1. Electronic Trading: A South African Entrepreneurial Perspective Raymond Ndlovu, CEO Noah Financial Innovation

2. AGENDA  FIX PROTOCOL – A UNIVERSAL LANGUAGE  THE ULTIMATE GOAL- EFFECTIVE COMMUNICATION  VOICES IN HARMONY  TOO MANY DIALECTS?  THE ACCENT ON RISING COSTS  LOST IN TRANSLATION – PROBLEMS WITH THE STATUS QUO  HOW TO “FIX” IT?- “CO-OPETITION”

3. FIX PROTOCOL – A UNIVERSAL LANGUAGE  TRANSPARENCY  COST- EFFECTIVENESS  EFFICIENCY & ECONOMIES OF SCALE  SUSTAINABILITY

4. THE ULTIMATE GOAL: EFFECTIVE COMMUNICATION STRAIGHT THROUGH PROCESSING STP Forum Initiative “The automation of activities in the securities industry from beginning to end, in order to enable cross organisation and cross system integration.”

5. THE ULTIMATE GOAL: EFFECTIVE COMMUNICATION

6. VOICES IN HARMONY ETI is divided into four high-level processes

7. VOICES IN HARMONY  INDUSTRY-WIDE GLOBAL STANDARD  FACILITATES INTER-OPERABILITY FOR CURRENT NETWORKS  ENABLES FLEXIBILTY TO ADAPT TO VARIOUS MARKETS AND TRANSACTION TYPES  ENSURES TRANSPARENT & TRACEABLE TRADES

8. TOO MANY DIALECTS? BROKER FUND MANAGER TRADING SYSTEM CLEARING HOUSE CSD TRANSFER SECRETARIES CSDP LENDING DESK LENDING REQUEST CONFIRMATION TRADE UPDATE SETTLEMENT ORDER INTIMATIONS CORP ACTIONS DEMAT COMMITS SETTLEMENT ORDERS INTIMATIONS LENDING ORDER CONFIRMATION OF SETTLEMENT AFFIRMATION ORDER IOI/FON CONTRACT NOTE AFFIRMATION ALLOCATION ETI ETC ETS REMAT

9. TOO MANY DIALECTS? CASE STUDY #1

10. TOO MANY DIALECTS? CASE STUDY #2

11. TOO MANY DIALECTS? CASE STUDY #3

12. THE ACCENT ON RISING COSTS BROKER CONNECTED DIRECTLY TO THE JSE ; NO OMS PER MONTHANNUAL TERMINALR2 700.005R13 500.00 VWAPR6.305R 31.50 GENERAL-LIVE INDICESR36.005R180.00 GENERAL-LIVE LEVEL 2 INDICES R171.005R855.00 SENSR1 998.001 BACKUP TERMINALR585.002R1 170.00 COST OF 5 TERMINALS R17 734.50R212 814.00

13. THE ACCENT ON RISING COSTS LOCAL BROKER COST –ELECTRONIC TRADING WITH OMS 5 TERMINALS CONNECTED TO 5 CLIENTS PER MONTHANNUAL IOIR3 500.00 JSE-SETS API SERVICE FEER5 880.00 VWAPR6.305R 31.50 GENERAL-LIVE INDICESR36.005R180.00 GENERAL-LIVE LEVEL 2 INDICESR171.005R855.00 SENSR1 998.001 BACKUP TERMINALR585.002R1 170.00 OMS/EXECUTION ENGINER30 000.00 NETWORK CONNECTION –IF CLLIENT ON SAME NECTWORK3R7 000.00 NETWORK CONNECTION-CLIENT HAS DIFFERENT NETWORK PROVIDER5R30 000.00 ALLOCATION COSTSR5 000.00 MESSAGE COSTSR5 000.00 COST OF 5 TERMINALSR90 614.50R1 087 374.00

14. LOST IN TRANSLATION: PROBLEMS WITH THE STATUS QUO  MULTIPLICITY OF “ORIGINAL” SOLUTIONS  PLETHORA OF NETWORK & SOLUTION PROVIDER CHOICE…..  ……..WITHOUT THE REQUISITE FREEDOM!  COSTS ABOUND  WHO HAS THE DEEP POCKETS?  IS VALUE BEING DERIVED APTLY?

15. A POTENTIAL SOLUTION Other Stakeholders & Services There are many other connections to the JSE London Stock Exchange FTSE STRATE-Settlements Credit Checking Other Markets Brokers Access to JSE trading and services Critical to doing business An enabling technology Converge services over a single infrastructure Fund Managers Order Management System FIX connectivity Information Subscription Data download Information Providers Information distribution is the core business Adding value services in addition to the JSE Info Provider Fund Manager JSE JSE Member Settlement LSE FTSE Other Markets Managed Network SOURCE-JSE WEB SITE

16. HOW TO “FIX” IT?- “CO-OPETITION”  TAKE HEED OF WARNING SIGNS  CREATE TRUST AMONGST ROLE PLAYERS  ADOPT A SINGULAR, COMMON VISION  CREATE A MULTI-DISCIPLINARY INDUSTRY FORUM  MAKE THINGS HAPPEN!!!!!

17. DISCUSSION