SII Operations Forum – Euroclear Single Platform & Funds in the UK

1. SII Operations Forum –Euroclear Single Platform & Funds in the UK London 30 November 2007

2. Euroclear Single Platform & FundsAgenda • High-level description of Single Platform Custody scope and timeline • Euroclear Group Consolidation strategy and projects • Migration to SP Custody • CCI • Client readiness actions plan • Funds • Who are Euroclear? • Objectives of the Euroclear and EUI funds solution • Benefits of Market Infrastructure involvement • Solution design and consultation

3. Agent Customer Consolidation of markets within Euroclear Group Access / Communication Common Communication Interface Euroclear UK & Ireland Euroclear France Euroclear Nederland Euroclear Belgium Euroclear Bank Contract / Relationship Domestic Service Full Service Service Central Banks & Payment systems Full integration of legacy systems and functionality IT infrastructure Single Settlement Engine

4. Timeline for platform consolidationClient impact 2006 2007 2008 2009 2010 CCI Single Gateway Early Harmonisation SSE ESES SP Custody SP Settlement Harmonisation Technical only Euronextinstruments Custody all Euroclear group markets Settlementall Euroclear groupmarkets Consolidation Settlement activity Euronextmarkets custody & settlement Custody on a single platform Settlement on a single platform

5. EBe E NL E F CREST E B EBe E NL E F CREST E B EBe E NL E F CREST E B Legend CCI Client Communication Interface Single Platform Core Processing SSE Positioning & booking Legal record Country boundary Legacy Technical overview of consolidation phases SSE ESES SP Custody EBe E NL E F CREST E B CCI Legacy communication ESES-CCI – e-RGV - E2A Legacy/ Settlements ESES - RGV upgrade SP / Custody ESES - SP component SSE SSE SSE SP Settlement

6. Objectives of harmonisation and consolidation in Europe • Markets are resolved to address fragmentation issue • Benefits: • Improved STP using ISO standards • Reduction of costs and risks thanks to: • Removal of paper processes • Standardisation of practices • Consolidation / simplification of platforms and processing systems

7. The role of Euroclear Group in addressing fragmentation issues Result of the Euroclear Group market consultation Play leading role in supporting key market initiatives to remove Giovannini barriers (e.g., ECSDA, …) Contribute to building a Single European Market: single, harmonised platform for corporate actions and meetings in Belgium, France, Ireland, The Netherlands and United Kingdom Reduce X-border transaction costs thanks to harmonisation of market practices

8. Features of the Single Platform Custody functions • Harmonisation: • Classification and simplification of Corporate Actions processes in four main categories • Distributions • Mandatory distribution • Mandatory distribution with options • Reorganisations • Mandatory reorganisation • Mandatory reorganisation with options • Voluntary reorganisation • Meetings • Information • E.g. certification name change • Agreement on a single order of dates (ex-date, record date, payment date) for any event

9. Features of the Single Platform Custody functions • Standardisation • STP messaging • between Issuer (Agent) – CSD: • ISO 20022 for CA announcements and processing • ISO 20022 for Meeting announcements and processing • between CSD – Client • ISO 15022 for CA announcements and processing • ISO 20022 for Meeting announcements and processing • Standard processing in line with standardisation of announcements • Increase efficiencies • Real-time credit and reporting of cash proceeds • Fewer Market Claims occurrence thanks to harmonisation of CA Dates (Ex-date, RD, PD) • Out of scope • Transaction management (Market claims, transformations, buyer protection)

10. Use of ISO 15022 formats and 20022 (Meetings) Harmonisation of Corporate Action processing in Euroclear UK & Ireland Introduction of interim securities for all distributions with options Cash distribution Entitlement reporting Single announcement for multiple accounts or per account Standing instructions Standardisation of CA processes Extended use of ISO, STP for input and reporting SP CustodyKey improvement Euroclear UK & Ireland

11. Euroclear Single Platform & FundsAgenda • High-level description of Single Platform Custody scope and timeline • Euroclear Group Consolidation strategy and projects • Migration to SP Custody • CCI • Client readiness actions plan

12. Migration to SP CustodyMigration steps • Single Platform Custody functional releases: • Participants need to adapt their systems to: • Manage the new corporate action event lifecycle resulting from harmonisation of market practices, • Connect to CCI, • The Single Platform ISO formats for custody processes • Gradual migration of events (under investigation): • New event will start on the SP • Live events on launch date would continue on the legacy platform • Few remaining long-term live events would migrate to SP • Single Platform Custody communications aspects • Early Harmonisation • CCI Networks and CCI gateway

13. 3 6 1 CA LFC start CA LFC end Old market practice 4 2 End of transition New market practice SP launch date Activation period(*) 5 (*) : from 1 Wk to 1 Mth Transition period (from 2 M to 3 M) 1 2 2 3 4 2 5 6 Euroclear UK & Ireland Migration“Gradual selective phased” approach • CAs started before the launch date continue LFC in legacy • Selected CAs starting after the launch date start on SP Custody • Before completion of the selected CAs in , other CAs continue in legacy • When the selected CAs in are successfully completed, all the CAs start on SP Custody • After the end of a transition period, all CAs that started on legacy are end of life, or converted to SP Custody. • Legacy CA is closed

14. 4 CA LFC end CA LFC start 1 Old market practice SP launch date End of transition 2 3 New market practice Transition period : min 3 months Euroclear Bank Migration“Gradual” approach • CAs started before the launch date in legacy must continue LFC in legacy • All new CAs started after the launch date on SP Custody • After the end of a transition period, all CAs started on legacy are end of life or, converted to SP Custody • Legacy CA closed 1 2 3 4

15. Common CommunicationInterface CCI Principles CCI Migration

16. Three Channels • STP File Transfer (push) • Files of messages • For bulk message exchange • Parameters to trigger outbound files • Format identical to messaging • Screen channel • Mandatory for set-up and operator management • Sole point of contact for smaller clients • Back-up and exceptions for larger clients • STP Messaging (push) • Individual messages • Sent in real time • Parameters to trigger outbound messages STP channels (ISO15022 / 20022) Messaging File transfer Screen interface Pull recovery Pull Push CCI

17. Multiple Network ProvidersBT and SWIFT Client Network Euroclear group Network Provider gateway Network Provider gateway Single Platform

18. Common CommunicationInterface CCI Principles CCI Migration

19. CCI - Migration Challenges Three Levels Of Change Connectivity • Technical interfaces • Network providers • Access Method Data Formats • ISO Standards Back Office • Harmonised processes • Training

20. Facilitating Migration

21. Euroclear Single Platform & FundsAgenda • High-level description of Single Platform Custody scope and timeline • Euroclear Group Consolidation strategy and projects • Migration to SP Custody • CCI • Client readiness actions plan

22. SP Custody – Client readiness actions planAwareness 19 June 2007 London 20 June 2007 Dublin Roadshows Visits and conferences Ongoing since June 2007 CCI: ongoing since July 2007 SPC: ongoing since October 2007 Webinars

23. SP Custody – Client readiness actions planPublications & actions  November 2006 Blueprint – edition 1  Service descriptions Available  June 2007 SP Project implementation kit  Documentation timeline June 2007  Detailed service descriptions As of September 2007  As of September 2007 Data dictionnaries  Q&A service October 2007 First Euroclear UK&IR Implementation Forum  October 2007

24. SP Custody – Client readiness actions planDSD Timeline

25. SP Custody – Client readiness actions planwww.euroclear.co.uk

26. SP Custody – Client readiness actions plan www.euroclear.co.uk

27. SP Custody – Client readiness actions plan www.euroclear.co.uk

28. SP Custody – Client readiness actions planE-mail service How to stay informed of the latest news on SP Custody and CCI ? The e-mail service

29. SP Custody – Client readiness actions plan www.euroclear.co.uk

30. SP Custody – Client readiness actions planQ&A service, FAQ • Q&A service • EUI-SPCustody@euroclear.com • SP.connectivity@euroclear.com • FAQ – Frequently Asked Questions • www.euroclear.co.uk

31. Questions ?

32. Euroclear Single Platform & FundsAgenda • Funds • Who are Euroclear? • Objectives of the Euroclear and EUI funds solution • Benefits of Market Infrastructure involvement • Solution design and consultation

33. Euroclear Group CSD markets 42% of European funds market Non Euroclear Group CSD markets 48% of European funds market Euroclear Nederland Euroclear Belgium Euroclear Bank Euroclear France EMXCo EuroclearEuropean funds exposure Euroclear UK & Ireland

34. Euroclear Single Platform & FundsAgenda • Funds • Who are Euroclear? • Objectives of the Euroclear and EUI funds solution • Benefits of Market Infrastructure involvement • Solution design and consultation

35. Market RequirementsMarket observations • Demand for straight through processing • Requirement for greater efficiency • Is a ‘plateau’ approaching? • What is the true growth potential?

36. Market RequirementsTransaction volume growth as a result of automation

37. Euroclear StrategyLong Term Vision • European market infrastructure for pan-European Markets • Order Messaging • Settlement • Servicing • Separate Components • Evolve into one environment • Open Access

38. Euroclear strategy Integration plans Buy side Sell side Scope of Euroclear Group Fund Services Record keeping in register Commission calculation Order collection and order aggregation Order routing Settlement Asset servicing

39. Euroclear Single Platform & FundsAgenda • Funds • Who are Euroclear? • Objectives of the Euroclear and EUI funds solution • Benefits of Market Infrastructure involvement • Solution design and consultation

40. Benefits of using Order RoutingEMXCo • One Standard – only one set of data required • One connection – no need to manage multiple connections to access many counterparties • Reduced risk – data entered once and re-used throughout • Greater STP – true straight through processing of your business processes

41. Benefits of using the UK Market infrastructureEuroclear UK and Ireland (EUI) • Economies of Scale • Instructs the movement over £600bn of cash each day • Cash Payments • Central Bank Money • Immediate irrevocable cash movements • Payments move between the payment banks and not within EUI • Multi currency payments possible in £UK, $US and Euro • Settlement • Guaranteed settlement on settlement date • 80-85% of settlement occurs before 08:30 • Settlement efficiency of 95%+ • Control over settlement and cash movements

42. Benefits of using the UK Market infrastructureEuroclear Group • Operational Risk • Consultation process • Market/Euroclear evolve together • Build-up towards end solution • Volume growth • Reconciliation • Live intra-day cash reconciliation information • Reconciliation of Cash positions and movements

43. Euroclear Single Platform & FundsAgenda • Funds • Who are Euroclear? • Objectives of the Euroclear and EUI funds solution • Benefits of Market Infrastructure involvement • Solution design and consultation

44. Consultation and DesignGovernance • Funds Liaison Group (FLG) • New service strategy • Market voice • Service priority • Market changes advice • Technical Working Groups • Standards committee • New service design

45. Consultation and DesignFunds Liaison Group • Abbey Share Dealing • APCIMS • Bank of New York • BNP Paribas Fund Services UK • Brewin Dolphin Securities • Charles Stanley • Edward Jones • Fidelity • Halifax Share Dealing • Hargreaves Lansdown • HSBC • IMA • IFDS • Invesco Perpetual • JP Morgan Asset Management • Mellon Global Securities Services • New Star Investment Funds • Northern Trust • Old Mutual Asset Management • PIMA • Skandia • State Street • Threadneedle Asset Management

46. ProgressFLG Agreements • Settlement of Funds should take place in EUI • We should move towards cash and securities model • Costs should be controlled as much as possible • STP is the primary objective

47. ProgressLegislative and Regulatory • Agreement with the Treasury and FSA to propose the alteration of regulations to allow electronic transfer of title • Agreement with the Treasury and FSA to propose the changes to the Uncertificated Securities Regulations (USR’s) to allow settlement of mutual funds in EUI • Both of these will allow the movement of the market towards greater STP • Combined with the IMA we are progressing these changes to a conclusion

48. Phase 1 Process flows in the UK marketCurrent UK Order and Settlement Process EMX Provider Distributor • Benefits • Enables direct input of transactions from EMX into EUI • Allows the creation of cash settlement messages in EUI • Facilitates the efficient movement of Cash between parties EUI

49. Future phasesPriorities post phase 1 • Stock Settlement • Reconciliation • Transfers (a market acceptable standard) • Own name to nominee • Nominee to nominee • Further STP