1. © Copyright 2010, The NASDAQ OMX Group, Inc. All rights reserved. NEW ROLES OF CENTRAL SECURITIES DEPOSITORIES HAYK VOSKANYAN, CENTRAL DEPOSITORY OF ARMENIA

2. CONTENT Centralized CSD system Pension system, funded pension reforms Other developements

3. CENTRALIZED CSD SYSTEMS Full centralization All the services are provided to end customers by one entity-CSD Partial centralization Front office services related to issuers and securities owners are outsourced to specialized entities, i.e. banks and investment companies Armenia goes the second way, partial centralization. 3

4. SITUATION IN ARMENIA, PRECONDITIONS FOR CHANGE Before 2008 registry keeping was centralized to CDA Now registry keeping is done in three entities, one of which CDA and two investment companies, All other functions are centralized in CDA (C&S of exchange trades, ISIN) 4

5. DESCRIPTION OF NEW MODEL All registers will be kept in CDA Investment companies and banks will be account and issuer operators, CDA centralized system members CDA will have its new software (DEPEND) All information will be held at CDA system All transactions will be conducted in CDA system 5

6. RATIONALE OF THE NEW SYSTEM Information system, which will comply with international standards of IT security IT and operational risk management standards Equal possibilities for all market participants to serve their clients Competition on the level of account and issuer operators Centralization of fixed costs Cost effectiveness 6

7. RATIONALE OF THE NEW SYSTEM 2 Centralized response to all to queries sent by state bodies Easiness of regulatory reporting Geographical access (now CDA operates only in Yerevan), which will save time and cost of customers Possibilities for Investment companies and banks to provide full package of services to owners and issuers Possibilities to use the system to enlarge the market e.g. Government Bonds Off course centralization is not good in general, but with proper implementation and regulation we believe we will avoid all disadvantages of centralization. 7

8. PENSION SYSTEM, FUNDED PENSION REFORM Started from 2006 design of new mandatory funded pillar Estonian system were used as a benchmark 2010 December, laws passed in the parliament Since April 2011 Armenian Mandatory Pension Information System project has started 8

9. ROLE OF CDA IN NEW PENSION SYSTEM Centralized account management Receive information from SRC (tax authority) Selection and exchange of pension funds (from account operators) Unit issue Unit exchange Lump sum payments Programmed withdrawals Centralized custody Safekeeping of pension assets Link to global custodian for foreign assets 9

10. OTHER DEVELOPMENTS Links with other CSDs Already have account in Kazakhstan LLC (Russia) has account in Armenia Plans to expand connections with other countries We are ready to cooperate with all interested parties.

11. © Copyright 2010, The NASDAQ OMX Group, Inc. All rights reserved. THANK YOU! 11