1. OUTSOURCED TRADING SOLUTIONS FOR FINANCIAL INSTITUTIONS June 23 rd 2011

2. Romania’s gateway to online trading Brief introduction The Online Trading Industry Case study: Ava FX Business opportunities Q & A Agenda

3. Romania’s gateway to online trading Brief introduction Established in 2006 Fastest growing broker in Europe Trading volumes over $50B monthly Operates in 150 countries 7 offices worldwide Regulated in the EU by the Central Bank of Ireland Winner of multiple awards

4. Romania’s gateway to online trading The Online Trading Industry Mid-late 1990’s: Saxo Bank (EU) and FXCM (US) bring the spot FX market to the retail investors. Broadband internet access in homes and workplaces Internet access everywhere (Wi-Fi, mobile etc.) Increasing confidence of customers making financial transactions online Economic growth How it started Main Drivers:

5. Romania’s gateway to online trading Source: IDC, Gartner, Morgan Stanley The Online Trading Industry Main drivers

6. Romania’s gateway to online trading Source: Microsoft The Online Trading Industry Main drivers

7. Romania’s gateway to online trading Open 24h, as opposed as stock markets – trading in free time Fairness of the market – huge liquidity, no market movers or inside info Ability to generate gains in any market condition High amount of leverage The Online Trading Industry Value proposition

8. Romania’s gateway to online trading Evolution Increased regulatory scrutiny Institutional customers become more comfortable with online firms Online trading industry 2006: 5% of revenues from institutional customers 2010: Over 10% of revenues from institutional customers (+100%) The Online Trading Industry

9. Romania’s gateway to online trading Source: IBS, Sept. 2010 3.3 4.0 The Online Trading Industry Growth

10. Romania’s gateway to online trading Source: IBS, Sept. 2010 +20% ~ +48% ~ The Online Trading Industry Growth 1.0 1.5

11. Romania’s gateway to online trading The Online Trading Industry Relevance 90%+ of trading volumes consists of spot FX Rapid growth of CFDs and FX options BIS surveys pick up volumes through liquidity providers BIS includes several online trading firms and non-bank dealers for the first time in 2010

12. Romania’s gateway to online trading CFDs: Contract For Difference A contract for difference (or CFD) is a contract between two parties, typically described as "buyer" and "seller", stipulating that the buyer will pay to the seller the difference between the current value of an asset and its value at contract time. No physical exchange of asset, only difference in price More liquidity – No need for matching order No expiry – Rollover of positions on different underlying Ability to short-sell all assets regardless of regulations High leverage available The Online Trading Industry

13. Romania’s gateway to online trading The Online Trading Industry Geography – A truly global market Healthy distribution worldwide for both trading volumes and customer base Key trends US caught up with the EU. Trend expected to reverse due regulatory limitations Expected reduction in volumes and customers migration to non-US firms Growth of CFDs will shrink US pie CFDs not allowed in the US “ Rest-of-the-World” will grow in importance Due to availability of market drivers

14. Romania’s gateway to online trading USEuropeOtherJapan Source: LeapRate The Online Trading Industry Geography – A truly global market

15. Romania’s gateway to online trading The Online Trading Industry Revenue and revenue base Estimated total annual revenues of the trading firms to be approximately $6.5 billion Steady growth of CFD-related trading volume. Currently about 10% of total, 12% by 2012 and 15% by 2015 Steady expansion of products range traded through CFDs

16. Romania’s gateway to online trading Source: LeapRate The Online Trading Industry Revenue and revenue base

17. Romania’s gateway to online trading The Online Trading Industry Demand drivers #1 Driver: Volatility - Crude oil: Soared to $160/barrel in summer 2008 and dived to a quarter of that price in winter 2009. Trading on crude-oil CFDs skyrockets! - As Gold’s volatility increased, trading volumes increased proportionally Trading volumes on CFDs today: 10% of total Forecasted by mid decade: 15% of total 50%+ increase considering that CFDs are virtually absent from US market

18. Romania’s gateway to online trading Source: LeapRate FXGold and OilOther CFDs The Online Trading Industry Segmentation by product FX CFDs

19. Romania’s gateway to online trading The Online Trading Industry Market trends Increasing involvement of institutional customers 10% of total volumes from nil in 2000, expected to reach 50% in the next decade Increased interest from customers of savings products Through management of online accounts by professional money managers Increased interest in technology by customers Mirror trading platforms, automatic execution, signal providing, technology bridges

20. Romania’s gateway to online trading The Online Trading Industry Business models Aggregation Trading Liquidity

21. Romania’s gateway to online trading The Online Trading Industry Business models Aggregation Trading Liquidity Mainly marketing driven firms Usually working on revenue sharing deals with market makers CPA deals Rev. Share on spreads White labels Variety of back-office solutions In house Outsourced (full white label)

22. Romania’s gateway to online trading The Online Trading Industry Business models Aggregation Trading Liquidity Responsible for: Data feeds Execution Risk management Variety of revenue models: Market making Agent markup Fee per trade

23. Romania’s gateway to online trading The Online Trading Industry Business models Aggregation Trading Liquidity Usually very large firms Provide Data feeds Liquidity Back-to-back trades Clearing

24. Romania’s gateway to online trading The Online Trading Industry Technology Trading platforms Auto trading Mirror trading platforms Social networks

25. Romania’s gateway to online trading The Online Trading Industry Technology Trading platforms Auto trading Mirror trading platforms Social networks Multi-asset Mono-currency User-friendly Open architecture Market analysis News Calendars Other

26. Romania’s gateway to online trading The Online Trading Industry Technology Trading platforms Auto trading Mirror trading platforms Social networks

27. Romania’s gateway to online trading The Online Trading Industry Technology Trading platforms Auto trading Mirror trading platforms Social networks APIs* on trading servers Programmable trading platforms Off-the-shelf robots Bridges for signals Other… *Application Programming Interface

28. Romania’s gateway to online trading The Online Trading Industry Technology Trading platforms Auto trading Mirror trading platforms Social networks Cheapness Variety Increasing quality of providers through certification process Strictly volume based Revenues depend on rebates

29. Romania’s gateway to online trading The Online Trading Industry Technology Trading platforms Auto trading Mirror trading platforms Social networks Combine principles of traditional asset management with social networking Stricter certification process Traditional forms of revenue generation (performance fee etc.)

30. Romania’s gateway to online trading Case study: Ava FX Ava’s success: key drivers Accessibility Service Trading experience Competitiveness Security of funds

31. Romania’s gateway to online trading Case study: Ava FX Ava’s success: key drivers Accessibility Service Trading experience Competitiveness Security of funds Minimum deposit $100 Free demo account Welcome bonuses All payment methods accepted Customer support in 12 languages Easy margin and P/L calculation Training and webinars

32. Romania’s gateway to online trading Accessibility Service Trading experience Competitiveness Security of funds Case study: Ava FX Ava’s success: key drivers 24h support Multi-lingual assistance Trading through dealing room Technical support Personalized service Ava Select Simplified processes

33. Romania’s gateway to online trading Accessibility Service Trading experience Competitiveness Security of funds Case study: Ava FX Ava’s success: key drivers 2 trading platforms Trading from mobile EUR/USD/GBP/JPY accounts Free advanced trading tools and indicators Mirror trading, auto-trading etc. “Visual” trading

34. Romania’s gateway to online trading Accessibility Service Trading experience Competitiveness Security of funds Case study: Ava FX Ava’s success: key drivers Over 200 instruments Fixed spreads High leverage State-of-the-art execution No negative-balance margin calls

35. Romania’s gateway to online trading Accessibility Service Trading experience Competitiveness Security of funds Case study: Ava FX Ava’s success: key drivers MiFID compliant Segregated accounts Solid depository banks No negative balance margin calls

36. Romania’s gateway to online trading Business opportunities Why banks stayed out Industry dynamics Fast growth, fast change, sophisticated marketing and customer retention techniques Failure to recognize potential Identified as a low-margin segment banks largely underestimated volumes Lack of skill sets and HR Especially online mass-marketing. Relatively low-barriers entrepreneurs and talents prefer setting up their own firm or work for equity upsides in startups High customer churn Banks are usually equipped for long-term investments and relationships with customers

37. Romania’s gateway to online trading Business opportunities What it takes MARKETINGBACKOFFICE TRADING + RISK MGMT CUSTOMER SUPPORT CUSTOMER RETENTION

38. Romania’s gateway to online trading Business opportunities Banks – Core expertise MARKETINGBACKOFFICE TRADING + RISK MGMT CUSTOMER SUPPORT CUSTOMER RETENTION Established brand Ability to cross-sell

39. Romania’s gateway to online trading Business opportunities MARKETINGBACKOFFICE TRADING + RISK MGMT CUSTOMER SUPPORT CUSTOMER RETENTION Different back-office management Different payment methods Banks – Core expertise

40. Romania’s gateway to online trading Business opportunities MARKETINGBACKOFFICE TRADING + RISK MGMT CUSTOMER SUPPORT CUSTOMER RETENTION Different trading platforms Trading on CFDs Banks – Core expertise

41. Romania’s gateway to online trading Business opportunities MARKETINGBACKOFFICE TRADING + RISK MGMT CUSTOMER SUPPORT CUSTOMER RETENTION Assistance needed for customer base Highly labor intensive Demanding training process Banks – Core expertise

42. Romania’s gateway to online trading Business opportunities MARKETINGBACKOFFICE TRADING + RISK MGMT CUSTOMER SUPPORT CUSTOMER RETENTION Banks – Core expertise High customer churn Very different marketing techniques

43. Romania’s gateway to online trading Business opportunities MARKETINGBACKOFFICE TRADING + RISK MGMT CUSTOMER SUPPORT CUSTOMER RETENTION #1#1 # 3 # 2 Banks – Core expertise FUNCTIONAL RELATIONAL

44. Romania’s gateway to online trading Business opportunities Population Internet Users Penetration User Growth ( 2009 Est. )Latest Data(% Population)(2009 vs. 2000) Romania22,215,4217,430,00033.40%828.80% European Union 489,601,562319,895,34665.30%238.90% Internet trends in Romania Source: www.internetworldstats.com

45. Romania’s gateway to online trading Internet trends in Romania Business opportunities On days when you use the Internet, how long do you use it on an average day? Source: MCDC Study by IAB-EU & InSites Consulting

46. Romania’s gateway to online trading Business opportunities How many days do you use the internet in an average week? Internet trends in Romania Source: MCDC Study by IAB-EU & InSites Consulting

47. Romania’s gateway to online trading Business opportunities Internet trends in Romania Do you have an internet connection at home? Source: MCDC Study by IAB-EU & InSites Consulting

48. Romania’s gateway to online trading Business opportunities Internet trends in Romania Proportion of respondents who perform named activity at least weekly Source: MCDC Study by IAB-EU & InSites Consulting

49. Romania’s gateway to online trading Business opportunities MARKETINGBACKOFFICE TRADING + RISK MGMT CUSTOMER SUPPORT CUSTOMER RETENTION Banks – Core expertise #1#1 # 3 # 2 FUNCTIONAL RELATIONAL

50. Romania’s gateway to online trading The solutions MARKETINGBACKOFFICE TRADING + RISK MGMT CUSTOMER SUPPORT CUSTOMER RETENTION Business opportunities Omnibus Account AVA FX MASTER ACCOUNT CUST. ACCT. BANK

51. Romania’s gateway to online trading The solutions MARKETINGBACKOFFICE TRADING + RISK MGMT CUSTOMER SUPPORT CUSTOMER RETENTION Business opportunities Omnibus Account Branded trading platform Full control on trading conditions Full control on back-office and customer relationship

52. Romania’s gateway to online trading Business opportunities The solutions MARKETINGBACKOFFICE TRADING + RISK MGMT CUSTOMER SUPPORT CUSTOMER RETENTION Partial White Label

53. Romania’s gateway to online trading Business opportunities The solutions - Partial White Label

54. Romania’s gateway to online trading Business opportunities The solutions MARKETINGBACKOFFICE TRADING + RISK MGMT CUSTOMER SUPPORT CUSTOMER RETENTION Partial White Label CUST. ACCT. SHARED CRM SYSTEM

55. Romania’s gateway to online trading Business opportunities The solutions MARKETINGBACKOFFICE TRADING + RISK MGMT CUSTOMER SUPPORT CUSTOMER RETENTION Partial White Label Fully branded customer experience (website + platform) Fully outsourced back-office solutions including quick payment methods Full control on customer relationship

56. Romania’s gateway to online trading The solutions MARKETINGBACKOFFICE TRADING + RISK MGMT CUSTOMER SUPPORT CUSTOMER RETENTION Business opportunities Full White Label Fully branded customer experience (website + platform + emails) Advanced customer tracking and data mining Fully outsourced back-office solutions

57. Romania’s gateway to online trading Advantages Business opportunities Quick time-to-market Minimal investment State-of-the-art technology Best skills set in the industry (Marketing, anti-fraud etc.)

58. Romania’s gateway to online trading Q & A Thank you for your attention Questions are welcome Gabriele Manasse Director – Italy g.manasse@avafx.com

59. Romania’s gateway to online trading

61. “dbFX has been a strongly performing business for Deutsche Bank but has reached a point where in order to reach its full potential it requires significant investment in specific resources which are not consistent with Deutsche Bank’s current strategic initiatives.” - Deutsche Bank press release Another good reason would be that by June this year dbFX would probably be required to become an RFED due to its foreign bank status which would require major restructuring and additional compliance – which probably wasn’t worth it for Deutsche Bank. - Forex Magnates 21/4/2011