1. Suffolk County Council Securities Finance Date: 19 th January, 2009 Location: Ipswich

2. 2 A product where participants generate revenue by temporarily transferring idle securities, in a collateralised transaction, to a borrower. LENDER BORROWER Ownership of Securities Collateral and Fees Securities Lending Defined

3. 3 Monthly Revenue *Programme suspended in October, 2008 Source: SL PerformanceReporter®

4. 4 Risk Management >Borrower Default Risk >Market Risk >Liquidity Risk >Operational Risk >Legal, Tax, Regulatory etc. Risks Safeguards >Stringent borrower review, conservative borrowers, client controls >Indemnification for borrower default >Collateral and margin >Daily mark to market >Effective collateral management >Size of programme >Buffers >Dedicated operations group >Procedures and regular audit >Product Development group >Due diligence process

5. 5 Acceptable Collateral for UK Local Authorities >Collateral must be in the form of one of the following: –Cash* –Near cash –Government and Public Securities (GOPS)** –Certificates of Deposit –Letters of Credit –Deliveries by Value (UK gilts and UK equities) * Cash can only be reinvested into security types appearing on the list of collateral forms (cash is not acceptable for Suffolk County Council) ** GOPS are defined as government bonds or bonds issued by supranational entities

6. 6 >Lender motivation –To generate incremental revenue with minimal impact on the day to day trading activities of the portfolio managers and without incurring any undue risks. >Borrower motivation –It is cheaper and / or more efficient to borrow shares than to buy them on the open market –Securities are borrowed by a counterparty that has a commitment to deliver shares which it has sold, but does not possess. –Securities are borrowed to create a “short” position in a security. –Arbitrage trades, covering tax, convertible bond, index etc… –Securities are borrowed as part of a financing strategy. –Settlement coverage

7. 7 This document is for information purposes only and is not intended to constitute or form part of any binding contractual arrangement or any commitment by State Street to provide securities lending services or any related services. The products and services outlined herein are offered to professional clients or eligible counterparties through State Street Bank Europe Limited and State Street Bank and Trust Company, London branch, who are authorised and regulated by the Financial Services Authority (FSA) in the United Kingdom (UK), and State Street Bank GmbH, London branch, which is authorised by the Bundesbank and German Financial Supervisory Authority (BaFin) and regulated by the FSA for the conduct of UK business. Clients should be aware of the risks trading foreign exchange, equities, fixed income or derivative instruments or in investments in non-liquid or emerging markets. Derivatives generally involve leverage and are therefore more volatile than their underlying cash investments. The information provided does not constitute investment advice and is not a solicitation to buy or sell securities or to provide investment services. It does not take into account any investor's particular investment objectives, strategies or tax status. All material has been obtained from sources believed to be reliable but we make no representation or warranty as to its accuracy or completeness and you should not place any reliance on this information. Past performance is no guarantee of future results. Please contact your State Street representative for further information.