© Copyright 2011, The NASDAQ OMX Group, Inc. All rights reserved. TRANSPARENCY BY PAGANO COMMENTS FROM JENS HENRIKSSON, PRESIDENT NASDAQ OMX STOCKHOLM

Pre- and post-trade transparencyIssuer non-disclosure Opaque tradingIssuer transparency TRANSPARENCY WHAT AN EXCHANGE IS REALLY ABOUT! The exchange is the place where demand and supply of capital meet in an efficient and stable way. Support growth of companies and the economy, create jobs. We love transparency! 2

© Copyright 2011, The NASDAQ OMX Group, Inc. All rights reserved. 3 And so does the leaders of the world!!

Transparency is the starting point - Market integrity WHEN SHOULD WE NOT HAVE FULL TRANSPARENCY? 4 Some transactions need to be less transparent - Waivers from pre-trade transparency - Delayed post-trade publication Large transactions - Equity. - Non-equity  Swedish bond market BUT! Exemptions need to be clear and harmonised

Focus both on INVESTOR and COMPANY perspective. Not always the same… WHEN SHOULD WE QUESTION ASSET TRANSPARENCY ? 5 Issuers are diverse - Size, complexity, maturity, business model, company groups - Main market + First North (equities, and bonds?) Transparency may be better than detailed legislation  Corporate Governance in principles-based codes + comply or explain

Similar to Kay review – but it focused on effeciency; from a trading perspective and a governance perspective. COMMENTS ON TRANSPARENCY 6 ”A large literature shows that higher liquidity is associated with … a lower cost of capital to firms” ”Why are markets so opaque?... in many cases [intermediaries] own the platforms… Opaque platforms are more resilient to competition.” Gomber and Pieron ”However, our analysis of individual OTC trade size data between January 2008 and April 2010 both for high liquids (EURO STOXX 50 constituents) and a sample of less liquid securities shows that a significant share of OTC transactions are neither above SMS nor would they face market impact if concluded on open, public order books.”

”the faster information gets impounded in market prices: better price discovery.” COMMENTS ON TRANSPARENCY 7 ”Market platforms… are not interested in making information about the trading process available quickly and for free.” We are interested! But no incomes, no speed, and in the long run: no markets. Three reasons” for opacity: Compliance. Tax. Information processing. More reasons: Fraud. Business secrets. Public anger…. ”Information processing costs.” Has anybody read a whole prospect? The fine print?

ALL IN ALL. A VERY GOOD PAPER! 8