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Equity Finance

Equity Finance. Break-out session Euroclear Collateral Conference Tuesday, 13 May 2014. Equity finance Your needs. A solid collateral management platform Strong asset servicing capabilities Managing your pool of collateral held across different locations In an optimal way At low cost.

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Equity Finance

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  1. Equity Finance Break-out session Euroclear Collateral Conference Tuesday, 13 May 2014

  2. Equity financeYour needs • A solid collateral management platform • Strong asset servicing capabilities • Managing your pool of collateral held across different locations • In an optimal way • At low cost

  3. Collateral Giver Collateral Taker Seller Borrower Purchaser Lender Euroclear Collateral managementOne platform, multiple products Cash Collateral Loan(1) Collateral Collateral Repo Securities lending Derivatives Others (1) Optional

  4. Automatic processes Euroclear Collateral managementSupporting your equity finance business • Matching of triparty instructions • Selection and allocation according to defined eligibility sets • Transfer of securities (FoP, DvP) • Daily mark-to-market • Margin calls and releases • Asset servicing of collateral • Substitute securities when required • Settlement needs • Custody needs Integrated systems protect you against settlement and custody risk Dedicated support Operational teams guide you in your day-to-day operational needs

  5. Indices Sector Market cap. Turnover Price Volatility Security currency Issuer country ISIN code Max.quotation age … Auto exclude own securities >100 indices from Asia, Europe and US 19 sectors: Auto, Chemicals, Basic resources… Minimum Market capitalization (USD MM) Maximum ADTV (%) Maximum price volatility (%) Restrictions on underlying equities for Convertibles and DRs Concentrations-Restrictions Eligibility Haircuts Euroclear Collateral managementMitigatingmarket and liquidityrisks

  6. Asset ServicingBasic principles

  7. Asset ServicingA flexible solution Need to finance positions over record date • Option not to substitute for identical tax status • Possibility to instruct voluntary events directly on counterpart’s account

  8. A single pool of collateralExtensive market coverage Israel Spain Austria Italy Belgium Slovakia Denmark Luxembourg Sweden The Netherlands Argentina Dubai Hong Kong Switzerland Brazil Finland UK Japan Norway Canada France Singapore Poland Portugal Mexico Germany …and more!! USA Greece Ireland Euroclear offers unparalleled interoperability

  9. Helpingyouthroughout the day… S1 S1 1:30 19:00 D + 1 D AutoSelect

  10. A single pool of collateral Open Inventory Sourcing Agent EuroclearBank ISO messages & reports Euroclear Bank ICSD Global Position Manager Giver Taker (New) Inventory manager module

  11. A single pool of collateral Partnering for your benefit • A smart way to make your domestic inventory held with BP2S or Citi available for your Euroclear Bank triparty activity • Your benefits: • Fully automated inventory management service • Fully automated settlement process, reducing settlement uncertainty, errors, and operational risks • Efficiently pool your domestic collateralresources

  12. Active Q4-2014 Q1-2015 2015-16 OIS coverageCurrent markets and roll-out The Netherlands Belgium Germany UK Italy • EuroclearBank • Triparty France Singapore USA Japan Spain Hong Kong Covering Equities and Fixed Income securities

  13. Collateral optimisationAn intelligent allocation Full flexibility at allocation Define pools of collateral and the order in which you wish to allocate them E.g. Small caps Secondary indices Primary indices

  14. Collateral optimisationBut alsobeyond Fail-driven Automatic reshuffling whenever more can be done with the available pool Quality-driven Automatic reallocation whenever lower-quality collateral hits your longbox Credit-driven Credit optimisation by aligning the settlement of starting and ending one-day repos

  15. Collateral optimisationA comprehensive solution • Fail reduction Your benefits: • A reduction in fails • A maximisation of the use of lower quality assets • Minimised credit usage • At no extra cost • Optimisation • Credit usage • Quality

  16. Euroclear Collateral managementAt what cost? • A strong offer • Euroclear offers the best value for money • Most reporting is free • Low servicing fees (<1Bps) • Synergy with Fixed-Income reduces fees further • Low fees

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