ACSDA Leadership Forum

1. ACSDA Leadership Forum CDS International Links

2. Overview • Drivers for Access to Foreign Markets • International Strategy • Canada - U.S. Links/Services • DTC Canadian Dollar Settlement Service • JASDEC Link • SEB Link • Euroclear France Link • Euroclear UK Direct Service • International Message Hub • Possible future links

3. Drivers for Access to Foreign Markets • Canadian issuers seeking cheaper, more liquid financing sources • Elimination of foreign property rule in 2005 has increased Canadian investor interest in foreign investments • Canada’s strong economy and global demand for natural resources has made Canadian companies and markets attractive destinations for foreign investment • Increased interest in dual listing of Canadian companies and foreign companies in Canada • Cost effective way for CDS participants to access foreign markets

4. International Strategy • Sponsor individual participant accounts with the central depository in the target market • Establish a bilateral depository-to-depository link • Will pursue an unilateral link, provided that it will be of sufficient value to participants

5. Canada - U.S. Links/Services • New York Link • DTC Direct Link • CDS-DTC Cross-Border Movement Service • U.S. Deposit/Withdrawal Service

6. New York Link • Established in 1985 • CDS sponsors participant membership with NSCC and DTC (participant has their own accounts at NSCC/DTC) • Allows CDS participants to interact directly with NSCC/DTC participants • CDS participants have access to all of the products/services offered by NSCC, DTC and OMGEO that are available to U.S. participant • CDS sponsored participants are subject to same risk controls as U.S. participants • CDS act as guarantor backed by auditing of sponsored participants

7. DTC Direct Link • Established in 1995 • CDS sponsors participant membership with DTC (participant has their own account at DTC) • Allows CDS participants to interact directly with DTC participants • CDS participants have access to all of the products/services offered by DTC and OMGEO that are available to U.S. participants • CDS sponsored participants are subject to same risk controls as U.S. participants with CDS as guarantor

8. CDS-DTC Cross-Border Movement Service • Facilitates deliveries of security positions to or from accounts at DTC and CDS (U.S. and Canadian securities) • Uses CDS’s omnibus account at DTC • Securities eligible in CDS’s and DTC’s systems • Delivery instructions are exchanged using SWIFT-like messages over a dedicated network • Used for inventory movements and to facilitate the settlement of trades • Service available to all CDS and DTC participants

9. U.S. Deposit/Withdrawal Services • Adopted in 1997 (CDS-West Canada merger) • Uses CDS’s omnibus account at DTC • Allows CDS participants to deposit/withdraw U.S. securities directly to/from their CDS ledger • CDS coordinates the deposit/withdrawal processes on behalf of CDS participants with DTC and U.S. transfer agents • Service available to all CDS participants

10. DTC CAD Settlement Service • Implemented in 2005 • DTC service • Utilizes DTC’s omnibus account at CDS • CDS’s system used to facilitate settlement activities • Allows settlement to occur between CDS and DTC participants against CAD • Specific Canadian securities eligible for service

11. JASDEC Link • Implemented in 1985 (JSCC) • Unilateral link - JASDEC has an omnibus account at CDS • Facilitates deliveries of security positions between CDS and JASDEC • Delivery instructions/information exchanged using ISO15022 compliant SWIFT messages

12. Euroclear France Link • Implemented in 1988 (SICOVAM) • Unilateral link - CDS has an omnibus account at Euroclear France • Facilitates deliveries of security positions between CDS and Euroclear France • Delivery instructions/information sent by CDS via ISO15022 compliant SWIFT messages but instructions/information received from Euroclear-France are not ISO15022 compliant

13. SEB Link • Implemented in 2001 • Unilateral link - CDS has an omnibus account at SEB (custodian bank in Sweden) • Facilitates deliveries of security positions between CDS and SEB • Delivery instructions/information exchanged using ISO15022 compliant SWIFT messages

14. Euroclear UK Direct Service • Implemented in August 2007 • CDS participants become members of Euroclear UK & Ireland under the sponsorship of CDS • CDS provides Canadian participants direct access to the Euroclear UK & Ireland GUI interface via SWIFT network • Allows Canadian participants to trade and settle directly with Euroclear UK & Ireland counterparties • Limited use of SWIFT ISO 15022 messaging to be expanded

15. International Message Hub • Implemented in 2006 • Manages processing of deliveries related to the JASDEC, Euroclear France, and SEB links • Little or no manual intervention required (STP) • Prior to its implementation delivery instructions/information were processed manually • Can accommodate new links and bilateral links

16. Possible Futures Links • Future possible links: • Markets with interlistings of Canadian companies such as energy and resource companies • Other large investment markets of interest to participants