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The Spirit of Trade

Richard Baker Chief Executive Officer

Regulatory Reform Opportunity for change

Swaps instruments are now subject to new global regulatory reform. In October 2012, the Dodd-Frank Wall Street & Consumer Protection Act became enforceable via the CFTC Swaps regulation. Swap Participants globally are required to be registered in various guises and trade, report and clear trades under new rules.

Globally, regulators are tightening rules and emulating the Dodd-

Frank Act.

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Reg

ula

tio

n

Time 2011 2012 2013

MiFID / EMIR / ISOCO

G20 Impact of CFTC Rules Swaps / Futures Evolution

G20 Nations Implement ISOCO Principals

For OTC Derivatives

Wall Street Reform and Consumer Protection (Dodd–Frank) Act lays the foundation defining a new mode of executing, trading, reporting and clearing swaps contracts. A SEF embodies the key characteristics of this new world – a “facility, trading system or platform in which

multiple participants have the ability to execute or trade swaps by accepting bids and offers made by other participants that are open to multiple participants in the facility or system”.

Cleartrade Exchange comfortably satisfies this definition

Dodd-Frank Act CFTC SWAPS RULES

2010 - Oct 2012 +

Demand Curve of Regulation

$700 Trillion Derivatives Market

What size market can we expect to see ?

What Dodd Frank did to me !

• Global regulatory reform of the derivatives market will see the emergence of new execution venues emulating listed exchange traded markets.

• Cleartrade Exchange (CLTX) has been the first to operate a Regulated Central Market and evolve the off exchange market as well as offer lower cost and agility when compared to full listed exchanges.

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OFF EXCHANGE

OTC Derivatives

ON EXCHANGE

LISTED FUTURES

Central Markets/ Execution Venue

Derivatives

Cleared

Introducing The Cleartrade Exchange

Cleartrade Exchange provides seamless transaction flow of Futures & OTC derivatives from electronic execution through to clearing house(s), and back...

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Cleartrade Exchange Timeline

Market Study Regulated Market

2009 2010 (FEB) Cleartrade Exchange Incorporation in Singapore

Technology

Design & Build

2011

Credit Filter& 1st Clearing House

1st IDB RMO License

Over 400,000

LOTS Processed

Live Trading & 3 Product Families

Member Onboarding

2012

Container Freight

PaaS Launched

DMA & Mobile Apps

Fuel Oil

Some of our Members…

The Derivative Value Chain

The Derivative Value Chain captures the workflow of the market. We seek differentiation through points of control.

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Bid / Offer

“Price Discovery”

Matching

“Trade Efficiency”

Trade Management & Reporting

“Trade Transparency”

Clearing

“Risk Management, Position & Open Interest

Disclosure”

• Electronic Order books multiple

instruments • Price Discovery • Event Ticker • Liquidity generation through

depth & spreads • Graphing & Analytics to

forecast order interest • Auction/RFQ/Routing • Market Making • Smart Order Management

• Electronic Order Matching • Hit & Lift matching • Risk, Credit, Position and

Netting Management across multiple clearing houses

• CCP account management • Multi-commodity trades

(complex strategies)

• Trade Event Ticker • Trade novation to CCP • Clearing ID Tag management

and reporting • Recap production/Finance

integration

• Trade Repository store/retrieve

• STP connections to multiple

clearing houses • In line credit/position/margin

filer integration to order books • Trade Reconciliation and Risk

Management

Derivative – A financial instrument derived from a physical underlying commodity that offers risk protection and allows innovative investment strategies.

The impact of Dodd Frank (OTC Swaps) New defined regulated “roles” and “trade flow”

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Introducing Broker

Exec

uti

on

Ven

ue

(SEF

/DC

M/F

BO

T)

Swaps Dealer

Major Swaps Dealer

US

Pers

on

Sw

aps

Part

icip

ant

Clearing House (CCP)

On October 12th 2012, CFTC rules for Swaps became law. This has a global impact because of the definition of a US Person, the requirement for trade reporting and clearing and the international reach of the CFTC.

Ow

n

Exch

ange

C

lear

ing

Trade Repository

Regulators (CFTC & SEC in the USA) all G20 nations following

US Person FCM/GC

M

Direct Members

Strictly Private and Confidential 8 Execution to Clearing : Price Discovery : Trade Reporting : Risk Management

EDGE Execution Platform

Orders, Routing, RFQ’s, & Trade Management, Credit Matrix,

Recap Engine Rules & algorithms

DM

A TRADE HUB

Post Trade Reporting and Management

FIX5.0

HU

B A

PI

LCH

NOS

SGX

Trade Hub Web interface

(Trade & Recap reports)

Cleartrade Clearing

Operations

3rd Party Trading Screens

STP Gateway Credit Matrix

Principals

GCM’s

Cleartrade Screens

Broker – Trade - GCM

Link to Broker Trade / recap Management

Systems

CME

Cleartrade Mobile

Price & Trade Discovery

Cleartrade Credit Matrix for GCM’s

Set financial margins by account

import positions, Net P&L risk view

Quote Vendor Feeds

EDGE Execution : Pre & Post Trade

Processing : Marketplace management, trading rules and

algorithms

EDG

E A

PI

The Cleartrade Platform the infrastructure of a regulated marketplace

WAVE

Brokers

Traders

LCH SGX NOS *CME Order Matching | Trade Processing | Recaps | Clearing | Reporting

Regulated Market Private Market Solution

*For Private Market Trades only

Cleartrade Exchange Open Market Direct Market Access (DMA) Connectivity Gateway

TRADE REPOSITORY

DMA

CLTX Services

MOBILE PRICE DICOVERY

MARKET DATA

CREDIT MATRIX FILTER

Trades Window Transparency Window

User Definable Contract Layouts Quick Trade / Order Entry

How we translate the rules… Screen Familiarization

Contract Widget Bar “Pick” contracts and drop on market to trade

Market Contracts for Trading Anonymous “bids & offers”, dynamic spreads

and ratios across all asset classes

“Market Events” – pre trade market activity Anonymous order activity for whole market

and market depth tool

Trader Member Principal

“Clearing Open/Close”

“Quick Trade” Presets

Hot Keys

“Trades Tape” – post trade Anonymous trade history for whole market

Detailed history for own trades

Trade Repository a trade reporting portal

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55,484 Trade items (27,742 matched buy/sell

trades) processed since June 2011

2,602 matched trades average per month items in 2012

52,975 lots average per month items in 2012

31,230 Trade items (15,615 matched buy/sell trades)

in CY2012

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Our mobile journey …

Going Mobile… in 3 months

• Defined user role profiles

– traders, brokers

• Defined data sets to be distributed via API

– Static snapshots, updates, layouts, real-time & delayed

• Defined device support (IOS/Android/Blackberry)

– No touch of apps on device for CLTX, a managed service

– Integrated via Web services API to Exchange feeds

– Dynamic population of contact data

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Definition Phase

User Interface Design & Showcase

Service Build & Integration

April 26th June 1st April 1st

On Device User Interface emulates the desktop experience

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Configuration Menu

“A tick list of contracts to monitor”

Select contract tabs to view prices and volumes

Configuration and Price Selection

On Device User Interface emulates the desktop experience

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Trade Event

Real-time reporting of exchange trades

Order Activity & Trade Events

Market Event

Real-time reporting of exchange orders on the market

Transparency + Liquidity = CONFIDENCE

Marketing

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Mobile is an integral component of the CLTX Platform and our commitment to price and data transparency

The Results thus far…

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Over 1800 Users of the Service

“Reaching new markets, new customers and extending our brand in a highly competitive landscape”

The road ahead…

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Cleartrade Exchange Mobile Roadmap priorities

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• Move to a Single Sign on Authentication Model across CLTX assets

• Expand data offering with inclusion of new contracts, daily reports, open interests positions and volumes

• Adoption of Mobile Wave 4.0 (May’13)

• Support Hybrid HTML5.0 and Native App experience across price view, trade hub and data center

• Evaluating Broker Block Trading Application (Sept’13)

FREIGHT METALS AGRICULTURE FUEL OIL

THE COMMODITY DERIVATIVES MARKETPLACE

• Regulated Futures

and Swaps

Contracts

• Over 40 contracts

across Freight,

Metals, Fuel Oil

and Agriculture

• Straight through

processing to

multiple clearing

houses

• Market data

access via major

quote vendors,

web and mobile

• Electronic Execution

via Web GUI

• Trade Reporting

• Hybrid Voice &

Screen Trading

• Real-time Credit

Margin Management

• Broker specific

features and

incentives

Thank you

Questions

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