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Strate’s membership to

Strate’s membership to. PRESENTED BY: Monica Singer DATE: 22 October 2009 PLACE: 10 th AMEDA Conference- Morocco Marrakesh. CSD to CSD Links Globally. Currently there are no CSD to CSD links to Africa. 2. Link-Up Markets: The Universal ‘Adapter’.

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Strate’s membership to

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  1. Strate’s membership to PRESENTED BY: Monica Singer DATE: 22 October 2009 PLACE: 10th AMEDA Conference- Morocco Marrakesh

  2. CSD to CSD Links Globally Currently there are no CSD to CSD links to Africa 2

  3. Link-Up Markets: The Universal ‘Adapter’ Link-Up Markets provides the infrastructure to facilitate cross-border settlement between foreign CSDs and Strate • Driving message harmonization through message conversion (using the ‘Adapter’) • Leveraging existing technology and infrastructure • The ‘Adapter’ written by TCS, used to integrate with Strate technology supported by TCS. • A technology solution to drive new business solutions which operates using Swift technology. Investor CSD (sender) Issuer CSD (receiver) Link Up Markets infrastructure “Adapter” Mapping Rules to convert messages 3

  4. Target 2 Securities vs. Link-Up Markets Link-Up Markets is more than just a reaction to T2S • Post Target 2 Securities (T2S) • Options for CSDs were consolidation (i.e. Euroclear’s single platform) or • Interoperability between CSDs which Link-Up Markets provides • Increased competition between CSDs • CSDs to move up the value chain (possibly into custody) 4

  5. Target 2 Securities vs. Link-Up Markets Link-Up Markets provides complimentary services to T2S 5

  6. Why is Link-Up Markets a good fit for Strate? • High Costs of multiple CSD to CSD Links vs. Link-Up’s interoperability • Link-Up provides interoperability (no “re-inventing of the wheel”) between many CSDs and promotes reusability of existing technology • Cheaper overall costs (IT infrastructure is outsourced, Message conversion, Maintenance of multiple links) • Link-Up provides a single point of access to Top Investment Destinations • Either directly or indirectly to 7 out of the Top 10 South African Investment Destinations • High adaptability and synchronization of technology platforms • Link-Up technology is TCS-based (Strate’s IT vendor of choice) • SAFIRES system at Strate is present in other CSD member(s) of Link-Up Markets • Link-Up and Strate both use SWIFT technology extensively 6

  7. Strategic benefits for Strate joining Link-Up Markets • Potential movement up the asset-serving value chain and new products and services • Learning from other CSDs on Global Best Practice for the future Strategic direction of Strate • Strengthen strategic position of South Africa as the Hub for further African markets • Alignment with Strate’s strategy for global recognition • Single link with the rest of the world • Strate becomes part of the international CSD community Link Up Markets 7

  8. Value Proposition to CSD Participants • Direct access to cross-border settlement at domestic CSD charge • An alternative channel for cross-border settlement, with the ability to retain current relationships with Global Custodians • Using existing connectivity to Strate (re-use of existing technology) through the domestic infrastructure and operations to facilitate cross-border settlement • White-labelling of services by Strate to its participants • Potential for an increase in inbound investment 8

  9. What Link-Up Markets is for the South African Market • Link-Up Markets introduces the following to the South African Market: • Direct access to cross-border settlement at a domestic CSD charge • Use of existing domestic infrastructure to effect a cross-border settlement • An alternative/choice channel for cross-border settlement for inbound and outbound transactions • Africa’s first CSD to CSD link with 8 European CSDs such as Clearstream Banking AG Frankfurt (Germany), CSE (Cyprus), Hellenic Exchanges S.A. (Greece), IBERCLEAR (Spain), Oesterreichische Kontrollbank AG (Austria), SIX SIS AG (Switzerland), VP SECURITIES (Denmark) and VPS (Norway) through bi-lateral agreements • Global exposure to proudly South African technology 9

  10. What functions would Strate be required to perform as a member of Link-Up Markets? Strate is joining Link-Up as an Issuer CSD initially due to international demand from foreign CSDs • Issuer CSD: Refers to the CSD which settles inboundinvestments: • Cash Movement : Always by a foreign bank to a local Bank • Main function of the Issuer CSD: To settle the transaction in accordance with • Issuer CSD rules • Link-Up Member CSD to open an account in the Issuer CSD • Investor CSD: Refers to the instructing CSD for outbound investments: (SA investors wanting to invest in foreign markets) • Cash Movement: Client’s Bank in South Africa which is a authorised dealer transferring • to a bank operating with the Link-Up Markets CSD (i.e. the Issuer CSD) • Main function of the Investor CSD: Instructs the Issuer CSD in a foreign country • Holds mirrored accounts in the Investor CSD of holdings in the Issuer CSD (as settlement takes place in the Issuer CSD) Issuer CSD is for Phase I and Investor CSD is for Phase II for all Link-Up CSD members 10

  11. 1.Connect to Link-Up Strate is planning the Issuer CSD leg as its first step • Using existing SWIFT technology • Using Strate’s communication portal 2.Service Scope Analysis • Obtain the requirements of 1 Investor CSD • Map requirements onto existing functionality within Strate as required by the Investor CSD 3. Bi-Lateral Agreements • With 1 Investor CSD to start off with • Agreeing Business Process flows and roles and responsibilities in legally binding agreements 4. Develop Market Guidelines • Based on Business Process flows and Bi-lateral agreements, develop Market guidelines for an Investor CSD (current and potential) who are members of Link-Up Markets about how to become an account holder in Strate (acting as an Issuer CSD) 11

  12. Estimated Live Date • Fourth quarter 2010 with at least one Investor CSD amongst Link-Up members having an account in Strate, opened and operational 12

  13. Questions? • Thank you • Consider it Done! 13

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