Clearstream’s domestic market reach

1. Clearstream’s domestic market reach Maria Ivanova Moscow, 6 February 2008

2. Network Management OverviewAgenda • Introduction • Market coverage • Network Management Roles & Responsibilities • Evolution and Challenges

3. Network Management OverviewIntroduction • Objectives are: • To describe Clearstream existing network • To outline Network Management roles and responsibilities • To provide updates as to key initiatives of Clearstream

4. Network Management OverviewMarket Coverage • Offers access to a full palette of international and domestic fixed-income securities, equities and investment funds • Primary place of issuance and settlement for Eurobonds and German securities • Link to 45 other markets • Over 680,000 eligible securities, our global network covers over 96% of outstanding debt worldwide • 93 currencies eligible (42 eligible for “full settlement”) • EUR 10.6 trillions of assets under custody in December 2007 • Guarantees operational excellence and efficiency end to end • Partnership with leading and reputable custodians and/or local CSDs • Optimal link design to ensure best service quality • Collaboration with key market players to improve service levels and market standards

5. Network Management OverviewInteracting with the market Depository banks Trade associations Regulators Euroclear Local & European authorities (regulation) Issuers Clearstream (Issuer-CSD) Agent banks Stock exchanges Data vendors & Other market suppliers Investment banks (arrangers, dealers,…) Market initiatives CSDs Law firms Numbering agencies • Continuous dialogue with market players and stakeholders is key to anticipate market evolution and adapt to the fast-changing issuance environment • Support from the entire community is also necessary to achieve further cost and processing efficiencies that Clearstream targets in order to protect the competitiveness of its issuance and settlement models

6. Network Management Overview Market coverage - Europe Iceland Netherlands Germany Denmark Norway Sweden Finland Estonia Poland Luxembourg Czech Republic Belgium Slovak Republic Clearstream United Kingdom Russia Hungary Austria Ireland Switzerland Croatia Portugal Spain France Italy Greece Cyprus Slovenia

7. Network Management Overview Market coverage - Asia/Pacific/Americas & Africa Turkey Canada South Korea China Japan USA Hong Kong Thailand Clearstream Mexico Malaysia Singapore Uruguay Indonesia Argentina Dubai South Africa Australia New Zealand

8. Network Management Overview Network structure • Type of Links • Links to domestic CSDs via Custodian Banks • Direct Access to remote CSDs • Semi-Direct Access to remote CSDs • Nostro Accounts • Settlement Agency arrangements with remote trading platforms • Links with … • Domestic Depositories • CSDs • International Depositories and Agency business • The Bridge (Euroclear Bank) • Cash Correspondent Banks (CCBs) • Stock Exchanges • Trading platforms (MTS etc.)

9. Network Management OverviewNetwork Structure Domestic access to core domestic markets is delivered through three fundamental approaches Direct linkoperatedby an agent Standard 3 Indirect link Direct link A link to a domestic market where CB’s account at the CSD is operated by a local agent.The settlement and accounting of any movement regarding CB’s activity are recorded on CB’s account with the CSD • A link to a domestic market where CB’s operates directly its account at the CSD. • The settlement and accounting of any movement regarding CB’s activity are recorded on CB’s account with the CSD. • A link to a domestic market where • CB’s account is maintained within • a domestic depository having a • direct link with the local CSD. • The settlement and accounting • of any movement regarding CB’s • activity are recorded by the • depository in its third party’s books. Agent / Local Depository Agent / Local Depository Domestic Central Securities Depository

10. Network Management OverviewAsset growth in recent years Assets Under Custody 1995 – 2006 Clearstream Luxembourg 5,000 4,000 3,000 EUR Billions 2,000 1,000 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 International Markets Domestic Markets

11. Network Management Overview Management and Assessment of the links with sub-custodians, cash correspondent banks (CCBs) and CSDs Depository Quality Assessment (DQA): quarterly assessment of the performance of depositories • Source of rating and comments: Settlement, Custody, Reconciliation, New Issue • Specific supplier KPI monitoring • Common Depository/SP scorecards • Processed, managed and controlled by Network Management Market Reviews: internal global review of each market covered by CBL or CBF • Scope: market infrastructure and development, business and market development, business performance relative to competitors, service performance of suppliers, significant issues and incidents (Issue Log), costing and billing, developments and action plans Conference calls between CBL Operations, Network Management and the Provider: • Escalation step for outstanding Operational and Service issues • Periodicity vary depending on risks and volumes • Processed, managed and controlled by Network Management Service Review Meeting: • Periodicity vary depending on risks and volumes • DQA results impact the scope of the Service Review • Clearstream Operations active role On site Due diligence Visits (AML, BCP, Officer Certificate): • Periodicity and Scope vary depending on risks and volumes • Impact of the results of (1) previous due diligence visit and of (2) the DQA • Processed, managed and controlled by Network Management, with Thomas Murray in some cases

12. Network Management OverviewEvolution and challenges • Increase market coverage • Improve quality of services • Adapt to market changes

13. Network Management OverviewIncrease market coverage • Turkish Public Debt (March 2006) • Offering Government debt and T-bills to existing equities offering via Isbank • DVP in Turkish Lira in the domestic market • New Link to Russia (may 2006) • Offering 54 most liquid equities on MICEX and RTS and Ministry of Finance bonds • Internal DVP settlement, domestic settlement is FOP • Currency opened for Euromarket issuance and settlement in January 2007 • Japanese Government Bonds (November 2006) • Book Entry JGB settlement First place of settlement outside Japan to be approved by Bank of Japan and National Tax Office • Dubai – DIFC (April 2007) • Offer all DIFX eligible securities • DVP settlment with DIFX conterparts and in course of being upgraded to full automation

14. Network Management OverviewIncrease market coverage • New link to Cyprus (May 2007) • Offering Cypriot equities and warrants listed on the Cypriot Stock Exchange and cleared via the Cypriot Central Securities Depository • DVP in Cypriot Pound in the domestic market • Cypriot Pound (CYP) has been introduced as a full settlement currency and will be redenominated in EUR on 1 January 2008 • Extension of the link on 29 October 2007 to corporate bonds and Government debt for settlement Against Payment in CYP and against EUR as of 1st January 2008 • New link to Slovenia (October 2007) • Offering Government debt • Other instruments to be added in the medium term • DVP in EUR (local currency) since the start • Extension in Singapore to Government Bonds (October 2007) • Coverage of Singaporean Government debt in addition to the existing offering • Upgrade in France (January 2008)

15. Network Management OverviewIncrease market coverage • New settlement currencies • BWP – Botswana Pula (January 2006) • AED – United Arab Emirates Dirham (July 2006) • RUB – Russian Ruble (January 2007) • CYP – Cypriot Pound (May 2007) • BHD – Bahraini Dinar (May 2007) • PEN – Peruvian Nuevos Soles (November 2007) • New denomination currencies, enabling Eurobond issuance: • New Ghanaian Cedi (GHS) on 3 September 2007 • Zambia Kwacha (ZMK) on 19 November 2007 • Venezuelan Bolivar Fuerte (VEF) on 1 January 2008

16. Network Management OverviewImprove service quality in the area of Income & Corporate Action processing • Clearstream is dependent on the existing market infrastructure and various intermediaries from the issuer to the ICSD (calculating agent, paying agent, fiscal agent etc.) • Generic infrastructure for STP in Custody established • Increase awareness of industry players • Use industry forums like the ICMSA (International Capital Market Services Association) and the newly created ISMAG (International Securities Market Advisory Group)

17. Network Management OverviewImprove local market access • LMAC objectives (Local Market Access): • 30 minutes settlement turnaround • cut-off time 15 minutes before the market deadline • all corporate events notifications within same day of publication • voluntary corporate events instruction deadlines few hours prior to market deadline • minimum reversal rate in income payments Focus on core operational requirements to be met from internal and upstream factors of production

18. Network Management OverviewAdapt to market changes • Eurobonds - NGN • Launch of New Global Note structure in June 2006 to support eligibility of Eurobonds in global bearer form as collateral for Eurosystem’s monetary policy operations • Appointment of 21 Common Depositories, 20 Common Service Providers and 18 Common Safekeepers • EUR 400+ bn of market outstandings • Funds • Launch of Central Facility for Funds in Luxembourg in February 2007 • Investment funds with transfer restrictions eligible since 30 August 2007 • Rationalisation of specialised service provider network

19. Network Management OverviewAdapt to market changes • International securities • Development of IDR structure to support listing of emerging market issuers on Frankfurt SE’s regulated segment (launch in Q4 2007) • Expansion of pre-issuance communication and automated ISIN allocation (EPIM product) to EMTNs (launch Q2 2008) • Review of custody arrangements for Eurobonds in global registered form in order to support their continued and future eligibility for Eurosystem operations • Leading contribution to many industry initiatives aiming at improving market performance, i.e. the ICMSA-sponsored “Variable Rate Information” Working Group

20. Thank you