MICEX FX market : current conditions and prospects Igor Marich, Vice-president, MICEX Ruble Forum 2009 Moscow, 10/11/2009

2 MICEX FX market: key figures The volume of transactions in 2008 reached 2 680,0 bln. USD - 1,8 times more than in 2007 The volume of transactions in January-September 2009 reached 2 293,7 bln. USD - 1,4 times more than January-September 2008 The daily average volume of transaction, mln. USD 2008Jan - Sept 2009 MICEX Group , ,5 FX market10 719, ,6 FX market share, %46.0%58.0%58.0%

3 Participants MICEX SH Foreign Banks Regional SH MICEX FX market: infrastructure МICEX NCC clearing trades settlements payments

4 MICEX FX market: Risk management system Participants requirements Trading limits Margin calculations Fails management Guarantee fund and other guarantees

5 MICEX FX market: trading instruments & trading time * For «Moscow» Section Members ** For «Region» Section Members USD/RUB USDRUB _TOD 10:00 – 11:00** 10: :00* USDRUB _TOM 10: :00 USD_TODTOM 10:00 – 11:00** 10: :00* EUR/RUB EURRUB _TOD 10:00 – 11:30** 10:00 -12:30* EURRUB _TOM 10: :00 EUR _TODTOM 10:00 – 11:30** 10:00 -12:30* EUR/USD EURUSD _TOD 10: :00 EURUSD _TOM 10: :00 EURUSD_TODTOM 10: :00 UAHRUB _TOM BYRRUB _TOM KZTRUB_ TOM 10: :30

6 MICEX FX market structure in

7 MICEX FX market – the core segment of the Russian FX market MICEX FX market – the core segment of the Russian FX market

8 MICEX FX market – the core segment of the Russian FX market (2) MICEX FX market – the core segment of the Russian FX market (2)

9 USD/RUB: structure in

10 EUR/RUB: structure in

11 EUR/USD: major preconditions Increased volatility under financial crisis conditions Decrease in volume of non-resident bank transactions at the home market Increase of liquidity in the EUR/RUB segment Market participants’ interest in direct EUR/USD quotation

12 EUR/USD: weekly average volume,

13 EUR/USD : average daily volume, mln. EUR

14 EUR/USD: structure, The volume of transactions in Apr.-Oct reached mln.EUR

15 MICEX FX market main projects Access to the MICEX FX market for the banks of EurAsEC countries Netting Ruble settlements in the RTGS (BESP) SWAP for settlement finalization «United trading limit» 2-tier access to the market

16 Access to the MICEX FX market for the banks of EurAsEC countries Direct market access for credit institutions from EurAsEC countries, in accordance with Agreement ( ): will be able to participate directly in trading in the MICEX FX market, to deal with CCP – NCC. will become members of MICEX FX market Section Project realized

17 USD/ RUB EUR/ RUB EUR/ USD USD/ RUB EUR/ USD EUR/ RUB Netting project USD RUBEUR RUB USD EUR USD EUR RUB now

18 Ruble settlements in the RTGS (BESP) Settlements using the accounts of the NCC with the MICEX SH (head office, branches) on the basis of RTGS technology: project aim is substitution of the Settlement session NCC will regulate regional liquidity itself adjustment of trading time for Moscow and Regional participants

19 SWAP for settlement finalization An alternative mechanism for final settlement in case of participant’s default: Project aim is substitution of the Additional Session mechanism Two stages of the project: —Transfering the defaulted position to the next tradind day (SWAP between NCC and liquidity provider) and closing it out on the basis of Additional Session —Transfering the defaulted position to the next trading day and closing it out in the UTS I stage: II stage:

20 «United trading limit» Providing the participants with more cost effective service: opportunity to trade in USD and EUR while posting one of the currencies: RUB, USD, EUR, or any its combination opportunity to trade in EUR using the net-operation limit

21 Trade system Two-tier access to the market Two-tier access to the market Orders deals Clients Orders Section member NCC information Clients information Attracting the new groups of participants (including non-residents) by development of DMA

22 Contacts Address: 13, Bolshoy Kislovskiy, Moscow , Russia Telephone: (095) Thank you!