Building relationships in the post regulation environment │International Conference: EBRD, NFEA, ISDA │ Robin Poynder, Head of FX&MM, EMEA

Building relationships in the post regulation environment Regulatory background The wider RUB financial markets – building visibility of liquidity Regulated Dealing community Messenger community

Regulation – G20 commitments In September 2009 the G20 recommended reforms to address concerns raised during the Credit Crisis, with an end 2012 deadline for implementation G20 aim was to reduce counterparty risk, operational risk and systemic risk within the financial markets, and in particular in OTC derivatives trading The G20 reforms have three key areas of focus for the Derivative financial market workflow: Clearing of all trades that are capable of clearing –Derivatives trades need to be cleared through a central counterparty (CCP): non cleared trades will incur additional capital charges and must be mark-to-market daily Regulated trading platform - all trades need to be executed on an exchange or regulated trading platform (SEF in US, MTF or OTF in Europe) –Focus on multi-quote, transparency, efficiency Transparency - Increased transparency pre-trade and post-trade (Spot and Forward FX currently expected to be exempt )

The wider set of RUB instruments Growth in international banks pricing Spot RUB - $7-8 bio traded each day in Thomson Reuters Forwards –MICEX tradable Swap prices – to 5yr –Full NDF coverage Full range of Deposit rates down the curve –Unique set of curves reflecting segmentation of liquidity –Implied Deposit rates from Prices from the four main brokers and international banks quoting –FX Options –Interest Rate Swaps –Cross Currency Swaps –Cross Basis Swaps –Forward Rate Agreements Thomson Reuters is the calculating agent for MOSPRIME, NFEA FX SWAP, MOSPRIME OIS spread, ROIS Fix All instruments are tradable and are traded through Dealing Dealing will be an MTF

Dealing network map: Russia Page 5 Russia has over 250,000 convs, 84% of which were domestic. The most international convs were with the UK (3% of total), Latvia (3%), and the Ukraine (2%). Over 99% of conversations were within Europe and the Former CIS. The vast majority of Russia’s conversations are domestic. There are international links with 69 countries, but activity is primarily within Europe and the former CIS. Bubble size represents number of conversations with Russia 4,000 50,000 Line width represents number of conversations between two countries < ,000 Check in Dealer Central for other banks trading IR and FX Derivatives

Messenger - RUFX Page 6