Commonwealth BankImpacts/ Changes to Operations Resulting from G20 Reform

31st August 2015/ Confidential

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Discussion Points

Commonwealth Bank of Australia Confidential

Reporting – intraday or T+1

Reconciliation – with trade repository

Collateral – portfolio and material terms recs, margin calls

Clearing – Mandatory clearing via direct or by broker

Maintenance of client information – correctly identifying clients

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Jan 15 Feb Mar Apr May June July Aug Sept Oct Nov Dec Jan 16 Feb

United States

Australia

HK

SG

Europe

CAN

2014/15 OTC Reform Regulation Project Impact Assessment

Margin on Uncleared – IM margin Phase in from 1/12/15. VM required from 1/12/15

Substituted Compliance Expiry of Cross Border Relief on 1/12/15 Possible Part 45 & 46 Entity Implementation

Mandatory Execution (SEF’s) – Ongoing timeline linked to clearing

SEC Requirements – Quarterly De Minimus Calculations . Implementation dates TBC

Central Clearing Interest Rates Q3/4 2015 Footnote 513: Relief expires 30/09/15

HKMA Consultation period Reporting : Expanded products and scope. Earliest May 2015

Mandatory Clearing & MTF’s for Rates & Credit Q3 /4 2015 (TBC)

No or Low impact for this project/IT Medium Business/IT Impact High Impact for Project, & IT

Indicates uncertainty in Regulationsand/or dates not finalised:

Russia, China, Malaysia & Sth Africa & Japan are

being monitored

HKMA to set Mandatory Reporting dates Cam

Margin on Uncleared

Monitoring Other Canadian Provinces

Volcker Rule – 21 July 2015

14/02/15 Version

Large Trader Reporting changes – Phased dates from 30/09/2014 to Changes to the trade reporting solution 30/04/2016

Commodity Position Limits & Aggregation – Date TBC

Collateral Rpting (CBA date) Oct 2015

Items in solid colour indicates confirmed dates:

ASIC Client Delegation Phase 3A Other Asset classes & 3B All Products 12 Oct 15

ASIC Reporting Exemption Expiry : Entity Identifiers , UTI pairing and sharing, Collateral, Entity Name, Lifecycle, ETD Reporting, unmasking 30 Sep 15

FX, Credit and Rates derivatives Reporting ‘Traded In’ & Additional Fields – 1 Nov

FX Reporting Phase 1 ‘Booked in’ 1 May

UTI Pair & Share – 1 Oct 2015 (counterparts to agree to UTI)

USI/UTI Feb 2016

Client Delegation Phase 3A Credit & Rates 13 April 15

ASIC Legal Entity Name Exemption expiry (subject to TR capability)– 1 July 2015

Reporting Dead Trades 2016

FX Securities Conversion Transactions Exp 30 Sep 16

ASIC Client Delegation Phase 3A Backloading 19 Oct 15

Mandatory Clearing Q4 2015 (TBC)

Phase 3A commence collateral, barriers and valuations for FX, Commods and equities 2 May 16

Relief exp for Val Reporting of Cleared Trades (letter – 14-90) 30 Jun 15

ASIC Phase 2 Nexus Rpting – 24 Feb 15

Phase 3A commence rpting of collateral barriers & valuations for credits & rates 2 Nov 15

Phase 1d Entities Backloading for Credit & Rates Transactions 1 Apr 15

New Jurisdictional fields 27 March

Reporting Deadline for Backloading 30 Apr

Mandatory Clearing. Q1 2016 (Date TBC) . Final Regs & Determination June 2015

ASIC Margin on Uncleared : APRA consultation Q2/Q3

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Highlights

Commonwealth Bank of Australia Confidential

- CBA cleared their first OTC trade via LCH in March 2012.

- CBA was the first Australian bank to clear an AUD swap via the ASX on the 10 Sept 2013.

- CBA has cleared over 10k OTC trades through different exchanges.

- In June 2015 CBA participated in the biggest ever AUD swap compression with the London Clearing House – in terms of notional reductions – a total of $4.3 trillion.

- CBA is reporting approximately 70k trades to different trade repositories.

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Issues

Commonwealth Bank of Australia Confidential

- Needed to implement a number of tactical solutions to meet tight deadlines.

- There were and still are a number of manual processes in place.

- Increased resourcing required to handle new processes and extra workload.

- Client maintenance issues, needed to ensure clients were flagged against correct jurisdictions within our product systems.

- A number of product system changes required.

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Questions

Commonwealth Bank of Australia Confidential

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