1. Proposed Further Security Request Process

2. Contents  Introduction Page 2  Illustrative example of Request to Provide Further Security Request Following Issue of two Cash Calls within a 28 day Rolling PeriodPage 3  Current Process  Current Cash Call & FSR Process Page 5 & 6  Current Cash Call & FSR Process - Example 1 Page 7  Current Cash Call & FSR Time-LinePage 8  Option 1 Process  Option 1 Cash Call & FSR ProcessPage 10  Option 1 Process – Example 2Page 11  Option 1 Cash Call & FSR Time-LinePage 12  Proposed Process Outside of 28 Day Measurement Period Page 13 Page 1

3. Introduction As part of their ongoing review EBCC members discussed, at the meeting held on 22 nd May 2009, the advantages and disadvantages of amending the FSR provisions within section X of the UNC. The main aim of doing this being to provide further incentives for Users to manage their indebtedness prudently and effectively. Following further analysis a number of options were presented and it was agreed at the 23 rd October 2009 EBCC meeting that, of the alternatives discussed, Option 1 would be most effective. Option 1 would see a third FSR within a 28 day measurement period trigger the reduction to the face value of security held by 20% and the retaining of any security in place for a minimum of 12 months (for the avoidance of doubt such reduction does not reduce the amount of security held). This document explains both the current and proposed Option 1 processes. In addition, the calculations to be utilised in the new method and accurate working examples are included. Page 2

4. Illustrative example of Request to Provide Further Security following issue of two Cash Calls within a 28 day rolling period D1 2nd Cash Call issued 2nd Cash Call appealed 2nd cash call withdrawn 3rd Cash Call issued Time in days D8D15 D22 Measurement Period 3rd Cash Call paid Request to provide Increased Security as 2 Cash Calls issued within the Measurement Period. (D1 to D28) 5 th Business Day appeal required by 12:00 hrs Revised/Reissued /Withdrawal Notice issued in response to Appeal 8 th Business Day Additional/Revised or Reissued security required by 12:00 hrs Notice of Failure issued after 12:00 hrs if Additional/Revised or Reissued security not received. NB: 2 nd Cash Call not taken into account for Request to Provide Further Security purposes, as it was appealed successfully and withdrawn. Notice of Failure expires 12:00 hrs on Business Day following issue of Notice of Failure and Additional/Revised or Reissued Security should have been received. Termination Notice issued. EBCC meeting to consider Termination if security not received D28 Page 3

5. CurrentProcess

6. Current Cash Call & FSR Process The following steps are associated with the calculations on page 7 and time-line on page 8 Step 1 If a User’s indebtedness exceeds the Cash Call limit a Cash Call is issued Step 2 If a second Cash Call is issued within the proceeding 28 day measurement period a Further Security Request (FSR) is issued by 12pm the following business day 2a) FSR 1 Calculation: Current Indebtedness*100/85 – Current Security 2b) This additional amount of security must remain in place for 90 Calendar Days from date of receipt of funds. FSR 1 amount may be returned after this period provided that conditions of UNC Section x2.3.5 have been met Step 3 If a third Cash Call is issued within the 28 day measurement period and the indebtedness is at its highest level then a 2 nd Further Security Request is issued by 12pm the following business day 3a) FSR 2 Calculation: Current Indebtedness*100/85 – Current Security 3b) This additional amount of security must remain in place for 90 Calendar Days from date of receipt of funds. FSR 2 amount may be returned after this period provided that conditions of UNC Section x2.3.5 have been met Page 5

7. Current Cash Call & FSR Process cont… Step 4 If a further Cash call is issued, again within the 28 day measurement period, and the indebtedness level for the period is peaked, then a 3 rd Further Security Request is issued 4a) FSR 3 Calculation: Current Indebtedness*100/85 – Current Security 4b) This additional amount of security must remain in place for 90 Calendar Days from date of receipt of funds. FSR 3 amount may be returned after this period provided that conditions of UNC Section x2.3.5 have been met Step 5 If any Cash Call is produced but the peak level of indebtedness in the 28 day measurement period has not been exceeded, then no FSR is issued N.B. Users may use the Cash Call Appeal process. Page 6

8. Example of a 28 day measurement period from 1 st Cash Call through to 3 rd Further Security Request. DESCRIPTION OF STEPS SET OUT ON PAGES 5 & 6 Step 1Step 2Step 3Step 5Step 4 Step 2aStep 3a Step 2bStep 3b Step 4a Step 4b Page 7 Current Cash Call & FSR Process – Example 1

9. Current Cash Call & FSR Time-Line STEP 1 - 1 st Cash Call Issued for over 28 days. This is D1 of the measurement period. Payment Due (PD) D2 STEP 2 - 2nd Cash Call Issued in 28 day measurement period. PD D6 STEP 2 - 2 nd Cash Call Triggers first FSR in 28 day measurement period. PD D14 Value of Further Security to be Held for 90 calendar Days STEP 5 - 4th Cash Call in 28 day measurement period Issued. PD D13. Indebtedness NOT Peaked STEP 4 - 5th Cash Call in 28 day measurement period Issued. PD D17 Indebtedness Peaked STEP 4 - 5 th Cash Call in 28 day measurement period, w ith Peaked Indebtedness, triggers 3rd FSR. PD D25. Value of Further Security to be Held for 90 calendar days STEP 3 - 3 rd Cash Call in 28 day measurement period Issued. PD D8. Indebtedness Peaked STEP 3 - 3 rd Cash Call in 28 day measurement period, with Indebtedness Peaked, triggers 2nd FSR. PD D16. Value of Further Security to be Held for 90 calendar days DESCRIPTION OF STEPS SET OUT ON PAGES 5 & 6 Page 8

10. Option 1 Process

11. Option 1 Cash Call & FSR Process Step 1 - Follow steps 1 – 3 of Current Process (See Page 4) Step 4 - If a further Cash call is issued, again within the 28 day measurement period, and has peaked the highest indebtedness level, then: 4a) the face value of security currently in place is reduced by 20%. 4b) FSR 3 Calculation: Indebtedness*100/85 – Current Security (at reduced level) 4c) The full face value of all Security held must now remain in place for at least 12 months from date of FSR issue. Any of which can only be returned providing that conditions of UNC Section x2.3.5 have been met. Step 5 - Any subsequent cash calls issued within the 28 day measurement period (REGARDLESS OF THE USER’S INDEBTEDNESS BEING AT IT’S HIGHEST LEVEL OR NOT) will result in the face value of security being reduced by a further 20%. An FSR will then be calculated, as per step 4b above, and issued. Step 6 – The full face value of any security now held must now remain in place for at least 12 months from date of issue of the latest FSR. Page 10 Steps 1 – 4 are associated with Example 1 calculations on page 7 and time-line on page 8. Steps 4 onwards are associated with Example 2 on page 11 and time-line on page 12 If the same sequence of events were to transpire as in example 1, all occurrences until the 3rd FSR will be the same. However, Option 1 would increase the value of the Further Security Amount Request by reducing the face value of the Security Amount held by 20%. Following receipt of payment of FSR 3, the face value of security will remain in place for at least 12 months from FSR 3 Issue Date.

12. Proposed Cash Call & FSR Process – Example 2 Step 4Step 4a Step 4b Step 4c PROPOSED EXAMPLE REMAINS THE SAME AS STEPS 1-3 SHOWN ON PAGE 5. DESCRIPTION OF STEP 4 SHOWN HERE SET OUT ON PAGE 10 Page 11

13. Proposed Cash Call & FSR Time- Line STEP 1 - 1 st Cash Call Issued for over 28 days. This is D1 of the measurement period. PD D2 STEP 2 - 2nd Cash Call Issued in 28 day measurement period. PD D6 STEP 2 - 2 nd Cash Call Triggers first FSR in 28 day measurement period. PD D14 Value of Further Security to be Held for 90 calendar Days STEP 4 - 5th Cash Call in 28 day measurement period Issued. PD D17 Indebtedness Peaked STEP 4 - 5 th Cash Call in 28 day measurement period, w ith Peaked Indebtedness, triggers 3rd FSR. PD D25. Face Value of All Security to remain in place for at least 12 months STEP 3 - 3 rd Cash Call in 28 day measurement period Issued. PD D8. Indebtedness Peaked STEP 3 - 3 rd Cash Call in 28 day measurement period, with Indebtedness Peaked, triggers 2nd FSR. PD D16. Value of Further Security to be Held for 90 calendar days FOR STEPS 1 – 3 DESCRIPTION SET OUT ON PAGE 5 FOR STEP 4 DESCRIPTON SET OUT ON PAGE 10 Page 12

14. Proposed Process Outside of 28 Day Measurement Period Step 7 - Any further Cash Call issued at any point after the 3rd FSR will result in the reduction to the face value of current security held by 20% and a further FSR being issued Step 8 - An FSR will be issued the day following the issue of the Cash Call, providing the cash call has not been appealed Step 9 - The full face value of security will remain in place for at least 12 months from the date of issue of the latest FSR Step 11 – For any subsequent Cash Calls issued, within the current 12 month measurement period, follow steps 7-10 REGARDLESS OF INDEBTEDNESS BEING AT IT’S HIGHEST LEVEL OR NOT If any 12 month measurement period finishes without further cash calls or FSRs being issued any security values may now be returned at the User’s request providing that conditions of UNC Section x2.3.5 have been met. If any Cash Calls are issued following the end of the 12 month measurement period the process will begin at step 1 as per page 4 These are the key steps following the end of the initial 28 day measurement period, in which there have been 3 FSRs, and within the 12 month re-basing of security period Page 13