Clearstream Entering New Markets: Challenges for Emerging Securities Markets Gaining ICSD access

1. Clearstream Entering New Markets: Challenges for Emerging Securities Markets Gaining ICSD access Jan Willems Vice President Sales and Relationship Manager Clearstream Banking Luxembourg

2. The “Markets Company” Integrated solutions for clients Excellent and stable credit rating Credit rating of Clearstream AA/Stable/A-1+ Current ratings Counterparty credit AA/Stable/A-1+ Certificate of deposit AA/A-1+ Commercial paper Local currency A-1+ Foreign currency Sovereign rating Luxembourg AAA/Stable/A-1+ Related entities Deutsche Börse Group AA/Stable/A-1+ Deutsche Börse Group Trading, listing, infrastructure partnerships across the globe Investment Fund markets Cash markets Derivatives markets Fixed income markets On exchange ETFs OTC Central Counterparty Services (CCP) Eurex Clearinghouse OTC Settlement, custody and securities financing Open settlement model The 1st International Joint Conference of AECSD and IAEx of CIS

3. 40 years in brief 1970: Cedel (as we were initially called) was established by 66 financial institutions from 11 countries to reduce the costs and risks of settling securities transactions in the Eurobond market. 1995: in January, a new corporate structure was introduced, establishing a parent company – Cedel International – with a subsidiary company, Cedelbank; two years later, a new subsidiary – Cedel Global Services – was established. 2000: Clearstream International was formed through the merger of Cedel International & Deutsche Börse Clearing, a Deutsche Börse AG subsidiary. 2002: in July, Clearstream became a wholly owned subsidiary of Deutsche Börse Group. 2010:“Clearstream 2013” sets out strategic goals that will enable us to effectively differentiate our company in the future competitive environment. The 1st International Joint Conference of AECSD and IAEx of CIS

4. Clearstream today Settlement • Delivery of securities v payment for over 114 million transactions pa • Reassignment of the ownership of the security and payment • 94 currencies eligible (42 eligible for settlement) Asset services • Assets under custody exceeding €11 trillion • More than 400,000 securities holdings • Servicing income, corporate actions and tax events Global Securities Financing • Securities lending and borrowing • Tripartite repo and collateral management • More than €576 billion monthly average outstandings Investment Funds Services • Series of solutions for investment funds (Vestima+, Central Facility for Funds • 5.2 million transactions pa over 82,000 investment funds Other services • Complete suite of connectivity for customers and providers to access the Creation platform • Cash management The 1st International Joint Conference of AECSD and IAEx of CIS

5. Clearstream’s core business Clearstream Banking Luxembourg (ICSD) Clearstream Banking Frankfurt (CSD) 2,500 customers in 100 countries 400 German banks & remote international partners Customers Securities Markets Assetservices Eurobonds, domestic bonds, equities, investment funds, etc Domestic German equities and bonds, international assets 52 markets worldwide via network of sub-custodians & direct CSD links 9 CSD links & international business with ICSD Full range of custody and collateral management services Custody and collateral management services The 1st International Joint Conference of AECSD and IAEx of CIS

6. Single point of access to 52 domestic markets worldwide 33 markets in Europe 19 worldwide Austria Belgium Bulgaria Croatia Cyprus Czech Republic DenmarkEstoniaFinlandFrance GermanyGreeceUnited Kingdom HungaryIceland IrelandItaly Latvia LithuaniaLuxembourgMalta NetherlandsNorwayPolandPortugal Romania Russia SlovakiaSloveniaSpainSwedenSwitzerlandTurkey ArgentinaAustraliaBrazilCanadaChina DubaiHong KongIndonesia IsraelJapan MalaysiaMexicoNew ZealandSingaporeSouth AfricaSouth KoreaThailand UruguayUSA + the International market and Global Emissions Market The 1st International Joint Conference of AECSD and IAEx of CIS

7. What Clearstream and foreign investors are looking for • Omnibus concept, nominee concept • Freely transferable and fungible shares • No restrictions on FX of income proceeds • Maximum Withholding at Source possibilities • Maximum security through accounts in local CSD operated by local bank (in emerging markets, subsidiary of G20 bank) • Absence of Stamp Duty • Swift compliant market • AML/KYC robust The 1st International Joint Conference of AECSD and IAEx of CIS

8. Challenges for Clearstream • Upfront investment of over EUR 400K in IT and system development for a full securities link and recurrent annual costs for each link (compliance, due diligence, etc …) • Run-up period of over 1-2 years (from RFI to RFP to validation and testing to implementation) • Changing appetite of investors («flavour of the day») • Local rules change during the set-up process • Correct prices and correct collateral validation • Finding a reliable local partner or finding a local CSD that allows accounts of ICSDs • Geo-political market risks linked to a link, threatening our client’s interests The 1st International Joint Conference of AECSD and IAEx of CIS

9. Malta model Background: • Small market, but nonethelessforeigninterest • Challenge: avoidset-upcosts (+/- EUR 400K), but nonethelessprovidelink to foreigninvestors Solution: • ClearstreamBanking Frankfurt opens account on the books of Maltese CSD and Maltese CSD opens account on the books of ClearstreamBanking Frankfurt • Maltese CSD operatesbothaccounts. • Free of payment transactions onlyat first stage The 1st International Joint Conference of AECSD and IAEx of CIS

10. Malta model continued • All securities are created book-entry in Malta and reflected in Maltese CSD account in Clearstream Banking Frankfurt • From Maltese CSD account in Clearstream Banking Frankfurt, all securities are moved across both CSD and ICSD accounts • All Maltese isin code become Clearstream Banking Frankfurt and Clearstream Banking Luxembourg eligible • Clearstream Banking Luxembourg uses Clearstream Banking Frankfurt as sub-custodian • Constant reconciliation between omnibus account of CBF at Maltese CSD and Maltese positions in CBF (1/1) The 1st International Joint Conference of AECSD and IAEx of CIS

11. Pre-requisities of model • Legal opinion to see if no issues with neither the securities nor the remote CSD under German Law • Possibility of remote CSD to work either with SWIFT or with propriety system, CASCADE • If non-EUR securities, possibility to pay income in either EUR, USD or CHF The 1st International Joint Conference of AECSD and IAEx of CIS

12. Benefits of model • Easy and cheap to implement • Much faster time-to-market • Secure infrastructure of Clearstream Banking Frankfurt, giving access to Clearstream Banking Luxembourg • Local shares can become Xetra eligible • Access to over 2,500 different world-wide financial institutions The 1st International Joint Conference of AECSD and IAEx of CIS

13. Conclusion: what does this all mean for my market? • Think ahead: it takes market infrastructures like ICSDs months (or years) to link to emerging/frontier markets • Consult with ICSDs, making use of 40 years expertise in creating technical, operational and regulatory conditions to offer ICSD access • Keep your market as operationally simple as possible. Successfull emerging/frontier securities markets are those with a simple, straight-forward set-up The 1st International Joint Conference of AECSD and IAEx of CIS