KDPW Group State-of-the-art post-trade infrastructure

Dr. Iwona Sroka – President & CEO of KDPW and KDPW_CCP

Warsaw, 15 September 2014

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join the celebrations of the 25th anniversary of economic freedom in Poland

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was established in 1991

was separated in 1994, as an independent, join stock company

was created in 2011

Overview of the Polish Capital Market

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KDPW

Financial Supervision Authority (KNF)

WSE Main Market, BondSpot, Catalyst, NewConnect, OTC

Financial institutions and intermediaries Issuers Institutional

investors

Individual investors

National Bank of Poland

KDPW_CCP

Polish Capital Market vs. Europe

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Equity market

Futures market Market Operator 2012 2013

London Stock Exchange Group 21,37% 20,56%

NYSE Euronext 15,36% 15,21%

Deutsche Börse 12,42% 12,29%

BME (Spanish Exchanges) 8,31% 7,48%

SIX Swiss Exchange 5,69% 6,28%

NASDAQ OMX Nordic 5,71% 5,72%

Oslo Børs 1,42% 1,11%

Warsaw Stock Exchange 0,57% 0,64%

CEESEG - Vienna 0,23% 0,23%

Athens Exchange 0,15% 0,18%

Boerse Stuttgart 0,14% 0,18%

Irish Stock Exchange 0,09% 0,13%

CEESEG - Budapest 0,11% 0,09%

CEESEG - Prague 0,13% 0,08%

Bucharest Stock Exchange 0,01% 0,01%

Bulgarian Stock Exchange 0,00% 0,01%

CEESEG - Ljubljana 0,00% 0,00%

Luxembourg Stock Exchange 0,00% 0,00%

Malta Stock Exchange 0,00% 0,00%

Bratislava Stock Exchange 0,00% 0,00%

Cyprus Stock Exchange 0,00% 0,00%

KDPW and KDPW_CCP

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100 %

NBP

Treasury

WSE

33%

33%

33% KDPW:

Trade repository service – EMIR compliant. One of the first 4 trade repositories in UE. ESMA registration of KDPW_TR (7 Nov. 2013)

LEI – one of the 14 agencies in the world allocating LEIs

KDPW_CCP:

Established: July 2011

100% of shares owned by KDPW

KDPW_CCP own capital: PLN 223 M (ca. EUR 53 M)

Central counterparty functionality through novation

Reporting to KDPW_TR (non mandatory)

KDPW_CCP the 3rd authorised clearing house in Europe

Regulated Market ATS Derivative OTC

Clearing

Risk Management

Collateral Management

SPAN VaR

Govt. Bonds T-Bills PLN WIG20

Companies

REPO OTC

Regulated Market ATS Cash OTC

Central Securities Depository

Corporate Actions

Numbering Agency (ISIN, LEI)

Operational Links with Foreign CSDs

Managing Deposit Accounts Registering and Safekeeping

of Securities

OFE Transfer Payments

Trade Repository

Exchange Clearing House (GIR KDPW)

Database Management

Settlement

Investor Compensation Scheme

Asset Management

Guarantee Fund

100%

Main responsibilities of KDPW and KDPW_CCP

At-a-Glance Statistics: August 2014

KDPW participants – 67

KDPW_CCP participants – 38

Issuers – 1032 (of which 58 are foreign)

Deposited equities issues – 1089

Deposited bond issues – 1033

Capitalisation of shares in KDPW – EUR 141 billion

Capitalisation of bonds in KDPW – EUR 193 billion

Number of cleared transactions – cash market: 13.69 M

Value of cleared transactions – cash market: EUR 107 Billion

Number of cleared transactions – derivatives market: 3.2 M

Value of cleared transactions – derivatives market: EUR 104 Billion

Operational Links with CSDs

KDPW maintains 19 operational links with foreign depositories: 9 direct links between KDPW and a foreign depository and 10 indirect links via an international depository (Clearstream Banking Luxembourg, Euroclear Bank) or a custodian bank (Bulgaria). KDPW has both a direct and an indirect link with Slovakia.

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Trade Repository

A trade repository is a set of information which fulfils the requirements of the Regulation of the European Parliament and of the Council on OTC derivatives, central counterparties and trade repositories.

The KDPW Trade Repository became operational on 2 November 2012.

It operates under the Trade Repository Rules.

14 November 2013: KDPW_TR was registered by ESMA as one of the four first regarded TRs.

Registered TRs in UE (as of 12.09.2014)

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1. DTCC Derivatives Repository Ltd. (DDRL) 14 November 2013

1. Krajowy Depozyt Papierów Wartościowych S.A. (KDPW)

14 November 2013

1. Regis-TR S.A. 14 November 2013

1. UnaVista Limited 14 November 2013

2. CME Trade Repository Ltd. (CME TR) 5 December 2013

2. ICE Trade Vault Europe Ltd. (ICE TVEL) 5 December 2013

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LEI Assigning

On 19 August 2013, KDPW has been assigned a prefix (2594) necessary to assign identifiers – future LEI – to legal entities.

According to the provisions of regulations delegated under EMIR, a relevant identifier is necessary in order to report derivative trades to a trade repository.

The prefix has been assigned by the ROC Secretariat (Regulatory Oversight Committee Secretariat) and will identify codes assigned by KDPW in the global LEI system (GLEIS). The KDPW prefix has been requested by the Polish Financial Supervision Authority, which acts as a sponsoring authority in the process of ROC’s authorisation of a local unit as an LOU (pre-LOU) within the global LEI system.

About KDPW_CCP

KDPW_CCP operates as a CCP (central counterparty) within the meaning of Regulation (EU) No 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC derivatives, central counterparties and trade repositories, performing the clearing of transactions executed in the cash and derivatives markets, both in on-exchange and off-exchange (OTC) markets.

In accordance with KDPW_CCP regulations (the Rules of Transaction Clearing (Organised Trading) and the Rules of Transaction Clearing (Non-Organised Trading)) KDPW_CCP becomes the counterparty for all transactions accepted for clearing.

This is performed using the mechanism of clearing novation, introduced on the basis of the Law on Trading in Financial Instruments.

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KDPW_CCP Milestones

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2009 • New Development Strategy of KDPW

2010 • Creation of KDPW_CLEARPOOL Clearing Guarantor – first step to CCP

2011

•Establishing of KDPW_CCP clearing house:

• Separate legal entity

• New clearing guarantee system

• SPAN

• CCP’s own capital

2012

• Introducing novation to the Polish legal system

• Introduction of OTC clearing service

2013 • Application for authorisation

2014 • EU Authorisation of KDPW_CCP

July 2011

Nov. 2012

8.04.2014

Authorised CCPs in UE (as of 12.09.2014)

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No. CCP Country Date

1 Nasdaq OMX Clearing AB Sweden 18.03.2014

2 European Central Counterparty N.V. Netherlands 1.04.2014

3 KDPW_CCP Poland 8.04.2014

4 Eurex Clearing AG Germany 10.04.2014

5 Cassa di Compensazione e Garanzia S.p.A. Italy 20.05.2014

6 LCH.Clearnet SA France 22.05.2014

7 European Commodity Clearing Germany 11.06.2014

8 LCH.Clearnet Ltd United Kingdom 12.06.2014

9 Keler CCP Hungary 4.07.2014

10 CME Clearing Europe Ltd United Kingdom 4.08.2014

11 CCP Austria, Abwicklungsstelle für Börsengeschäfte GmbH

Austria 14.08.2014

12 LME Clear Ltd United Kingdom 3.09.2014

Regulated Market ATS Derivative OTC

Clearing

Risk Management

Collateral Management

SPAN VaR

Govt. Bonds T-Bills PLN WIG20 Companies

REPO OTC

Main Responsibilities of KDPW_CCP

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KDPW_CCP - Markets & Products

CASH MARKET DERIVATIVES MARKET

Regulated ATS OTC Regulated

- Warsaw Stock

Exchange (WSE)

- BondSpot

shares, bonds,

subscription rights,

allotment

certificates,

investment &

structured

certificates, index

participation units,

mortgage bonds,

warrants, ETFs

- NewConnect

- Catalyst

- BondSpot

shares,

allotment

certificates,

bonds,

mortgage

bonds

- Warsaw Stock

Exchange (WSE)

futures

contracts,

options, index

participation

units

Forward Rate

Agreements,

Interest Rate

Swaps,

Overnight Index

Swaps, Basis

Swaps

- OTC

(MarkitWire,

SWIFTAccord)

OTC

- Matching

Engine

for REPO

T-bonds

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KDPW_CCP guarantees clearing of transactions executed on the regulated cash and derivatives market.

Regulated cash market trading platforms Regulated derivatives market trading platform

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Regulated Market and Alternative Trading System

KDPW_CCP guarantees clearing of transactions executed on the cash market in the alternative trading system.

ATS cash market trading platforms:

FRA

IRS

OIS

Basis Swaps

REPO

In the future: instruments denominated in EUR

and other currencies – with regard to market demand.

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PLN

OTC Clearing: Cleared Instruments

KDPW_CCP has focused on OTC

derivatives denominated in PLN

MarkitWire

OTC Clearing: Confirmation Platforms

KDPW_CCP clears trades on the basis of clearing instructions delivered by an electronic platform operator (MarkitWire, SWIFT Accord or proprietary matching solution for REPO).

SWIFT Accord

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Reporting to Trade Repository

In addition to compliance with its reporting obligations as a CCP, KDPW_CCP has developed the service of reporting derivative contracts to the Trade Repository operated by KDPW (KDPW_TR) on request of Clearing Members.

Reporting can be delegated both by Clearing Members and through them by their Clients and entities concluding derivative transactions on request of their Clients (Brokers).

On 7 November 2013 The European Securities Market Authority (ESMA) has registered the KDPW Trade Repository, confirming that it fulfills all trade repository requirements under EMIR.

The KDPW Trade Repository (KDPW_TR) was one of the first four such institutions to be registered in Europe.

KDPW_TR is approved to register all derivative contracts classes, both from the regulated and OTC market.

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www.kdpw.eu www.kdpwccp.eu