Meeting LuxSE

September 1st, 2015

2 September 2015

Agenda

1. Luxembourg Financial Center

2. Presentation of LuxSE

3. Projects & challenges

4. Fundsquare

5. Main takeaways

3 September 2015

1. Luxembourg Financial Center

Overview

150 Banks

35 Germany, 15 France, 12 Switzerland, 10 Italy, 9 UK…

4.300 Investment Funds:

SICAV, SICAF, SICAR, OPCVM (Organismes de placement collectif)…

National & international Law firms:

Linklaters, A&O, Arendt & Medernach, Clifford Chance…

International Consulting firms:

PWC, EY, KPMG, Deloitte, BDO…

315 PSF (Professionnels du secteur financier):

Streff, Luxtrust, Xerox, Bourse de Luxembourg…

Associations:

ABBL, ALFI, LFF (Luxembourg for Finance)…

4 September 2015

1. Luxembourg Financial Center

Why an exchange?

Major reasons:

1. Matching Offer & Demand (Market)

2. Price transparency

3. Guarantee : Clearing& Settlement

4. Regulation

5. Anonymity

Investor A Investor B Broker A Broker B Sell Sell Buy Buy

5 September 2015

2. Presentation of LuxSE History (1/3)

Founded in 1928 as an independent stock exchange

6 September 2015

2. Presentation of LuxSE History (2/3)

Serving the international capital markets for 50+ years

7 September 2015

2. Presentation of LuxSE History (3/3)

Synonym for innovation & transparency

8 September 2015

28 listed local companies

158 employees

Shareholders:

54.7% : Local banks

32.9 % : Other institutional & private shareholders

12.4 % : Grand Duchy of Luxembourg

Turnover of EUR 42.7 million*

Wholly-owned subsidiary :

Fundsquare (since 2013)

Euronext partnership (since 2006)

2. Presentation of LuxSE An exchange not like the others

*2014

Revenue composition**:

LuxSE, Deutsche Börse, SGX & LSE

Trading

Listing Market Data & Services

Source: Annual reports 2013 of LuxSE, DB, SGX & LSE

**Excluding revenues from other activities (e.g. clearing, settlement…)

9 September 2015

2. Presentation of LuxSE Overview

40,000+ listings

66% Bonds

17% Funds

15% Warrants

2% Shares/GDRs

100+ countries

USA, UK, China, India,

Italy, Brazil, UAE…

3,000+ issuers

72 Sovereigns

12 Supranationals

54 currencies

USD, EUR, GBP,

JPY, CNY, IDR, …

10,600+ new listed securities in 2014

For a total issued amount of EUR 1 trillion

10 September 2015

2. Presentation of LuxSE More than 3.000 international issuers

11 September 2015

A leader at the forefront of financial innovation for 50+ years

Innovation at LuxSE:

A predilection for international partners & products

Continuous development to embrace new products

2. Presentation of LuxSE Innovation

12 September 2015

A choice of 2 markets

2. Presentation of LuxSE Markets

Bourse de Luxembourg

EU Regulated Market

Euro MTF

Exchange Regulated Market

75%

25%

Largest MTF in the EU

+10,000 listings

Approval by LuxSE

Presence of top issuers

Fast growing market since 2005

European passport

+30,000 listings

Approval by CSSF (Lux. Regulator)

Long history since 1929

IFRS mandatory

Listings

by market (Sep. 2015)

13 September 2015

“Listing in Luxembourg”:

A unique full service process not matched by any other listing exchange

”Listed in Luxembourg” : automatically implies ”Admission to trading”

i.e. collateral eligibility requirements

In cooperation with Euronext:

UTP platform & Cross-membership (BE, FR, NL, PT & LU)

2. Presentation of LuxSE A quality label

14 September 2015

Open-outcry auction market:

A disappearing model

Some showcases:

2. Presentation of LuxSE Markets today

NYSE Deutsche Börse

*Since 1996

LuxSE* Euronext Brussels

Automatic trading:

Standard model

15 September 2015

2. Presentation of LuxSE Indices

Lux RI Fund Index

Basket index representing Luxembourg-

domiciled funds operating in the area of

responsible finance.

Since 2013

Lux GDRs India

Lux GDRs Taiwan

Weighted capitalisation indices comprised

of all Luxembourg listed GDRs of the

respective country

Since 2009

LuxX

Since 1999

Basket index of major Luxembourg

listed companies.

16 September 2015

3. Projects & challenges RMB business (1/3)

*Former GreTai Securities Market (GTSM)

Cooperation agreement with Exchanges from greater China:

MoU with major Chinese banks:

17 September 2015

3. Projects & challenges RMB business (2/3)

RMB & Chinese issuers present at LuxSE:

RM

B d

eno

min

ated

sec

uri

ties

C

hin

ese

issu

ers

18 September 2015

3. Projects & challenges RMB business (3/3)

*Source Bloomberg, LuxSE, LSE

Stock & flow of Dim Sum bonds listed on LuxSE Source LuxSE

Dim Sum bonds listed outside Asia* Source Bloomberg, LuxSE, LSE

19 September 2015

3. Projects & challenges Islamic Finance & LuxFLAG (1/2)

*ongoing project – exact date to be confirmed

Pioneers in European Islamic Finance in a few dates:

1978 - 1st Islamic Finance institution

1982 - 1st Sharia compliant insurance company

2002 - 1st listing of a Sukuk on LuxSE

2010 - Recognition of Islamic Finance products for tax treatment

2011 - LuxSE already listed 16 Sukuk

2014 - 1st Euro denominated Sovereign Sukuk (AAA rating)

Latest Sukuk listings on LuxSE:

Islamic Republic of Pakistan i.e. The Second Pakistan International Sukuk Company Ltd

Grand Duchy of Luxembourg i.e. Luxembourg Treasury Securities S.A.

Republic of South Africa i.e. ZAR Sovereign Capital Fund Proprietary Ltd

Goldman Sachs i.e. Jany Sukuk Company

Luxembourg provides an efficient legal, tax & regulatory framework for Islamic Finance

20 September 2015

3. Projects & challenges Islamic Finance & LuxFLAG (2/2)

*Environnemental, Social & Gouvernance

High synergy potentials between Islamic Finance & Responsible Investments Strategies:

Contribute to further standardization of Sharia compliant instruments

Eventually create Islamic Finance dedicated LuxFLAG labels

Ultimately converge towards:

o Reaching critical mass for Islamic Finance investment products

o Harmonizing cross-regional compliance rules

o Lowering costs / Increasing performance

LuxFLAG, a possible bridge to Islamic Finance :

ESG* labeled funds, complying with well defined ethical terms

21 September 2015

3. Projects & challenges Investment funds & ETFs

Listing investment funds & ETFs: a great potential

Enhance issuer’s visibility & transparency of financial information

Improve investor confidence with regards to information

Provide eligibility for institutional investors

o e.g. UCITS funds, insurance companies & pension funds

Tax advantages for tracker funds

Increase liquidity in niche products (e.g. collateral eligibility)

Investment funds listed on LuxSE (As of January 2015)

22 September 2015

Leading European Exchange for High Yield bonds

Market share of more than 60%

In May 2014:

Listing of a record 12 bn € High Yield bond by Numericable & Altice

High Yield bonds are one of the most traded types of securities on LuxSE

3. Projects & challenges High Yield bonds

Selection of High Yield bond listings in 2014:

September 2015 23

4. Fundsquare Why the Fundsquare platform ?

Information Services

Different collection point for many different types of

fund data & documents

Collection through not standardized tools & multi-formats

Multiple transmissions of the same data

Exponential cost in data administration,…

Order Management Services

Increased operational complexity linked to Cross-border distribution of Funds

Growing concerns of actors regarding costs, inefficiencies, redundant systems, disparate

processes & lack of standardization

September 2015 24

4. Fundsquare Need for efficient cross-border distribution of funds

Single point of contact for:

Asset managers, Fund distributors, Transfer agents

Information & Reporting Services

Fund data (static & dynamic)

Reporting & statistics

« Référentiel de place » Project

Order Management Services

Real-time order routing

Commission & fee information

Translation services

September 2015 25

4. Fundsquare Fundsquare a subsidiary of LuxSE

Fundsquare in some numbers:

900,000 KIIDS

75,000 Prospectuses & financial reports

Feeding data to 110 distributors

69,000 share classes

7,500 funds

120 million NAV transmissions annually

Fund information from 1,500 promoters

1.1 million regulatory reports transmitted annually

26 September 2015

5. Main takeaways Solutions for international…

Increased comfort

High transparency

Easy access to information

IV. Investors

II. Asset Managers

Supporting the launch & distribution of funds

Listing on the Euro MTF market

Fundsquare platform

Pre-listing advisory services

Efficient & predictable listing process

One-stop-shop for regulatory reporting

III. Listing agents, law firms & banks

I. Issuers

Access to international investors

Visibility - Promotion

Competitive pricing

27 September 2015

5. Main takeaways Key action points

Increase visibility of LuxSE:

Strengthen presence in international markets

Develop closer links with our key stakeholders

Strengthen the position of the Luxembourg Financial Center:

Support of LFF & ALFI promotion efforts

Leverage the strong position of LuxSE

Evolve with the market needs:

Refine our product offering

Enhance listing process efficiency

Contribute to financial innovation:

e.g. Virtual currencies, Responsible & Islamic finance,

Crowdfunding, RMB internationalization…

Contact details & links

Maurice BAUER Secretary General

mba@bourse.lu

More information on:

Follow us on:

www.bourse.lu/home

www.fundsquare.net

@LuxembourgSE

@fundsquare

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