Dubai Financial Market: Empowering Investors for Economic Growth

1. Dubai Financial Market ALEXANDRIA - EGYPT 26 April 2009

2. About DFM Vision: The Financial Market of Choice Mission Statement: To create a fair, efficient and transparent marketplace that provides choices through the best utilization of available resources in order to serve all stakeholders.

3. DFM Objectives Providing an opportunity to invest in securities in a manner that better serves the national economy. Regulating the process of trading in securities ensuring the protection of investors from unfair and improper practices. Creating highest liquidity in the marketplace through the interaction of supply and demand based on fair and equitable trading practices between investors. Organizing the transfer of securities ownership through the CSD Department, which operates an electronic system ensuring efficiency and timeliness of transfers. Implementing rules of professional conduct and discipline between brokers and DFM staff to maintain a high level of integrity and provide them with proper training. Collecting data and statistics about securities and issuing reports based on this information.

4. UAE Capital Market Structure Securities & Commodities Authority Dubai Financial Market Abu Dhabi Securities Exchange Dubai Gold and Commodities Exchange

5. Dubai Free Zone Exchanges A purpose built free zone regulator, which is independent of all financial and ancillary services conductedthroughthe Dubai International Financial Center (DIFC) Dubai Financial Services Authority NASDAQ Dubai Dubai Mercantile Exchange

6. Public Borse Dubai 80% 19.99% 20% DFM NASDAQ-OMX LSE 20% NASDAQ-DUBAI Dubai Capital Market Expansion Comments • Borse Dubai has 3 main shareholders : • ICD (International Corporation of Dubai): 60% • DIFCI (Dubai International Financial Center Investments): 20% • DFG (Dubai Financial Group): 20%

7. DFM – P.J.S.C. The first International Islamic Stock Market

8. DFM – P.J.S.C.

9. Regulatory Developments 2007 - 2008 ( completed ) 2009 (expected) Federal Regulatory Developments • Companies Law: • Reduction of minimum floatation from 55% to 30% for family businesses. • Capital Markets Regulations • GCC citizens are treated as UAE nationals. • Companies Law • - New rules being added. • Corporate Governance Guidelines. • All listed companies should implement the guidelines by April 2010 . • Capital Adequacy . • Custodians – drafted . • Margin Trading – Brokers training phase. • ETF – approved. • Drafted new IPO rules which is due to be published soon. SCA Regulatory Developments

10. DFM Main Components Trading Clearing, Settlement & Depository(CSD) Registry Upload & Update Organizing trading Listing securities Stock Transfer • Corporate Actions • Bonus shares • Stock Split • Raising capital Brokeragelicensing Arbitration Market Control Trading Settlement Disclosure monitoring Investor Numbers Brokers Monitoring Securities safe keeping

11. Accessing DFM Fully Automated Trading system Recorded phones Settlement type is T + 2 Trading priorities : Best price & best time Prompt transfer of ownerships DFM is accessible to all international investors Foreign ownership allowed for most traded companies Absence of Capital gain tax Dubai government’s commitment to growing capital markets as part of Dubai vision

12. DFM Trading Session Order Entry Continuous Trading Pre-Open Session 9:30 am 10:00 To 2:00 2:00 Closing

13. Communication Tools

14. Operational Capabilities Trading System • Continuous, order-driven, fully automated trading system • Tight coupling with depository system, enabling validation of sell orders against depository inventory prior to trading • Transparent, automated and cost-effective information dissemination • Upgrading to a high performance OMX X-Stream system Clearing, Settlement And Depository • T+2 rolling settlement with multilateral netting • Same-day turnarounds (back-to-back transactions) • Corporate actions (cash dividends, stock splits, bonus issues, etc.) • Undertaking an operational review to ensure compliance with G30 recommendations Risk Management • Trades once executed are final and irrevocable • Trading limits for market participants commensurate with posted collateral • Immediate suspension of trading for defaulting brokers • Established business continuity and contingency plans

15. Innovating to Advance DFM’s Performance Voice recognition system Adopting the DVP model in support of international investors Offering facilities such as (securities borrowing and lending and buy-in) to facilitate successful settlement OMX X-Stream • Huge excess with OMX x-stream( executes more than 720,000 trades per session) • Reliability and fault tolerance • High performance • Scalability and functional depth provides for virtually unlimited growth • The ability to integrate new business functions allows the trading system to evolve quickly and effectively in response to competitive and regulatory pressures CSD

16. DFM Performance Trading Value

17. DFM Performance Trading Volume

18. DFM Performance Market Capitalization by Sector

19. Foreign Ownership Foreign Ownership By Category (%)

20. Listings Progress in DFM

21. Listings Progress in DFM

22. Stock Game

23. DFM Statistics

24. DFM & Society

25. Clearing, Settlement & Depository DivisionCSD

26. CSD Organizational Chart Clearing , Settlement & Depository Division Director Call Center Investors Affairs Department Clearing & Settlement Department Central Depository Department

27. CSD in Brief • Is considered a major Division and most important foundation of DFM. • Supports the market’s functions through efficient and active performance. • Provides the DFM stakeholders with the optimum services. • Efficiently and confidentially manage and keep securities to protect all parties rights.

28. CSD in brief … cont • Handles depository and safekeeping of all securities listed in the market. • Organize, Manage and Maintain the database for all listed securities in the automated clearing system. • Provide the listed companies, accredited brokers and custodians with the direct linkage of the automated clearing system. • Operates with dematerialization securities.

29. CDS in brief … cont • Carry out clearing and settlement of all trades executed in the market. • Acts as counterpart to each broker or custodian. • Deals directly with the settlement banks for the purpose of settling the net to pay and to collect to and from the participants.

30. CSD Provides Services for the following:

31. 1. CSD Investor Services

32. CSD Investor Services • Generating and updating the unified Investor Number (IN). • Reserving securities of investors unwilling to trade. • Transferring ownership from certificates to electronic environment. • Transferring securities ownership between investors in execution of family& inheritance deals, court orders, trades made prior to DFM opening, and other. • Stock Transfer :Transferring Securities from CSD Account to Broker Account.

33. CSD Investor Services … cont • Registry Transfer : Transferring Securities from Broker Account to CSD Account. • Transferring Securities Between Brokers. • Issuing many types of “Securities Balance Statements” at request. • Issuing Audit confirmation letter at request. • Issuing and delivering statements to subscribing investors ( Daily, Weekly & Monthly).

34. CSD Investor Services … cont • Sending free statements to investors on a quarterly basis. • Sending free statements to traders on a daily basis. • Providing E-Services to Investors, enabling them to register through “Electronic Reports” , to view their stock account balances online. • Issuing Power of Attorneys for the purpose of Dubai Financial Market Only. • Changing/Adding of investor information. • Marking pledge on securities

35. 2. CSD Broker Services

36. CSD Brokers Services … cont • Transferring Securities between CSD and Brokers. • Stock Transfer • Registry Transfer • Managing Bank Guarantee. • Minimum of AED 20 Million • Maximum Trading Limit

37. CSD Brokers Services … cont • Increasing the Trading Limit: • New Bank Guarantee • Undertaking Letter from the Issuer Bank of B.G. • Deposit in DFM Account • Freeze Securities • Guarantee Amount that is to collect on (T+1) • Managing Clearing & Settlement process: • Prepare Settlement Report on (T+0). • Confirmation of Settlement on (T+2) @11:00 am. • Financial Penalty • Suspension from Trading (allowed to sell only)

38. CSD Brokers Services … cont • Prepare different types of reports upon Brokers request. • Correction of deals executed by mistake. • Fees (0.003*number of shares*price of deal) • Transfer of Settlement amount from one bank to another. • Transfer of pledged securities to Broker for sale. • Conduct training programs for new brokers. • Freeze and Release of pledged securities.

39. 3. CSD Listed Co. Services

40. CSD Listed Companies Services • Issuing a share book. • Issuing reports upon request. • Amending shareholders information. • Receiving share certificates on behalf of listed companies. • De freezing share certificate ( Dematerialization ).

41. CSD Listed Companies Services … cont • Providing listed companies with subscription service in different types of reports. • Applying all types of corporate actions on shareholders accounts. • For sub-listed companies, applying the instructions of depositing and withdrawing shares. • For depositing the shares the instruction has to come for the company's registrar. • For withdrawing the shares the investor gives the instruction in writing.

42. CSD Listed Companies Services … cont • Customizing reports for listed companies upon their request. • Providing sub-listed companies with monthly reports that shows all activities took place during the past month for their shareholders. • Sending a free share books annually at the end of the year. • De-freezing shares on behalf of listed companies. • Providing listed companies with reports that shows all Pledge Details at the time of Corporate Action.

43. 4. CSD Custodian Services

44. CSD Custodian Services • Issuing investor numbers. • Transfers. • Send Daily Reports about custodian clients trade details (without fees). • Settled Securities Report • Traded Securities Report • Trades by Custodian • Investor Balance for Custodian • Investor Position for Custodian • Customizing Reports upon their request (with fees). • Transfer of Settlement Obligations to Broker:

45. Thank You

46. Questions