1. Asia Pacific Financial Forum July 7, 2014 Seattle Asia Pacific Financial Forum Session 2: Forging Deep, Liquid and Integrated Capital Markets Keith Noyes Regional Director, Asia-Pacific ISDA ® ISDA is a registered trademark of the International Swaps and Derivatives Association, Inc. Copyright © 2014 International Swaps and Derivatives Association, Inc. Disclaimer: The information contained in this document is intended only for use during the presentation. ISDA accepts no liability whatsoever with respect to the use of this document or its contents.

2. Presentation Topics Legal Infrastructure as Risk Mitigant in Capital Markets: 1)Legal netting infrastructure. 2)Protecting collateral interests. 3)Margining of non-cleared derivatives 2

3. US$ trillions Dec.2009 Dec.2010Dec.2011 Jun.2012 Notional Amounts, Total OTC contracts 1 603.900601.046647.777638.928 Gross Market Values 21.542 21.296 27.278 25.392 % of Notional Amounts3.57%3.54%4.21%3.97% Gross Credit Exposure (after netting) 3.521 3.480 3.912 3.668 % of Gross Market Value16.34% 14.34%14.45% % of Notional Amounts0.58% 0.60%0.57% Exposure collateralized, average, all OTC derivatives 2 70%69.8%71.4% Gross Credit Exposure (after netting and adjusted for collateral) 1.056 1.051 1.119 % of Gross Market Value4.90%4.94%4.10% % of Notional Amounts0.17% 1 Bank for International Settlements (BIS), May 2011 and prior, Table 19, http://www.bis.org/statistics/otcder/dt1920a.pdfhttp://www.bis.org/statistics/otcder/dt1920a.pdf 2 ISDA Margin Survey 2012, http://www2.isda.org/functional-areas/research/surveys/margin-surveyshttp://www2.isda.org/functional-areas/research/surveys/margin-surveys The effectiveness of netting and collateral as risk mitigants. 3