1. Global trends in post trade Implications to CIS and CEE region Yerevan, October 2011
STRICTLY PRIVATE AND CONFIDENTIAL

2. cONTENTS Regulatory changes Increasing importance of clearing, CCP
Introduction of variety of new products
Interoperability, cross-margining
Technology playing a key role
Trends in post trade industry
Post trade capabilities
Product offering
Key initiatives
NASDAQ OMX CLEARING and CSD today and in the future
Implications to CIS and CEE
Internationalization and standardization
Derivatives and clearing
Technology requirements
Latest development in Armenian CSD
Pension System
Settlement model
CSD technology

3. What drives the future ? Algorithmic / High Frequency Trading
High performance position handling
DMA / Sponsored access
Advanced risk monitoring and control
Netting across clearing venues
Collaborative environment
Financial Crises – Infrastructure challenges
Focus on Counterparty risk
OTC Derivatives being cleared
Need for prudent environment
Regulatory supervision
Transparent risk management
Controlled processing
Expansion of FI products
Increased focus on technology
Functional requirements
Cost efficiency
Competition / Desire to grow business
Unbundling of services
OTC Trading service
Underlying cash/spot market cleared with derivatives
Serving Multiple markets
Product Innovation
Competition / Globalization
International Investor Community
Foreign products and currencies
Multi time-zone operation
Cross-boarder settlement
“Level playing field” / Interoperability
Regulatory
T2S
OTC Derivatives
Repository (exchange traded and OTC)
Compliance and surveillance
ESMA, EMIR, IOSCO, G20

4. European landscape for exchange traded equity cash and derivatives

5. NASDAQ OMX Post trade Today
NASDAQ OMX Post-Trade capabilities today cover the whole post-trade chain
Central Counterparty Clearing (CCP)
Central Security Depository (CSD)
CCP Capability
Derivatives on cash market and commodities
Plan to implement Cash CCP in 2012
Integrated with NASDAQ OMX trading systems
Genium INET Trading
X-Stream INET
Product coverage today
Genium INET Clearing
X-Stream INET Clering
Genium INET Risk Manager
CSD Capability
Both equities and bonds
Integrated with NASDAQ OMX clearing systems
Genium INET CSD
FOCUS AREA
Clearing and CSD business and technology development is one of the key focus areas in NASDAQ OMX
NASDAQ OMX operates 4 clearing houses and 4 CSD’s.
Confidential

6. NASDAQ OMX Clearing Current Product scope
NASDAQ OMX Nordic Derivatives Markets Clearing, Europe’s 3rd largest derivatives clearinghouse Nordic, Baltic and Russian Equities (Standardized and Flex/Tailor Made) Futures, Forwards and Options on Single Stocks and Depository Receipts Futures, Forwards and Options on Tradable Indexes Futures, Forwards and Options on Custom Made Indexes Nordic Fixed Income (Standardized and Flex/Tailor Made) Forward Rate Agreements Bond Forwards and Futures Policy Rate Futures Options on Bond Forwards IRS
Clearing for NASDAQ OMX Commodities Europe, the world’s largest power derivative exchange Nordic, German, Dutch and UK Commodities (Standardized) Futures, Forwards and Options on Electricity Contracts for Difference (CfDs) on Electricity Futures, Forwards, Options and Spot Contracts on Carbon Allowances

7. Key initiatives Default Fund Collateral Management System OTC Clearing
EMIR will require mandatory member sponsored default funds
New business will require increased safeguard requirements
To be introduced in Q1 2012
Default Fund
Collateral Management System
Introduce new in-house Collateral Management solution and replace current custodian institution model
Solution based on International standard
Deliver enhanced risk management procedures and services
Launch in Q in parallel with existing solution
Provide clearing of all Nordic derivatives and selected non-Nordic derivatives that are mandated for clearing by EMIR/ESMA
This includes trades created on NASDAQ OMX exchanges as well as trades coming from external trading venues and trades created outside organized trading facilities (OTC trades)
OTC Clearing
Integration commodities/
financials
Migrate commodities to same technical platform as financials markets
Will enable all members to trade and clear commodities using their existing memberships
Common collateral management, common settlement flows etc.

8. implications of Global trends to CIS and CEE region
DMA and remote access require standardized and easy access to post trade services
CCP a preferred solution but only if its cost efficient
Globally accepted DvP model for settlement
High standard risk management functionalities
Post trade interoperability or linkages
OTC Clearing
Important especially on fixed income and FX derivatives
Typically complicated due the nature of OTC market
Technology
Multi-instrument, multi-currency, multi-market, multi-time-zone
Rich in risk management functionalities and interfacing capabilities
Compliant with best practices
Globalization requires standardization
IOSCO, G30, EMIR etc. set the standards.
Efficient use of collateral.
Cross-border capabilities are needed.
Product variety and serviced currencies will increase.
Confidential

9. Latest development in Armenia
Armenian Pension System
Three pillar system. Second pillar to be centrally operated by NASDAQ OMX Armenia
Launch in 2014
Central Depository Infrastructure
Changes to settlement model
Improved registry functionalities
Guarantee fund to be established
New services
Credit Resource market
Product development initiatives together with CBA covering tradable monetary policy and government issued securities
Building infrastructure and services
Financial literacy is still one of the main development barrier in Armenia.
Pension system forces investors, market participants and media to educate themselves.
CBA in a key role to realize the goals.
Confidential