SGX Securities Lending Singapore Exchange 27 – 28 June 2006 The 8 th ACG Cross Training Seminar

SBL process and model What we do Tax guidelines & Regulatory updates Q&A Overview

Clearing Member / Depository Agent (Borrower) Clearing Member / Depository Agent (Borrower) Lending Pool Lending Pool CDP Borrowing Request Collateral Deposit Check Stock Availability Confirm Stock Availability Confirm Stock Availability Receive Loan Stock Deliver Loan Stock DA Sub- Account Holder DA Sub- Account Holder Direct Account Holder Direct Account Holder DA Sub- Account Holder DA Sub- Account Holder Direct Account Holder Direct Account Holder Direct Account Holder Direct Account Holder AUTOMATED PROCESS

Borrowers Lenders CDP Collateral Fees Loaned Stock SIMPLY……..

Lenders: CDP account holders Borrowers: Depository Agents/Clearing Members Facility: Borrowing period are -T + 3 borrowing period - Open dated Lending (subject to recall) : Borrowing fee is non-negotiable : First come first serve basis : Same day borrowing (cut-off time 11.00am) : Can return partial or full anytime : Minimum size is 1,000 shares CDP SBL MODEL

 Borrowing limit – per borrower and in total  Lending pool limit 25%  Concentration limits (eg. each borrower to borrow no more than 5% of the listed company issued capital)  Loans and collateral are marked-to-market at least once daily  Cash and LC collateral – at least 105% of loan value  Securities collateral – at least 130% of loan value SBL RISK MANAGEMENT

 Transfer of securities and collateral will not be regarded as a disposal.  Lending fee and rebate fee arising from SBL is tax exempted.  Manufactured dividend is taxable.  For non-residents, lending fee received is grossed, no withholding tax. TAX GUIDELINES