Page 1 © 2008 Thomas Murray Ltd. ACSDA 10 th General Assembly Presentation by Simon Thomas Thomas Murray 21 February 2008

Page 2 © 2008 Thomas Murray Ltd. Agenda m Risk Situation in the Americas m Market Infrastructure in Europe m Market Trends m Consolidations m Range of Services provided by CSDs m The retail model

Page 3 © 2008 Thomas Murray Ltd. CCC AAA Overall Capital markets Infrastructure Ratings AA+ AA AA- A+ A A- BBB BB B Comparative Chart Average Americas Average East Europe Avge West Europe Avge Asia Pacific Avge Mid East Africa

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Page 5 © 2008 Thomas Murray Ltd. Market Trends oPressure on profitability of exchanges oExchanges downstream - vertical silos (e.g Spain, Germany, Norway) oHorizontal consolidations (e.g OMX Group, Euroclear) oHistorical transition from exchange/broker owned, to market owned to public ownership oTransfer from market utility to commercial enterprises oInvolvement of central banks in CSD business (e.g Costa Rica, T2S) oTransitioned from internal clearing to external clearing via CCPs and CMUs oExpanding added value services (e.g issuers service, derivatives, funds processing)

Page 6 © 2008 Thomas Murray Ltd. ‘American Invasion’: US exchanges buying two horizontal ‘silos ‘ ‘Small is Vulnerable’: Anything not in a vertical silo is ‘up for grabs’ ‘Vertically Challenged’: Are the vertical silos coming up short in their ‘dormant’ strategy? Silos in Europe Vertical Silo Horizontal Silo Horizontal Association Independent CSD(s) NASDAQ NYSE DIFX Consolidations in Europe

Page 7 © 2008 Thomas Murray Ltd. Consolidations in the Americas Vertical Silo Horizontal Silo Horizontal Association Independent CSD(s)

Page 8 © 2008 Thomas Murray Ltd. Cash Market Services Alternatives Market Services Bermuda, Bolivia, Costa Rica, Ecuador, El Salvador, Guatemala, Jamaica, Panama, T&T, Uruguay, Venezuela Chile, Colombia, Peru, Egypt, Russia, China, Canada, UK, Japan, Singapore, Sweden, Finland, Denmark, Malaysia, South Africa USA, Norway, Euroclear, Clearstream France, Germany, Italy, Poland, Hong Kong, Australia, Thailand Range of services

Page 9 © 2008 Thomas Murray Ltd. Retail Model All domestic accounts held at the first level Each beneficial owner has their own account at the CSD The CSD acts as central registrar – the notary that grants legal title. (Other registration functions can be carried out by third party registrars e.g. Calling AGMs, paying dividends etc. Genuine nominee accounts only allowed for foreign participants Also known as the Direct Holding model Structure results in millions of accounts at the CSD No intermediaries required. Participants act as Account Operators to maintain details across millions of accounts CSD and Central Registrar Beneficial owner Foreign nominee Beneficial owner Foreign nominee Beneficial owner Beneficial owner Beneficial owner Beneficial owner Beneficial owner

Page 10 © 2008 Thomas Murray Ltd. m Strengths – Accounts at beneficial owner level – Investor protection - Designated Segregation – Single consolidated position – Direct access to accounts – Direct route for corporate actions – Issuers have complete shareholder details m Weaknesses – High operational risk - China – Maintenance of beneficial owner details – CSD cannot provide full customer service at this level – Reconciliations – Expensive Retail Model