange (OMX) • Wiener Börse AG • Asia • Hong Kong Exchanges and Clearing • Jakarta Stock Exchange • Korea Exchange • Philippine Dealing & Exchange Corp • Port Moresby Stock Exchange • Singapore Exchange • Shanghai Stock Exchange • Surabaya Stock Exchange • Thailand Futures Exchange • Australasia • Australian Stock Exchange • Bendigo Stock Exchange • Newcastle Stock Exchange • New Zealand Exchange Limited • SFE Corporation

9. Ideas and initiatives.Shared investments. • Market insights and product experience • Credibility when expanding innovative technology • Enhanced efficiency, functionality • Shared investments and experience.Catalyst in international consolidation. • Shared investments and experience.Partner in international consolidation. OMX business model creates a unique advantage Globalcustomerbase Efficient SecuritiesTransactions Home market operations Technologydevelopment and operations

10. Emerging Markets & the Quest for Efficiency

11. Intermediaries Investors Issuers Efficient Market From the helicopter view, the goal is efficient capital supply Infrastructure Exchange Clearing House CSD Supervisory Authority Central Bank

12. Well functioning securities markets = jobs, growth and prosperity Liquidity is key

13. An efficient securities transaction chainis essential for competitive markets and for economic growth Clearing & CSD Exchange Back office Front office

14. The transaction chain will always be subject to increased efficiency demands Clearing & CSD Exchange Back office 20–25% 30–35% 50–45% 100 100 100 75–80 Costs 65–70 50–55 Today Future Today Future Today Future Share of total cost base 12-15% 9-12% 70-75%

15. Securities value chain analysis Investor Brokerage Exchange Clearing-house Settlement & delivery Depository Central Securities Depository Clearing & settlement Member access Trading • Efficient trading applications for order entry as well as market making • Access through open API • Modern connectivity solutions, ensuring cost-efficient and reliable access • Highly scalable and reliable trading system • Flexible trading model, catering for multi-asset classes • Transparent market data handling, facilitating sales of market data • Efficient market supervision tools • Cost-efficient and flexible clearing and settlement catering for participants choice of settlement provider • Highly scalable and reliable clearing/ settlement system • Risk Management through CCP structure • Handling of all instruments • Streamline domestic & cross-border clearing and settlement by providing participants and settlement providers with one standard for clearing and settlement when trading

16. Improved efficiency = increased liquidity End user costs Indexed 60 50 40 30 20 10 0 25 50 75 100 125 150 Turnover velocity Percent Source: FIBV, Elkins McSherry, McKinsey

17. Electronic Trading

18. Characteristics Almost 40% manually enter data at least twice for the same transaction* 49% use electronic links to communicate trades between internal and external counterparts* Multiple systems Trends Automation Increased competition Globalization of markets New Trading models Falling commissions** Securities market characteristic & trends Market Participant Order Mgmt Trading Back Office *SIA/Gartner July 2003 ** Tabb Group 2004

19. Change in Order Flow Patterns Source: TABB Group Institutional Equity Trading 2005

20. Key Integrated Trading Components • Order Management/Trade Order Management Systems • FIX Connectivity • Compliance • Pre-Trade Analytics/Risk Management • Data Acquisition: Decision Support • Execution Management Systems, potentially DMA • Connectivity to Trading Partners & Destinations • Allocation & Settlement

21. Exchanges’ opportunity to facilitate broker trading efficiency • Shorter time to market with an application for new products, functionality and features • Easier, faster, lower cost access to market increasing transaction flow • Secure high performance flow of market information to clients • Lower TCO for market participants lowering the bar for profitable trades • Foundation for integrating players and markets • Foundation for local brokers to add more sophisticated routing, order management, program trading for themselves and their clients Attractsliquidity

22. Securities Market Trends

23. Foreign securities Local securities Local investors Foreign investors The trend is globalization Foreign securities Local securities Local investors Foreign investors Today Tomorrow

24. Being able to respond to change is a strategic key Globalization/Integration Margin pressure • Alliances, links • Round the clock trading • Harmonization/Standardization • Tight spreads pressure members • Automation • Outsourcing Competition Technology • Cross-listings • Cross-border • Internalization • Electronic trading increasing • Market data links under pressure • Key to competitiveness Consolidation Regulation • Cross-border • Regulatory pace of change • Eastern Europe and Asia opening up • DR requirements • The pace of change in the financial industry is high and increasing • Being able to respond to change is a strategic cornerstone

25. Global trading puts new demands on harmonization • System scalability and interoperability • Tailor-made systems make adaptations costly & time consuming • New and more complex demands • Automation and STP • Standardization of business processes • New message standards • New technology standards • Time to market • New securities • New functionality It’s expensive and difficult to keep up with demands

26. What is common for all markets – Emerging & developed? • Technology is key enabler • Technology “blueprint” for future growth • Lower the barrier for entrance • Create a trading environment recognized by global players • Technology contributes to revenue • Channels for participant service e.g. data distribution • Supports business development activity Technology is of strategic importance

27. OMX Offerings covering the entire transaction chain Marketparticipants Exchanges andmarketplaces Clearing organizationsand CSDs CLICK XT™Trading system for securities SAXESS™ Trading system for securities X-Stream™ Trading system TARGIN™Information dissemination system Horizon Trading system CONDICO™Trading system for energy markets SECUR™ System for clearing Securities EXIGO CSD™ System for settlement and central depository of securities Equator Depository system CLICK TRADE XT Trading Application SAXESS TRADE™ Trading application OMX Link Web Front-End Orc Software Multi-asset & Advanced Trading Applications FIX Solutions OMX Products OMX Outsourcing Operation and support • Software support & maintenance • Technical operations • Advisory

28. OMX Advisory Services: Work throughout the securities value chain, a few CSD project examples: • CSD study for Latin-American market: OMX created a vision for the central systems of the whole financial market in the country in Americas. Including 20+ interviews with the American CSDs main stakeholders. Some specific deliverables were • Business strategy, operational and organizational recommendations • Increased service offering for the CSD • Financial implications and recommendations • IT Feasibility study for Asian CSD: Defining the future business requirements of the CSD and mapping those against potential systems provider. Some deliverables: • Detailed functional and technical requirement definition • Functional Service Offering mapped and benchmarked • Future IT system vision • CSD Review for Middle East market: Including analysis of current situation and challenges, definition of target model, transformation plan and roadmap. Some of the concrete actions that the project recommendations resulted in were: • A new decentralized business model • Increased STP (straight through processing) in the transaction chain • Implementation of international standards for securities numbering and transactions

29. The Asia Market Perspective Several trends suggest the potential for considerable growth in integrated trading in Asia

30. Asian Growth Drivers • Sustained equity market trade volumes • Derivatives trading surge; • Retail participation (some cases retail cash trading 70%+ market share, natural flow through to derivatives given high degree of speculation) • Increased institutional & hedge fund capital flows into Asia • Greater degree of market making activity • Regional cross-boarder trading activity set to rise • Challenges to electronic execution growth versus US & Europe: • Market structure either in development or wide jurisdictional differences exist • Lack of a common currency • No region-wide benchmark interest rate as credit risk standard

31. Asian Market Trends:Avoiding marginalization/attracting liquidity • Asian electronic & advanced trading - behind US & Europe, but growing fast! • More Exchange competition & linkages • Increased DMA support: • from Exchanges (e.g. Taiwan SE to offer DMA end-06) • 15% of total trading volume via DMA, those with system capabilities (Greenwich, Feb 2006) • FIX uptake continues + expansion of product coverage via FIX • Future efficiency initiatives: • Potential for SEA Shared Services Platform relating to Exchanges’ technology • Steps towards Integration… ASEAN harmonization of standards and a regional clearing & depository utility?

32. Thank you