KDPW - The Central Securities Depository of Poland

www.kdpwccp.eu

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KDPW_CCP: Ready to Develop a Regional CCP

I. Clearing of the largest financial market in the CEE Region

II. Clearing of instruments: Cash market Derivatives market OTC market

III. OTC clearing: FRA, IRS, OIS, Basis Swaps, Repo

IV. Professional risk management (SPAN and VaR methodology)

V. Wide range of collateral – shares, bonds, currencies

VI. EMIR authorisation (PLN) EUR in progress Ready to authorise other currencies and commodities

VII. KDPW_CCP’s own capital – EUR 54 mln

VIII. High class IT solutions (effective support for business lines)

IX. In-house advanced technology and top qualified IT team

X. Reporting to KDPW_TR (via KDPW_CCP with no additional costs)

XI. Links to other CSDs (KDPW – 20 markets including 8 in the CEE Region)

XII. Reliable ownership structure (KDPW: 100% of KDPW_CCP shares)

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Poland has the largest population in CEE with about 38,5 mln people, equal to 7,6% of the population of the EU Member States and 34% of the population of the CEE Region.

Poland had the EU’s 8th largest GDP in 2014 and the largest in the CEE Region. GDP of Poland in 2014 was 413 134 mln EUR, equal to 3% of the GDP of the EU Member States and 28% of the GDP of the CEE Region. 2nd place belongs to Austria, 3rd place to Greece, 4th to the Czech Republic.

Key Economic Figures - CEE Region

COUNTRY POPULATION (mln)

REAL GDP GROWTH

RATE - volume

(%; 2014/2013)

GDP at market prices

(mln EUR)

INVESTMENTS

(bln EUR)

EXPORT of goods and

services (in % of GDP)

Poland 38.5 3.4 413 133 81 46.9

Austria 8.5 0.3 328 885 73 53.4

Greece 11 0.8 179 080 21 33

Czech Republic 10.5 2.0 154 929 39 83.6

Romania 20 2.6 150 018 33 41.1

Hungary 9.8 3.6 103 302 22 91.1

Slovakia 5.4 2.4 75 214 16 91.9

Bulgaria 7.2 1.7 42 010 9 67.9

Slovenia 2.0 2.6 37 246 8 76.8

EU (28 countries) 507 1.3 13 920 541 2,685,229 42.9

4 *Source: FESE, As of 31 July 2015

Market Capitalisation (EUR M)

Number of Companies Number of IPOs 2013-2015

Capital markets in the CEE Region

2 1 1

2

0 1 1

118

0Athens

ExchangeBucharest

StockExchange

BulgarianStock

Exchange

CEESEG -Budapest

CEESEG -Ljubljana

CEESEG -Prague

CEESEG -Vienna

WarsawStock

Exchange

10

120

10 776

910 98

4 372

196

3 805

17 450

29 101

0

15 000

30 000

AthensExchange

BucharestStock

Exchange

BulgarianStock

Exchange

CEESEG -Budapest

CEESEG -Ljubljana

CEESEG -Prague

CEESEG -Vienna

WarsawStock

Exchange

Value of Equity Trading (EUR mln)

39 254

19 544

4 180 15 881

5 933

25 744

90 932

147 417

0

20 000

40 000

60 000

80 000

100 000

120 000

140 000

160 000

AthensExchange

BucharestStock

Exchange

BulgarianStock

Exchange

CEESEG -Budapest

CEESEG -Ljubljana

CEESEG -Prague

CEESEG -Vienna

WarsawStock

Exchange

(EUR mln)

243

81

366

46 47 24 96

907

0

500

1 000

AthensExchange

BucharestStock

Exchange

BulgarianStock

Exchange

CEESEG -Budapest

CEESEG -Ljubljana

CEESEG -Prague

CEESEG -Vienna

WarsawStock

Exchange

5 *Source: FESE, Electronic Order Book, 2014

Exchanges

Cash market value (CEE=100%)

Exchange traded derivatives value

(CEE = 100%) Currency CSD CCP

Warsaw Stock Exchange 42,8% 84,3% PLN KDPW KDPW_CCP

ATHEX Group 23,8% 12,6% EUR ATHEXCSD ATHEXCLEAR

CEESEG - Vienna 20,6% 0,6% EUR OeKB CCP Austria

CEESEG - Budapest 5,2% 2,6% HUF KELER KELER CCP

CEESEG - Prague 5,0% CZK CSD Prague

Bucharest Stock Exchange 1,2% RON Depozitarul Central

Ljubljana Stock Exchange 0,5% EUR KDD

Bulgarian Stock Exchange 0,3% BGN CDAD

Zagreb Stock Exchange 0,4% HRK SKDD

Bratislava Stock Exchange 0,1% EUR CDCP SR

TOTAL 100% 100%

Capital Markets in the CEE Region

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The KDPW Group provides the broadest range of

services for the financial market in the CEE and holds

European authorisation for services, which confirms

compliance with international regulations and opens

the door to provision of services across the European

Union.

This has significantly improved the international

credibility of the Polish financial market and gives a

quality guarantee of post-trade services offered by the

KDPW Group.

Post-trade services in the CEE Region

Post-trade Services in the CEE

Separation of CCP and CSD

Authorisation of CCP

Trade Repository

LEI Assigning

7 *Source: FESE 2014 and CCPs websites

CCPs, Own Capital [2014]

CCP EUR [%]

KDPW_CCP 53 528 018 47,9%

ATHEX Clear 29 720 000 26,6%

KELER CCP 17 099 987 15,3%

CCP.A 11 384 844 10,2%

TOTAL 111 732 849 100%

CCPs in the CEE Region

Markets Cash market turnover

[2014]

Exchange traded derivatives value

[2014]

CCP – cleared transactions from local SE (mln EUR) [%] (mln EUR) [%]

Warsaw Stock Exchange 49 912 46% 55 591 84,3%

ATHEX 27 778 26% 8 289 12,6%

CEESEG - Vienna 24 018 22% 384 0,6%

CEESEG – Budapest 6 003 6% 1 717 2,6%

TOTAL 107 712 100% 31,3 100%

CCP Other markets cleared

KDPW_CCP OTC derivatives, repo, securities lending and borrowing

ATHEX Clear Commodity derivatives

KELER CCP Commodity derivatives

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Central counterparty functionality through novation

European authorisation under EMIR

Netting in cash (mandatory) and securities (optional)

- More attractive clearing solution for foreign investors (prop-shops, HFT) and day traders

Segregation of accounts

Clearing of OTC market:

- Currently: PLN (FRA, IRS, OIS, Basis Swap, REPO)

- In the process of authorisation: EUR (FRA, IRS, OIS, Basis Swap)

OTC derivatives clearing based on MarkitWire instructions

Guarantee system for negotiated securities lending transactions

Margins calculated on intra-day and daily basis

Wide range of collateral – shares, bonds, currencies

STP with WSE trading system (UTP - NYSE Euronext)

KDPW_CCP own capital: EUR 54 mln

PLN account in the SORBNET2 NBP system

EUR account in the TARGET2 NBP system

WIG20 shares

KDPW_CCP Services

Derivatives trade reporting to KDPW_TR (with no additional fees)

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CASH MARKET DERIVATIVES MARKET

Regulated ATS OTC Regulated OTC

- Warsaw Stock

Exchange (GPW)

- BondSpot

- NewConnect

- Catalyst

- BondSpot

- Matching Engine

for REPO

shares, bonds,

subscription rights,

allotment

certificates,

investment &

structured

certificates, index

participation units,

mortgage bonds,

warrants, ETFs

shares, allotment

certificates,

bonds, mortgage

bonds

T-Bonds

- Warsaw Stock

Exchange (GPW) - OTC (MarkitWire)

futures contracts,

options Forward Rate

Agreements, Interest

Rate Swaps,

Overnight Index

Swaps, Basis Swaps

Markets & Products

KDPW Services (CSD)

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ANCILLARY SERVICES

Omnibus accounts for foreign investors

Collective depository accounts at the CSD level, with option to segregate by investor/group of investors

Hold/Release mechanism (optional)

Cash settlement in central bank: money – PLN in NBP, EUR in TARGET2

Agent for Securities lending & borrowing - automatic and negotiated

Settlement and collateral management for tri-party repo service (non-guaranteed) and repo guaranteed by KDPW_CCP

Partial settlement (optional), technical netting

Corporate Actions: information, distribution of proceedings, tax services

Trade repository and LEI assigning local operating unit (LOU)

Market settlement cycle in line with CSDR (T+2)

Preparation for CSD authorisation under CSDR (2016)

KDPW_CCP participants – regulated market – 37

KDPW_CCP participants – OTC market – 16

KDPW participants – 61

KDPW_TR participants – 213

Issuers – 1174 (of which 82 are foreign)

Deposited equities issues – 1149

Deposited bond issues – 1701

Total number of reports received by KDPW_TR – 186, 7 mln

Capitalisation of shares in KDPW – EUR 143 bln

Capitalisation of bonds in KDPW – EUR 151 bln

11 *As of 31 August 2015

Basic Statistics

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KDPW_CCP Participants – Organised Trading

Global range: ABN AMRO Clearing Bank N.V. - leading global player, clearing

16 million trades per day across 90 exchanges worldwide

International scope with a branch in Poland: BNP PARIBAS SECURITIES SERVICES S.K.A. SOCIETE GENERALE S.A. BANCO ESPIRITO SANTO DE INVESTIMENTO S.A. KBC Securities S.A.

Polish investment firms in international capital groups: BANK BPH S.A. BANK HANDLOWY W WARSZAWIE S.A. BANK POLSKA KASA OPIEKI S.A. BANK ZACHODNI WBK S.A. DEUTSCHE BANK POLSKA S.A. ERSTE SECURITIES POLSKA S.A. ING BANK ŚLASKI S.A. RAIFFEISEN BANK POLSKA S.A. BANK MILLENNIUM S.A. BIURO MAKLERSKIE ALIOR BANK S.A. BIURO MAKLERSKIE BANKU BGŻ BNP PARIBAS S.A.

BIURO MAKLERSKIE BANKU BPH S.A. CENTRALNY DOM MAKLERSKI PEKAO S.A. DB SECURITIES S.A. DOM INWESTYCYJNY XELION SP. Z O.O. DOM MAKLERSKI BANKU HANDLOWEGO S.A. DOM MAKLERSKI mBANKU S.A. DOM MAKLERSKI PEKAO S.A. DOM MAKLERSKI RAIFFEISEN BANK POLSKA S.A. ING SECURITIES SPÓŁKA AKCYJNA W WARSZAWIE MILLENNIUM DOM MAKLERSKI S.A. NOBLE SECURITIES DOM MAKLERSKI S.A. PEKAO INVESTMENT BANKING S.A.

Polish investment firms: COPERNICUS SECURITIES S.A. DOM MAKLERSKI BANKU BPS SPÓLKA AKCYJNA DOM MAKLERSKI BANKU OCHRONY ŚRODOWISKA S.A. DOM MAKLERSKI BDM S.A. DOM MAKLERSKI PKO BP S.A. IPOPEMA SECURITIES S.A. OPERA DOM MAKLERSKI SP. Z O.O. PGE DOM MAKLERSKI S.A. TRIGON DOM MAKLERSKI S.A.

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KDPW_CCP Participants – OTC Trading

Polish investment firms in international capital groups:

RAIFFEISEN BANK POLSKA S.A. (Raiffeisen Bank International)

MBANK S.A. (Commerzbank AG)

BANK BGŻ BNP PARIBAS S.A. (BNP Paribas)

BANK HANDLOWY W WARSZAWIE S.A. (Citibank Overseas Investment Corporation)

BANK MILLENNIUM S.A. (Banco Comercial Portugues)

BANK POLSKA KASA OPIEKI S.A. (UniCredit SpA)

BANK ZACHODNI WBK S.A. (Banco Santander SA)

CREDIT AGRICOLE BANK POLSKA S.A. (Crédit Agricole)

DEUTSCHE BANK POLSKA S.A. (Deutsche Bank AG)

GETIN NOBLE BANK S.A. (LC CORP BV)

ING BANK ŚLĄSKI S.A. (ING Bank NV)

FM BANK PBP S.A. (ABRIS Capital Partners)

Polish banks:

BANK GOSPODARSTWA KRAJOWEGO S.A.

BANK OCHRONY ŚRODOWISKA S.A.

POWSZECHNA KASA OSZCZĘDNOŚCI BANK POLSKI S.A.

BANK POCZTOWY S.A.

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Protecting investment - stability Core services supported by the service platform developed since the inception of KDPW Experienced support team – technical staff with long-term experience Vendor management based on long-term relations and a practical track record High-end core service server platform Access to innovative state-of-the-art solutions Direct support of manufacturers – access to broad technical infrastructure Relations with top-class specialists Cost efficiency Standard communication solutions Server platform virtualisation / centralisation Scalability – server platform and telecommunication architecture supports scalability of

performance and capacity Security, reliability, availability DRP (Disaster Recovery Plan) using Back-up Site resources Infrastructure availability - No single point of failure Cryptographic solutions

IT Infrastructure – Effective Support for Business Lines

Potential KDPW_CCP Clearing Members:

Investment firms

Banks

Other financial institutions

CCPs and clearing houses

Main conditions for KDPW_CCP clearing members:

to hold a depository account or securities account in CSD or to have a settlement agent;

to hold a bank account with the relevant settlement bank in the transaction currency or to have a payment agent.

Potential KDPW_CCP Members – main conditions

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General clearing member:

the amount ca. EUR 12 mln and the sum of ca. EUR 1.2 mln for each entity represented by the clearing member – for banks;

the amount ca. EUR 3.5 mln and the sum of ca. EUR 0.5 mln for each entity represented by the clearing member – for brokerage houses;

Direct clearing member:

ca. EUR 6 mln for banks;

ca. EUR 1 mln for brokerage houses;

Clearing house:

ca. EUR 25 mln,

Non-clearing member (no financial requirements)

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Organised Trading:

General clearing member:

ca. EUR 25 mln;

Individual clearing member:

ca. EUR 12.5 mln;

Clearing house:

ca. EUR 25 mln;

Non-clearing member (no financial requirements)

OTC Market:

Capital Requirements for Clearing Members

Cash market

0.0035 % of the value of the transaction, however,

not less than 0.05 EUR and not more than 0.5 EUR

for the clearing of one transaction.

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Organised Trading:

OTC Market:

KDPW_CCP Fees

* (0;6M] (6M;1Y] (1Y;2Y] (2Y;5Y] (5Y;10Y] (10Y;15Y] (15Y;20Y]

Forward Rate Agreement

0.0001% 0.00015% 0.0002%

Interest Rate Swap

0.00005% 0.0001% 0.00015% 0.0002% 0.0003% 0.0004% 0.0005%

(0;1W] (1W;2W] (2W;1M] (1M;3M] (3M;6M] (6M;12M] (12M;5Y]

Repo 0.0001% 0.00015% 0.0002% 0.0003% 0.0005% 0.001% 0.002%

Derivatives market

Share futures – 0.08 EUR per contract

Currency futures – 0.02 EUR per contract

Index futures – 0.19 EUR per contract

Interest rate futures – fee suspended

Options – 0.2 % of the value of the option premium, however, not less than 0.05 EUR and not more than 0.48 EUR

* Fees waived until the end of 2015

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Credits of the defaulting member

Margins:

initial deposit > initial margin > additional margin

Resources of the relevant default fund

Contributed by the defaulting member

Dedicated resources of KDPW_CCP

(in the amount corresponding to at least 25% of the capital requirements taking into account the allocation of the resources in relation to the size of the fund)

Contributions of other KDPW_CCP clearing members to the relevant default fund

Own funds of KDPW_CCP

(up to 110% of the capital requirements)

Additional contributions of other KDPW_CCP clearing members to the relevant default fund

(not more than 50% of the last contributions)

Remaining own funds of KDPW_CCP

Default Waterfall

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Dr. Iwona Sroka President and CEO KDPW and KDPW_CCP iwona.sroka@kdpw.pl Phone: +48 22 537 93 53

Mobile: +48 601 374 636

Marcin Truchanowicz Chief Risk Officer KDPW_CCP marcin.truchanowicz@kdpw.pl Phone: +48 22 537 95 64 Mobile: +48 604 615 575

Sławomir Pycko Director, Strategy and Business Development Department, KDPW slawomir.pycko@kdpw.pl Phone: +48 22 537 95 60 Mobile: +48 605 948 404

Ready to Build the Regional CCP

Interested? We’re ready to clear trades from the CEE Region