Market Update ASLF 2016 Mauricio Schwartzmann Securities Country Manager

Capital Market Dec’ Interest Rates Exchange Rate (MXN / USD) Source: Banamex & Banxico Dec’ Dec’ f 2016f  GDP Growth 2.2% 2.4% 2.6%  Interest Rate 2.81% 3.25% 3.75%  Inflation 4.08% 2.43% 3.3%  Exchange rate  Intl. Reserves  Unemployment Forecast Foreign Direct Investment (US$ in Bn)

Recent Market Developments Key HighlightsSummaryClient Benefit CSD (Indeval) live trade status Clients will experience an improved online trade status for Indeval’s transactions. The new MT548´s will reflect the status of the transactions once uploaded to Indeval The Indeval trade status will allow the clients to monitor the transactions’ life cycle and timely identify and fix discrepancies. Mandatory Requirements Regulatory requirements to identify investors Art 115 – Regulatory documentation Credit Agreement Common Reporting Standards (CRS) Strengthen controls Possibility to maintain omnibus and/or final beneficiary account structures

Service Update Key HighlightsSummaryClient Benefit Early Book Clearing of all book to book transactions prior to market opening Earlier transaction clearing, notifications, liquidity and holdings Trade Prioritization Capability to prioritize trades based on counterparty Potential fails reduction Shadow Posting Services for Lent positions Provide additional regular reporting for positions out on loan Enhanced securities holding report supporting off-shore Securities Lending Withholding Tax Process Enhanced processing allowing same day withhold and notification Tax withholding and client notification, for coupon and dividend payments Reduced Proxy Voting Deadlines Improved instructions deadline for common events, of 2 business days prior to meeting day Event participation wider window

Forthcoming Initiatives Key HighlightsSummaryClient Benefit Securities Market Interface (SMI) Banamex to migrate its CSD’s interface to a global proprietary tool - SMI Clients will benefit from an enhanced new platform with global settlement standards, more agile and flexible. Target 2Q 2016 SPID SPID (Dollars Interbank Payment System) will allow local bank-to-bank USD currency payments in the market Clients will be able to hold accounts and process bank-to-bank payment orders in MXN and USD currencies. Target 2Q’16 Block trade Transactions flagged as “blocked” will be linked among them and will only settle once the triggering transaction is settled Clients will have the capability to segregate the settlement of securities lending activity in a omnibus structure. Target 3Q 2016

 Biva Central de Corretajes S.A de C.V. (CENCOR) has requested approval from Mexico’s Ministry of Finance (SHCP) to open a new stock exchange in Mexico – Bolsa Institucional de Valores (BIVA).  Fixed Income Securities Lending Market participants seeking for Fixed Income holders to lend securities Country Hot Topic

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