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Tadawul CSD: Overview of New Services

Tadawul CSD: Overview of New Services. 25 th Apr, 2012. Agenda. Tadawul at a Glance Market Stats CSD Overview Issuers’ Obstacles Overview of New Services Next Steps. Tadawul Roles. Services Value Chain. 1. Listing. 2. Trading Services.

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Tadawul CSD: Overview of New Services

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  1. Tadawul CSD: Overview of New Services 25th Apr, 2012

  2. Agenda Tadawul at a Glance Market Stats CSD Overview Issuers’ Obstacles Overview of New Services Next Steps

  3. Tadawul Roles

  4. Services Value Chain 1. Listing 2. Trading Services We enable Saudi companies to raise the capital they need to grow, by listing securities on our highly-efficient, transparent, and well-regulated market. Through our market we give companies access to a deep and liquid pool of investment capital. Once companies have been admitted to trading, we use our services and expertise to help them maximise the value of their listing We invest in technology to provide the trading platform used by investors, via broking firms, to buy and sell securities. Our systems provide fast and efficient access to trading allowing investors, brokers and institutions to quickly access the equity market. Trading is tightly integrated to the Tadawul depository, with all sell orders being checked for availability of the security prior to order release into the market 3. Market Information 4. Settlement, Registry and Depository We supply high-quality, real-time prices, market indices, news and other information to the financial community. Strong relationships with data vendors help ensure the markets receive the information they depend upon. We invest in technology to create new applications for our data and seek to constantly upgrade our products and services. We provide the securities settlement system for both debt and equity instruments, as well as custody services. Our computerized book-entry-settlement system enables instant settlement and delivery of securities at T+0 for equities. Our CSD provides an important range of registration and depository services to investors and listed companies, enabling companies to manage their service requirements towards their investor base

  5. Trading & Settlement Cycle EOD: Clearing Bank Cash Netting T+0: instant delivery and cash payment for investors Feature: Tadawul checks each broker buy order real-time before order book entry, for potential breach of broker’s intra-day settlement position limit as set by clearing bank. Broker’s position recalculated real-time (position = limit + executed trades – buy orders). Over limit buy orders are rejected prior to order book entry Page 5

  6. Agenda Tadawul at a Glance Market Stats CSD Overview Issuers’ Obstacles Overview of New Services Next Steps

  7. Market Stats • GDP of 2,100 B SAR (560B USD) • Equity market free float is about 40% • Private placements: • 12 private bonds (OTC traded) • 8 private JSCs (OTC traded) • 15 sectors (major sectors are Petrochemical, Banking, Cement, Retail, Telecom) • Market PE of 13-14x • 2011 Corporate earnings of over 90B SAR • About 50B SAR dividends distributed in 2011

  8. Capital Raising NUMBER OF NEW COMPANIES LISTING (IPO) CAPITAL RAISED* (IPO) US$ BN IN 2008, NEW IPOS AT TADAWUL RAISED $9.7 BN, MAKING TADAWUL THE SECOND LARGEST IPO MARKET IN THE WORLD IN 2008 AFTER NYSE (AHEAD OF LSE AND NASDAQ) * Excludes secondary capital raising and rights issues

  9. Market Growth 50% drop to US $683bn Number of Transactions (millions) CMA established to regulate the market = US$ 1,403bn Approximately the same size as Italy Tadawul set up to run the Saudi Equity market = US $657bn

  10. TASI Index & Market PE

  11. Agenda Tadawul at a Glance Market Stats CSD Overview Issuers’ Obstacles Overview of New Services Next Steps

  12. Key Functions

  13. Accounts & Portfolios

  14. Agenda Tadawul at a Glance Market Stats CSD Overview Issuers’ Obstacles Overview of New Services Next Steps

  15. Issuer Obstacles • Difficulty in communicating with shareholders • Lack of an easy mechanism for shareholders to know about their dividend entitlements • Accumulation of unclaimed amounts • Difficulty in participating in AGMs • Shareholders unaware of certain certificates (materialized shares)

  16. Tadawulaty • Filling the gap between issuers and their shareholders • Empowering investors by enabling them to participate more effectively • Elevating the practices of shareholder relations at listed companies

  17. Development Timeline 2012 – 2011 Promotion and awareness of services to listed companies 10/2011 – 03/2011 eVoting applied for a number of AGMs 10/2009 1steVoting used In acquisition txn 03/2011 Launching 1st phase of Tadawulaty 10/2011 Launching 2nd phase of Tadawulaty 2013 – 2012 Developing more services and promotion of existing ones

  18. Existing Services Electronic Voting Registry Services Tawasul Service Trading Restriction Dividend Entitlement & Payment Status Sharebook Access AGM Management

  19. “Being-Developed” Services Customized Reports Call Center Wireless Voting Search Engine for unclaimed amounts

  20. Agenda Tadawul at a Glance Market Stats CSD Overview Issuers’ Obstacles Overview of New Services Next Steps

  21. Registration & Identity Check Electronic Registration - Online Broker website Tadawulaty Investor Investor User ID Password User ID Password Confirm Visit Login Redirect In person Broker website Tadawulaty • Validate Identity • Apply for investor OTP sent to mobile no Visit Enter Send Email

  22. AGM Services

  23. First Phase (Setup): • Issuers to send the following: • Company Logo. • Attachments (i.e. financial statements, CV’s or anything that helps the investor in making a good decision). • Agenda items. • Owners completely excluded from the AGM or excluded at item level. • E-Voting duration (e.g. 1 to 2 weeks). • Tadawul setup and approval of AGM: • AGM preparation: • Enter basic information. • Enter detailed information. • Enter agenda data. • Add agenda items (e.g. a simple item, cumulative voting, normal voting). • Identify AGM members (e.g. AGM Secretary, Ministry of Commerce representative... etc.) • Data entry of AGM Minutes of Meeting.

  24. Second Phase (E-Voting): • Starting Electronic Voting. • Notification to shareholders of the company via SMS and e-mail. • Voting on behalf: brokers will call shareholders to vote on behalf of them. • Shareholders have the option to change their votes. • E-Voting will end before 11:00 a.m. on AGM day and Sharebook will be updated automatically.

  25. Third Phase (AGM Day): • The Company will have an updated Sharebook in the same day of AGM meeting. • Distributing of printed voting cards to all attendees (i.e. shareholders and voters on behalf). • Shareholders still have the option to change their votes. • Tadawulaty can provide the company with the following reports: • Attendance report. • Attendance report including vote types. • Missing voting cards report. • Total voting result report. • All AGMs will be archived including reports, issuer can review them at anytime. • Voting progress report. • Attendance holding summary report. • Minutes of meeting report. • Voting summary report.

  26. Facilities

  27. eVoting & AGM stats 18 AGMs managed in 2011, 16 reached quorum from 1st meeting Over 11 AGMs so far in 2012 – 30 AGMs requested so far eVoting for 10 different AGMs were live – same time Higher percentage from outside the AGM city In 2011, the average of eVoting was about 15-20%. Higher percentage in 2012 (35% so far) Unlisted companies are also using this service Some changes are coordinated with brokers to increase this further

  28. Dividends Services

  29. Dividends Services Process (Entitled, Announced)

  30. Dividends Stats Historical entitled dividends are available in Tadawulaty from 2001 to 2012 34 companies have provided dividends payment status from 2001 to 2012 Total amount of unclaimed dividends for those companies is more than SAR 666 million which belongs to 155,506 investors Total amount of entitled dividends available in Tadawulaty is more than SAR 278 billion which belongs to 2.1 million investors Total amount of dividends payment status available in Tadawulaty is about SAR 77 billion which belongs to more than 1 million investors

  31. Consolidated Reporting Member 1 Member 2 Member 3 Member 4 Tadawulaty

  32. Unlisted Companies • Tadawul provides a list of registry services to listed companies Listed Companies • Shares Ownership registry service • Corporate actions reporting • Shares registry service • Sharebook reporting • Dividends Reporting service • AGM & e-Voting service • Tadawul will provide the same list of services to unlisted companies Unlisted Companies

  33. Sharebook Reporting Chose requested date and file type Login to Enter the request Request will send 3 1 2 Tadawul admin If Request is Approved Review the request Sharebook will be send to the company Check the file and review the company details If Request is Rejected The admin approved or reject the request The admin will enter the reason of rejection Company

  34. Trading Restriction Tadawul will Pledge all issuer stock and will send Trading Restriction notification for all Top Executives, Board of Directors and their associates

  35. Shareholder Communication Service (Tawasul)

  36. Agenda Tadawul at a Glance Market Stats CSD Overview Issuers’ Obstacles Overview of New Services Next Steps

  37. Shareholders Services Evolution Basic Registry Services Fragmented Shareholder Services Integrated Shareholder Relations Services Full Fledged Investor Relations Services • Keep the shareholders data • Generate sharebook report on request • Consolidated Portfolio Reporting • AGM & e-voting • Dividends Reporting • Sharebook reporting • Certificates Search • Tawasul • Trading Restriction • Shareholder relations services • Wireless voting • Call center • Shareholder relations services • Webcasting • Investors Targeting • Competitive Intelligence

  38. Envisaged Shareholder Relations Package

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