Corporate Governance at CDS Ian A. Gilhooley President and CEO

2 ACSDA Leadership Forum Ownership structure IIROC (SRO) (15.2%) National Bank of Canada (3%) Canadian Imperial Bank of Commerce (7.1%) The Royal Bank of Canada (13.9%) Bank of Montreal (6.2%) TSX Inc. (18.1%). The Toronto Dominion Bank (21%) The Bank of Nova Scotia (15.9%) Six banks hold 66.7%

3 ACSDA Leadership Forum Corporate structure

4 ACSDA Leadership Forum Board

5 ACSDA Leadership Forum Governance

6 ACSDA Leadership Forum Board governance manual General –CDS Group of Companies –Outstanding Common and Preferred Shares –Board of Directors – Appointment and Contact Information –Board Forward Agenda Terms of Reference and Guidelines –Terms of Reference for the Board of Directors –Terms of Reference for the Board Chair –Terms of Reference for the President and Chief Executive Officer –Terms of Reference for a Director –Governance Guidelines –Code of Conduct and Conflict of Interest Guidelines for Directors Committees –Current Committee Membership –Committee Guidelines –Terms of Reference for the Audit/Risk Committee and Timetable –Terms of Reference for the Finance Committee and Timetable –Terms of Reference for the Governance/Human Resources Committee and Timetable Review Processes –Performance Evaluation Process for the President and CEO –Board Evaluation and Review Process –Strategic Planning Process –Succession Planning Process Reference –Corporate Organization Chart –Articles –By-Law 1 –Pooling Agreement –Statutory Recognitions of CDS Limited and CDS Clearing –CDS/Stakeholder Committees –Terms of Reference for the: Risk Advisory Committee, Strategic Development Review Committee, Legal Drafting Group –Personal Information Privacy Policy Statement –Independent Director Compensation –Directors’ and Officers’ Liability Insurance and Indemnification Agreement –Senior Management – Contact Information –Risk Policies –Corporate Restructuring Cover Memo –CDS Glossary

7 ACSDA Leadership Forum Regulatory environment ProvincialFederal Ontario Securities Commission Bank of Canada Securities Acts Payment Clearing & L’Autorité des marchés financiers Working relationships n Canadian Securities Administrators n Office of the Superintendent of Financial Institutions n Other provincial securities commissions Settlement Act Approve all rule and external procedure changes

8 ACSDA Leadership Forum Committee structure Board committees Governance/ human resources Audit/risk Finance Internal committees Strategy group Enterprise steering committee Operations Risk management Retirement & benefits External committees Strategic development review committee (SDRC) – Debt and equity – Entitlements – Taxation Risk advisory committee SDRC approves all external procedure changes before regulatory review

9 ACSDA Leadership Forum Internal controls program Each business identifies & documents key processes –Risk exposures that may impact critical deliverables –Internal controls to address exposures –Evidence to assure controls are performed Executive due diligence and signoff quarterly –Summary of gaps under remediation and control issues identified –Governed by internal control policy Significant issues escalated immediately to senior management via: –Normal reporting lines –Risk management committee Internal Audit performs independent assessments

10 ACSDA Leadership Forum Internal policies Policies and operational procedures are documented Provide a structure to develop processes and procedures at detailed level Compliance with policies is a condition of employment Reviewed and updated annually Reviewed with employees at orientation

Questions Corporate Governance at CDS