1. The AMEDA Messaging Hub PRESENTED BY: Steve Everett DATE: 28 April, 2010 PLACE: 11 th AMEDA Conference- Beirut, Lebanon

2. W HAT IS THE NEED FOR CSD TO CSD L INKS ? Reduction of Cross-Border Settlement costs 2 Studies have revealed an increase Globally in CSD to CSD links Reduction of Systemic Risks in Cross-Border settlement The increased need for Regulation Access to top investment destinations as required by investors Local Market Benefits The actual CSD Benefits by moving up the Value Chain

3. C ROSS - BORDER TRADE INITIATIVES IN THE AMEDA REGION Initiatives on trading often lead to initiatives in the post-trade environment 3

4. T HE CURRENT CROSS - BORDER POST - TRADE SETTLEMENT ENVIRONMENT IN THE AMEDA REGION Often in the region links are not CSD to CSD links, however are links between Custodian Banks Multiple Custodian links outnumber CSD to CSD links in Africa CSD to CSD links Custodial Links 4

5. A POSSIBLE FUTURE FOR CROSS - BORDER POST - TRADE SETTLEMENT IN THE AMEDA REGION By using a ‘virtual Hub’ for all intra-AMEDA messaging and for those from the AMEDA region to the rest of the world HUB CSD to CSD links 5

6. Settlement volumes/demand and regional initiatives to increase trading and settlement Cash Settlement processes for each country and co-operation amongst Central Banks Legal/Regulatory/Political barriers for each country A number of considerations need to be accounted for in the feasibility and Business case for the Hub Currency and Tax Regimes Sophistication of CSDs and the means of communication (SWIFT, WAN, etc.) 6 Processing of Corporate Actions and the scope, implication and operation of Custodial Services to service member CSDs T HE R ULES OF T HE G AME

7. The AMEDA Messaging Hub Driving message harmonization through message conversion Leveraging existing technology and infrastructure by licensing Link-Up Markets technology to a virtual ‘Hub’ through the existing Link-Up Shareholders, Strate and MCDR Routing of messages to Link-Up Shareholders, either Strate or MCDR dependent on the geographical proximity of a message sender by ‘sponsoring another CSD’ 7 Using the proven Link-Up Markets technology, the Messaging Hub will be a ‘Link-Up’ Markets for the AMEDA Region T HE B USINESS M ODEL

8. 8 The Hub will be closely aligned to the business model for Link-Up Markets in Europe The Business Model The solution should provide for both DVP and FoP settlement options Local Cash Settlement Agent banks in each country will remain Pre-Funding of cash for settlement of equities and bonds to reduce credit risks The local CSD Participant for inbound settlement will only facilitate the cash-leg of transactions being processed through the AMEDA Messaging Hub The Hub would enable to message conversion functionality required in order to harmonize messages. T HE B USINESS M ODEL (C ONT.)

9. CSDs in the AMEDA region can cost-effectively move up the Value Chain The Benefits T HE B ENEFITS Enabling settlement of foreign transactions at domestic CSD rates and reducing the number of indirect costs (through multiple intermediaries) associated with cross border settlement An alternative channel to enable foreign investment into and out of Africa The opportunity to offer additional, white-labelled, services to (the African investor Market) and move up the value chain Low costs for current CSDPs to use the service, as domestic infrastructure is used to effect a cross-border settlement H armonization of legal/regulatory issues between AMEDA member country CSDs 9 Revenue stream diversification for African CSDs through the new service of cross- border settlement CSDs may make use of Link-Up technology without being a Shareholder and meeting the stringent requirements of being a Link-up Member

10. Status 10 A whitepaper has been submitted to the AMEDA board for the approval of the initiation of sub-committee to work on a business case and the subsequent project on behalf of AMEDA.

11. R ECOMMENDATIONS - T HE AMEDA B OARD Approve the Adoption of the European Linkup Markets Approach within the AMEDA to gain leverage on the financial, infrastructure or legislative aspects.

12. R ECOMMENDATIONS - T HE AMEDA B OARD Technical, Technological infrastructure needs Collect the necessary data from all interested members to better understand their individual needs To develop a meaningful business case for this initiative. Approve the standardisation Task Force to find study and solutions to enable AMEDA members benefits:

13. R ECOMMENDATIONS - T HE AMEDA B OARD Providing the model for AMEDA member collaboration in terms of how AMEDA can effectively plan and execute the initiative at hand. Sanction initiative and give the green light for a feasibility study to build the business case

14. Questions? Thank you 14