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2. WHAT MiFID MEANS FOR LJUBLJANA STOCK EXCHANGE? Jana Morela LL.M Management Board Adviser Ljubljana Stock Exchange June 2007

3. 3 LJSE today - in numbers   Market capitalisation of shares (31th May 2007):   16.0 billion EUR   Average daily turnover with shares in Jan - May 2007: 819,7 transactions, 6,6 million EUR in shares   Official market ratios (as of 31th May 2007):   P/E: 27,5   P/B: 2,57   Div. yield: 0,99%

4. 4 LJSE today - Market Structure BONDS SEMI- OFFICIAL MARKET SHARES BONDS INVESTMENT FUNDS SHORT-TERM SECURITIES INVESTMENT FUNDS

5. 5 CHANGING LANDSCAPE ON FINANCIAL MARKETS  New fragmentation and increased competition  Between exchanges  Exchanges, ATS, MTF’s  Members against exchanges  Disconnecting listing and trading services  Transparency  Full disclosure of market data  Full disclosure of regulated information  Higher standards for transparency of issuers  Regulatory barriers

6. 6 CHANGING LANDSCAPE ON FINANCIAL MARKETS  Price discovery  Pre and post trade transparency  Best execution rule implemented on the side of the member  Internalization / concentration  Changing nature and role of regulators  Supervision and micro regulation  Providing services to all exchanges and markets  Driver of success or failure for national markets?  Explicit and implicit cost of regulation

7. 7 EXPECTATION FROM THE STOCK EXCHANGE  Members  More, better and diverse products  Better liquidity  Competitive pricing of services  Price discovery  Issuers  Access to new investors  Improved investor relations  Maintaining relative importance and visibility  Investors  More, better and diverse products  Better liquidity  Competitive pricing of services  Membership structure

8. 8 EXPECTATION FROM THE STOCK EXCHANGE  Shareholders of exchange  Value of shares  Long term competitiveness  Efficiency of operations  Regulator / Government  Regulatory compliance  Surveillance of markets  Efficient price discovery  Stability of operations  Efficient services

9. 9 POTENTIAL REASONS TO MAINTAIN A LOCAL STOCK EXCHANGE   Domestic market is the ˝natural place˝ for most firms, but global ones   Flexibility to meet the needs of local firms and investors   Low cost trading systems are available now

10. 10 TWO STEPS TO ACHIEVE GOALS: 2005-2006: (by ourselfs) Stronger role of the LJSE in the national economy From quantity to quality New products and services Demutualization 2007-2009: (with partners) International competitiveness and full integration into EU capital markets with introduction of MiFID and EURO

11. 11 PRIORITY PROJECTS for 2007-2009   Improved quality of the products and services:   Liquidity providers,   Automatic order routing,   Road shows, reporting and CG.   Projects to secure the central position of the LJSE on the domestic market in the post MiFID environment   LJSE as the prime venue for publishing information by issuers in Slovenia.   LJSE as the central storage of Regulated Information in Slovenia.

12. 12 PRIORITY PROJECTS for 2007-2009  LJSE as the main provider of Market Data and Regulated Information from Slovenia.  Complete the range of products traded on the LJSE:  Alternative market for shares (MTF).  Full integration of the LJSE in the EU market place:  Remote members, foreign vendors, foreign investors, new indices,  Harmonization of Rules for listing, trading and reporting,  Competitive clearing and settlement of cross border trading,  New Europe as an investment destination.

13. 13 Jana Morela,LL.M. Management Board Adviser Ljubljana Stock Exchange THANK YOU FOR YOUR ATTENTION. http://www.ljse.si