® CLS and the CLS Logo are registered trademarks of CLS UK Intermediate holdings Ltd © 2003 CLS UK Intermediate Holdings Ltd. ® The operational impact of CLS CLS’ perspective Presentation to FX Operations Managers Conference 20 th & 21 st April 2005, London John Hagon, Director of Operations, CLS Services Ltd

Positive Impacts of CLS Settlement risk reduction Multilateral Netting Real time information Improved STP Information services Streamlining of confirmation process Matching

Positive Impacts of CLS Reconciliation Increased processing scalability Reduction in fails Reduction in SWIFT costs for (MT202) payments Reduction in compensation claims Reduced operational risk (prep for BASEL II) Increased standardisation

Positive Impacts of CLS Easier and quicker diagnosis of problems Opportunity to rationalise Operations Resilience Single “Pipe”

…but there are some issues to address Funding and nostro costs need to be better managed We need to drive down unit costs We need to continue to mitigate the concentration risk

The Future for the Service Non-Eligible Currencies Non-Deliverable Forwards Option Premiums Credit Derivatives & Interest Rate Swaps Multiple Settlement Sessions Input Matching Confirmation Multilateral Netting Settlement