Strate’s membership to

PRESENTED BY: Monica SingerDATE: 22 October 2009

PLACE: 10th AMEDA Conference- Morocco Marrakesh

CSD to CSD Links Globally

Currently there are no CSD to CSD links to Africa

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Link-Up Markets: The Universal ‘Adapter’

Driving message harmonization through message conversion (using the ‘Adapter’)

Leveraging existing technology and infrastructure

The ‘Adapter’ written by TCS, used to integrate with Strate technology supported by TCS.

A technology solution to drive new business solutions which operates using Swift

technology.

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Link Up Markets infrastructure“Adapter”

Investor CSD (sender) Issuer CSD (receiver)

Link-Up Markets provides the infrastructure to facilitate cross-border settlement between foreign CSDs and Strate

Mapping Rules to convert messages

Target 2 Securities vs. Link-Up Markets

Post Target 2 Securities (T2S)

• Options for CSDs were consolidation (i.e. Euroclear’s single platform) or

• Interoperability between CSDs which Link-Up Markets provides

• Increased competition between CSDs

• CSDs to move up the value chain (possibly into custody)

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Link-Up Markets is more than just a reaction to T2S

Target 2 Securities vs. Link-Up Markets

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Link-Up Markets provides complimentary services to T2S

Why is Link-Up Markets a good fit for Strate?

High Costs of multiple CSD to CSD Links vs. Link-Up’s interoperability

• Link-Up provides interoperability (no “re-inventing of the wheel”) between many

CSDs and promotes reusability of existing technology

• Cheaper overall costs (IT infrastructure is outsourced, Message conversion, Maintenance of multiple

links)

Link-Up provides a single point of access to Top Investment Destinations

• Either directly or indirectly to 7 out of the Top 10 South African Investment

Destinations

High adaptability and synchronization of technology platforms

• Link-Up technology is TCS-based (Strate’s IT vendor of choice)

• SAFIRES system at Strate is present in other CSD member(s) of Link-Up Markets

• Link-Up and Strate both use SWIFT technology extensively

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Strategic benefits for Strate joining Link-Up Markets

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Single link with the rest of the world Alignment with Strate’s strategy for global recognition Strengthen strategic position of South Africa as the Hub for further African markets Strate becomes part of the international CSD community Learning from other CSDs on Global Best Practice for the future Strategic direction of

Strate

Potential movement up the asset-serving value chain and new products and services

Value Proposition to CSD Participants

Direct access to cross-border settlement at domestic CSD charge

An alternative channel for cross-border settlement, with the ability to retain current

relationships with Global Custodians

Using existing connectivity to Strate (re-use of existing technology) through the

domestic infrastructure and operations to facilitate cross-border settlement

White-labelling of services by Strate to its participants

Potential for an increase in inbound investment

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What Link-Up Markets is for the South African Market

Link-Up Markets introduces the following to the South African Market:

Direct access to cross-border settlement at a domestic CSD charge

Use of existing domestic infrastructure to effect a cross-border settlement

An alternative/choice channel for cross-border settlement for inbound and outbound

transactions

Africa’s first CSD to CSD link with 8 European CSDs such as Clearstream Banking

AG Frankfurt (Germany), CSE (Cyprus), Hellenic Exchanges S.A. (Greece),

IBERCLEAR (Spain), Oesterreichische Kontrollbank AG (Austria), SIX SIS AG

(Switzerland), VP SECURITIES (Denmark) and VPS (Norway) through bi-lateral

agreements

Global exposure to proudly South African technology

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What functions would Strate be required to perform as a member of Link-Up Markets?

Issuer CSD: Refers to the CSD which settles inbound investments:

Cash Movement : Always by a foreign bank to a local Bank

Main function of the Issuer CSD: To settle the transaction in accordance with

Issuer CSD rules

Link-Up Member CSD to open an account in the Issuer CSD

Investor CSD: Refers to the instructing CSD for outbound investments: (SA

investors wanting to invest in foreign markets)

Cash Movement: Client’s Bank in South Africa which is a authorised dealer transferring

to a bank operating with the Link-Up Markets CSD (i.e. the Issuer CSD)

Main function of the Investor CSD: Instructs the Issuer CSD in a foreign country

Holds mirrored accounts in the Investor CSD of holdings in the Issuer CSD (as settlement takes place in

the Issuer CSD)

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Strate is joining Link-Up as an Issuer CSD initially due to international demand from foreign CSDs

Issuer CSD is for Phase I and Investor CSD is for Phase II for all Link-Up CSD members

Strate is planning the Issuer CSD leg as its first step

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Estimated Live Date

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Fourth quarter 2010 with at least one Investor CSD amongst Link-Up

members having an account in Strate, opened and operational

Questions?

Thank you

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Consider it Done!