Eurex Clearing Lending CCP Overview on the CCP

Eurex Clearing Lending CCP Overview on the CCP service for securities lending December 2015

Eurex Clearing Lending CCP December 2015 Content • What services does Eurex Clearing provide? • Why is the Lending CCP beneficial for you? • What is the Lending CCP service offering? • What is required to participate in the Lending CCP? • How to get in contact? 2 www. eurexclearing. com

Eurex Clearing Lending CCP December 2015 Eurex Clearing offers central counterparty services for multiple asset classes across multiple markets Market participants Eurex Exchange (Derivatives) Eurex. OTC (IRS) Frankfurt Stock Exchange Irish Stock Exchange (Equities, ETFs) (Equities) Eurex Bonds Eurex Repo (Bonds, Basis) (Repo, GC Pooling) Securities Lending Eurex Clearing Central Securities Depositories International Central Securities Depositories • Eurex Clearing is part of Eurex Group, which is a full subsidiary of Deutsche Boerse Group and has one of the strongest rating profiles of financial market infrastructure providers in the world; S&P rates Deutsche Boerse Group with AA. • Eurex Clearing is licensed as a credit institution under the supervision of the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, Ba. Fin). • Eurex Clearing is an approved QCCP; the national competent authority Ba. Fin approved Eurex Clearing as in accordance with the European Market Infrastructure Regulation (EMIR) effective 10 April 2014. • Eurex Clearing is fully compliant with CPMI and IOSCO Recommendations for CCPs. 3 www. eurexclearing. com

Eurex Clearing Lending CCP December 2015 Lending CCP’s unique service offering benefits the securities lending marketplace Simplifies your multiple counterparty credit structure to a single CCP relation for all novated loans • Improved distribution for borrowers and lenders with restrictive counterparty parameters • Maintains bilateral trading relationships Transparent and standardized risk management & default procedures • Lending CCP guarantees the return of the loan and collateral securities • Offers protection from counterparty default Beneficial regulatory capital requirements • Capital costs reduced for CCP loans Operational efficiency by CCP-managed post-trade services • Settlement flows controlled by CCP (based on Power of Attorney) • Lending CCP operates as the ‘golden source’ for loan valuation and centralized billing Membership structure for Lenders allows for Agency and Principal roles • Specific Lender License supports the Agent Lender / Beneficial Owner relationship; utilizes a ‘pledge model’ for non-cash collateral – Beneficial Owners do not pay margin for the related transactions • Lenders can act as Principal using either a Direct or General Clearing Membership 4 www. eurexclearing. com

Eurex Clearing Lending CCP December 2015 Lending CCP delivers a combined platform to connect bilateral and electronic markets Securities lending market participants Bilateral market (OTC) Electronic securities lending trading platforms Equi. Lend*, Pirum Real-Time Service Eurex Repo-Sec. Lend Market Eurex Clearing Lending CCP Central Securities Depositories International Central Securities Depositories Clearstream Banking Frankfurt Euroclear BE, FR, NL SIX SIS Clearstream Banking Luxembourg Euroclear Bank *Equi. Lend planned start date in March 2016 5 www. eurexclearing. com

Eurex Clearing Lending CCP December 2015 Lending CCP serves the key elements of the securities lending market Transactions • Bilateral transactions (OTC) • Electronic markets Markets • Bonds – European corporate & government bonds • Equities – coverage of key European markets • Exchange Traded Funds (ETFs) Collateral • Loans against cash collateral • Loans against non-cash collateral - bonds & equities Tri-party • Clearstream Banking Luxembourg collateral agents • Euroclear Bank Post-trade functionality • Loan Deliveries, Mark-to-Marks, Re-rates, Recalls, Returns, Buy-ins • Corporate Actions, dividend payments • Automated billing (lending fees & rebates) 6 www. eurexclearing. com

Eurex Clearing Lending CCP December 2015 Lending CCP operates an integrated solution for your securities lending transactions Lending CCP System Trade management Position management • Loan capture • Buy-ins • Loan validation • Corporate Actions • Loan novation • Rebate / lending fees • Loan confirmation • Clearing fees • Loan recalls • Reporting • Loan returns Delivery management • Instruction of securities deliveries (on behalf) • Instruction of cash payments (on behalf) • Fee settlement (Rebate / Lending Fees) Risk management • Procedure to control collateral compared to risk exposure • Collection and release of cash and non-cash collateral Collateral management • Daily mark-to-market • Intraday calculation of margin requirements • Margin requirements consider deposited principal collateral • Information on settlement results • Loan re-rates 7 www. eurexclearing. com

Eurex Clearing Lending CCP December 2015 Lending CCP incorporates STP trade-flow for your securities lending activity Loan negotiation Trading Lender Loan information Flow Provider* Real-time trade validation Loan information Borrower Clearing Membership Clearing Member Data transmission Eurex Clearing Membership Cash Settlement Payment bank Validation Novation Confirmation Loan life-cycle management Non-cash Principal Collateral Tri-party agent Equities CSD Bonds Loan securities ICSD *Flow Provider used as the entry channel from market participants to Eurex Clearing e. g. for New loan transactions, Re-rates, Recalls, Returns etc. 8 www. eurexclearing. com

Eurex Clearing Lending CCP December 2015 Lending CCP’s Specific Lender License supports the Beneficial Owner’s role and Agent Lender relationship Agent Lender Beneficial Owner Loan negotiation Loan securities Non-cash Principal Collateral Specific Lender License Key: Borrower Loan securities Eurex Clearing Non-cash Principal Collateral Clearing Member Margin Collateral Pledge to Lender Pledge to the CCP Transfer of Title Beneficial Owner maintains business relationship with Agent Lender • Agent Lender continues to arrange loans for CCP eligible transactions • Operational links with flow provider and CCP maintained by Agent Lender • Agent Lender reports loans and collateral through existing reporting set Beneficial Owner uses an approved Specific Lender License with a distinctive CCP membership • No requirement to clear through a General Clearing Member • No requirement to pay margin • No default fund contribution Dedicated requirements for Specific Lender License • Supervised financial sector entity located within the EU, Switzerland, USA* and other selected countries • Permission to perform securities lending business • Pre-requisite is collateral pledge model with Tri-party Collateral Agent *Pending legal analysis 9 www. eurexclearing. com

Eurex Clearing Lending CCP December 2015 Lending CCP incorporates a Tri-party collateral process for the management of your non-cash collateral Lender Clearing Member CCP Reporting Eurex Clearing Borrower Reporting Clearing Member Tri-party agreement* Collateral Receiver Lender Tri-party a/c Collateral Giver & Receiver Transfer of Title or Pledge CCP Tri-party a/c Transfer of Title Borrower Tri-party a/c Integrated and enhanced collateral management • Exposure management undertaken by Lending CCP • Lender eligibility profiles (bonds & equities) maintained by Lending CCP and Tri-party collateral agent • Borrower substitutions of Principal Collateral undertaken by Tri-party collateral agent • Tri-party collateral agents ensures substitution of Principal Collateral prior to Corporate Actions • Re-use of Principal Collateral within the regulations of Tri-party collateral agent (for transfer of title) *Borrower, Lender and the CCP make use of the same Tri-party Collateral Agent e. g. Clearstream Banking Luxembourg or Euroclear Bank 10 www. eurexclearing. com

Eurex Clearing Lending CCP December 2015 Lending CCP includes an integrated solution for Corporate Action processing on novated transactions Management of Corporate Actions Mandatory Voluntary Cash Distributions • Automatic processing of compensation payments based on the payment rate as agreed in the loan transaction Distributions with Options • Automatic distribution of Rights processed as an opening of a new Rights loan • Lender can recall the Rights to execute/sell; non-recalled/returned Rights will be automatically cash settled at the end of the subscription period Securities Distributions • Automatic distribution of stock dividends and bonus shares processed as an opening of a new loan or an update to the existing loan Mandatory Reorganizations • Automatic nominal and/or ISIN changes processed as an opening of a new loan or an update to the existing loan; Squeezeout/Redemptions/Liquidations lead to closing of the loan and an automatic cash settlement Voluntary Reorganizations • Corporate Action CCP Transformation* function allows market participants to arrange for all types of voluntary corporate actions bilaterally while keeping the loan within the CCP • Eurex Clearing’s Graphical User Interface** allows Borrowers and Lenders to electronically communicate, agree and transmit the expected outturn instructions towards Eurex Clearing • Dispute Resolution Committee provides independent deliberation on disputed voluntary corporate actions *Transformation via Pirum Real-time Service; ** GUI via Eurex Clearing web portal www. eurexclearing. com 11

Eurex Clearing Lending CCP December 2015 Summary of the Lending CCP’s participation and set-up requirements Clearing Membership - Securities Lending license • Clearing Conditions of Eurex Clearing - Chapter IX Clearing of Securities Lending Transactions • ‘Full’ clearing membership (GCM/DCM) or Specific Lender License for Beneficial Owners Technical connectivity to Lending CCP flow provider & reporting infrastructure • Eurex Repo-Sec. Lend Market and/or Pirum Real-Time Service • Eurex Clearing Common Report Engine Securities accounts for loan securities at (I)CSDs • Equities - Clearstream Banking Frankfurt, Euroclear Belgium/France/Netherlands (ESES) and/or SIX SIS • Fixed income - Clearstream Banking Luxembourg or Euroclear Bank Cash accounts for loan related activities • Cash accounts for fee/rebate and compensation payments (CHF, EUR, USD) Collateral accounts for Principal Collateral • Cash accounts for EUR and USD for cash collateral (EUR, USD) • Tri-party collateral profile/account at Clearstream Banking Luxembourg and/or Euroclear Bank for non-cash collateral Collateral accounts for Margin Collateral • Cash accounts (CHF, GBP, EUR, USD) for additional margin payments and/or • Pledge securities account at Clearstream Banking Frankfurt, Clearstream Banking Luxembourg or SIX SIS 12 www. eurexclearing. com

Eurex Clearing Lending CCP December 2015 Eurex Clearing continues to advance its Lending CCP for the securities lending market Lending CCP service offering: Asset classes Flow Providers Cash, Bonds, Equities & Exchange Traded Funds Equi. Lend*, Eurex Repo-Sec. Lend Market & Pirum Real-Time Service Loan securities Settlement locations European fixed income: Government bonds Supranational bonds Regional bonds Local government bonds Corporate bonds ICSD: Equities: Belgium France Germany Netherlands Switzerland CSD: ESES / Euroclear Belgium ESES / Euroclear France Clearstream Banking Frankfurt ESES / Euroclear Netherlands SIX SIS Exchange Traded Funds: Replicated ETFs CSD: Clearstream Banking Frankfurt Non-cash Principal Collateral Tri-party Collateral Agents Bonds, equities & ETFs Clearstream Banking Luxembourg & Euroclear Bank Cash Principal Collateral Payment locations EUR USD TARGET 2 account Payment banks Clearstream Banking Luxembourg & Euroclear Bank *Equi. Lend planned start date in March 2016 13 www. eurexclearing. com

Eurex Clearing Lending CCP December 2015 Lending CCP information Contact Frankfurt Paris Efthimia Kefalea Thomas Wißbach Ebru Ciaravino T +49 (0) 69 2111 7275 M +49 (0) 172 299 0628 T +49 (0) 69 2111 7992 M +49 (0) 172 619 9850 T +33 (0) 155 27 6768 M +33 (0) 685 93 1333 efthimia. kefalea@eurexclearing. com thomas. wissbach@eurexclearing. com ebru. ciaravino@eurexclearing. com London USA Gerard Denham Jonathan Lombardo Tim Gits T +44 (0) 207 862 7634 M +44 (0) 787 688 5276 T +44 (0) 207 862 7559 M +44 (0) 746 915 8310 T +1 312 544 1091 M +1 312 929 8588 gerard. denham@eurexclearing. com jonathan. lombardo@eurexclearing. com tim. gits@eurexclearing. com Connect Web Twitter www. eurexclearing. com @Eurex. Group E-mail Linked. In Lending. CCP@eurexclearing. com www. linkedin. com/company/eurex 14 www. eurexclearing. com

Eurex Clearing Lending CCP December 2015 © Eurex 2015 Deutsche Börse AG (DBAG), Clearstream Banking AG (Clearstream), Eurex Frankfurt AG, Eurex Clearing AG (Eurex Clearing) as well as Eurex Bonds Gmb. H (Eurex Bonds) and Eurex Repo Gmb. H (Eurex Repo) are corporate entities and are registered under German law. Eurex Zürich AG is a corporate entity and is registered under Swiss law. Clearstream Banking S. A. is a corporate entity and is registered under Luxembourg law. U. S. Exchange Holdings, Inc. and International Securities Exchange Holdings, Inc. (ISE) are corporate entities and are registered under U. S. American law. Eurex Frankfurt AG (Eurex) is the administrating and operating institution of Eurex Deutschland Eurex Zürich AG are in the following referred to as the “Eurex Exchanges”. 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