Danny Corrigan CEO, CME European Trade Repository ACI Russia General Assembly 29 May 2014 CME GROUP – FX Futures

2 Foreign Exchange

3 Source: Council of the EU, ESMA, BCBS, IOSCO, Oliver Wyman analysis OTC derivatives are going through a global regulatory filter 1234 Basel IIIBCBS/ IOSCOCPSS/ IOSCOEMIR (Dodd-Frank in the US) Improved coverage of counterparty credit risk (CCR) Margin requirements for non-centrally cleared OTC derivatives Common principles for CCPs Mandatory central clearing for standardized OTC derivatives Introduction of CVA Refined treatment of CCP exposures Introduction of leverage ratio More stringent rules for margin calculation and segregation Subject to an exposure threshold Introduction of guiding principles to structure CCP risk management Stress-test (Cover 1/2) to size default fund Reporting of all derivatives to trade repositories Improved risk management Drives capital requirements Drives initial margin requirements Drives default fund requirements Drives central clearing requirements

4 Cost drivers vary significantly across FX models Cost driverBilateral OTC FX derivatives, no initial margin Bilateral OTC FX derivatives, with initial margin Centrally cleared OTC FX derivatives Exchange-traded FX derivatives Margin requirement Variation margin Initial margin  Margin period of risk (MPOR) for initial margin n/a10 days~ 5 days, CCP dependent 1–2+ days, depending on exchange Exposure Bilateral exposure  CCP exposure  MPOR for capital10+ days 5 days CVA VaR  Default fund contribution  Costs Capital costsHighLow Funding costsLowHighMediumLow - Medium CVAHighMediumNo No/low costsRelatively low costsRelatively high costs

5 Current Regulations: Multilateral netting benefits increase cost efficiency of futures and cleared OTC models Bilateral no IM Bilateral with IM OTC cleared Exchange traded CapitalTrade exposure capital Default fund capital CVA VaR capital Total capital requirement FundingInitial margin posted Default fund Total funding requirement Costs (annualized) Capital costs Funding costs CVA Total costs (annualized) € MM Cost in % of bilateral with no initial margin 100% 190%65% 28% Source: Datastream, Bloomberg, CME, Oliver Wyman analysis 1. Depends on overall risk offsets; assumed 60% IM and exposure netting benefit for CCP models vs. 20% for bilateral trades Key assumptions underlying analysis: Initial margin calculated using 99% VaR methodology; assumed 5% DF/IM with 10% c-factor; EPE FX and IR methodology used for proxy factors in capital and CVA exposure calculation; 30% bilateral risk weight; 2% CCP risk weight; proxy multiplier used for CVA VaR calculation;12.5% bank capital ratio; 11% cost of capital; 1.2% funding costs; 1.2% annualised CVA A central counterparty model may result in significant multilateral netting benefits for portfolios of trades 1 Risk exposure reduced and capital requirements lowered Drilldown: Mixed FX portfolio Annualized cost of €10 BN notional € MM Multilateral netting results in lower initial margin requirements Benefits of using counterparty highlighted when considering a trading portfolio rather than a single directional trade Cost benefits clearest for ETD model where initial margin requirements and therefore funding costs are decreased Perspectives

CME Europe Ltd Launched April 2014 London-based, FCA supervised RIE positioning it in Europe’s most important financial centre Wholly owned subsidiary of CME Group with a dedicated Board of Directors and Management Team Initially launching with 30 FX futures including USD/RUB and will become a multi-asset class exchange phased in over time Guided by the strategic imperatives of efficiency & simplicity Using CME Globex, the world’s leading electronic trading system, as its trading platform CME ClearPort will be used to enter block & EFP trades, amongst others, to bring them under the rules of the exchange and for clearing Clearing services are provided by CME Clearing Europe, a Bank of England recognised and supervised London-based clearing house 6

Will Patrick – CME group