How can SWIFT be used on the Russian Securities Market? Steven Palstermans Head of Russia, CIS & Mongolia

2 Eligibility criteria – 27 SWIFT user categories SWIFT Community Members Non shareholding Members Sub-members Brokers & Dealers Central Depositories & clearing Institutions Subsidiary Providers of custody & Nominee Services Recognised Exchanges for Securities & related financial Instruments Fund Administrators IMI’s Money Brokers Non shareholding Financial Inst. Trading Institutions Registrar & Transfer Agents Trust or Fiduciary Services Companies Representative Offices Travellers Cheque Issuers Securities Proxy voting Agencies Treasury ETC Service Providers Securities Electronice Trade Confirmation Service Providers Securities Market Data Providers Financial Market Regulators Treasury Counterparties Corporates Participants in MA-CUGs Payments System Participants Securities System Participants CREST Participants

3 CIS : Traffic Share Source : FIN_per Sales Area

4 Russia : Messages by market Russia CIS Aug/2008 Growth Payments18.10% Securities74.07% Treasury10.20% Trade14.01% Total21.84% Aug/2008 Growth Payments15.75% Securities72.79% Treasury11.75% Trade10.40% Total18.77%

5 Russia : Weight Domestic Traffic per Market Weight: 54% Weight: 26% Weight: 70% Weight: 15%

6 Securities Market Infrastructures on SWIFT >80 institutions from 50 countries Hong Kong Exchanges and Clearing Hong Kong Monetary Authority (CMU) Hong Kong Estonian Securities Depository OMX Estonia MCSD MISR for Clearing, Settlement and Depository Egypt Central Securities Depository Bank of Greece Greece Eurex Clearing Clearstream Banking AG MTS Germany Caja de ValoresArgentina France Finland Czech Republic Croatia Canada Brazil Belgium Austria Australia Euroclear France Euronext Paris – MATIF MTS NCSD Finland – APK OMX UNIVYC Sredisnja Depositarrna Agencija CDS CBLC Euroclear Belgium Euroclear Bank MTS National Bank of Belgium OeKB Australian Securities Exchange Austraclear Keler KSEI Euroclear UK & Ireland Hungary Indonesia Ireland Euroclear Nederland MTS Netherlands RBNZ Austraclear NZX Ltd New Zealand The National Depository Center Depository Clearing Company Russian Federation National Depository for Securities – KDPW Poland Banco de Portugal – SITEME MTS Portugal VPSNorway S.D. IndevalMexico Clearstream Banking SALuxemburg OMXLithuania Midclear Central Depository Lebanon Bank of Latvia Central Depository OMX Latvia Korea Securities DepositoryKorea Central Securities Depository Kazakhstan Stock Exchange Kazakhstan Bank of Japan Jasdec Japan CCG Monte Titoli Italy Tel Aviv Stock ExchangeIsrael Central Bank of Sri Lanka (LankaSecure) Sri Lanka DIFXUAE - Dubai Reserve Bank of ZimbabweZimbabwe ISE Settlement and Custody Bank INCTurkey The Central Depository (Pte) Ltd Monetary Authority of Singapore Bank of Slovakia CDCP Singapore Slovakia Chicago Mercantile Exchange Clearing Corporation DTCC Federal Reserve Banks Omgeo Options Clearing Corporation USA Euroclear UK & Ireland LCH.Clearnet London Stock Exchange United Kingdom Thailand Securities Depository Co. Ltd. Thailand Taiwan Depository & Clearing Corporation Taiwan SIS SIS x-clear Switzerland NCSD Sweden – VPC OMX Sweden Iberclear MEFF MTS Spain STRATE JSE Ltd South Africa Central Securities Clearing Corporation – KDD Slovenia Denmark OMX VP

How can we talk to each other in one language: ISO Standards?

8 Existing standards working groups for CSDs Giovannini working groups Global CSD working group Consolidate CSD views on standards

9 National Market Practice Groups NMPG countries NMPG countries specified on EIG

10 Market Need – Manual data entry problem CSD Issuer Registrar Investor Custodian On-Line (very few markets) ISO 15022

11 Market need – Corporate Actions Challenges  Significant shortfall in message quality and market practice compliance  Limitations of software vendor solutions  Difficult business case – management buy-in for improvement projects Drivers  Losses / risk mitigation  Operational efficiency  Reducing costs  Regulatory compliance  Customer Service  Maximise portfolio performance  Achieve scalability The Drive for STP  Standards  Market practice and tools  Best practices

12 Simulation Testing and Qualification Service (STaQS) Test MT 564 Notification and MT 566 Confirmation messages for compliance to market practice … a health check for Corporate Actions messages What can you do with this service? –Measure conformance –Identify improvement areas –Benchmark progress –Improve counterparty automation STaQS for Corporate Actions

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How to make it easier and cheaper to use SWIFT?

15 80% 18% 2% Low volume customers Messages per day 180 5, ,000 Low volume customers Medium volume customers 1,00040,000 Institutions High volume customers

16 Easy to order, install and use SWIFT security FIN and FileAct enabled Attractive price Available now. Product Simple connectivity Alliance Lite

17 Attractive pricing 4, EUR/item Items/month EUR/month Pay as you go Flat Fee 1 item = 1 FIN MT, or 1 FileAct chunk of 100 KB, sent or received 850 Monthly billing 200 Subscription for 1 year, tacitly renewed, cancellation with 3 months notice

18 Questions?

19 Thank you